## Tuesday,

July 13, 2010

Book 2 of 2 Books
Pages 40039–40718



# Part II



# Department of

Health and Human

Services

Centers for Medicare & Medicaid Services

42 CFR Parts 405, 409, et al.

Medicare Program; Payment Policies Under the Physician Fee Schedule and Other Revisions to Part B for CY 2011; Proposed Rule


### 40040 Federal Register / Vol. 75, No. 133 / Tuesday, July 13, 2010 / Proposed Rules

**DEPARTMENT OF HEALTH AND**
**HUMAN SERVICES**

**Centers for Medicare & Medicaid**
**Services**

**42 CFR Parts 405, 409, 410, 411, 413, 414, 415, and 424** 

**[CMS–1503–P]**

**RIN 0938–AP79**

**Medicare Program; Payment Policies Under the Physician Fee Schedule and** 
**Other Revisions to Part B for CY 2011**

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

**ACTION :**  Proposed rule.

**SUMMARY :**  This proposed rule addresses proposed changes to the physician fee
schedule and other Medicare Part B payment policies to ensure that our payment systems are updated to reflect changes in medical practice and the
relative value of services. It also addresses, implements or discusses certain provisions of both the Affordable
Care Act and the Medicare Improvements for Patients and Providers Act of 2008. In addition, this proposed rule discusses payments under the Ambulance Fee Schedule, Clinical Laboratory Fee Schedule, payments to ESRD facilities, and payments for Part B drugs. Finally, the proposed rule includes a discussion regarding the Chiropractic Services Demonstration program, the Competitive Bidding Program for Durable Medical Equipment and Provider and Supplier Enrollment
Issues associated with Air Ambulances. (See the Table of Contents for a listing of the specific issues addressed in this proposed rule.)

**DATES :**  To be assured consideration,
comments must be received at one of the addresses provided below, no later than 5 p.m. on August 24, 2010.

**ADDRESSES :**  In commenting, please refer
to file code CMS–1503–P. Because of staff and resource limitations, we cannot accept comments by facsimile (FAX)

transmission.

You may submit comments in one of four ways (please choose only one of the ways listed):

1. Electronically. You may submit electronic comments on this regulation

to http://www.regulations.gov . Follow
the instructions for ‘‘ submitting a

comment. ’’

2. By regular mail. You may mail written comments to the following address only:

Centers for Medicare & Medicaid Services, Department of Health and Human Services, Attention: CMS–1503– P, P.O. Box 8013, Baltimore, MD 21244–

8013.

Please allow sufficient time for mailed
comments to be received before the close of the comment period.

3. By express or overnight mail. You may send written comments to the following address only:

Centers for Medicare & Medicaid Services, Department of Health and
Human Services, Attention: CMS–1503– P, Mail Stop C4–26–05, 7500 Security Boulevard, Baltimore, MD 21244–1850.

4. By hand or courier. If you prefer, you may deliver (by hand or courier) your written comments before the close of the comment period to either of the following addresses:

a. For delivery in Washington, DC—
Centers for Medicare & Medicaid Services, Department of Health and Human Services, Room 445–G, Hubert H. Humphrey Building, 200 Independence Avenue, SW., Washington, DC 20201.

(Because access to the interior of the Hubert H. Humphrey Building is not readily available to persons without Federal government identification, commenters are encouraged to leave their comments in the CMS drop slots located in the main lobby of the building. A stamp-in clock is available for persons wishing to retain a proof of filing by stamping in and retaining an extra copy of the comments being filed.)

b. For delivery in Baltimore, MD—
Centers for Medicare & Medicaid Services, Department of Health and Human Services, 7500 Security Boulevard, Baltimore, MD 21244–1850.

If you intend to deliver your comments to the Baltimore address, please call telephone number (410) 786– 9994 in advance to schedule your
arrival with one of our staff members.

Comments mailed to the addresses indicated as appropriate for hand or courier delivery may be delayed and received after the comment period.

**FOR FURTHER INFORMATION CONTACT :**  Rebecca Cole, (410) 786–4497, for issues

related to physician payment and for
all other issues not identified below. Cheryl Gilbreath, (410) 786–5919, for

issues related to payment for covered outpatient drugs and biologicals. Roechel Kujawa, (410) 786–9111, for

issues related to ambulance services. Glenn McGuirk, (410) 786–5723, for

clinical laboratory issues. Randall Ricktor, (410) 786–4632, for

Federally Qualified Health Center

Issues. Pauline Lapin, (410) 786–6883, for

issues related to the chiropractic
services demonstration BN issue. Troy Barsky, (410)786–8873, or Kristin Bohl, (410)786–8680, for issues related to physician self-referral. Troy Barsky, (410)786–8873, or Fred

Grabau (410)786–0206, for issues related to timely filing rules. Henry Richter, (410)786–4562, or Lisa

Hubbard, (410)786–5472, for issues related to renal dialysis provisions and payments for end-stage renal
disease facilities. Diane Stern, (410)786–1133, for issues

related to the physician quality reporting initiative and incentives for e-prescribing. Sheila Roman, 410–786–6004, or

Pamela Cheetham, 410–786–2259, for issues related to the Physician Resource Use Feedback Program and value-based purchasing. Joel Kaiser, (410)786–4499, for issues

related to the DME provisions. Jim Bossenmeyer, (410)786–9317, for

issues related to provider and supplier enrollment issues.

**SUPPLEMENTARY INFORMATION :** 

Inspection of Public Comments: All
comments received before the close of the comment period are available for viewing by the public, including any personally identifiable or confidential
business information that is included in a comment. We post all comments
received before the close of the comment period on the following Web site as soon as possible after they have
been received: http:// www.regulations.gov. Follow the search
instructions on that Web site to view public comments.

Comments received timely will also be available for public inspection as they are received, generally beginning approximately 3 weeks after publication of a document, at the headquarters of
the Centers for Medicare & Medicaid Services, 7500 Security Boulevard, Baltimore, Maryland 21244, Monday through Friday of each week from 8:30 a.m. to 4 p.m. To schedule an appointment to view public comments, phone 1–800–743–3951.

Table of Contents

To assist readers in referencing sections contained in this preamble, we are providing a table of contents. Some of the issues discussed in this preamble affect the payment policies, but do not require changes to the regulations in the Code of Federal Regulations (CFR). Information on the regulation’s impact appears throughout the preamble, and therefore, is not discussed exclusively in section V. of this proposed rule.

I. Background

A. Development of the Relative Value

System


### 40041 Federal Register / Vol. 75, No. 133 / Tuesday, July 13, 2010 / Proposed Rules

1. Work RVUs 2. Practice Expense Relative Value Units

(PE RVUs) 3. Resource-Based Malpractice (MP) RVUs

4. Refinements to the RVUs 5. Adjustments to RVUs Are Budget

Neutral B. Components of the Fee Schedule

Payment Amounts C. Most Recent Changes to Fee Schedule II. Provisions of the Proposed Rule for the Physician Fee Schedule A. Resource-Based Practice Expense (PE)

Relative Value Units (RVUs)

1. Overview 2. Practice Expense Methodology a. Direct Practice Expense b. Indirect Practice Expense per Hour Data

c. Allocation of PE to Services (i) Direct Costs (ii) Indirect Costs d. Facility and Nonfacility Costs e. Services with Technical Components

(TCs) and Professional Components (PCs)

f. Alternative Data Sources and Public

Comments on Final Rule for 2010 g. PE RVU Methodology (i) Setup File (ii) Calculate the Direct Cost PE RVUs (iii) Create the Indirect Cost PE RVUs (iv) Calculate the Final PE RVUs (v) Setup File Information (vi) Equipment Cost per Minute 3. Proposed PE Revisions for CY 2011 a. Equipment Utilization Rate b. HCPCS Code-Specific PE Proposals (1) Biohazard Bags (2) PE Inputs for Professional Component

(PC) Only and Technical Component (TC) Only Codes Summing to Global Only Codes (3) Equipment Time Inputs for Certain

Diagnostic Tests (4) Cobalt-57 Flood Source (5) Venom Immunotherapy (6) Equipment Redundancy (7) Equipment Duplication (8) Establishing Overall Direct PE Supply

Price Inputs Based on Unit Prices and Quantities
c. AMA RUC Recommendations in CY

2010 for Changes to Direct PE Inputs (1) Electrogastrography and Esophageal

Function Test (2) 64-Slice CT Scanner and Software (3) Cystometrogram (4) Breath Hydrogen Test (5) Radiographic Fluoroscopic Room d. Referral of Existing CPT Codes for AMA

RUC Review e. Updating Equipment and Supply Price

Inputs for Existing Codes B. Malpractice Relative Value Units (RVUs) 1. Background 2. Malpractice RVUs for New and Revised

Services Effective Before the Next 5-Year

Review 3. Revised Malpractice RVUs for Selected

Disc Arthroplasty Services C. Potentially Misvalued Codes Under the

Physician Fee Schedule 1. Valuing Services Under the PFS 2. Identifying, Reviewing, and Validating

the RVUs of Potentially Misvalued

Services Under the PFS a. Background b. Progress in Identifying and Reviewing

Potentially Misvalued Codes c. Validating RVUs of Potentially

Misvalued Codes

3. CY 2011 Identification and Review of

Potentially Misvalued Services a. Codes on the Multi-Specialty Points of

Comparison List b. Codes With Low Work RVUs Commonly

Billed in Multiple Units Per Single

Encounter c. Codes With High Volume and Low Work

RVUs
d. Codes With Site-of-Service-Anomalies

e. Codes With ‘‘ 23-hour ’’ Stays 4. Expanding the Multiple Procedure

Payment Reduction (MPPR) Policy to Additional Nonsurgical Services a. Background b. Proposed CY 2011 Expansion of the

Imaging Technical Component MPPR Policy to Additional Combinations of Imaging Services c. Proposed CY 2011 Expansion of the

MPPR Policy to Therapy Services 5. High Cost Supplies a. Backgroundb. Future Updates to the Prices of HighCost Supplies D. Geographic Practice Cost Indices

(GPCIs) 1. Background 2. GPCI Update a. Physician Work GPCIs b. Practice Expense GPCIs (1) The Affordable Care Act Requirements

for PE GPCIs (2) Summary of CY 2011 Proposed PE

GPCIs c. Malpractice GPCIs d. General GPCI Update Process 3. Payment Localities E. Physician Fee Schedule Update for CY

2011 1. Rebasing the Medicare Economic Index

(MEI) a. Background

b. Use of More Current Data c. Rebasing and Revising Expense

Categories in the MEI (1) Developing the Weights for Use in the

MEI (2) Physician’s Own Time (3) Physician’s Practice Expenses (A) Non-Physician Employee

Compensation (B) Office Expenses (C) Professional Liability Insurance (PLI)

Expense (D) Medical Equipment Expenses (E) Medical Supplies Expenses (F) All Other Professional Expenses

d. Selection of Price Proxies for Use in the

MEI (1) Expense Categories in the MEI (A) Physician’s Own Time (Physician

Compensation) (B) Nonphysician Employee Compensation (C) Utilities (D) Chemicals (E) Paper (F) Rubber and Plastics (G) Telephone (H) Postage (I) All Other Labor-Intensive Services (J) Fixed Capital (K) Moveable Capital (L) Professional Liability Insurance (M) Medical Equipment (N) Other Professional Expenses (2) Productivity Adjustment to the MEI e. Results of Rebasing f. Adjustments to the RVU Shares to Match

the Proposed Rebased MEI Weights III. Code-Specific Issues for the PFS

A. Therapy Services 1. Outpatient Therapy Caps for CY 2011 2. Alternatives to Therapy Caps a. Background
b. Current Activities c. Potential Short-Term Approaches to

Therapy Caps B. Diabetes Self-Management Training

(DSMT) Services (HCPCS Codes G0108 and G0109) 1. Background 2. Proposed Payment for DSMT Services
C. End-State Renal Disease Related

Services for Home Dialysis (CPT Codes 90963, 90964, 90965, and 90966) 1. End-Stage Renal Disease Home Dialysis

Monthly Capitation Payment Services (CPT Codes 90963, 90964, 90965, and 90966) 2. Daily and Monthly ESRD-Related

Services (CPT Codes 90951 Through 90970) D. Portable X-Ray Set-Up (HCPCS Code

Q0092) E. Pulmonary Rehabilitation Services

(HCPCS Code G0424) F. Application of Tissue-Cultured Skin

Substitutes to Lower Extremities (HCPCS Codes GXXX1 and GXXX2) G. Canalith Repositioning (CPT Code

95992)
H. Intranasal/Oral Immunization Codes

(CPT Codes 90467, 90468, 90473, and 90474)

I. Refinement Panel Process J. Remote Cardiac Monitoring Services

(CPT Codes 93012, 93229, 93268, and 93271)

IV. Medicare Telehealth Services for the Physician Fee Schedule A. Billing and Payment for Telehealth

Services 1. History 2. Current Telehealth Billing and Payment

Policies B. Requests for Adding Services to the List

of Medicare Telehealth Services C. Submitted Requests for Addition to the

List of Telehealth Services for CY 2011 (1) Individual KDE Services (2) Individual DSMT Services (3) Group KDE, MNT, DSMT, and HBAI

Services (4) Initial, Subsequent, and Discharge Day

Management Hospital Care Services (5) Initial, Subsequent, Discharge Day

Management, and Other Nursing Facility

Care Services (6) Neuropsychological Testing Services (7) Speech-Language Pathology Services (8) Home Wound Care Services D. Summary of CY 2011 Telehealth

Proposals

V. Provisions of the Patient Protection and

Affordable Care Act of 2010 A. Section 3002: Improvements to the

Physician Quality Reporting System


### 40042 Federal Register / Vol. 75, No. 133 / Tuesday, July 13, 2010 / Proposed Rules

B. Section 3003: Improvements to the

Physician Feedback Program and Section 3007: Value-Based Payment Modifier Under the Physician Fee Schedule 1. Background

2. Effect of the Patient Protection and

Affordable Care Act on the Program 3. Implementation of Sections 3003 and

3007 of the Affordable Care Act 4. Comments Sought on Specific Policy

Topics Related to Both PPACA Sections

3003 and 3007 a. Risk Adjustment

b. Attribution c. Benchmarking and Peer Groups d. Cost and Quality Measures and

Composite Measurement
C. Section 3102: Extension of the Work

Geographic Index Floor and Revisions to the Practice Expense Geographic Adjustment Under the Medicare Physician Fee Schedule, and Protections for Frontier States as Amended by

Section 10324 of the Affordable Care Act D. Section 3103: Extension of Exceptions

Process for Medicare Therapy Caps E. Section 3104: Extension of Payment for

Technical Component of Certain Physician Pathology Services

F. Section 3105: Extension of Ambulance

Add-On G. Section 3107: Extension of Physician

Fee Schedule Mental Health Add-On H. Section 3108: Permitting Physician

Assistants to Order Post-Hospital

Extended Care Services I. Section 3111: Payment for Bone Density

Tests J. Section 3114: Improved Access for

Certified Nurse Midwife Services

K. Section 3122: Extension of Medicare

Reasonable Costs Payments for Certain Clinical Diagnostic Laboratory Tests Furnished to Hospital Patients in Certain

Rural Areas

L. Section 3134: Misvalued Codes Under

the Physician Fee Schedule

M. Section 3135: Modification of

Equipment Utilization Factor for Advanced Imaging Services 1. Adjustment in Practice Expense to

Reflect Higher Presumed Utilization 2. Adjustment in Technical Component

‘‘ Discount ’’ on Single-Session Imaging to Consecutive Body Parts N. Section 3136: Revision for Payment for

Power-Driven Wheelchairs a. Payment Rules for Power Wheelchairs b. Elimination of Lump Sum Payment for

Standard Power Wheelchairs c. Revision of Payment Amounts for Power

Wheelchairs O. Section 3139: Payment for Biosimilar

Biological Products

P. Section 3401: Revision of Certain Market

Basket Updates and Incorporation of Productivity Improvements Into Market Basket Updates That Do Not Already Incorporate Such Improvements

1. ESRD Market Basket Discussion 2. Productivity Adjustment Regarding

Ambulance and Clinical Laboratory Fee

Schedules a. Ambulatory Surgery Centers (ASCs) b. Ambulance Fee Schedule (AFS)

c. Clinical Lab Fee Schedule Q. Section 4103: Medicare Coverage of Annual Wellness Visit Providing a
Personalized Prevention Plan 1. Background a. Medicare Coverage of Preventive

Physical Examinations and Routine Checkups b. Requirements for Coverage of an Annual

Wellness Visit 2. Proposed Revisions a. Proposed Revisions to § 411.15,

Particular Services Excluded From Coverage b. Proposed Revisions to Part 410, Subpart

B—Medical and Other Health Services (1) Definitions (2) Requirements of the First Visit for

Personalized Prevention Plan Services (3) Requirements of Subsequent Visits for

Personalized Prevention Plan Services 3. Payment for the Annual Wellness Visit

Providing Personalized Prevention Plan Services (PPPS)
R. Section 4104: Removal of Barriers to

Preventive Services in Medicare
1. Definition of ‘‘ Preventive Services ’’
2. Deductible and Coinsurance for

Preventive Services
3. Extension of Waiver of Deductible to

Services Furnished in Connection With
or in Relation to a Colorectal Cancer Screening Test that Becomes Diagnostic or Therapeutic S. Section 5501: Expanding Access to

Primary Care Services and General Surgery Services 1. Section 5501(a): Incentive Payment

Program for Primary Care Services a. Background b. Proposed Primary Care Incentive

Payment Program (PCIP) 2. Section 5501(b): Incentive Payment

Program for Major Surgical Procedures

Furnished in Health Professional Shortage Areas a. Background b. Proposed HPSA Surgical Incentive

Payment Program (HSIP) 3. Sections 5501(a) and (b) of the

Affordable Care Act and Payment for Critical Access Hospital Professional Services Under the Optional Method T. Section 6003: Disclosure Requirements

for In-Office Ancillary Services Exception to the Prohibition on Physician Self-Referral for Certain Imaging Services 1. Background 2. Proposed Disclosure Requirement

U. Section 6404: Maximum Period for

Submission of Medicare Claims Reduced

to Not More Than 12 Months 1. Background

2. Provisions of Affordable Care Act V. Section 6410 and MIPPA: Adjustments to

the Medicare Durable Medical Equipment, Prosthetics, Orthotics, and Supplies Competitive Acquisition Program 1. Background 2. Subdividing Large MSAs Under Round

2 3. Exclusions of Certain Areas After Round

2 and Prior to 2015 4. Expansion of Round 2 W. Section 10501(i)(3)—Proposed

Collection of HCPCS Data for Development and Implementation of a Prospective Payment System for the Medicare Federally Qualified Health Center Program VI. Other Provisions of the Proposed Regulation A. Part B Drug Payment: Average Sales

Price (ASP) Issues

1. ‘‘ Carry Over ’’ ASP 2. Partial Quarter ASP Data 3. Determining the Payment Amount for

Drugs and Biologicals Which Include

Intentional Overfill
4. WAMP/AMP

5. Price Substitutions

a. AMP threshold

b. AMP Price Substitution B. Ambulance Fee Schedule: Proposed

Policy for Reporting Units When Billing for Ambulance Fractional Mileage 1. Policy for Reporting Units When Billing

for Ambulance Fractional Mileage or

Other Services a. History of Medicare Ambulance Services (1) Statutory Coverage of Ambulance

Services (2) Medicare Regulations for Ambulance

Services b. Mileage Reporting (1) Background and Current Process for

Reporting Ambulance Mileage (2) Potential for Inaccuracies in Reporting

Units and Associated Risks (3) Billing of Fractional Units for Mileage C. Clinical Laboratory Fee Schedule:

Signature on Requisition D. Discussion of Chiropractic Services

Demonstration E. Provisions Related to Payment for Renal

Dialysis Services Furnished by EndStage Renal Disease (ESRD) Facilities

1. CY 2005 Provisions

2. CY 2006 Provisions

3. CY 2007 Provisions

4. CY 2008 Provisions 5. CY 2009 Updates 6. CY 2010 Updates 7. Proposals for CY 2011

a. MIPPA Provisions
b. Affordable Care Act Provision 8. Proposed Update to the Drug Add-On

Adjustment to the Composite Rate a. Estimating Growth in Expenditures for

Drugs and Biologicals for CY 2010 b. Estimating Growth in Expenditures for

Drugs and Biologicals in CY 2011 c. Estimating Per Patient Growth d. Applying the Proposed Growth Update

to the Drug Add-On Adjustment e. Proposed Update to the Drug Add-On

Adjustment f. Proposed Update to the Geographic

Adjustments to the Composite Rate g. Proposed Updates to Core-Based

Statistical Area (CBSA) Definitions h. Proposed Updated Wage Index Values i. Reduction to the ESRD Wage Index Floor j. Proposed Wage Index Values for Areas

With No Hospital Data k. Budget Neutrality Adjustment l. ESRD Wage Index Tables

F. Issues Related to the Medicare

Improvements for Patients and Providers Act of 2008 (MIPPA) 1. Section 131: Physician Payment,

Efficiency, and Quality Improvements—


### 40043 Federal Register / Vol. 75, No. 133 / Tuesday, July 13, 2010 / Proposed Rules

Physician Quality Reporting Initiative (PQRI) a. Program Background and Statutory

Authority b. Incentive Payments for the 2011 PQRI c. Proposed 2011 Reporting Periods for

Individual Eligible Professionals d. Proposed 2011 PQRI Reporting

Mechanisms for Individual Eligible

Professionals (1) Proposed Requirements for Individual

Eligible Professionals Who Choose the Claims-Based Reporting Mechanism (2) Proposed Requirements for Individual

Eligible Professionals Who Choose the Registry-Based Reporting Mechanism (3) Proposed Requirements for Individual

Eligible Professionals Who Choose the EHR-Based Reporting Mechanism (4) Proposed Qualification Requirements

for Registries (5) Proposed Qualification Requirements

for EHR Vendors and Their Products e. Proposed Criteria for Satisfactory

Reporting of Individual Quality Measures for Individual Eligible

Professionals f. Proposed Criteria for Satisfactory

Reporting Measures Groups for Individual Eligible Professionals g. Proposed Reporting Option for

Satisfactory Reporting on Quality Measures by Group Practices (1) Group Practice Reporting Option—

GPRO I (2) Process for Physician Group Practices to

Participate as Group Practices and Criteria for Satisfactory Reporting h. Statutory Requirements and Other

Considerations for 2011 PQRI Measures (1) Statutory Requirements for 2011 PQRI

Measures (2) Other Considerations for Measures

Proposed for Inclusion in the 2011 PQRI i. Proposed 2011 PQRI Quality Measures

for Individual Eligible Professionals (1) Proposed 2011 Individual Quality

Measures Selected From the 2010 PQRI Quality Measures Set Available forClaims Based Reporting and RegistryBased Reporting (2) Proposed 2011 Individual Quality

Measures Selected From the 2010 PQRI Quality Measures Set Available for Registry Based Reporting Only (3) New Individual Quality Measures

Selected for Proposed for 2011 (4) Proposed 2011 Measures Available for

EHR-Based Reporting (5) Measures Proposed for Inclusion in

2011 Measures Groups j. Proposed 2011 PQRI Quality Measures

for Physician Groups Selected to Participate in the Group Practice Reporting Option k. Public Reporting of PQRI Data

l. Affordable Care Act Extension of

Incentive for PQRI Program m. Affordable Care Act Timely Feedback

Reports n. Affordable Care Act Informal Appeals

Process
o. Affordable Care Act Maintenance of

Certification Program p. Affordable Care Act Physician Compare

Web Site q. Affordable Care Act Integration of PQRI

EHR Measures and HITECH Measures in

Years After 2011

2. Section 132: Incentives for Electronic

Prescribing (eRx)—The Electronic Prescribing Incentive Program a. Program Background and Statutory

Authority b. The 2011 Reporting Period for the eRx

Incentive Program c. Proposed Criteria for Determination of

Successful Electronic Prescriber for Eligible Professionals (1) Reporting the Electronic Prescribing

Measure (2) The Reporting Denominator for the

Electronic Prescribing Measure (3) Qualified Electronic Prescribing

System—Required Functionalities and

Part D eRx Standards (4) The Reporting Numerator for the

Electronic Prescribing Measure (5) Criteria for Successful Reporting of the

Electronic Prescribing Measure

d. Determination of the 2011 Incentive

Payment Amount for Individual Eligible

Professionals Who Are Successful

Electronic Prescribers e. Proposed Reporting Option for

Satisfactory Reporting of the Electronic Prescribing Measure by Group Practices (1) Definition of ‘‘ Group Practice ’’ (2) Process for Group Practices to

Participate as Group Practices and Criteria for Successful Reporting of the Electronic Prescribing Measure by Group

Practices f. Public Reporting of Names of Successful

Electronic Prescribers G. DMEPOS Competitive Bidding Program

Issues 1. Implementation of a National Mail Order

Competitive Bidding Program for Diabetic Testing Supplies

a. Revision of the Definition of ‘‘ Mail

Order ’’ (1) Legislative and Regulatory History of

the Medicare Durable Medical Equipment, Prosthetics, Orthotics, and Supplies (DMEPOS) Competitive Bidding Program (2) National Mail Order Competitive

Bidding Program (3) The MIPPA and the Medicare DMEPOS

Competitive Bidding Program (4) Competition for Mail Order Diabetic

Supplies Under Round 1 of the Medicare DMEPOS Competitive Bidding Program b. Overview of Proposed Rule c. Future Competitions for Diabetic Testing

Supplies

d. Definition of Mail Order Item e. Special Rule in Case of National Mail

Order Competition for Diabetic Testing Strips f. Anti-Switching Rule in Case of National

Mail Order Competition for Diabetic Test Strips 2. Off-the-Shelf (OTS) Orthotics Exemption 3. Changes to Payment for Oxygen and

Oxygen Equipment a. Background b. Furnishing Oxygen Equipment After the

36-Month Rental Period (Cap) c. Furnishing Oxygen Equipment During

the 36-Month Rental Period (Cap) 4. Grandfathering Rules Resulting in Extra Payments to Contract Suppliers Under the DMEPOS Competitive Bidding Program 5. Appeals Process a. Background b. Proposed Appeals Process (1) Purpose and Definitions: (§ 414.402) (2) Applicability (3) Contract Termination (4) Notice of Termination (5) Corrective Action Plan (6) Right to Request a Hearing by the CBIC

Hearing Officer (7) Scheduling of the Hearing (8) Burden of Proof (9) Role of the Hearing Officer (10) CMS’s Final Determination (11) Effective Date of the Contract

Termination (12) Effect of Contract Termination H. Provider and Supplier Enrollment Issue:

Air Ambulance Provision
I. Technical Corrections 1. Physical Therapy, Occupational

Therapy, and Speech-Language Pathology 2. Scope of Benefits VII. Collection of Information Requirements VIII. Response to Comments IX. Regulatory Impact Analysis

A. RVU Impacts 1. Resource Based Work, PE, and

Malpractice RVUs 2. CY 2011 PFS Impact Discussion a. Changes in RVUs b. Combined Impact B. Geographic Practice Cost Indices (GPCIs) C. Rebasing and Revising of the MEI

D. The Affordable Care Act Provisions 1. Section 3103: Extension of Exceptions

Process for Medicare Therapy Caps 2. Section 3104: Extension of Payment for

Technical Component of Certain Physician Pathology Services

3. Sections 3105 and 10311: Extension of

Ambulance Add-Ons 4. Section 3107: Extension of Physician Fee

Schedule Mental Health Add-On 5. Section 3111: Payment for Bone Density

Tests
6. Section 3122: Extension of Medicare

Reasonable Costs Payments for Certain Clinical Diagnostic Laboratory Tests Furnished to Hospital Patients in Certain

Rural Areas

7. Section 3135: Modification of

Equipment Utilization Factor for Advanced Imaging Services 8. Section 3136: Revisions in Payments for

Power Wheelchairs

9. Section 3401: Revisions of Certain

Market Basket Updates and Incorporation of Productivity Adjustments 10. Section 4103: Medicare Coverage of

Annual Wellness Visit Providing a

Personalized Prevention Plan

11. Section 4104: Removal of Barriers to

Preventive Services in Medicare 12. Section 5501: Expanding Access to

Primary Care Services and General Surgery Services 13. Section 6003: Disclosure Requirements

for In-Office Ancillary Services Exception to the Prohibition of Physician Self-referral for Certain Imaging Services


### 40044 Federal Register / Vol. 75, No. 133 / Tuesday, July 13, 2010 / Proposed Rules

14. Section 6404: Maximum Period for

Submission of Medicare Claims Reduced

to Not More Than 12 Months E. Other Provisions of the Proposed

Regulation 1. Part B Drug Payment: ASP Issues 2. Ambulance Fee Schedule: Proposed

Policy for Reporting Units When Billing for Ambulance Fractional Mileage 3. Chiropractic Services Demonstration 4. Renal Dialysis Services Furnished by

ESRD Facilities 5. Section 131(b) of the MIPPA: Physician

Payment, Efficiency, and Quality Improvements—Physician Quality Reporting Initiative (PQRI)

6. Section 132 of the MIPPA: Incentives for

Electronic Prescribing (eRx)—The eRx Incentive Program 7 RHC/FQHC Issues 8. Durable Medical Equipment-Related

Issues a. Off-the-Shelf (OTS) Orthotics Exemption b. Changes to Payment for Oxygen

Equipment
F. Alternatives Considered G. Impact on Beneficiaries H. Accounting Statement Regulation Text Addendum A—Explanation and Use of

Addendum B Addendum B—Proposed Relative Value

Units and Related Information Used in Determining Medicare Payments for CY

2011 Addendum C—[Reserved] Addendum D—Proposed CY 2011 Geographic Adjustment Factors (GAFs) Addendum E—Proposed CY 2011 Geographic Practice Cost Indices (GPCIs) by State and Medicare Locality Addendum F—Proposed CY 2011 Diagnostic Imaging Services Subject to the Multiple Procedure Payment Reduction Addendum G—CPT/HCPCS Imaging Codes Defined by Section 5102(b) of the DRA Addendum H—Proposed CY 2011 ‘‘ Always Therapy ’’ Services* Subject to the Multiple Procedure Payment Reduction Addendum I—[Reserved] Addendum J—[Reserved] Addendum K—Proposed CY 2011 ESRD Wage Index for Urban Areas Based on

CBSA Labor Market Areas Addendum L—Proposed CY 2011 ESRD Wage Index for Rural Areas Based on

CBSA Labor Market Areas

Acronyms

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

AA Anesthesiologist assistant

AACVPR American Association of

Cardiovascular and Pulmonary

Rehabilitation

AANA American Association of Nurse

Anesthetists

ABMS American Board of Medical

Specialties ABN Advanced Beneficiary Notice

ACA ‘‘ Affordable Care Act ’’ ACC American College of Cardiology

ACGME Accreditation Council on Graduate

Medical Education ACLS Advanced cardiac life support ACR American College of Radiology

AED Automated external defibrillator AFROC Association of Freestanding

Radiation Oncology Centers

AHA American Heart Association AHFS–DI American Hospital Formulary

Service—Drug Information AHRQ [HHS’] Agency for Healthcare

Research and Quality

AMA American Medical Association

AMA–DE American Medical Association

Drug Evaluations AMP Average manufacturer price AO Accreditation organization AOA American Osteopathic Association APA American Psychological Association APTA American Physical Therapy

Association ARRA American Recovery and

Reinvestment Act (Pub. L. 111–5) ASC Ambulatory surgical center ASP Average sales price ASRT American Society of Radiologic

Technologists ASTRO American Society for Therapeutic

Radiology and Oncology

ATA American Telemedicine Association AWP Average wholesale price BBA Balanced Budget Act of 1997 (Pub. L.

105–33) BBRA [Medicare, Medicaid and State Child

Health Insurance Program] Balanced Budget Refinement Act of 1999 (Pub. L. 106–113) BIPA Medicare, Medicaid, and SCHIP

Benefits Improvement Protection Act of 2000 (Pub. L. 106–554) BLS Basic Life support BN Budget neutrality BPM Benefit Policy Manual CABG Coronary artery bypass graft CAD Coronary artery disease CAH Critical access hospital

CAHEA Committee on Allied Health

Education and Accreditation CAP Competitive acquisition program CBIC Competitive Bidding Implementation

Contractor CBP Competitive Bidding Program

CBSA Core-Based Statistical Area

CF Conversion factor CfC Conditions for Coverage CFR Code of Federal Regulations CKD Chronic kidney disease CLFS Clinical laboratory fee schedule

CMA California Medical Association CMHC Community mental health center CMP Civil money penalty

CMS Centers for Medicare & Medicaid

Services CNS Clinical nurse specialist CoP Condition of participation COPD Chronic obstructive pulmonary

disease CORF Comprehensive Outpatient

Rehabilitation Facility

COS Cost of service CPEP Clinical Practice Expert Panel

CPI Consumer Price Index CPI–U Consumer price index for urban

customers CPR Cardiopulmonary resuscitation CPT [Physicians’] Current Procedural Terminology (4th Edition, 2002, copyrighted by the American Medical Association)

CR Cardiac rehabilitation CRNA Certified registered nurse anesthetist CRP Canalith repositioning CRT Certified respiratory therapist

CSW Clinical social worker CY Calendar year DEA Drug Enforcement Agency DHS Designated health services DME Durable medical equipment DMEPOS Durable medical equipment,

prosthetics, orthotics, and supplies DOQ Doctor’s Office Quality

DOS Date of service DRA Deficit Reduction Act of 2005 (Pub. L.

109–171) DSMT Diabetes self-management training E/M Evaluation and management EDI Electronic data interchange EEG Electroencephalogram

EHR Electronic health record EKG Electrocardiogram EMG Electromyogram EMTALA Emergency Medical Treatment

and Active Labor Act EOG Electro-oculogram EPO Erythopoeitin ESRD End-stage renal disease

FAX Facsimile FDA Food and Drug Administration (HHS)

FFS Fee-for-service

FR Federal Register GAF Geographic adjustment factor GAO General Accounting Office GEM Generating Medicare [Physician

Quality Performance Measurement Results]

GFR Glomerular filtration rate GPO Group purchasing organization GPCI Geographic practice cost index HAC Hospital-acquired conditions

HBAI Health and behavior assessment and

intervention HCPAC Health Care Professional Advisory

Committee
HCPCS Healthcare Common Procedure

Coding System HCRIS Healthcare Cost Report Information

System HDRT High dose radiation therapy HH PPS Home Health Prospective Payment

System HHA Home health agency HHRG Home health resource group HHS [Department of] Health and Human

Services HIPAA Health Insurance Portability and

Accountability Act of 1996 (Pub. L. 104– 191) HIT Health information technology HITECH Health Information Technology for

Economic and Clinical Health Act (Title IV of Division B of the Recovery Act, together

with Title XIII of Division A of the Recovery Act) HITSP Healthcare Information Technology

Standards Panel HIV Human immunodeficiency virus HOPD Hospital outpatient department HPSA Health Professional Shortage Area

HRSA Health Resources Services

Administration (HHS) IACS Individuals Access to CMS Systems

ICD International Classification of Diseases


### 40045 Federal Register / Vol. 75, No. 133 / Tuesday, July 13, 2010 / Proposed Rules

ICF Intermediate care facilities

ICR Intensive cardiac rehabilitation ICR Information collection requirement IDTF Independent diagnostic testing facility IFC Interim final rule with comment period IMRT Intensity-Modulated Radiation

Therapy IPPE Initial preventive physical

examination IPPS Inpatient prospective payment system
IRS Internal Revenue Service

ISO Insurance services office

IVD Ischemic Vascular Disease IVIG Intravenous immune globulin IWPUT Intra-service work per unit of time JRCERT Joint Review Committee on

Education in Radiologic Technology KDE Kidney disease education LCD Local coverage determination MA Medicare Advantage MA–PD Medicare Advantage—Prescription

Drug Plans MAV Measure Applicability Validation MCMP Medicare Care Management

Performance

MDRD Modification of Diet in Renal

Disease MedCAC Medicare Evidence Development

and Coverage Advisory Committee (formerly the Medicare Coverage Advisory Committee (MCAC)) MedPAC Medicare Payment Advisory

Commission
MEI Medicare Economic Index MIEA–TRHCA Medicare Improvements and

Extension Act of 2006 (that is, Division B

of the Tax Relief and Health Care Act of 2006 (TRHCA)) (Pub. L. 109–432) MIPPA Medicare Improvements for Patients

and Providers Act of 2008 (Pub. L. 110– 275) MMA Medicare Prescription Drug,

Improvement, and Modernization Act of 2003 (Pub. L. 108–173) MMSEA Medicare, Medicaid, and SCHIP

Extension Act of 2007 (Pub. L. 110–173) MNT Medical nutrition therapy

MOC Maintenance of certification MP Malpractice MPPR Multiple procedure payment

reduction MQSA Mammography Quality Standards

Act of 1992 (Pub. L. 102–539) MRA Magnetic resonance angiography MRI Magnetic resonance imaging MSA Metropolitan statistical area NBRC National Board for Respiratory Care NCD National Coverage Determination NCQDIS National Coalition of Quality

Diagnostic Imaging Services NDC National drug code NF Nursing facility

NISTA National Institute of Standards and

Technology Act NP Nurse practitioner
NPI National Provider Identifier NPP Nonphysician practitioner NQF National Quality Forum NRC Nuclear Regulatory Commission OACT [CMS’] Office of the Actuary OBRA Omnibus Budget Reconciliation Act ODF Open door forum OGPE Oxygen generating portable

equipment OIG Office of Inspector General OMB Office of Management and Budget ONC [HHS’] Office of the National

Coordinator for Health IT OPPS Outpatient prospective payment

system OSCAR Online Survey and Certification

and Reporting PA Physician assistant

PAT Performance assessment tool PC Professional component PCI Percutaneous coronary intervention PDP Prescription drug plan PE Practice expense PE/HR Practice expense per hour PEAC Practice Expense Advisory

Committee PERC Practice Expense Review Committee PFS Physician Fee Schedule PGP [Medicare] Physician Group Practice

PHI Protected health information PHP Partial hospitalization program PIM [Medicare] Program Integrity Manual PLI Professional liability insurance

POA Present on admission

POC Plan of care PPI Producer price index PPIS Physician Practice Information Survey PPS Prospective payment system PPTA Plasma Protein Therapeutics

Association PQRI Physician Quality Reporting Initiative PR Pulmonary rehabilitation PRA Paperwork Reduction Act PSA Physician scarcity areas PT Physical therapy PTCA Percutaneous transluminal coronary

angioplasty PVBP Physician and Other Health

Professional Value-Based Purchasing Workgroup RA Radiology assistant RBMA Radiology Business Management

Association RFA Regulatory Flexibility Act

RHC Rural health clinic RIA Regulatory impact analysis RN Registered nurse RNAC Reasonable net acquisition cost RPA Radiology practitioner assistant RRT Registered respiratory therapist RUC [AMA’s Specialty Society] Relative

(Value) Update Committee

RVU Relative value unit

SBA Small Business Administration SGR Sustainable growth rate SLP Speech-language pathology SMS [AMA’s] Socioeconomic Monitoring

System SNF Skilled nursing facility SOR System of record SRS Stereotactic radiosurgery STARS Services Tracking and Reporting

System TC Technical Component

TIN Tax identification number

TRHCA Tax Relief and Health Care Act of

2006 (Pub. L. 109–432) TTO Transtracheal oxygen UPMC University of Pittsburgh Medical

Center USDE United States Department of

Education USP–DI United States Pharmacopoeia-Drug

Information VBP Value-based purchasing WAMP Widely available market price I. Background

Since January 1, 1992, Medicare has paid for physicians’ services under section 1848 of the Social Security Act (the Act), ‘‘ Payment for Physicians’

Services. ’’ The Act requires that payments under the physician fee schedule (PFS) are based on national uniform relative value units (RVUs)
based on the relative resources used in furnishing a service. Section 1848(c) of the Act requires that national RVUs be established for physician work, practice expense (PE), and malpractice expense.
Before the establishment of the resource-based relative value system, Medicare payment for physicians’
services was based on reasonable charges. We note that throughout this proposed rule, unless otherwise noted,
the term ‘‘ practitioner ’’ is used to describe both physicians and eligible nonphysician practitioners (such as physician assistants, nurse practitioners, clinical nurse specialists, certified nurse midwives, psychologists, or social workers) that are permitted to furnish
and bill Medicare under the PFS for the
services under discussion.

A. Development of the Relative Value System

1. Work RVUs

The concepts and methodology underlying the PFS were enacted as part of the Omnibus Budget Reconciliation Act (OBRA) of 1989 (Pub. L. 101–239), and OBRA 1990, (Pub. L. 101–508). The final rule, published on November 25, 1991 (56 FR 59502), set forth the fee schedule for payment for physicians’ services beginning January 1, 1992. Initially, only the physician work RVUs were resource-based, and the PE and malpractice RVUs were based on average allowable charges.

The physician work RVUs established for the implementation of the fee schedule in January 1992 were developed with extensive input from the physician community. A research
team at the Harvard School of Public Health developed the original physician
work RVUs for most codes in a cooperative agreement with the Department of Health and Human Services (DHHS). In constructing the code-specific vignettes for the original physician work RVUs, Harvard worked with panels of experts, both inside and outside the Federal government, and obtained input from numerous physician specialty groups.

Section 1848(b)(2)(B) of the Act specifies that the RVUs for anesthesia
services are based on RVUs from a uniform relative value guide, with appropriate adjustment of the


### 40046 Federal Register / Vol. 75, No. 133 / Tuesday, July 13, 2010 / Proposed Rules

conversion factor (CF), in a manner to
assure that fee schedule amounts for
anesthesia services are consistent with those for other services of comparable value. We established a separate CF for anesthesia services, and we continue to
utilize time units as a factor in determining payment for these services. As a result, there is a separate payment methodology for anesthesia services.

We establish physician work RVUs for
new and revised codes based on our
review of recommendations received
from the American Medical Association’s (AMA) Specialty Society Relative Value Update Committee (RUC).

2. Practice Expense Relative Value Units (PE RVUs)

Section 121 of the Social Security Act Amendments of 1994 (Pub. L. 103–432), enacted on October 31, 1994, amended section 1848(c)(2)(C)(ii) of the Act and required us to develop resource-based PE RVUs for each physician’s service beginning in 1998. We were to consider general categories of expenses (such as office rent and wages of personnel, but excluding malpractice expenses) comprising PEs.

Section 4505(a) of the Balanced Budget Act of 1997 (BBA) (Pub. L. 105– 33), amended section 1848(c)(2)(C)(ii) of the Act to delay implementation of the resource-based PE RVU system until January 1, 1999. In addition, section 4505(b) of the BBA provided for a 4-year transition period from charge-based PE
RVUs to resource-based RVUs.

We established the resource-based PE RVUs for each physicians’ service in a final rule, published November 2, 1998 (63 FR 58814), effective for services
furnished in 1999. Based on therequirement to transition to a resourcebased system for PE over a 4-year period, resource-based PE RVUs did not become fully effective until 2002.

This resource-based system was based on two significant sources of actual PE data: the Clinical Practice Expert Panel (CPEP) data; and the AMA’s Socioeconomic Monitoring System (SMS) data. The CPEP data were collected from panels of physicians, practice administrators, and nonphysicians (for example, registered nurses (RNs)) nominated by physician specialty societies and other groups. The CPEP panels identified the direct inputs required for each physician’s service in both the office setting and out-of-office setting. We have since refined and revised these inputs based
on recommendations from the RUC. The AMA’s SMS data provided aggregate specialty-specific information on hours
worked and PEs. Separate PE RVUs are established for procedures that can be performed in both a nonfacility setting, such as a physician’s office, and a facility setting, such as a hospital outpatient department. The difference between the facility and nonfacility RVUs reflects the fact that a facility typically receives separate payment from Medicare for its costs of providing the service, apart from payment under the PFS. The nonfacility RVUs reflect all of the direct and indirect PEs of providing a particular service.

Section 212 of the Balanced Budget Refinement Act of 1999 (BBRA) (Pub. L. 106–113) directed the Secretary of Health and Human Services (the Secretary) to establish a process under which we accept and use, to the maximum extent practicable and consistent with sound data practices, data collected or developed by entities and organizations to supplement the data we normally collect in determining the PE component. On May 3, 2000, we published the interim final rule (65 FR 25664) that set forth the criteria for the submission of these supplemental PE survey data. The criteria were modified in response to comments received, and published in the Federal Register (65 FR 65376) as part of a November 1, 2000 final rule. The PFS final rules published in 2001 and 2003, respectively, (66 FR 55246 and 68 FR 63196) extended the period during which we would accept these supplemental data through March

1, 2005.

In the calendar year (CY) 2007 PFS final rule with comment period (71 FR 69624), we revised the methodology forcalculating direct PE RVUs from the topdown to the bottom-up methodology beginning in CY 2007 and provided for a 4-year transition for the new PE RVUs under this new methodology. This
transition ended in CY 2010 and direct
PE RVUs are calculated in CY 2011 using this methodology, unless
otherwise noted.

In the CY 2010 PFS final rule with comment period, we updated the PE/ hour (HR) data that are used in the
calculation of PE RVUs for most specialties (74 FR 61749). For this update, we used the Physician Practice Information Survey (PPIS) conducted by the AMA. The PPIS is a multispecialty, nationally representative, PE survey of both physicians and nonphysician practitioners (NPPs) using a survey instrument and methods highly
consistent with those of the SMS and the supplemental surveys used prior to CY 2010. We note that in CY 2010, for oncology, clinical laboratories, and independent diagnostic testing facilities (IDTFs), we continued to use the supplemental survey data to determine PE/HR values (74 FR 61752).

3. Resource-Based Malpractice (MP)

RVUs

Section 4505(f) of the BBA amended section 1848(c) of the Act requiring us to implement resource-based malpractice (MP) RVUs for services
furnished on or after 2000. The
resource-based MP RVUs were implemented in the PFS final rule published November 2, 1999 (64 FR 59380). The MP RVUs were based on malpractice insurance premium data
collected from commercial and physician-owned insurers from all the States, the District of Columbia, and

Puerto Rico.

4. Refinements to the RVUs

Section 1848(c)(2)(B)(i) of the Act requires that we review all RVUs no lessoften than every 5 years. The first FiveYear Review of the physician work RVUs was published on November 22, 1996 (61 FR 59489) and was effective in
1997. The second Five-Year Review was published in the CY 2002 PFS final rule with comment period (66 FR 55246) and
was effective in 2002. The third FiveYear Review of physician work RVUs was published in the CY 2007 PFS final rule with comment period (71 FR 69624) and was effective on January 1, 2007. ( Note: Additional codes relating to the third Five-Year Review of physician
work RVUs were addressed in the CY
2008 PFS final rule with commentperiod (72 FR 66360).) The fourth FiveYear Review of physician work RVUs
was initiated in the CY 2010 PFS final rule with comment period where we
solicited candidate codes from the public for this review (74 FR 61941). Changes due to the fourth Five-Year Review of physician work RVUs will be effective January 1, 2012.

In 1999, the AMA’s RUC established the Practice Expense Advisory Committee (PEAC) for the purpose of refining the direct PE inputs. Through March 2004, the PEAC provided recommendations to CMS for over 7,600 codes (all but a few hundred of the codes currently listed in the AMA’s Current Procedural Terminology (CPT) codes). As part of the CY 2007 PFS final rule with comment period (71 FR69624), we implemented a new bottomup methodology for determining
resource-based PE RVUs and transitioned the new methodology over a 4-year period. A comprehensive review of PE was undertaken prior to the 4-year transition period for the new PE methodology from the top-down to the bottom-up methodology, and this transition was completed in CY 2010. In


### 40047 Federal Register / Vol. 75, No. 133 / Tuesday, July 13, 2010 / Proposed Rules

CY 2010, we also incorporated the newPPIS data to update the specialtyspecific PE/HR data used to develop PE RVUs. Therefore, the next Five-Year
Review of PE RVUs will be addressed in

CY 2014.

In the CY 2005 PFS final rule with comment period (69 FR 66236), we implemented the first Five-Year Review of the MP RVUs (69 FR 66263). Minor modifications to the methodology were
addressed in the CY 2006 PFS final rule with comment period (70 FR 70153).
The second Five-Year Review and update of resource-based malpractice RVUs was published in the CY 2010 PFS final rule with comment period (74 FR 61758) and was effective in CY 2010.

5. Adjustments to RVUs Are Budget
Neutral

Section 1848(c)(2)(B)(ii)(II) of the Act provides that adjustments in RVUs for a year may not cause total PFS payments to differ by more than $20 million from what they would have been if the adjustments were not made. In
accordance with section 1848(c)(2)(B)(ii)(II) of the Act, if
revisions to the RVUs cause expenditures to change by more than $20 million, we make adjustments to ensure that expenditures do not increase or decrease by more than $20 million.

As explained in the CY 2009 PFS final rule with comment period (73FR 69730), as required by section 133(b) of the Medicare Improvements for Patients and Providers Act of 2008 (MIPPA) (Pub. L. 110–275), the separate budget neutrality (BN) adjustor resulting from the third Five-Year Review of physician work RVUs is being applied to the CF beginning in CY 2009 rather than to the
work RVUs.

For CY 2010, we adopted a number of new payment policies for which we estimated the potential for a redistributive effect under the PFS, including the use of the new PPIS data to develop the specialty-specific PE/HR used for the PE RVUs (74 FR 61749 through 61752) and the elimination of the reporting of all CPT consultation
codes in order to allow for correct and consistent coding and appropriate payment for evaluation and management services under the PFS (74 FR 61767 through 61775). We recognize that clinical experience with these new PFS policies has been growing over the first 6 months of CY 2010 and, as we seek to improve future PFS payment accuracy for services, we are interested in public comments on the perspectives of physicians and nonphysician practitioners caring for Medicare
beneficiaries under the current PFS coding and payment methodologies for physicians’ services.

B. Components of the Fee Schedule Payment Amounts

To calculate the payment for every physicians’ service, the components of the fee schedule (physician work, PE, and MP RVUs) are adjusted by a geographic practice cost index (GPCI).
The GPCIs reflect the relative costs of physician work, PE, and malpractice expense in an area compared to the national average costs for each
component.

RVUs are converted to dollar amounts through the application of a CF, which is calculated by CMS’ Office of the Actuary (OACT).

The formula for calculating the Medicare fee schedule payment amount for a given service and fee schedule area can be expressed as:
Payment = [(RVU work × GPCI work) + (RVU PE × GPCI PE) + (RVU malpractice × GPCI malpractice)] × CF

C. Most Recent Changes to the Fee
Schedule

The CY 2010 PFS final rule with comment period (74 FR 61738) implemented changes to the PFS and other Medicare Part B payment policies.
It also finalized some of the CY 2009 interim RVUs and implemented interim
RVUs for new and revised codes for CY 2010 to ensure that our payment systems are updated to reflect changes in medical practice and the relative
value of services. The CY 2010 PFS final rule with comment period also addressed other policies, as well as certain provisions of the MIPPA.

As required by the statute at the time of its issuance on October 30, 2009, the
CY 2010 PFS final rule with comment period announced the following for CY 2010: The PFS update of

¥ 21.2 percent; the initial estimate for the sustainable growth rate of

¥ 8.8 percent; and the CF of $28.4061.

On December 10, 2009, we published a correction notice (74 FR 65449) to
correct several technical and typographical errors that occurred in the
CY 2010 PFS final rule with comment period. This correction notice
announced a revised CF for CY 2010 of
$28.3895.

On December 19, 2009, the Department of Defense Appropriations Act, 2010 (Pub. L. 111–118) was signed
into law. Section 1011 of Pub. L. 111– 118 provided a 2-month zero percent update to the CY 2010 PFS effective only for dates of service from January 1, 2010 through February 28, 2010. On March 2, 2010, the Temporary Extension Act of 2010 (Pub. L. 111–144) was signed into law. Section 2 of Pub. L. 111–144 extended the zero percent update to the PFS through March 31,
2010 that was in effect for claims with dates of service from January 1, 2010 through February 28, 2010.

In addition, on April 15, 2010, the Continuing Extension Act of 2010 (Pub. L. 111–157) was signed into law.
Section 4 of Public Law 111–157 extended through May 31, 2010 the zero percent update to the PFS that was in
effect for claims with dates of services from January 1, 2010 through March 31, 2010. The law is retroactive to April 1,

2010.

In the May 11, 2010 Federal Register (75 FR 26350), we published a subsequent correction notice to correct several technical and typographical
errors that occurred in the CY 2010 PFS final rule with comment period and the December 10, 2009 correction notice. The May 11, 2010 correction notice
announced a revised CF for CY 2010 of
$28.3895.

Finally, on March 23, 2010 the Patient
Protection and Affordable Care Act (Pub. L. 111–148) was signed into law. Shortly thereafter, on March 30, 2010,
the Health Care and Education Reconciliation Act of 2010 (Pub. L. 111– 152) was signed into law. These two laws are discussed in this proposed rule and are collectively referred to as the

‘‘ Affordable Care Act ’’ (ACA) throughout this proposed rule.

II. Provisions of the Proposed Rule for the Physician Fee Schedule

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

1. Overview

Practice expense (PE) is the portion of the resources used in furnishing the service that reflects the general categories of physician and practitioner expenses, such as office rent and personnel wages but excluding malpractice expenses, as specified in section 1848(c)(1)(B) of the Act. Section 121 of the Social Security Amendments of 1994 (Pub. L. 103–432), enacted on October 31, 1994, required CMS todevelop a methodology for a resourcebased system for determining PE RVUs for each physician’s service. We develop PE RVUs by looking at the direct and indirect physician practice resources involved in furnishing each service. Direct expense categories include clinical labor, medical supplies and medical equipment. Indirect expenses include administrative labor, office expense, and all other expenses. The sections that follow provide more


### 40048 Federal Register / Vol. 75, No. 133 / Tuesday, July 13, 2010 / Proposed Rules

detailed information about the methodology for translating the resources involved in furnishing each service into service-specific PE RVUs. In addition, we note that section 1848(c)(2)(B)(ii)(II) of the Act provides that adjustments in RVUs for a year may not cause total PFS payments to differ by more than $20 million from what they would have been if the adjustments were not made. Therefore, if revisions to the RVUs cause expenditures to change by more than $20 million, we make adjustments to ensure that expenditures do not increase or decrease by more than $20 million. We refer readers to the
CY 2010 PFS final rule with comment period (74 FR 61743 through 61748) for a more detailed history of the PE methodology.

2. Practice Expense Methodology

a. Direct Practice Expense

We use a bottom-up approach to determine the direct PE by adding the costs of the resources (that is, the clinical staff, equipment, and supplies) typically required to provide each
service. The costs of the resources are calculated using the refined direct PE inputs assigned to each CPT code in our PE database, which are based on our
review of recommendations received
from the American Medical Association’s (AMA’s) Relative Value Update Committee (RUC). For a detailed explanation of the bottom-up direct PE methodology, including examples, we
refer readers to the Five-Year Review of
Work Relative Value Units Under the PFS and Proposed Changes to the Practice Expense Methodology proposed notice (71 FR 37242) and the CY 2007 PFS final rule with comment period (71 FR 69629).

b. Indirect Practice Expense per Hour

Data

We use survey data on indirect practice expenses incurred per hour worked (PE/HR) in developing the indirect portion of the PE RVUs. Prior to CY 2010, we primarily used the practice expense per hour (PE/HR) by specialty that was obtained from the AMA’s Socioeconomic Monitoring Surveys (SMS). These surveys were conducted from 1995 through 1999. For several specialties that collected additional PE/HR data through supplemental surveys, we incorporated these data in developing the PE/HR values used annually.

While the SMS was not specifically designed for the purpose of establishing PE RVUs, we found these data to be the
best available at the time. The SMS was a multispecialty survey effort conducted using a consistent survey instrument and method across specialties. The survey sample was randomly drawn from the AMA Physician Masterfile to ensure national representativeness. The AMA discontinued the SMS survey in 1999. As required by the Balanced Budget Refinement Act of 1999 (BBRA) (Pub. L. 106–113), we also established a process by which specialty groups could submit supplemental PE data. In the May 3, 2000 Federal Register , we issued the Medicare Program; Criteria for Submitting Supplemental Practice Expense Survey Data interim final rule (65 FR 25664) in which we established criteria for acceptance of supplemental
data. The criteria were modified in the
CY 2001 and CY 2003 PFS final rules with comment period (65 FR 65380 and 67 FR 79971, respectively). In addition to the SMS, we previously used supplemental survey data for the following specialties: Cardiology; dermatology; gastroenterology; radiology; cardiothoracic surgery; vascular surgery; physical and occupational therapy; independent laboratories; allergy/immunology; independent diagnostic testing facilities (IDTFs); radiation oncology; medical oncology; and urology.

Because the SMS data and the supplemental survey data were from different time periods, we historically inflated them by the Medicare Economic Index (MEI) to put them on as comparable a time basis as we could when calculating the PE RVUs. This MEI proxy was necessary in the past due to the lack of contemporaneous, consistently collected, and comprehensive multispecialty survey
data.

The AMA administered a new survey in CY 2007 and CY 2008, the Physician Practice Expense Information Survey (PPIS), which was expanded (relative to the SMS) to include nonphysician practitioners (NPPs) paid under the PFS. The PPIS was designed to update the specialty-specific PE/HR data used to develop PE RVUs. The AMA and the CMS contractor, The Lewin Group (Lewin), analyzed the PPIS data and calculated the PE/HR for physician and nonphysician specialties, respectively. The AMA’s summary worksheets and Lewin’s final report are available on the
CMS Web site at http://www.cms.gov/ PhysicianFeeSched/PFSFRN/ itemdetail.asp?filterType=none& filterByDID=-99& sortByDID=4&sortOrder= descending&itemID=CMS1223902& intNumPerPage=10 . ( See downloads
labeled AMA PPIS Worksheets 1–3 and Physician Practice Expense non MDDO Final Report) The PPIS is a multispecialty, nationally representative, PE survey of both physicians and NPPs using a consistent survey instrument and methods highly consistent with those used for the SMS and the supplemental surveys. The PPIS gathered information from 3,656 respondents across 51 physician specialty and healthcare professional groups.

We believe the PPIS is the most comprehensive source of PE survey information available to date. Therefore, we used the PPIS data to update the PE/
HR data for almost all of the Medicarerecognized specialties that participated in the survey for the CY 2010 PFS. When we changed over to the PPIS data beginning in CY 2010, we did not change the PE RVU methodology itself
or the manner in which the PE/HR data are used in that methodology. We only updated the PE/HR data based on the new survey. Furthermore, as we explained in the CY 2010 PFS final rule with comment period (74 FR 61751), because of the magnitude of payment reductions for some specialties resulting from the use of the PPIS data, we finalized a 4-year transition (75/25 for CY 2010, 50/50 for CY 2011, 25/75 for CY 2012, and 0/100 for CY 2013) from the previous PE RVUs to the PE RVUs developed using the new PPIS data.

Section 303 of the Medicare Prescription Drug, Improvement, and Modernization Act of 2003 (MMA) (Pub. L. 108–173) added section 1848(c)(2)(H)(i) of the Act, which requires us to use the medical oncology supplemental survey data submitted in 2003 for oncology drug administration services. Therefore, the PE/HR for medical oncology, hematology, and hematology/oncology reflects the continued use of these supplemental survey data.

We do not use the PPIS data for reproductive endocrinology, sleep medicine, and spine surgery since these specialties are not separately recognized by Medicare, and we do not know how
to blend these data with Medicarerecognized specialty data.

Supplemental survey data on independent labs, from the College of American Pathologists, were implemented for payments in CY 2005. Supplemental survey data from the National Coalition of Quality Diagnostic Imaging Services (NCQDIS), representing IDTFs, were blended with supplementary survey data from the American College of Radiology (ACR) and implemented for payments in CY 2007. Neither IDTFs nor independent labs participated in the PPIS. Therefore,
we continue to use the PE/HR that was


### 40049 Federal Register / Vol. 75, No. 133 / Tuesday, July 13, 2010 / Proposed Rules

developed from their supplemental survey data.

Finally, consistent with our past practice, the previous indirect PE/HR values from the supplemental surveys for medical oncology, independent laboratories, and IDTFs were updated to CY 2006 using the MEI to put them on a comparable basis with the PPIS data.
In the CY 2010 PFS final rule with comment period (74 FR 61753), we
miscalculated the indirect PE/HR for IDTFs as part of this update process. Therefore, for CY 2011, we are proposing to use a revised indirect PE/ HR of $479.81 for IDTFs, consistent with our final policy to update the indirect PE/HR values from prior supplemental survey data that we are continuing to use in order to put these data on a comparable basis with the PPIS data. This revision changes the IDTF indirect percentage from 51
percent to 50 percent.

Previously, CMS has established PE/ HR values for various specialties without SMS or supplemental survey data by crosswalking them to other similar specialties to estimate a proxy PE/HR. For specialties that were part of the PPIS for which we previously used a crosswalked PE/HR, we instead use
the PPIS-based PE/HR. We continue previous crosswalks for specialties that did not participate in the PPIS. However, beginning in CY 2010 we changed the PE/HR crosswalk for portable x-ray suppliers from radiology to IDTF, a more appropriate crosswalk because these specialties are more similar to each other with respect to physician time.

In the CY 2010 PFS final rule with comment period (74 FR 61752), we agreed that, under the current PE methodology, the PPIS data for registered dieticians should not be used
in the calculation of PE RVUs since these dieticians are paid 85 percent of what a physician would be paid for providing the service. To include their survey data in the PE calculation would influence the ratesetting by incorporating what the services would be paid if performed by registered dieticians and not strictly what the payment rates would be if provided by physicians. We further stated that we
would utilize the ‘‘ All Physicians ’’ PE/ HR, as derived from the PPIS, in the
calculation of resource-based PE RVUs
in lieu of the PE/HR associated withregistered dieticians. In the resourcebased PE methodology for CY 2010, while we removed the specialty of registered dieticians from the ratesetting step we did not assign the ‘‘ All Physicians ’’ PE/HR to services furnished by registered dieticians. Instead, we allowed the PE/HR for those services to be generated by a weighted average of all the physician specialties that also
furnished the services. This method was consistent with our policy to not use the registered dietician PPIS PE/HR in calculating the PE RVUs for services furnished by registered dieticians but we did not actually crosswalk the specialty of registered dietician to the

‘‘ All Physicians ’’ PE/HR data as we had intended according to the final policy. Nevertheless, we are affirming for CY 2011 that the proposed resource-based
PE RVUs have been calculated in accordance with the final policy adopted in the CY 2010 PFS final rule with comment period (74 FR 61752) for registered dietician services that crosswalks the specialty to the ‘‘ All Physicians ’’ PE/HR data.

As provided in the CY 2010 PFS final rule with comment period (74 FR 61751), CY 2011 is the second year of the 4-year transition to the PE RVUs calculated using the PPIS data. Therefore, in general, the CY 2011 PE RVUs are a 50/50 blend of the previous
PE RVUs based on the SMS and supplemental survey data and the new PE RVUS developed using the PPIS data
as described above. Note that the reductions in the PE RVUs for expensive diagnostic imaging equipment attributable to the change to an equipment utilization rate assumption of 75 percent ( see 74 FR 61753 through
61755 and section II.A.3. of this proposed rule) are not subject to the

transition.

c. Allocation of PE to Services

To establish PE RVUs for specific services, it is necessary to establish the
direct and indirect PE associated with
each service.

(i) Direct costs. The relative relationship between the direct cost portions of the PE RVUs for any two services is determined by the relative relationship between the sum of the direct cost resources (that is, the clinical staff, equipment, and supplies) typically required to provide the services. The
costs of these resources are calculated from the refined direct PE inputs in our PE database. For example, if one service has a direct cost sum of $400 from our
PE database and another service has a direct cost sum of $200, the direct portion of the PE RVUs of the first
service would be twice as much as the direct portion of the PE RVUs for the
second service.

(ii) Indirect costs. Section II.A.2.b. of this proposed rule describes the current data sources for specialty-specific
indirect costs used in our PE
calculations. We allocate the indirect costs to the code level on the basis of the direct costs specifically associated with a code and the greater of either the clinical labor costs or the physician work RVUs. We also incorporate the survey data described earlier in the PE/ HR discussion. The general approach to developing the indirect portion of the
PE RVUs is described below.

• For a given service, we use the direct portion of the PE RVUs calculated as described above and the average percentage that direct costs represent of total costs (based on survey data) across the specialties that perform the service
to determine an initial indirect allocator. For example, if the direct portion of the PE RVUs for a given service were 2.00 and direct costs, on average, represented 25 percent of total costs for the specialties that performed the service, the initial indirect allocator would be 6.00 since 2.00 is 25 percent
of 8.00.

• We then add the greater of the work RVUs or clinical labor portion of the direct portion of the PE RVUs to this
initial indirect allocator. In our example, if this service had work RVUs of 4.00 and the clinical labor portion of the direct PE RVUs was 1.50, we would add 6.00 plus 4.00 (since the 4.00 work RVUs are greater than the 1.50 clinical labor portion) to get an indirect allocator of 10.00. In the absence of any further use of the survey data, the relative relationship between the indirect cost portions of the PE RVUs for any two services would be determined by the relative relationship between these indirect cost allocators. For example, if
one service had an indirect cost
allocator of 10.00 and another service had an indirect cost allocator of 5.00, the indirect portion of the PE RVUs of the first service would be twice as great as the indirect portion of the PE RVUs
for the second service.

• We next incorporate the specialtyspecific indirect PE/HR data into the calculation. As a relatively extreme example for the sake of simplicity, assume in our example above that, based on the survey data, the average indirect cost of the specialties performing the first service with an allocator of 10.00 was half of the average indirect cost of the specialties performing the second service with an indirect allocator of 5.00. In this case, the indirect portion of the PE RVUs of the first service would be equal to that
of the second service.

d. Facility and Nonfacility Costs

For procedures that can be furnished in a physician’s office, as well as in a hospital or facility setting, we establish two PE RVUs: facility and nonfacility.


### 40050 Federal Register / Vol. 75, No. 133 / Tuesday, July 13, 2010 / Proposed Rules

The methodology for calculating PE RVUs is the same for both the facility and nonfacility RVUs, but is applied independently to yield two separate PE
RVUs. Because Medicare makes a separate payment to the facility for its costs of furnishing a service, the facility PE RVUs are generally lower than the nonfacility PE RVUs.

e. Services With Technical Components (TCs) and Professional Components (PCs)

Diagnostic services are generally comprised of two components: a professional component (PC) and a technical component (TC), each of which may be performed independently or by different providers, or they may be performed together as a ‘‘ global ’’ service.
When services have PC and TC components that can be billed separately, the payment for the global component equals the sum of the payment for the TC and PC. This is a result of using a weighted average of the
ratio of indirect to direct costs across all the specialties that furnish the global components, TCs, and PCs; that is, we apply the same weighted average indirect percentage factor to allocate indirect expenses to the global components, PCs, and TCs for a service. (The direct PE RVUs for the TC and PC sum to the global under the bottom-up methodology.)

f. Alternative Data Sources and Public
Comments on Final Rule for 2010.

In the CY 2010 PFS final rule with comment period (74 FR 61749 through 61750), we discussed the Medicare Payment Advisory Commission’s (MedPAC’s) comment that in the future,

‘‘ CMS should consider alternatives to collecting specialty-specific cost data or options to decrease the reliance on such
data. ’’ We agreed with MedPAC that it would be appropriate to consider the future of the PE RVUs moving forward. We sought comments from other stakeholders on the issues raised by MedPAC for the future. In particular, we requested public comments regarding MedPAC’s suggestion that we consideralternatives for collecting specialtyspecific cost data or options to decrease
the reliance on such data. We noted MedPAC’s comment that, ‘‘ CMS should consider if Medicare or provider groups should sponsor future data collection efforts, if participation should be voluntary (such as surveys) or mandatory (such as cost reports), and whether a nationally representative sample of practitioners would be sufficient for either a survey or cost
reports. ’’ MedPAC also stated that one option for decreasing the reliance on specialty-specific cost data would be the
elimination of the use of indirect PE/HR data in the last step of establishing the indirect cost portion of the PE RVUs as described previously.

Almost all of the commenters on the
CY 2010 PFS final rule with comment period that addressed this issue expressed a general willingness to work with CMS on methodological improvements or future data collection efforts. Although no commenters detailed a comprehensive overall alternative methodology, several commenters did provide suggestions regarding future data collection efforts and specific aspects of the current methodology.

The commenters that addressed the issue of surveys supported the use of surveys if they yielded accurate PE
information. The few commenters that addressed the issue of cost reports were opposed to physician cost reports. The commenters varied with respect to their opinions regarding whether data collection efforts should be led by organized medicine, individual specialty societies, or CMS. Several
commenters that addressed the issue of voluntary versus mandatory data collection efforts supported voluntary data collection efforts and opposed mandatory data collection efforts.

Some commenters recommended no changes to the methodology or PE data
in the near future. Other commenters indicated that the methodology and data changes needed to be made for CY 2011. Although most commenters did not directly address the use of the indirect PE/HR data, those that did predominately opposed the elimination
of the use of these data.

Many commenters addressed specifics of the PE methodology (as further
described in section II.A.2.c. of this proposed rule). Some were opposed to the scaling factor applied in the development of the direct PE portion of the PE RVUs so that in the aggregate the direct portion of the PE RVUs do not exceed the proportion indicated by the survey data ( See Step 4 in g.(ii) below).
Several of these commenters advocated the elimination of this direct scaling factor, while others indicated that the issue should be examined more closely.

A few commenters recommended that physician work not be used as an allocator in the development of the indirect portion of the PE RVUs as
described earlier in this section. A few indicated that physician time, but not physician work, should be used in the allocation. Other commenters suggested
that indirect costs should be allocated solely on the basis of direct costs. We note that many of the issues raised by commenters on the CY 2010 PFS final rule with comment period are
similar to issues raised in thedevelopment of the original resourcebased PE methodology and in subsequent revisions to the methodology, including the adoption of the bottom-up methodology. While we are not proposing a broad methodological change or broad data
collection effort in this CY 2011 PFS proposed rule, we invite comments on our summary of the issues raised by the
commenters on the CY 2010 PFS final rule with comment period, as presented above. The complete public comments on that final rule are available for public

review at http://www.regulations.gov by entering ‘‘ CMS–1413–FC ’’ in the search box on the main page.

g. PE RVU Methodology

For a more detailed description of the PE RVU methodology, we refer readers
to the CY 2010 PFS final rule with comment period (74 FR 61745 through 61746).

(i) Setup File

First, we create a setup file for the PE methodology. The setup file contains the direct cost inputs, the utilization for each procedure code at the specialty and facility/nonfacility place of service level, and the specialty-specific PE/HR data from the surveys.

(ii) Calculate the Direct Cost PE RVUs

Sum the costs of each direct input. Step 1: Sum the direct costs of the inputs for each service. Apply a scaling adjustment to the direct inputs.

Step 2: Calculate the current aggregate pool of direct PE costs. This is the product of the current aggregate PE (aggregate direct and indirect) RVUs, the CF, and the average direct PE percentage from the survey data.

Step 3: Calculate the aggregate pool of
direct costs. This is the sum of the product of the direct costs for each service from Step 1 and the utilization
data for that service.

Step 4: Using the results of Step 2 and Step 3 calculate a direct PE scaling adjustment so that the aggregate direct cost pool does not exceed the current aggregate direct cost pool and apply it to the direct costs from Step 1 for each

service.

Step 5: Convert the results of Step 4
to an RVU scale for each service. To do this, divide the results of Step 4 by the
CF. Note that the actual value of the CF
used in this calculation does not influence the final direct cost PE RVUs, as long as the same CF is used in Step 2 and Step 5. Different CFs will result


### 40051 Federal Register / Vol. 75, No. 133 / Tuesday, July 13, 2010 / Proposed Rules

in different direct PE scaling factors, but
this has no effect on the final direct cost PE RVUs since changes in the CFs and changes in the associated direct scaling
factors offset one another.

(iii) Create the Indirect Cost PE RVUs

Create indirect allocators. Step 6: Based on the survey data,
calculate direct and indirect PE percentages for each physician specialty.

Step 7: Calculate direct and indirect PE percentages at the service level by taking a weighted average of the results of Step 6 for the specialties that furnish
the service. Note that for services with TCs and PCs, the direct and indirect percentages for a given service do not vary by the PC, TC, and global
components.

Step 8: Calculate the service level
allocators for the indirect PEs based on the percentages calculated in Step 7.
The indirect PEs are allocated based on the three components: the direct PE RVUs, the clinical PE RVUs, and the
work RVUs.

For most services the indirect
allocator is: indirect percentage * (direct PE RVUs/ direct percentage) + work RVUs.

There are two situations where this
formula is modified:

• If the service is a global service (that is, a service with global, professional, and technical components), then the indirect allocator is: indirect percentage * (direct PE RVUs/direct percentage) +
clinical PE RVUs + work RVUs.

• If the clinical labor PE RVUs exceed the work RVUs (and the service is not a global service), then the indirect allocator is: indirect percentage * (direct PE RVUs/direct percentage) + clinical

PE RVUs.

( Note: For global services, the indirect
allocator is based on both the work
RVUs and the clinical labor PE RVUs. We do this to recognize that, for the PC service, indirect PEs will be allocated using the work RVUs, and for the TC service, indirect PEs will be allocated using the direct PE RVUs and the
clinical labor PE RVUs. This also allows the global component RVUs to equal the sum of the PC and TC RVUs.)

For presentation purposes in the examples in the Table 2, the formulas were divided into two parts for each service. The first part does not vary by service and is the: indirect percentage * (direct PE RVUs/direct percentage). The second part is either the work RVUs, clinical PE RVUs, or both depending on whether the service is a global service
and whether the clinical PE RVUs exceed the work RVUs (as described earlier in this step).

Apply a scaling adjustment to the
indirect allocators.

Step 9: Calculate the current aggregate pool of indirect PE RVUs by multiplying the current aggregate pool of PE RVUs by the average indirect PE percentage from the survey data.

Step 10: Calculate an aggregate pool of indirect PE RVUs for all PFS services by adding the product of the indirect PE allocators for a service from Step 8 and
the utilization data for that service.

Step 11: Using the results of Step 9 and Step 10, calculate an indirect PE adjustment so that the aggregate indirect
allocation does not exceed the available aggregate indirect PE RVUs and apply it to indirect allocators calculated in Step

8. Calculate the indirect practice cost
index.

Step 12: Using the results of Step 11,calculate aggregate pools of specialtyspecific adjusted indirect PE allocators for all PFS services for a specialty by adding the product of the adjusted
indirect PE allocator for each service
and the utilization data for that service.

Step 13: Using the specialty-specificindirect PE/HR data, calculate specialtyspecific aggregate pools of indirect PE for all PFS services for that specialty by adding the product of the indirect PE/ HR for the specialty, the physician time for the service, and the specialty’s
utilization for the service across all services performed by the specialty.

Step 14: Using the results of Step 12and Step 13, calculate the specialtyspecific indirect PE scaling factors.

Step 15: Using the results of Step 14, calculate an indirect practice cost index at the specialty level by dividing each specialty-specific indirect scaling factor by the average indirect scaling factor for
the entire PFS.

Step 16: Calculate the indirect practice cost index at the service level to ensure the capture of all indirect costs. Calculate a weighted average of the practice cost index values for the specialties that furnish the service. ( Note: For services with TCs and PCs, we calculate the indirect practice cost index across the global components, PCs, and TCs. Under this method, the indirect practice cost index for a given service (for example, echocardiogram) does not vary by the PC, TC, and global component.) Step 17: Apply the service level indirect practice cost index calculated in Step 16 to the service level adjusted indirect allocators calculated in Step 11 to get the indirect PE RVUs.

(iv) Calculate the Final PE RVUs

Step 18: Add the direct PE RVUs from Step 6 to the indirect PE RVUs from Step 17 and apply the final PE budget neutrality (BN) adjustment, MEI rebasing adjustment, and multiple procedure payment reduction (MPPR) adjustment.

The final PE BN adjustment is calculated by comparing the results of Step 18 (prior to the MEI rebasing and MPPR adjustments) to the current pool of PE RVUs. This final BN adjustment is required primarily because certain specialties are excluded from the PE RVU calculation for ratesetting purposes, but all specialties are included for purposes of calculating the final BN adjustment. ( See ‘‘ Specialties excluded from ratesetting calculation ’’ below in this section.)

As discussed in section II.E.1. of this proposed rule, we are proposing to
rebase and revise the Medicare Economic Index (MEI) for CY 2011. As
discussed in section II.C.4. of this proposed rule, section 1848(c)(2)(K) of the Act (as added by section 3134 of the ACA) specifies that the Secretary shall identify potentially misvalued codes by examining multiple codes that are frequently billed in conjunction with furnishing a single service. There is inherent duplication in the PE
associated with those services which are frequently furnished together, so reducing PFS payment for the second and subsequent services to account for the efficiencies in multiple service sessions may be appropriate. Consistent with this provision of the ACA, we are proposing a limited expansion of the current MPPR policy for imaging
services for CY 2011 and a new MPPR policy for therapy services.

(v) Setup File Information

• Specialties excluded from ratesetting calculation: For the purposes of calculating the PE RVUs, we exclude certain specialties, such as certain nonphysician practitioners paid at a percentage of the PFS and low volume specialties, from the calculation. These specialties are included for the purposes of calculating the BN adjustment. They are displayed in Table 1.


### 40052 Federal Register / Vol. 75, No. 133 / Tuesday, July 13, 2010 / Proposed Rules

T ABLE 

### 1—S PECIALTIES 

### E XCLUDED 

### F ROM 

### R ATESETTING 

### C ALCULATION

Specialty code Specialty description

42 ............................................................................... Certified nurse midwife. 49 ............................................................................... Ambulatory surgical center. 50 ............................................................................... Nurse practitioner. 51 ............................................................................... Medical supply company with certified orthotis t. 52 ............................................................................... Medical supply company with certified prosthet ist. 53 ............................................................................... Medical supply company with certified prosthet ist-orthotist. 54 ............................................................................... Medical supply company not included in 51, 52, or 53.

55 ............................................................................... Individual certified orthotist. 56 ............................................................................... Individual certified prosthetist. 57 ............................................................................... Individual certified prosthetist-orthotist. 58 ............................................................................... Individuals not included in 55, 56, or 57. 59 ............................................................................... Ambulance service supplier, e.g., private ambulance companies, funeral homes, etc. 60 ............................................................................... Public health or welfare agencies. 61 ............................................................................... Voluntary health or charitable agencies.

73 ............................................................................... Mass immunization roster biller. 74 ............................................................................... Radiation therapy centers. 87 ............................................................................... All other suppliers ( e.g., drug and department stores). 88 ............................................................................... Unknown supplier/provider specialty. 89 ............................................................................... Certified clinical nurse specialist. 95 ............................................................................... Competitive Acquisition Program (CAP) Vendor. 96 ............................................................................... Optician. A0 ............................................................................... Hospital.
A1 ............................................................................... SNF. A2 ............................................................................... Intermediate care nursing facility. A3 ............................................................................... Nursing facility, other.

A4 ............................................................................... HHA. A5 ............................................................................... Pharmacy. A6 ............................................................................... Medical supply company with respiratory therap ist. A7 ............................................................................... Department store. 1 ................................................................................. Supplier of oxygen and/or oxygen related equi pment. 2 ................................................................................. Pedorthic personnel. 3 ................................................................................. Medical supply company with pedorthic personn el.

• Crosswalk certain low volume physician specialties: Crosswalk the utilization of certain specialties with relatively low PFS utilization to the associated specialties.

• Physical therapy utilization:
Crosswalk the utilization associated with all physical therapy services to the specialty of physical therapy.

• Identify professional and technical
services not identified under the usual TC and 26 modifiers: Flag the services that are PC and TC services, but do not use TC and 26 modifiers (for example, electrocardiograms). This flag associates
the PC and TC with the associated global code for use in creating the indirect PE RVUs. For example, the professional service, CPT code 93010 (Electrocardiogram, routine ECG with at least 12 leads; interpretation and report only), is associated with the global service, CPT code 93000 (Electrocardiogram, routine ECG with at least 12 leads; with interpretation and report).

• Payment modifiers: Payment
modifiers are accounted for in the creation of the file. For example,
services billed with the assistant at surgery modifier are paid 16 percent of the PFS amount for that service; therefore, the utilization file is modified to only account for 16 percent of any
service that contains the assistant at surgery modifier.

• Work RVUs: The setup file contains the work RVUs from this proposed rule.

(vi) Equipment Cost per Minute

The equipment cost per minute is
calculated as: (1/(minutes per year * usage)) * price * ((interest rate/(1 ¥ (1/((1 + interest rate) * life of equipment)))) + maintenance)

Where:

minutes per year = maximum minutes per year if usage were continuous (that is, usage = 1); generally 150,000 minutes. usage = equipment utilization assumption; 0.75 for certain expensive diagnostic imaging equipment ( see 74 FR 61753 through 61755 and section II.A.3. of this proposed rule) and 0.5 for others. price = price of the particular piece of equipment.

interest rate = 0.11. life of equipment = useful life of the particular piece of equipment.
maintenance = factor for maintenance; 0.05.

Note: The use of any particular conversion factor (CF) in Table 2 to illustrate the PE calculation has no effect on the resulting

RVUs.


### 40053 Federal Register / Vol. 75, No. 133 / Tuesday, July 13, 2010 / Proposed RulesTABLE2—CALCULATION OFPE RVUSUNDERMETHODOLOGY FORSELECTEDCODESStep Source Formula99213Office visit, estnonfacility33533CABG, arterial,single facility71020Chest x-raynonfacility71020–TCChest x-raynonfacility71020–26Chest x-raynonfacility93000ECG, completenonfacility93005ECG, tracingnonfacility93010ECG, reportnonfacility(1) Labor cost (Lab) ..... Step 1 ............ AMA ............................. ......................................13.3277.525.74 5.74 0.00 6.12 6.12 0.00(2) Suppy cost (Sup) .... Step 1 ............ AMA ............................. ......................................2.987.343.393.39 0.00 1.19 1.19 0.00(3) Equipment cost(Eqp).Step 1 ............ AMA ............................. ...................................... 0.19 0.65 8.17 8.17 0.00 0.12 0.12 0.00(4) Direct cost (Dir) ...... Step 1 ............ ...................................... =(1)+(2)+(3) .................16.5085.5117.31 17.31 0.00 7.43 7.43 0.00(5) Direct adjustment(Dir Adj).Steps 2–4 ...... See footnote* ............... ...................................... 0.484 0.484 0.484 0.484 0.484 0.484 0.484 0.484(6) Adjusted labor ......... Steps 2–4 ...... =Lab * Dir Adj .............. =(1) * (5) ......................6.4537.522.782.780.002.96 2.96 0.00(7) Adjusted supplies ... Steps 2–4 ...... =Sup * Dir Adj ............. =(2) * (5) ......................1.443.551.641.640.000.580.58 0.00(8) Adjusted equipment Steps 2–4 ...... =Eqp * Dir Adj ............. =(3) * (5) ......................0.090.323.963.960.000.060.06 0.00(9) Adjusted direct ........ Steps 2–4 ...... ...................................... =(6)+(7)+(8) .................7.9941.398.388.38 0.00 3.60 3.60 0.00(10) Conversion Factor(CF).Step 5 ............ PFS .............................. ...................................... 36.0791 36.0791 36.0791 36.0791 36.0791 36.0791 36.0791 36.0791(11) Adj. labor cost converted.Step 5 ............ =(Lab * Dir Adj)/CF ...... =(6)/(10) ....................... 0.18 1.04 0.08 0.08 0.00 0.08 0.08 0.00(12) Adj. supply costconverted.Step 5 ............ =(Sup * Dir Adj)/CF ..... =(7)/(10) ....................... 0.04 0.10 0.05 0.05 0.00 0.02 0.02 0.00(13) Adj. equip costconverted.Step 5 ............ =(Eqp * Dir Adj)/CF ..... =(8)/(10) ....................... 0.00 0.01 0.11 0.11 0.00 0.00 0.00 0.00(14) Adj. direct costconverted.Step 5 ............ ...................................... =(11)+(12)+(13) ........... 0.22 1.15 0.23 0.23 0.00 0.10 0.10 0.00(15) Wrk RVU ............... Setup File ...... PFS .............................. ......................................0.9733.750.22 0.00 0.22 0.17 0.00 0.17(16) Dir_pct ................... Steps 6, 7 ...... Surveys ........................ ......................................25.5%18.0%28.9%28.9% 28.9% 29.0% 29.0% 29.0%(17) Ind_pct .................. Steps 6, 7 ...... Surveys ........................ ......................................74.5%82.0%71.2%71.2% 71.2% 71.1% 71.1% 71.1%(18) Ind. Alloc. formula(1st part).Step 8 ............ See Step 8 ................... ...................................... ((14)/(16)) * (17) ((14)/(16)) * (17) ((14)/(16)) * (17) ((14)/(16)) * (17) ((14)/(16)) * (17) ((14)/(16)) * (17) ((14)/(16)) * (17) ((14)/(16)) * (17)(19) Ind. Alloc. (1stpart).Step 8 ............ ...................................... See (18) ....................... 0.65 5.23 0.57 0.57 0.00 0.24 0.24 0.00(20) Ind. Alloc. formulas(2nd part).Step 8 ............ See Step 8 ................... ...................................... (15) (15) (15)+(11) (11) (15) (15)+(11) (11) (15)(21) Ind. Alloc. (2ndpart).Step 8 ............ ...................................... See (20) ....................... 0.97 33.75 0.30 0.08 0.22 0.25 0.08 0.17(22) Indirect Allocator(1st+2nd).Step 8 ............ ...................................... =(19)+(21) .................... 1.62 38.98 0.87 0.65 0.22 0.50 0.33 0.17(23) Indirect Adjustment(Ind Adj).Steps 9–11 .... See footnote** ............. ...................................... 0.369 0.369 0.369 0.369 0.369 0.369 0.369 0.369(24) Adjusted IndirectAllocator.Steps 9–11 .... =Ind Alloc * Ind Adj ..... ...................................... 0.60 14.37 0.32 0.24 0.08 0.18 0.12 0.06(25) Ind.Practice CostIndex (PCI).Steps 12–16 .. See Steps 12–16 ......... ...................................... 1.104 0.831 0.852 0.852 0.852 0.926 0.926 0.926(26) Adjusted Indirect ... Step 17 .......... = Adj. Ind Alloc * PCI .. =(24) * (25) ..................0.6611.950.270.200.070.170.11 0.06(27) MEI Rebasing Adjustment.Step 18 .......... PFS .............................. ...................................... 1.168 1.168 1.168 1.168 1.168 1.168 1.168 1.168(28) MPPR Adjustment Step 18 .......... PFS .............................. ......................................1.0111.0111.0111.011 1.011 1.011 1.011 1.011(29) PE RVU ................ Step 18 .......... =(Adj Dir+Adj Ind) *budn * MEI Adj *MPPR Adj.=((14)+(26)) * budn *(27) * (28).1.03 15.36 0.59 0.51 0.08 0.32 0.25 0.07**Note:**PE RVUs in Table 2, row 27, may not match Addendum B due to rounding.* The direct adj = [current pe rvus * CF * avg dir pct]/[sum direct inputs] = [Step 2]/[Step 3].** The indirect adj = [current pe rvus * avg ind pct]/[sum of ind allocators] = [Step 9]/[Step 10].


### 40054 Federal Register / Vol. 75, No. 133 / Tuesday, July 13, 2010 / Proposed Rules

3. Proposed PE Revisions for CY 2011

a. Equipment Utilization Rate

As part of the PE methodology

associated with the allocation of equipment costs for calculating PE RVUs, we currently use an equipment utilization rate assumption of 50 percent for most equipment, with the exception of expensive diagnostic imaging equipment (which is equipment priced at over $1 million, for example, computed tomography (CT) and magnetic resonance imaging (MRI) scanners), for which we adopted a 90 percent utilization rate assumption and provided for a 4-year transition beginning in CY 2010 (74 FR 61755). Therefore, CY 2010 is the first transitional payment year. Payment is made in CY 2010 for the diagnostic services listed in Table 3 (those that include expensive diagnostic imaging equipment in their PE inputs) based on 25 percent of the new PE RVUs and 75 percent of the prior PE RVUs for those

services.

Section 1848(b)(4)(C) of the Act (as added by section 3135(a) of the ACA) requires that with respect to fee

schedules established for CY 2011 and subsequent years, in the methodology for determining PE RVUs for expensive diagnostic imaging equipment under the

CY 2010 PFS final rule with comment period, the Secretary shall use a 75 percent assumption instead of the

utilization rates otherwise established in that rule. The provision also requires that the reduced expenditures attributable to this change in the
utilization rate for CY 2011 and subsequent years shall not be taken into account when applying the budget neutrality limitation on annual adjustments described in section 1848(c)(2)(B)(ii)(II) of the Act.

As a result, the 75 percent equipment utilization rate assumption will be applied to expensive diagnostic imaging equipment in a nonbudget neutral manner for CY 2011, and the changes to
PE RVUs will not be transitioned over a period of years. We will apply the 75 percent utilization rate assumption in
CY 2011 to all of the services to which we currently apply the transitional 90 percent utilization rate assumption in
CY 2010. These services are listed in a file on the CMS Web site that is posted
under downloads for the CY 2010 PFS final rule with comment period at: ( http://www.cms.gov/ physicianfeesched/downloads/CODES

_ SUBJECT

_ TO

_ 90PCT

_ USAGE

_ RATE.zip ). These codes are also displayed in Table 3. 

### T ABLE 

### 3—C URRENT 

### CPT C ODES 

### S UB



### JECT TO 

### F IRST 

### Y EAR 

### (CY 2010) OF


### 4-Y EAR 

### T RANSITION TO 

### 90 P ERCENT


### E QUIPMENT 

### U TILIZATION 

### R ATE 

### A S



### SUMPTION AND 

### T HAT 

### W ILL 

### B E 

### S UB



### JECT TO THE 

### 75 P ERCENT 

### E QUIP



### MENT 

### U TILIZATION 

### R ATE 

### A SSUMP



### TION IN 

### CY 2011

CPT code Short descriptor

70336 ...... Mri, temporomandibular joint(s). 70450 ...... Ct head/brain w/o dye. 70460 ...... Ct head/brain w/dye. 70470 ...... Ct head/brain w/o & w/dye. 70480 ...... Ct orbit/ear/fossa w/o dye. 70481 ...... Ct orbit/ear/fossa w/dye. 70482 ...... Ct orbit/ear/fossa w/o & w/dye. 70486 ...... Ct maxillofacial w/o dye. 70487 ...... Ct maxillofacial w/dye. 70488 ...... Ct maxillofacial w/o & w/dye. 70490 ...... Ct soft tissue neck w/o dye. 70491 ...... Ct soft tissue neck w/dye. 70492 ...... Ct soft tissue neck w/o & w/dye. 70540 ...... Mri orbit/face/neck w/o dye. 70542 ...... Mri orbit/face/neck w/dye. 70543 ...... Mri orbit/face/neck w/o & w/dye. 70551 ...... Mri brain w/o dye. 70552 ...... Mri brain w/dye. 70553 ...... Mri brain w/o & w/dye. 70554 ...... Fmri brain by tech. 71250 ...... Ct thorax w/o dye. 71260 ...... Ct thorax w/dye. 71270 ...... Ct thorax w/o & w/dye. 71550 ...... Mri chest w/o dye. 71551 ...... Mri chest w/dye. 71552 ...... Mri chest w/o & w/dye. 72125 ...... CT neck spine w/o dye. 72126 ...... Ct neck spine w/dye. 72127 ...... Ct neck spine w/o & w/dye. 72128 ...... Ct chest spine w/o dye. 72129 ...... Ct chest spine w/dye. 72130 ...... Ct chest spine w/o & w/dye. 72131 ...... Ct lumbar spine w/o dye. 72132 ...... Ct lumbar spine w/dye. 72133 ...... Ct lumbar spine w/o & w/dye. 72141 ...... Mri neck spine w/o dye. 72142 ...... Mri neck spine w/dye. 72146 ...... Mri chest spine w/o dye. 72147 ...... Mri chest spine w/dye. 72148 ...... Mri lumbar spine w/o dye. 72149 ...... Mri lumbar spine w/dye. 72156 ...... Mri neck spine w/o & w/dye. 72157 ...... Mri chest spine w/o & w/dye. 72158 ...... Mri lumbar spine w/o & w/dye. 72192 ...... Ct pelvis w/o dye. 72193 ...... Ct pelvis w/dye. 72194 ...... Ct pelvis w/o & w/dye. 72195 ...... Mri pelvis w/o dye. 72196 ...... Mri pelvis w/dye. 72197 ...... Mri pelvis w/o & w/dye. 73200 ...... Ct upper extremity w/o dye. 73201 ...... Ct upper extremity w/dye. 73202 ...... Ct upper extremity w/o & w/dye. 73218 ...... Mri upper extr w/o dye. 73219 ...... Mri upper extr w/dye. 73220 ...... Mri upper extremity w/o & w/dye. 73221 ...... Mri joint upper extr w/o dye. 73222 ...... Mri joint upper extr w/dye. 73223 ...... Mri joint upper extr w/o & w/dye. 73700 ...... Ct lower extremity w/o dye. 73701 ...... Ct lower extremity w/dye. 73702 ...... Ct lower extremity w/o & w/dye. 73718 ...... Mri lower extremity w/o dye. 

### T ABLE 

### 3—C URRENT 

### CPT C ODES 

### S UB



### JECT TO 

### F IRST 

### Y EAR 

### (CY 2010) OF


### 4-Y EAR 

### T RANSITION TO 

### 90 P ERCENT


### E QUIPMENT 

### U TILIZATION 

### R ATE 

### A S



### SUMPTION AND 

### T HAT 

### W ILL 

### B E 

### S UB



### JECT TO THE 

### 75 P ERCENT 

### E QUIP



### MENT 

### U TILIZATION 

### R ATE 

### A SSUMP



### TION IN 

### CY 2011—Continued

CPT code Short descriptor

73719 ...... Mri lower extremity w/dye. 73720 ...... Mri lower ext w/dye & w/o dye. 73721 ...... Mri joint of lwr extr w/o dye. 73722 ...... Mri joint of lwr extr w/dye. 73723 ...... Mri joint of lwr extr w/o & w/dye. 74150 ...... Ct abdomen w/o dye. 74160 ...... Ct abdomen w/dye. 74170 ...... Ct abdomen w/o & w/dye. 74181 ...... Mri abdomen w/o dye. 74182 ...... Mri abdomen w/dye. 74183 ...... Mri abdomen w/o and w/dye. 74261 ...... Ct colonography, w/o dye. 74262 ...... Ct colonography, w/dye. 75557 ...... Cardiac mri for morph. 75559 ...... Cardiac mri w/stress img. 75561 ...... Cardiac mri for morph w/dye. 75563 ...... Cardiac mri w/stress img & dye. 75571 ...... Ct hrt w/o dye w/ca test. 75572 ...... Ct hrt w/3d image. 75573 ...... Ct hrt w/3d image, congen. 77058 ...... Mri, one breast. 77059 ...... Mri, both breasts. 77078 ...... Ct bone density, axial. 77084 ...... Magnetic image, bone marrow.

Additionally, for CY 2011, we are proposing to expand the list of services to which the higher equipment utilization rate assumption applies to all other diagnostic imaging services that utilize similar expensive CT and MRI
scanners. The additional 24 CPT codes (listed in Table 4) to which we are proposing to apply the 75 percent equipment utilization rate assumption also have expensive diagnostic imaging equipment (priced at over $1 million) included in their PE inputs. These services are predominantly diagnostic computed tomographic angiography (CTA) and magnetic resonance angiography (MRA) procedures that include similar expensive CT and MRI scanners in their direct PE inputs. We
indicated in the CY 2010 PFS final rule with comment period (74 FR 61754) that we were persuaded by PPIS data on angiography that the extrapolation of MRI and CT data (and their higher equipment utilization rate) may be inappropriate. However, this reference was limited to those procedures that include an angiography room in the direct PE inputs, such as CPT code 93510 (Left heart catheterization, retrograde, from the brachial artery, axillary artery or femoral artery; percutaneous). In contrast, CTA and MRA procedures include a CT room or


### 40055 Federal Register / Vol. 75, No. 133 / Tuesday, July 13, 2010 / Proposed Rules

MRI room, respectively, in the direct PE inputs, and the PPIS data confirm that a higher assumed utilization rate than 50 percent would be appropriate. The PPIS angiography room data that reflected a 56 percent equipment utilization rate would not specifically apply to CTA and MRA procedures. Thus, on further review, we believe it is appropriate to include CTA and MRA procedures in the list of procedures for which we assume a 75 percent equipment utilization rate, and we are proposing to do so beginning in CY

2011.

Consistent with section 1848(c)(2)(B)(v)(III) of the Act (as amended by section 3135 of the ACA), the reduced expenditures attributable to this change in the utilization rate assumption applicable to CY 2011 shall
not be taken into account when applying the budget neutrality limitation on annual adjustments described in section 1848(c)(2)(B)(ii)(III)
of the Act.

As provided in the CY 2010 PFS final rule with comment period (74 FR 61751), CY 2011 is the second year of the 4-year transition to the PE RVUs calculated using the PPIS data. The reductions in the PE RVUs for expensive diagnostic imaging equipment attributable to the change to an equipment utilization rate assumption of 75 percent for CY 2011 are not subject
to the transition.



### T ABLE 

### 4—P ROPOSED 

### CPT C ODE 

### A D



### DITIONS TO THE 

### 75 P ERCENT 

### E QUIP



### MENT 

### U TILIZATION 

### R ATE 

### A SSUMP



### TION 

### CY 2011

CPT code Short descriptor

70496 ...... Ct angiography, head. 70498 ...... Ct angiography, neck. 70544 ...... Mr angiography head w/o dye. 70545 ...... Mr angiography head w/dye. 70546 ...... Mr angiography head w/o & w/ dye. 

### T ABLE 

### 4—P ROPOSED 

### CPT C ODE 

### A D



### DITIONS TO THE 

### 75 P ERCENT 

### E QUIP



### MENT 

### U TILIZATION 

### R ATE 

### A SSUMP



### TION 

### CY 2011—Continued

CPT code Short descriptor

70547 ...... Mr angiography neck w/o dye. 70548 ...... Mr angiography neck w/dye. 70549 ...... Mr angiography neck w/o & w/ dye. 71275 ...... Ct angiography, chest. 71555 ...... Mri angio chest w/ or w/o dye. 72159 ...... Mr angio spone w/o & w/dye. 72191 ...... Ct angiography, pelv w/o & w/ dye. 72198 ...... Mri angio pelvis w/ or w/o dye. 73206 ...... Ct angio upper extr w/o & w/dye. 73225 ...... Mr angio upr extr w/o & w/dye. 73706 ...... Ct angio lower ext w/o & w/dye. 73725 ...... Mr angio lower ext w/ or w/o dye. 74175 ...... Ct angiography, abdom w/o & w/ dye. 74185 ...... Mri angio, abdom w/ or w/o dye. 75565 ...... Card mri vel flw map add-on. 75574 ...... Ct angio hrt w/3d image. 75635 ...... Ct angio abdominal arteries. 76380 ...... CAT scan follow up study. 77079 ...... Ct bone density, peripheral.

b. HCPCS Code-Specific PE Proposals

In this section, we discuss other specific CY 2011 proposals and changes related to direct PE inputs. The proposed changes that follow are included in the proposed CY 2011 direct PE database, which is available
on the CMS Web site under the
downloads for the CY 2011 PFS proposed rule at http://www.cms.gov/ PhysicianFeeSched/.

(1) Biohazard Bags

We have identified 22 codes for which the supply item ‘‘ biohazard bag ’’ (SM004) is currently considered a direct PE input. The item is already properly
accounted for in the indirect PE because
it is not attributable to an individual patient service. Therefore, we are proposing to remove the biohazard bag from the CY 2011 direct PE database and the changes in direct PE inputs for
the associated services are reflected in the proposed CY 2011 direct PE
database.

(2) PE Inputs for Professional Component (PC) Only and Technical Component (TC) Only Codes Summing to Global Only Codes

In the case of selected diagnostic tests,
different but related CPT codes are used to describe global, professional, and technical components of a service. These codes are unlike the majority of other diagnostic test CPT codes where modifiers may be used in billing a single
CPT code in order to differentiate professional and technical components.
When different but related CPT codes are used to report the components of these services, the different CPT codes
are referred to as ‘‘ global only, ’’

‘‘ professional (PC) only, ’’ and ‘‘ technical (TC) only ’’ codes. Medicare payment systems are programmed to ensure that the PE RVUs for global only codes equal
the sum of the PE RVUs for the PC and TC only codes. However, it has come to our attention that the direct PE inputs for certain global only codes do not reflect the appropriate summation of their related TC only and PC only component code PE inputs as they appear in the direct PE database. While the PFS payment calculations have been programmed to apply the correct PE RVUs for the global only code based on a summation of component code PE RVUs, the direct PE database has reflected incorrect inputs that are overridden by the payment system. Therefore, we are proposing to correct the direct PE inputs for the global only codes so that the inputs reflect the appropriate summing of the PE inputs for the associated PC only and TC only codes. The proposed CY 2011 direct PE
database includes PE corrections to the
14 CPT codes listed in Table 5.



### T ABLE 

### 5—G ROUPS OF 

### R ELATED 

### CPT C ODES 

### W ITH 

### P ROPOSED 

### C HANGES TO 

### PE I NPUTS 

### S O 

### T HAT 

### I NPUTS FOR


### P ROFESSIONAL 

### C OMPONENT 

### (PC) O NLY AND 

### T ECHNICAL 

### C OMPONENT 

### (TC) O NLY 

### C ODES 

### S UM TO 

### G LOBAL 

### O NLY 

### C ODES

CPT code Long descriptor

93224 ................ Wearable electrocardiographic rhythm derived monitoring for 24 hours by continuous original waveform recording and storage, with visual superimposition scanning; includes recording, scanning analysis with report, physician review and interpretation.93225 ................ Wearable electrocardiographic rhythm derived monitoring for 24 hours by continuous original waveform recording and storage, with visual superimposition scanning; recording (includes connection, recording, disconnection).93226 ................ Wearable electrocardiographic rhythm derived monitoring for 24 hours by continuous original waveform recording and storage, with visual superimposition scanning; scanning analysis with report. 93230 ................ Wearable electrocardiographic rhythm derived monitoring for 24 hours by continuous original waveform recording and storage without superimposition scanning utilizing a device capable of producing a full miniaturized printout; including recording, microprocessor-based analysis with report, physician review and interpretation. 93231 ................ Wearable electrocardiographic rhythm derived monitoring for 24 hours by continuous original waveform recording and storage without superimposition scanning utilizing a device capable of producing a full miniaturized printout; recording (includes connection, recording, and disconnection.


### 40056 Federal Register / Vol. 75, No. 133 / Tuesday, July 13, 2010 / Proposed Rules

T ABLE 

### 5—G ROUPS OF 

### R ELATED 

### CPT C ODES 

### W ITH 

### P ROPOSED 

### C HANGES TO 

### PE I NPUTS 

### S O 

### T HAT 

### I NPUTS FOR 

### P ROFES



### SIONAL 

### C OMPONENT 

### (PC) O NLY AND 

### T ECHNICAL 

### C OMPONENT 

### (TC) O NLY 

### C ODES 

### S UM TO 

### G LOBAL 

### O NLY 

### C ODES 

### — Continued

CPT code Long descriptor

93232 ................ Wearable electrocardiographic rhythm derived monitoring for 24 hours by continuous original waveform recording and storage without superimposition scanning utilizing a device capable of producing a full miniaturized printout; microprocessor-based analysis with report.93268 ................ Wearable patient activated electrocardiographic rhythm derived event recording with presymptom memory loop, 24-hour attended monitoring, per 30 day period of time; includes transmission, physician review and interpretation.93270 ................ Wearable patient activated electrocardiographic rhythm derived event recording with presymptom memory loop, 24-hour attended monitoring, per 30 day period of time; recording (includes connection, recording, and disconnection).93271 ................ Wearable patient activated electrocardiographic rhythm derived event recording with presymptom memory loop, 24-hour attended monitoring, per 30 day period of time; monitoring, receipt of transmissions, and analysis. 93720 ................ Plethysmography, total body; with interpretation and report. 93721 ................ Plethysmography, total body; tracing only, without interpretation and report. 93784 ................ Ambulatory blood pressure monitoring, utilizing a system such as magnetic tape and/or computer disk, for 24 hours or longer; including recording, scanning analysis, interpretation and report. 93786 ................ Ambulatory blood pressure monitoring, utilizing a system such as magnetic tape and/or computer disk, for 24 hours or longer; recording only. 93788 ................ Ambulatory blood pressure monitoring, utilizing a system such as magnetic tape and/or computer disk, for 24 hours or longer; scanning analysis with report.

(3) Equipment Time Inputs for Certain Diagnostic Tests

We have recently identified incorrect equipment time inputs for four CPT codes associated with certain diagnostic tests (each is displayed in Table 5):

• CPT code 93225 is the TC only code that includes the connection, recording,
and disconnection of the holter monitor (CMS Equipment Code EQ127) used in
24 hour continuous electrocardiographic rhythm derived monitoring. The current equipment time input for the holter monitor is 42minutes, which parallels the intraservice clinical labor input time for the CPT code. However, the equipment time
should reflect the 24 hours of continuous monitoring in which the device is used exclusively by the patient. Therefore, we are proposing to change the monitor equipment time for CPT code 93225 to 1440 minutes, the
number of minutes in 24 hours.

• CPT code 93226 is the TC only code that includes the scanning analysis with report. The number of minutes the monitor (CMS Equipment Code EQ127) is used in this service should parallel the intra-service clinical labor input time of 52 minutes during which the monitor is in use, instead of the current equipment time of 1440 minutes, because this code does not represent 24 hours of device use. Therefore, we are proposing to change the monitor equipment time for CPT code 93226 to

52 minutes.

• CPT 93224 is the global only code that includes the connection, recording, and disconnection of the monitor (CMS Equipment Code EQ127) and the scanning analysis with report, as well as the physician review and interpretation. Under our proposal, its direct PE inputs have been appropriately summed to
include the 1492 total minutes of time
for the holter monitor that are included
in CPT codes 93225 and 93226.

• CPT code 93788 is the TC only code that describes the scanning analysis with report for ambulatory blood pressure monitoring. The equipment time input for the blood pressure monitor should parallel the 10 minutes of clinical labor input for the CPT code since that is the time during which the monitor is in use. Currently, the equipment time input for the monitor is 1440 minutes, which is appropriate only for CPT code 93786, the code that describes the 24 hours of ambulatory blood pressure monitoring recording. In this case, CPT code 93786’s direct PE inputs are correct. Therefore, we are proposing to correct the equipment time input for the ambulatory blood pressure
monitor in CPT code 93788 to 10

minutes.

• CPT code 93784 is the global only code that includes the recording, the scanning analysis with report, and the physician interpretation and report for ambulatory blood pressure monitoring. Under our proposal, its direct PE inputs have been appropriately summed to
include the 1450 total minutes of time for the ambulatory blood pressure
monitor that are included in CPT codes
93786 and 93788.

We have modified the proposed CY
2011 direct PE database to reflect these changes.

(4) Cobalt-57 Flood Source

Stakeholders have requested that CMS
reevaluate the useful life of the Cobalt57 flood source (CMS Equipment Code ER001), given their estimate of approximately 271 days for the source’s half-life. The current useful life input
for the Colbalt-57 flood source is 5 years. Using publicly available catalogs,
we found that the Cobalt-57 flood
source is marketed with a useful life of 2 years. Therefore, we are proposing to change the useful life input from thecurrent 5 years to 2 years. The Cobalt57 flood source is included with the revised useful life input for 96 HCPCS codes in the proposed CY 2011 direct
PE database.

(5) Venom Immunotherapy

One stakeholder provided updated price information for the venoms used for the five venom immunology CPT codes, specifically 95145 (Professional services for the supervision of preparation and provision of antigens for allergen immunotherapy (specify number of doses); single stinging insect venom); 95146 (Professional services for the supervision of preparation and provision of antigens for allergen immunotherapy (specify number of doses); 2 single stinging insect venoms); 95147 (Professional services for the supervision of preparation and provision of antigens for allergen immunotherapy (specify number of doses); 3 single stinging insect venoms); 95148 (Professional services for the supervision of preparation and provision of antigens for allergen immunotherapy (specify number of doses); 4 single stinging insect venoms); 95149 (Professional services for the supervision of preparation and provision of antigens for allergen immunotherapy (specify number of doses); 5 single stinging insect venoms).

In the CY 2004 PFS final rule with comment period (68 FR 63206), we


### 40057 Federal Register / Vol. 75, No. 133 / Tuesday, July 13, 2010 / Proposed Rules

adopted a pricing methodology that utilizes the average price of a 1 milliliter dose of venom and adds that price per dose as direct PE inputs for CPT codes 95145 and 95146. When a patient requires three stinging insect venoms, as for CPT code 95147, the price input for a 3-vespid mix is used. This 3-vespid mix price is also used to value CPT codes 95148 (four venoms) and 96149 (five venoms), with the single venom price added once to CPT code 97148
and twice to CPT code 97149.

As requested by the stakeholder, we are updating the price inputs for the 1- milliliter dose of venom to $16.67 and for the 3-vespid mix to $30.22 in the proposed CY 2011 direct PE database.

(6) Equipment Redundancy

Stakeholders have recently brought to our attention that the ECG, 3-channel (with SpO2, NIBP, temp, resp) (CMS Equipment Code EQ011) incorporates all of the functionality of the pulse oximeter with printer (CMS Equipment Code EQ211). Therefore, in HCPCS codes where CMS Equipment Code EQ011 is present, CMS Equipment Code EQ211 is redundant. On this basis, we are proposing to remove the pulse oximeter with printer (CMS Equipment Code EQ211) as an input for the 118 codes that also contain the ECG, 3- channel (with SpO2, NIBP, temp, resp) (CMS Equipment Code EQ011). We have made these adjustments in the proposed

CY 2011 direct PE database.

(7) Equipment Duplication

We recently identified a number of CPT codes with duplicate equipment inputs in the PE database. We are proposing to remove the duplicate equipment items and have modified the proposed CY 2011 direct PE database accordingly as detailed in Table 6.



### T ABLE 

### 6—CPT C ODES 

### W ITH 

### P ROPOSED 

### R EMOVAL OF 

### D UPLICATE 

### E QUIPMENT 

### I TEMS IN THE 

### D IRECT 

### PE D ATABASE

CPT code CMS equipmentcode for duplicate equipment Description of equipment

19302 P-mastectomy w/ln removal ......................................... EF014 ............... light, surgical. 19361 Breast reconstr w/lat flap ............................................. ED005 .............. camera, digital system, 12 megapixel (medical grade). EF031 ............... table, power. EQ168 .............. light, exam. 44157 Colectomy w/ileoanal anast ......................................... EF031 ............... table, power. EQ168 .............. light, exam. 44158 Colectomy w/neo-rectum pouch .................................. EF031 ............... table, power. EQ168 .............. light, exam. 56440 Surgery for vulva lesion ............................................... EF031 ............... table, power. EQ170 .............. light, fiberoptic headlight w-source. 57296 Revise vag graft, open abd .......................................... EF031 ............... table, power. EQ170 .............. light, fiberoptic headlight w-source. 58263 Vag hyst w/t/o & vag repair ......................................... EF031 ............... table, power. 59610 Vbac delivery ................................................................ EF031 ............... table, power. 67228 Treatment of retinal lesion ........................................... EL005 ............... lane, exam (oph). EQ230 .............. slit lamp (Haag-Streit), dedicated to laser use. 76813 Ob us nuchal meas, 1 gest .......................................... ED024 ............... film processor, dry, laser. 77371 Srs, multisource ........................................................... EQ211 .............. pulse oximeter w-printer. 93540 Injection, cardiac cath .................................................. ED018 .............. computer workstation, cardiac cath monitoring. EL011 ............... room, angiography. EQ011 .............. ECG, 3-channel (with SpO2, NIBP, temp, resp). EQ032 .............. IV infusion pump.
EQ088 .............. contrast media warmer. EQ211 .............. pulse oximeter w-printer. 93542 Injection for heart x-rays .............................................. ED018 .............. computer workstation, cardiac cath monitoring. EL011 ............... room, angiography. EQ011 .............. ECG, 3-channel (with SpO2, NIBP, temp, resp). EQ032 .............. IV infusion pump.
EQ088 .............. contrast media warmer. EQ211 .............. pulse oximeter w-printer.

(8) Establishing Overall Direct PE Supply Price Inputs Based on Unit Prices and Quantities

We have identified minor errors in total price inputs for a number of supply

items due to mathematical mistakes in multiplying the item unit price and the quantity used in particular CPT codes
for the associated services. We are proposing to modify the direct PE database to appropriately include the overall supply price input for a supply item as the product of the unit price and the quantity of the supply item used in
the CPT code. Most of the overall supply price input changes are small, and we have adjusted the proposed CY 2011 direct PE database accordingly.
The CPT and Level II HCPCS codes and associated supplies for nonfacility and facility settings that are subject to these corrections are displayed in Tables 7 and 8, respectively.



### T ABLE 

### 7—O VERALL 

### S UPPLY 

### P RICE 

### C ALCULATION 

### C ORRECTIONS FOR 

### N ONFACILITY 

### S ETTINGS

CPT/HCPCS
code Short descriptor CMS Supply
code with overall price corrections Description of supply

11952 ................. Therapy for contour defects .......... SC029 .............. needle, 18–27g. 11954 ................. Therapy for contour defects .......... SC029 .............. needle, 18–27g. 15820 ................. Revision of lower eyelid ................ SA082 ............... pack, ophthalmology visit (w-dilation).


### 40058 Federal Register / Vol. 75, No. 133 / Tuesday, July 13, 2010 / Proposed Rules

T ABLE 

### 7—O VERALL 

### S UPPLY 

### P RICE 

### C ALCULATION 

### C ORRECTIONS FOR 

### N ONFACILITY 

### S ETTINGS 

### —Continued

CPT/HCPCS
code Short descriptor CMS Supply
code with overall price corrections Description of supply

15821 ................. Revision of lower eyelid ................ SA082 ............... pack, ophthalmology visit (w-dilation). 15822 ................. Revision of upper eyelid ............... SA082 ............... pack, ophthalmology visit (w-dilation). 17311 ................. Mohs, 1 stage, h/n/hf/g ................. SG078 .............. tape, surgical occlusive 1in (Blenderm). 17312 ................. Mohs addl stage ........................... SG078 .............. tape, surgical occlusive 1in (Blenderm). 17313 ................. Mohs, 1 stage, t/a/l ....................... SG078 .............. tape, surgical occlusive 1in (Blenderm). 17314 ................. Mohs, addl stage, t/a/l .................. SG078 .............. tape, surgical occlusive 1in (Blenderm). 21011 ................. Exc face les sc < 2 cm ................. SH046 .............. lidocaine 1% w-epi inj (Xylocaine w-epi). 21013 ................. Exc face tum deep < 2 cm ........... SH046 .............. lidocaine 1% w-epi inj (Xylocaine w-epi). 21073 ................. Mnpj of tmj w/anesth ..................... SG079 .............. tape, surgical paper 1in (Micropore). 21076 ................. Prepare face/oral prosthesis ......... SL047 ............... dental stone powder. 21081 ................. Prepare face/oral prosthesis ......... SK024 ............... film, dental. 21310 ................. Treatment of nose fracture ........... SB034 ............... mask, surgical, with face shield. 23075 ................. Exc shoulder les sc < 3 cm .......... SG056 .............. gauze, sterile 4in x 4in (10 pack uou). ....................................................... SH021 ............... bupivacaine 0.25% inj (Marcaine). 24075 ................. Exc arm/elbow les sc < 3 cm ....... SG056 .............. gauze, sterile 4in x 4in (10 pack uou). ....................................................... SH021 ............... bupivacaine 0.25% inj (Marcaine). 25075 ................. Exc forearm les sc < 3 cm ............ SG056 .............. gauze, sterile 4in x 4in (10 pack uou). ....................................................... SH021 ............... bupivacaine 0.25% inj (Marcaine). 26115 ................. Exc hand les sc < 1.5 cm ............. SG056 .............. gauze, sterile 4in x 4in (10 pack uou). ....................................................... SH021 ............... bupivacaine 0.25% inj (Marcaine). 27327 ................. Exc thigh/knee les sc < 3 cm ....... SG056 .............. gauze, sterile 4in x 4in (10 pack uou). 27618 ................. Exc leg/ankle tum < 3 cm ............. SG056 .............. gauze, sterile 4in x 4in (10 pack uou). 28039 ................. Exc foot/toe tum sc > 1.5 cm ........ SG056 .............. gauze, sterile 4in x 4in (10 pack uou). 28043 ................. Exc foot/toe tum sc < 1.5 cm ........ SG056 .............. gauze, sterile 4in x 4in (10 pack uou). 28045 ................. Exc foot/toe tum deep < 1.5cm .... SG056 .............. gauze, sterile 4in x 4in (10 pack uou). 28306 ................. Incision of metatarsal .................... SA048 ............... pack, minimum multi-specialty visit. 28307 ................. Incision of metatarsal .................... SA048 ............... pack, minimum multi-specialty visit. 28310 ................. Revision of big toe ........................ SA048 ............... pack, minimum multi-specialty visit. 28312 ................. Revision of toe .............................. SA048 ............... pack, minimum multi-specialty visit. 28313 ................. Repair deformity of toe ................. SA048 ............... pack, minimum multi-specialty visit. 28315 ................. Removal of sesamoid bone .......... SA048 ............... pack, minimum multi-specialty visit. 28340 ................. Resect enlarged toe tissue ........... SA048 ............... pack, minimum multi-specialty visit. 28344 ................. Repair extra toe(s) ........................ SA048 ............... pack, minimum multi-specialty visit. 28345 ................. Repair webbed toe(s) ................... SA048 ............... pack, minimum multi-specialty visit. 28496 ................. Treat big toe fracture .................... SA048 ............... pack, minimum multi-specialty visit. 28755 ................. Fusion of big toe joint ................... SA048 ............... pack, minimum multi-specialty visit. 28820 ................. Amputation of toe .......................... SA048 ............... pack, minimum multi-specialty visit. 28890 ................. High energy eswt, plantar f ........... SC051 .............. syringe 10–12ml. 29870 ................. Knee arthroscopy, dx .................... SG079 .............. tape, surgical paper 1in (Micropore). 32553 ................. Ins mark thor for rt perq ................ SB034 ............... mask, surgical, with face shield. 36475 ................. Endovenous rf, 1st vein ................ SC074 ............... iv pressure infusor bag. 36592 ................. Collect blood from picc ................. SG050 .............. gauze, non-sterile 2in x 2in. 41530 ................. Tongue base vol reduction ........... SD009 .............. canister, suction. 41805 ................. Removal foreign body, gum .......... SD134 .............. tubing, suction, non-latex (6ft) with Yankauer tip (1). 41806 ................. Removal foreign body, jawbone ... SD134 .............. tubing, suction, non-latex (6ft) with Yankauer tip (1)

. 42107 ................. Excision lesion, mouth roof ........... SD009 .............. canister, suction. 46505 ................. Chemodenervation anal musc ...... SD009 .............. canister, suction. 49411 ................. Ins mark abd/pel for rt perq .......... SB034 ............... mask, surgical, with face shield. 49440 ................. Place gastrostomy tube perc ........ SK089 ............... x-ray developer solution. 49441 ................. Place duod/jej tube perc ............... SK089 ............... x-ray developer solution. 49442 ................. Place cecostomy tube perc .......... SK089 ............... x-ray developer solution. 49446 ................. Change g-tube to g-j perc ............. SK089 ............... x-ray developer solution. 49450 ................. Replace g/c tube perc ................... SK089 ............... x-ray developer solution. 49451 ................. Replace duod/jej tube perc ........... SK089 ............... x-ray developer solution. 49452 ................. Replace g-j tube perc ................... SK089 ............... x-ray developer solution. 49460 ................. Fix g/colon tube w/device ............. SK089 ............... x-ray developer solution. 49465 ................. Fluoro exam of g/colon tube ......... SK089 ............... x-ray developer solution. 50382 ................. Change ureter stent, percut .......... SB034 ............... mask, surgical, with face shield. 50384 ................. Remove ureter stent, percut ......... SB034 ............... mask, surgical, with face shield. 50385 ................. Change stent via transureth ......... SB034 ............... mask, surgical, with face shield. 50386 ................. Remove stent via transureth ......... SB034 ............... mask, surgical, with face shield. 50387 ................. Change ext/int ureter stent ........... SB034 ............... mask, surgical, with face shield. 50389 ................. Remove renal tube w/fluoro .......... SB034 ............... mask, surgical, with face shield. 51100 ................. Drain bladder by needle ............... SH047 .............. lidocaine 1%–2% inj (Xylocaine). 51101 ................. Drain bladder by trocar/cath ......... SH047 .............. lidocaine 1%–2% inj (Xylocaine). 51727 ................. Cystometrogram w/up ................... SC051 ............... syringe 10–12ml. 51728 ................. Cystometrogram w/vp ................... SC051 .............. syringe 10–12ml. 51729 ................. Cystometrogram w/vp&up ............. SC051 .............. syringe 10–12ml. 52649 ................. Prostate laser enucleation ............ SA048 ............... pack, minimum multi-specialty visit. 53855 ................. Insert prost urethral stent .............. SB024 ............... gloves, sterile.


### 40059 Federal Register / Vol. 75, No. 133 / Tuesday, July 13, 2010 / Proposed Rules

T ABLE 

### 7—O VERALL 

### S UPPLY 

### P RICE 

### C ALCULATION 

### C ORRECTIONS FOR 

### N ONFACILITY 

### S ETTINGS 

### —Continued

CPT/HCPCS
code Short descriptor CMS Supply
code with overall price corrections Description of supply

59300 ................. Episiotomy or vaginal repair ......... SG062 .............. packing, gauze plain 0.25–0.50in (5 yd uou). 59812 ................. Treatment of miscarriage .............. SA052 ............... pack, post-op incision care (staple). 64490 ................. Inj paravert f jnt c/t 1 lev ............... SK025 ............... film, dry, radiographic, 8in x 10in. 64493 ................. Inj paravert f jnt l/s 1 lev ............... SH021 ............... bupivacaine 0.25% inj (Marcaine). ....................................................... SK025 ............... film, dry, radiographic, 8in x 10in. 65272 ................. Repair of eye wound ..................... SA082 ............... pack, ophthalmology visit (w-dilation). 65286 ................. Repair of eye wound ..................... SA082 ............... pack, ophthalmology visit (w-dilation). 66250 ................. Follow-up surgery of eye .............. SA082 ............... pack, ophthalmology visit (w-dilation). 67031 ................. Laser surgery, eye strands ........... SA082 ............... pack, ophthalmology visit (w-dilation). 67105 ................. Repair detached retina ................. SA082 ............... pack, ophthalmology visit (w-dilation). 67110 ................. Repair detached retina ................. SA082 ............... pack, ophthalmology visit (w-dilation). 67120 ................. Remove eye implant material ....... SA082 ............... pack, ophthalmology visit (w-dilation). 67228 ................. Treatment of retinal lesion ............ SA082 ............... pack, ophthalmology visit (w-dilation). 67901 ................. Repair eyelid defect ...................... SA048 ............... pack, minimum multi-specialty visit. 75571 ................. Ct hrt w/o dye w/ca test ................ SJ019 ............... electrode adhesive disk. 75572 ................. Ct hrt w/3d image ......................... SJ019 ............... electrode adhesive disk. 75573 ................. Ct hrt w/3d image, congen ........... SJ019 ............... electrode adhesive disk. 75574 ................. Ct angio hrt w/3d image ............... SJ019 ............... electrode adhesive disk. 75960 ................. Transcath iv stent rs&i .................. SK034 ............... film, x-ray 14in x 17in. 76821 ................. Middle cerebral artery echo .......... SM013 .............. disinfectant, surface (Envirocide, Sanizide). 77371 ................. Srs, multisource ............................ SG079 .............. tape, surgical paper 1in (Micropore). 77372 ................. Srs, linear based ........................... SG079 .............. tape, surgical paper 1in (Micropore). 77373 ................. Sbrt delivery .................................. SG079 .............. tape, surgical paper 1in (Micropore). 78452 ................. Ht muscle image spect, mult ........ SC051 .............. syringe 10–12ml. ....................................................... SK092 ............... x-ray fixer solution 78454 ................. Ht musc image, planar, mult ......... SK092 ............... x-ray fixer solution. 88125 ................. Forensic cytopathology ................. SL026 ............... clearing agent (Histo-clear). 88355 ................. Analysis, skeletal muscle .............. SK073 ............... skin marking ink (tattoo). ....................................................... SL061 ............... embedding paraffin. ....................................................... SL078 ............... histology freezing spray (Freeze-It). ....................................................... SL201 ............... stain, eosin. 88356 ................. Analysis, nerve .............................. SB023 ............... gloves, non-sterile, nitrile. ....................................................... SK073 ............... skin marking ink (tattoo). ....................................................... SL061 ............... embedding paraffin. ....................................................... SL078 ............... histology freezing spray (Freeze-It). ....................................................... SL108 ............... pipette. ....................................................... SL201 ............... stain, eosin. 88365 ................. Insitu hybridization (fish) ............... SF004 ............... blade, microtome.

....................................................... SL179 ............... 1.0N NaOH. ....................................................... SL183 ............... slide, organosilane coated. ....................................................... SL189 ............... ethanol, 100%. ....................................................... SL190 ............... ethanol, 70%.

....................................................... SL194 ............... Hemo-De. ....................................................... SM016 .............. eye shield, splash protection. 88367 ................. Insitu hybridization, auto ............... SC057 .............. syringe 5–6ml. ....................................................... SF004 ............... blade, microtome. ....................................................... SL030 ............... cover slip, glass. ....................................................... SL085 ............... label for microscope slides.

....................................................... SL178 ............... 0.2N HCL.

....................................................... SL179 ............... 1.0N NaOH. ....................................................... SL181 ............... pipette tips, sterile. ....................................................... SL183 ............... slide, organosilane coated. ....................................................... SL189 ............... ethanol, 100%. ....................................................... SL190 ............... ethanol, 70%. ....................................................... SL191 ............... ethanol, 85%.

....................................................... SL194 ............... Hemo-De. ....................................................... SM016 .............. eye shield, splash protection. 88368 ................. Insitu hybridization, manual .......... SF004 ............... blade, microtome.

....................................................... SL179 ............... 1.0N NaOH. ....................................................... SL183 ............... slide, organosilane coated. ....................................................... SL189 ............... ethanol, 100%. ....................................................... SL190 ............... ethanol, 70%.

....................................................... SL194 ............... Hemo-De. ....................................................... SM016 .............. eye shield, splash protection. 88385 ................. Eval molecul probes, 51–250 ....... SL207 ............... air, filtered, compressed. ....................................................... SL218 ............... DNA, Versagene, blood kit. ....................................................... SL220 ............... ethanol, 200%. ....................................................... SL225 ............... gas, nitogen, ultra-high purity (compressed), grade 5.0. 88386 ................. Eval molecul probes, 251–500 ..... SL207 ............... air, filtered, compressed. ....................................................... SL218 ............... DNA, Versagene, blood kit.


### 40060 Federal Register / Vol. 75, No. 133 / Tuesday, July 13, 2010 / Proposed Rules

T ABLE 

### 7—O VERALL 

### S UPPLY 

### P RICE 

### C ALCULATION 

### C ORRECTIONS FOR 

### N ONFACILITY 

### S ETTINGS 

### —Continued

CPT/HCPCS
code Short descriptor CMS Supply
code with overall price corrections Description of supply

....................................................... SL220 ............... ethanol, 200%. ....................................................... SL225 ............... gas, nitogen, ultra-high purity (compressed), grade 5.0. 90470 ................. Immune admin H1N1 im/nasal ..... SB036 ............... paper, exam table. 91065 ................. Breath hydrogen test .................... (blank) ............... Sivrite-4. 91132 ................. Electrogastrography ...................... SD062 .............. electrode, surface. 91133 ................. Electrogastrography w/test ........... SD062 .............. electrode, surface. 92550 ................. Tympanometry & reflex thresh ...... SK059 ............... paper, recording (per sheet). 92597 ................. Oral speech device eval ............... SB022 ............... gloves, non-sterile. 92610 ................. Evaluate swallowing function ........ SB022 ............... gloves, non-sterile. 92626 ................. Eval aud rehab status ................... SK008 ............... audiology scoring forms. 92627 ................. Eval aud status rehab add-on ...... SK008 ............... audiology scoring forms. 92640 ................. Aud brainstem implt programg ...... SK068 ............... razor. 95004 ................. Percut allergy skin tests ................ SC023 .............. multi-tine device. 95024 ................. Id allergy test, drug/bug ................ SA048 ............... pack, minimum multi-specialty visit. ....................................................... SG050 .............. gauze, non-sterile 2in x 2in. 95027 ................. Id allergy titrate-airborne ............... SA048 ............... pack, minimum multi-specialty visit. ....................................................... SC052 ............... syringe 1ml. 95044 ................. Allergy patch tests ........................ SK087 ............... water, distilled. 95052 ................. Photo patch test ............................ SK087 ............... water, distilled. 95148 ................. Antigen therapy services .............. SH009 .............. antigen, venom. 95805 ................. Multiple sleep latency test ............ SK094 ............... x-ray marking pencil. 96040 ................. Genetic counseling, 30 min .......... SK062 ............... patient education booklet. 96102 ................. Psycho testing by technician ........ SK057 ............... paper, laser printing (each sheet). 96360 ................. Hydration iv infusion, init ............... SC018 .............. iv infusion set. ....................................................... SC051 ............... syringe 10–12ml. ....................................................... SG050 .............. gauze, non-sterile 2in x 2in. 96365 ................. Ther/proph/diag iv inf, init ............. SC018 .............. iv infusion set. ....................................................... SC051 ............... syringe 10–12ml. ....................................................... SG050 .............. gauze, non-sterile 2in x 2in. 96366 ................. Ther/proph/diag iv inf addon ......... SB022 ............... gloves, non-sterile. 96367 ................. Tx/proph/dg addl seq iv inf ........... SB022 ............... gloves, non-sterile. 96369 ................. Sc ther infusion, up to 1 hr ........... SC013 .............. infusion pump cassette-reservoir. 96371 ................. Sc ther infusion, reset pump ......... SC013 ............... infusion pump cassette-reservoir. 96372 ................. Ther/proph/diag inj, sc/im ............. SB022 ............... gloves, non-sterile. 96374 ................. Ther/proph/diag inj, iv push .......... SB022 ............... gloves, non-sterile. ....................................................... SC051 ............... syringe 10–12ml. ....................................................... SG050 .............. gauze, non-sterile 2in x 2in. 96375 ................. Tx/pro/dx inj new drug addon ....... SB022 ............... gloves, non-sterile. ....................................................... SC051 ............... syringe 10–12ml. 96401 ................. Chemo, anti-neopl, sq/im .............. SC051 ............... syringe 10–12ml. ....................................................... SG050 .............. gauze, non-sterile 2in x 2in. 96402 ................. Chemo hormon antineopl sq/im .... SC051 .............. syringe 10–12ml. ....................................................... SG050 .............. gauze, non-sterile 2in x 2in. 96409 ................. Chemo, iv push, sngl drug ............ SC018 .............. iv infusion set 22. ....................................................... SC051 ............... syringe 10–12ml. 96411 ................. Chemo, iv push, addl drug ........... SC018 .............. iv infusion set. ....................................................... SC051 ............... syringe 10–12ml. 96413 ................. Chemo, iv infusion, 1 hr ................ SC018 .............. iv infusion set. ....................................................... SC051 ............... syringe 10–12ml. 96417 ................. Chemo iv infus each addl seq ...... SC018 .............. iv infusion set. 96445 ................. Chemotherapy, intracavitary ......... SC018 .............. iv infusion set. ....................................................... SH069 ............... sodium chloride 0.9% irrigation (500–1000ml uou). 96542 ................. Chemotherapy injection ................ SC018 .............. iv infusion set. 99366 ................. Team conf w/pat by hc pro ........... SK062 ............... patient education booklet. G0270 ................ MNT subs tx for change dx .......... SK057 ............... paper, laser printing (each sheet). ....................................................... SK062 ............... patient education booklet. G0271 ................ Group MNT 2 or more 30 mins .... SK057 ............... paper, laser printing (each sheet).



### T ABLE 

### 8—O VERALL 

### S UPPLY 

### P RICE 

### C ALCULATION 

### C ORRECTIONS FOR 

### F ACILITY 

### S ETTINGS

CPT/HCPCS Code Short descriptor CMS supply
code with overall price corrections Description of supply

15738 ................. Muscle-skin graft, leg .................... SG017 .............. bandage, Kling, non-sterile 2in. 15820 ................. Revision of lower eyelid ................ SA082 ............... pack, ophthalmology visit (w-dilation). 15821 ................. Revision of lower eyelid ................ SA082 ............... pack, ophthalmology visit (w-dilation). 15822 ................. Revision of upper eyelid ............... SA082 ............... pack, ophthalmology visit (w-dilation). 19303 ................. Mast, simple, complete ................. SB006 ............... drape, non-sterile, sheet 40in x 60in. 20900 ................. Removal of bone for graft ............. SA054 ............... pack, post-op incision care (suture).


### 40061 Federal Register / Vol. 75, No. 133 / Tuesday, July 13, 2010 / Proposed Rules

T ABLE 

### 8—O VERALL 

### S UPPLY 

### P RICE 

### C ALCULATION 

### C ORRECTIONS FOR 

### F ACILITY 

### S ETTINGS 

### —Continued

CPT/HCPCS Code Short descriptor CMS supply
code with overall price corrections Description of supply

21011 ................. Exc face les sc < 2 cm ................. SA048 ............... pack, minimum multi-specialty visit. 21013 ................. Exc face tum deep < 2 cm ........... SA048 ............... pack, minimum multi-specialty visit. 21193 ................. Reconst lwr jaw w/o graft .............. SJ061 ............... tongue depressor. 21194 ................. Reconst lwr jaw w/graft ................. SJ061 ............... tongue depressor. 21240 ................. Reconstruction of jaw joint ............ SJ061 ............... tongue depressor. 21366 ................. Treat cheek bone fracture ............ SJ061 ............... tongue depressor. 21435 ................. Treat craniofacial fracture ............. SJ061 ............... tongue depressor. 21555 ................. Exc neck les sc < 3 cm ................ SA048 ............... pack, minimum multi-specialty visit. 21930 ................. Exc back les sc < 3 cm ................ SA048 ............... pack, minimum multi-specialty visit. 22902 ................. Exc abd les sc < 3 cm .................. SA048 ............... pack, minimum multi-specialty visit. 23075 ................. Exc shoulder les sc < 3 cm .......... SA048 ............... pack, minimum multi-specialty visit. 24075 ................. Exc arm/elbow les sc < 3 cm ....... SA048 ............... pack, minimum multi-specialty visit. 25075 ................. Exc forearm les sc < 3 cm ............ SA048 ............... pack, minimum multi-specialty visit. 26115 ................. Exc hand les sc < 1.5 cm ............. SA048 ............... pack, minimum multi-specialty visit. 27047 ................. Exc hip/pelvis les sc < 3 cm ......... SA048 ............... pack, minimum multi-specialty visit. 27327 ................. Exc thigh/knee les sc < 3 cm ....... SA048 ............... pack, minimum multi-specialty visit. 27618 ................. Exc leg/ankle tum < 3 cm ............. SA048 ............... pack, minimum multi-specialty visit. 28307 ................. Incision of metatarsal .................... SA048 ............... pack, minimum multi-specialty visit. 28340 ................. Resect enlarged toe tissue ........... SA048 ............... pack, minimum multi-specialty visit. 28345 ................. Repair webbed toe(s) ................... SA048 ............... pack, minimum multi-specialty visit. 28820 ................. Amputation of toe .......................... SA048 ............... pack, minimum multi-specialty visit. 33516 ................. Cabg, vein, six or more ................ SA052 ............... pack, post-op incision care (staple). 34510 ................. Transposition of vein valve ........... SA054 ............... pack, post-op incision care (suture). 35013 ................. Repair artery rupture, arm ............ SA048 ............... pack, minimum multi-specialty visit. 41150 ................. Tongue, mouth, jaw surgery ......... SA048 ............... pack, minimum multi-specialty visit. 41153 ................. Tongue, mouth, neck surgery ....... SA048 ............... pack, minimum multi-specialty visit. 41155 ................. Tongue, jaw, & neck surgery ........ SA048 ............... pack, minimum multi-specialty visit. 41805 ................. Removal foreign body, gum .......... SD134 .............. tubing, suction, non-latex (6ft) with Yankauer tip (1). 41806 ................. Removal foreign body, jawbone ... SD134 .............. tubing, suction, non-latex (6ft) with Yankauer tip (1)

. 42160 ................. Treatment mouth roof lesion ......... SD122 ............... suction tip, Yankauer. 51925 ................. Hysterectomy/bladder repair ......... SB006 ............... drape, non-sterile, sheet 40in x 60in. 56620 ................. Partial removal of vulva ................ SA048 ............... pack, minimum multi-specialty visit. 57284 ................. Repair paravag defect, open ........ SA051 ............... pack, pelvic exam. SB006 ............... drape, non-sterile, sheet 40in x 60in. 57285 ................. Repair paravag defect, vag .......... SA051 ............... pack, pelvic exam. SB006 ............... drape, non-sterile, sheet 40in x 60in. 57423 ................. Repair paravag defect, lap ........... SA051 ............... pack, pelvic exam. SB006 ............... drape, non-sterile, sheet 40in x 60in. 58660 ................. Laparoscopy, lysis ........................ SB006 ............... drape, non-sterile, sheet 40in x 60in. 58662 ................. Laparoscopy, excise lesions ......... SJ046 ............... silver nitrate applicator. 58670 ................. Laparoscopy, tubal cautery ........... SJ046 ............... silver nitrate applicator. 58940 ................. Removal of ovary(s) ...................... SA052 ............... pack, post-op incision care (staple). 58952 ................. Resect ovarian malignancy ........... SB006 ............... drape, non-sterile, sheet 40in x 60in. 64632 ................. N block inj, common digit .............. SA048 ............... pack, minimum multi-specialty visit. 65112 ................. Remove eye/revise socket ............ SA050 ............... pack, ophthalmology visit (no dilation). 65114 ................. Remove eye/revise socket ............ SA050 ............... pack, ophthalmology visit (no dilation). 65235 ................. Remove foreign body from eye .... SA082 ............... pack, ophthalmology visit (w-dilation). 65265 ................. Remove foreign body from eye .... SA082 ............... pack, ophthalmology visit (w-dilation). 65272 ................. Repair of eye wound ..................... SA082 ............... pack, ophthalmology visit (w-dilation). 65273 ................. Repair of eye wound ..................... SA082 ............... pack, ophthalmology visit (w-dilation). 65280 ................. Repair of eye wound ..................... SA082 ............... pack, ophthalmology visit (w-dilation). 65285 ................. Repair of eye wound ..................... SA082 ............... pack, ophthalmology visit (w-dilation). 65286 ................. Repair of eye wound ..................... SA082 ............... pack, ophthalmology visit (w-dilation). 65290 ................. Repair of eye socket wound ......... SA082 ............... pack, ophthalmology visit (w-dilation). 65770 ................. Revise cornea with implant ........... SA050 ............... pack, ophthalmology visit (no dilation). 65850 ................. Incision of eye ............................... SA082 ............... pack, ophthalmology visit (w-dilation). 65865 ................. Incise inner eye adhesions ........... SA082 ............... pack, ophthalmology visit (w-dilation). 65870 ................. Incise inner eye adhesions ........... SA082 ............... pack, ophthalmology visit (w-dilation). 66180 ................. Implant eye shunt ......................... SA082 ............... pack, ophthalmology visit (w-dilation). 66185 ................. Revise eye shunt .......................... SA082 ............... pack, ophthalmology visit (w-dilation). 66220 ................. Repair eye lesion .......................... SA082 ............... pack, ophthalmology visit (w-dilation). 66250 ................. Follow-up surgery of eye .............. SA082 ............... pack, ophthalmology visit (w-dilation). 66500 ................. Incision of iris ................................ SA082 ............... pack, ophthalmology visit (w-dilation ). 66600 ................. Remove iris and lesion ................. SA082 ............... pack, ophthalmology visit (w-dilation). 66605 ................. Removal of iris .............................. SA082 ............... pack, ophthalmology visit (w-dilation). 66625 ................. Removal of iris .............................. SA082 ............... pack, ophthalmology visit (w-dilation). 66630 ................. Removal of iris .............................. SA082 ............... pack, ophthalmology visit (w-dilation). 66635 ................. Removal of iris .............................. SA082 ............... pack, ophthalmology visit (w-dilation). 66682 ................. Repair iris & ciliary body ............... SA082 ............... pack, ophthalmology visit (w-dilation). 66820 ................. Incision, secondary cataract ......... SA082 ............... pack, ophthalmology visit (w-dilation).


### 40062 Federal Register / Vol. 75, No. 133 / Tuesday, July 13, 2010 / Proposed Rules

T ABLE 

### 8—O VERALL 

### S UPPLY 

### P RICE 

### C ALCULATION 

### C ORRECTIONS FOR 

### F ACILITY 

### S ETTINGS 

### —Continued

CPT/HCPCS Code Short descriptor CMS supply
code with overall price corrections Description of supply

66850 ................. Removal of lens material .............. SA082 ............... pack, ophthalmology visit (w-dilation). 66852 ................. Removal of lens material .............. SA082 ............... pack, ophthalmology visit (w-dilation). 66930 ................. Extraction of lens .......................... SA082 ............... pack, ophthalmology visit (w-dilation). 66940 ................. Extraction of lens .......................... SA082 ............... pack, ophthalmology visit (w-dilation). 66983 ................. Cataract surg w/iol, 1 stage .......... SA082 ............... pack, ophthalmology visit (w-dilation). 67015 ................. Release of eye fluid ...................... SA082 ............... pack, ophthalmology visit (w-dilation). 67031 ................. Laser surgery, eye strands ........... SA082 ............... pack, ophthalmology visit (w-dilation). 67036 ................. Removal of inner eye fluid ............ SA082 ............... pack, ophthalmology visit (w-dilation). 67040 ................. Laser treatment of retina .............. SA082 ............... pack, ophthalmology visit (w-dilation). 67105 ................. Repair detached retina ................. SA082 ............... pack, ophthalmology visit (w-dilation). 67107 ................. Repair detached retina ................. SA082 ............... pack, ophthalmology visit (w-dilation). 67110 ................. Repair detached retina ................. SA082 ............... pack, ophthalmology visit (w-dilation). 67115 ................. Release encircling material ........... SA082 ............... pack, ophthalmology visit (w-dilation). 67120 ................. Remove eye implant material ....... SA082 ............... pack, ophthalmology visit (w-dilation). 67228 ................. Treatment of retinal lesion ............ SA082 ............... pack, ophthalmology visit (w-dilation). 67400 ................. Explore/biopsy eye socket ............ SA082 ............... pack, ophthalmology visit (w-dilation). 67412 ................. Explore/treat eye socket ............... SA082 ............... pack, ophthalmology visit (w-dilation). 67440 ................. Explore/drain eye socket .............. SA082 ............... pack, ophthalmology visit (w-dilation). 67908 ................. Repair eyelid defect ...................... SG008 .............. applicator, cotton-tipped, non-sterile 6in. 88356 ................. Analysis, nerve .............................. SL108 ............... pipette.

c. AMA RUC Recommendations in CY 2010 for Changes to Direct PE Inputs

In a March 2010 letter, the AMA RUC made specific PE recommendations that we consider below. As stated earlier, the proposed changes that follow are included in the proposed CY 2011 direct PE database, which is available

on the CMS Web site under the

downloads for the CY 2011 PFS proposed rule at http://www.cms.gov/ PhysicianFeeSched/.

(1) Electrogastrography and Esophageal

Function Test

We are accepting the AMA RUC

recommendations for the CY 2011 PE inputs for the following CPT codes: 91132 (Electrogastrography, diagnostic, transcutaneous); 91133 (Electrogastrography, diagnostic, transcutaneous; with provocative testing); 91038 (Esophageal function test, gastroesophageal reflux test with nasal catheter intraluminal impedance electrode(s) placement, recording, analysis and interpretation; prolonged (greater than 1 hour, up to 24 hours)). For CPT code 91038, we have assumed a useful life of 5 years for the equipment

item ‘‘ ZEPHR impedance/pH reflux monitoring system with data recorder, software, monitor, workstation and

cart, ’’ based on its entry in the AHA’s publication, ‘‘ Estimated Useful Lives of Depreciable Hospital Assets, ’’ which we

use as a standard reference. The proposed CY 2011 direct PE database has been changed accordingly. (2) 64-Slice CT Scanner and Software

The AMA RUC submitted an updated recommendation regarding the correct pricing of the 64-slice CT scanner and its accompanying software. Based on the documentation accompanying the recommendation, we are accepting this recommendation and updating the price input for the 64-slice scanner and software. This affects the following four CPT codes that use either the scanner, the software, or both: 75571 (computed tomography, heart, without contrast material, with quantitative evaluation of coronary calcium); 75572 (Computed tomography, heart, with contrast material, for evaluation of cardiac structure and morphology (including 3D image postprocessing, assessment of cardiac function, and evaluation of venous structures, if performed)); 75573 (Computed tomography, heart, with contrast material, for evaluation of cardiac structure and morphology in the setting of congenital heart disease (including 3D image postprocessing, assessment of LV cardiac function, RV

structure and function and evaluation of venous structures, if performed)); and 75574 (Computed tomographic angiography, heart, coronary arteries and bypass grafts (when present), with contrast material, including 3D image postprocessing (including evaluation of cardiac structure and morphology, assessment of cardiac function, and evaluation of venous structure, if performed)). The proposed CY 2011

direct PE database has been modified accordingly. (3) Cystometrogram

The AMA RUC recently identified a rank order anomaly regarding CPT code 51726 (Complex cystometrogram (i.e., calibrated electronic equipment)). Currently, this procedure has higher PERVUs, despite being less resourceintensive than the three CPT codes for
which it serves as the base: 51727 (Complex cystometrogram (i.e., calibrated electronic equipment); with urethral pressure profile studies ( i.e., urethral closure pressure profile), any technique); 51728 (Complex cystometrogram ( i.e., calibrated electronic equipment); with voiding pressure studies ( i.e., bladder voiding pressure), any technique); and 51729 (Complex cystometrogram ( i.e., calibrated electronic equipment); with voiding pressure studies ( i.e., bladder voiding pressure) and urethral pressure profile studies ( i.e., urethral closure pressure profile), any technique).

Since usual AMA RUC policy is that CPT codes with a 0-day global period do not have pre-service time associated with the code, the AMA RUC recommended removing the nonfacility pre-service clinical staff time from the PE inputs for 51726. Additionally, the
AMA RUC recommended that the nonfacility clinical intra-service staff
time for CPT code 51276 be reduced
from the 118 minutes of intra-service clinical staff time currently assigned to
the code to 85 minutes of intra-service clinical staff time. These changes would resolve the rank order anomaly and bring the PE inputs for CPT code 51726 into alignment with the other three codes. Finally, and for the reasons


### 40063 Federal Register / Vol. 75, No. 133 / Tuesday, July 13, 2010 / Proposed Rules

stated above, the AMA RUC
recommended that CMS remove the 23 minutes of pre-service nonfacility
clinical staff time from CPT code 51725 (Simple cystometrogram (CMG) ( e.g., spinal manometer)). We are accepting these recommendations and, therefore, have changed the direct PE inputs for
CPT codes 51725 and 51726 in the nonfacility setting in the proposed CY
2011 direct PE database.

(4) Breath Hydrogen Test

The AMA RUC provide recommendations regarding the PE inputs for CPT code 91065 (breath hydrogen test ( e.g., for detection of lactase deficiency, fructose intolerance, bacterial overgrowth, or oro-cecal gastrointestinal transit). We are accepting the recommendations with
two modifications. We have folded the two pieces of equipment listed as

‘‘ quinGas Table-Top Support Stand, 3

Tank ’’ and ‘‘ Drying Tube, Patient Sample ’’ into the ‘‘ BreathTrackerDigital

SC Instrument ’’ and summed their inputs into one equipment line-item, since these equipment items are used together specifically for the service in question. We have increased the useful life input of the ‘‘ BreathTrackerDigital

SC Instrument ’’ from 7 to 8 years based on our use of the American Hospital Association (AHA)’s publication entitled, ‘‘ Estimated Useful Lives of Depreciable Hospital Assets ’’ as a standard reference. Additionally,
because the AMA RUC did not include equipment times in their recommendations for this CPT code, we
have used 53 minutes as the total time for all equipment items based on the total intra-service period for the clinical labor, consistent with our general policy for establishing equipment times. These
modifications are reflected in the proposed CY 2011 direct PE database.

(5) Radiographic Fluoroscopic Room

A recent AMA RUC review of services that include the radiographic fluoroscopic room (CMS Equipment Code EL014) as a direct PE revealed that the use of the item is no longer typical
for certain services in which it is specified within the current direct cost inputs. The AMA RUC recommended to CMS that the radiographic fluoroscopic
room be deleted from CPT codes 64420 (Injection, anesthetic agent; intercostal nerve, single); 64421 (Injection, anesthetic agent; intercostal nerves, multiple, regional block); and 64620 (Destruction by neurolytic agent, intercostal nerve).

We are accepting these recommendations and, therefore, these changes are included in the proposed
CY 2011 direct PE database.

The AMA RUC also informed us that it has convened a workgroup to examine the inclusion of the fluoroscopic room across a broader range of codes. We will consider any future recommendations from the AMA RUC on this topic when they are submitted.

d. Referral of Existing CPT Codes for

AMA RUC Review

As part of our review of high cost supplies, we conducted a clinical review of the procedures associated with high cost supplies to confirm that those supplies currently are used in the typical case described by the CPT codes. While we confirmed that most high cost supplies could be used in the procedures for which they are currently direct PE inputs, we noted that one of the high cost supplies, fiducial screws (CMS Supply Code SD073) with a current price of $558, is included as a direct PE input for two CPT codes, specifically 77301 (Intensity modulatedradiotherapy plan, including dosevolume histograms for target and critical structure partial tolerance specifications) and 77011 (Computed tomography guidance for stereotactic localization). The documentation used in the current pricing of the supply item
describes a kit that includes instructions, skull screws, a drill bit,
and a collar for the TALON ® System manufactured by Best nomos. Best
nomos’ literature describes the insertion of the screws into the patient’s skull to ensure accurate set-up. When CPT codes
77301 and 77011 were established in CY 2002 and CY 2003, respectively, we accepted the AMA RUC
recommendations to include fiducial
screws in the PE for these services. Upon further review, while we understand why this supply may be considered a typical PE input for CPT code 77011, we do not now believe that fiducial screws, as described in the Best nomos literature, would typically be used in CPT code 77301, where the
most common clinical scenario would be treatment of prostate cancer.

Therefore, in order to ensure that CPT
codes 77301 and 77011 are appropriately valued for CY 2011 through the inclusion or exclusion of fiducial screws in their PE, we are asking the AMA RUC to review these CPT codes with respect to the inclusion
of fiducial screws in their PE. We are requesting that the AMA RUC make recommendations to us regarding whether this supply should be included
in the PE or removed from the PE for
CPT codes 77301 and 77011 in a timeframe that would allow us to adopt interim values for these codes for CY 2011, should the AMA RUC recommend a change. If the AMA RUC continues to
recommend the inclusion of fiducial
screws in the PE for CPT code 77301 and/or 77011 for CY 2011, we are requesting that the AMA RUC provide
us with a detailed rationale for the inclusion of this specialized supply in the PE for the typical case reported
under the relevant CPT code. We would also request that the AMA RUC furnish updated pricing information for the screws if they continue to recommend the screws as a PE input for one or both
of these CPT codes in CY 2011.

e. Updating Equipment and Supply Price Inputs for Existing Codes

Historically, we have periodically received requests to change the PE price inputs for supplies and equipment in the PE database. In the past, we have considered these requests on an ad hoc basis and updated the price inputs as part of quarterly or annual updates if we believed them to be appropriate. In this proposed rule, we are proposing to establish a regular and more transparent process for considering public requests for changes to PE database price inputs for supplies and equipment used in existing codes.

We are proposing to act on public requests to update equipment and supply price inputs annually through rulemaking by following a regular and consistent process as discussed in the following paragraphs. We are proposing to use the annual PFS proposed rule
released in the summer and the final
rule released on or about November 1 each year as the vehicle for making these changes.

We will accept requests for updating the price inputs for supplies and equipment on an ongoing basis; requests
must be received no later than
December 31 of each CY to be
considered for inclusion in the next proposed rule. In that next proposed rule, we would present our review of submitted requests to update price inputs for specific equipment or supplies and our proposals for the subsequent calendar year. We would then finalize changes in the final rule for the upcoming calendar year. Our
review of the issues and consideration of public comments may result in the following outcomes that would be presented in the final rule with comment period:

• Updating the equipment or supply price inputs, as requested.

• Updating the equipment or supply price inputs, with modifications.

• Rejecting the new price inputs.


### 40064 Federal Register / Vol. 75, No. 133 / Tuesday, July 13, 2010 / Proposed Rules

• Declining to act on the request pending a recommendation from the

AMA RUC.

To facilitate our review and preparation of issues for the proposed rule, at a minimum, we would expect that requesters would provide the following information:

• Name and contact information for the requestor.

• The name of the item exactly as it appears in the direct PE file under
downloads for the most recent PFS final rule with comment period, available on
the CMS Web site at http:// www.cms.gov/PhysicianFeeSched/ PFSFRN/list.asp#TopOfPage

.

In order to best evaluate the requests in the context of our goal of utilizing accurate market prices for these items as direct PE inputs, we also would expect requestors to provide multiple invoices from different suppliers/manufacturers. In some cases, multiple sources may not be available, whereupon a detailed explanation should be provided to support the request. When furnishing invoices, requestors should take into consideration the following parameters:

++ May be either print or electronic but should be on supplier and/or manufacturer stationery (for example, letterhead, billing statement, etc. )

++ Should be for the typical, common, and customary version of the supply or equipment that is used to
furnish the services.

++ Price should be net of typical rebates and/or any discounts available, including information regarding the magnitude and rationale for such
rebates or discounts.

++ If multiple items are presented on the same invoice, relevant item(s) should be clearly identified.

We are soliciting public comments on this proposed process, including the information that requestors should furnish to facilitate our full analysis in preparation for the next calendar year’s rulemaking cycle.

B. Malpractice Relative Value Units (RVUs)

1. Background

Section 1848(c) of the Act requires that each service paid under the PFS be comprised of three components: work, PE, and malpractice. From 1992 to 1999, malpractice RVUs were charge-based, using weighted specialty-specific malpractice expense percentages and 1991 average allowed charges. Malpractice RVUs for new codes after 1991 were extrapolated from similar existing codes or as a percentage of the corresponding work RVU. Section 4505(f) of the BBA required us to implement resource-based malpractice RVUs for services furnished beginning in 2000. Therefore, initial implementation of resource-based malpractice RVUs occurred in 2000.

The statute also requires that we review, and if necessary adjust, RVUs no less often than every 5 years. Thefirst review and update of resourcebased malpractice RVUs was addressed
in the CY 2005 PFS final rule with comment period (69 FR 66263). Minor modifications to the methodology were
addressed in the CY 2006 PFS final rule with comment period (70 FR 70153). In
the CY 2010 PFS final rule with comment period, we implemented the second review and update of malpractice RVUs. For a discussion of the second review and update of malpractice RVUs see the CY 2010 PFS proposed rule (74 FR 33537) and final rule with comment period (74 FR 61758).

2. Malpractice RVUs for New and
Revised Services Effective Before the

Next 5-Year Review

Currently, malpractice RVUs for new
and revised codes effective before the next 5-Year Review (for example, effective CY 2011 through CY 2014) are determined by a direct crosswalk to a
similar ‘‘ source ’’ code or a modified
crosswalk to account for differences in
work RVUs between the new/revised
code and the source code. For the modified crosswalk approach, we adjust the malpractice RVUs for the new/
revised code to reflect the difference in
work RVUs between the source code
and the AMA RUC’s recommended work value (or the work value we are applying as an interim final value under the PFS) for the new code. For example,
if the interim final work RVUs for the new/revised code are 10 percent higher than the work RVUs for the source code, the malpractice RVUs for the new/ revised code would be increased by 10 percent over the source code RVUs. This approach presumes the same risk factor
for the new/revised code and source
code but uses the work RVUs for thenew/revised code to adjust for risk-ofservice. The assigned malpractice RVUs
for new/revised codes effective between updates remain in place until the next

5-Year Review.

We will continue our current approach for determining malpractice
RVUs for new/revised codes that
become effective before the next 5-Year Review and update. Under this approach we will crosswalk the new/
revised code to the RVUs of a similar source code and adjust for differences in work (or, if greater, the clinical labor portion of the fully implemented PE RVUs), between the source code and the new/revised code. Additionally, we will publish a list of new/revised codes and the analytic crosswalk(s) used for determining their malpractice RVUs in the final rule with comment period, which we have not previously done. The CY 2011 malpractice RVUs for new/ revised codes will be implemented as
interim final values in the CY 2011 PFS final rule with comment period, where they will be subject to public comment. They will then be finalized in the CY
2012 PFS final rule with comment period.

3. Revised Malpractice RVUs for Selected Disc Arthroplasty Services

As discussed in the CY 2010 PFS proposed rule (74 FR 33539), we assign malpractice RVUs to each service based upon a weighted average of the risk factors of all specialties that furnish the
service. For the CY 2010 review of malpractice RVUs, we used CY 2008 Medicare payment data on allowed services to establish the frequency of a service by specialty. CPT code 22856 (Total disc arthroplasty (artificial disc), anterior approach, including discectomy with end plate preparation (includes osteophytectomy for nerve root or spinal cord decompression and microdissection), single interspace, cervical) had zero allowed services for CY 2008. Therefore, our contractor initially set the level of services to 1, and assigned a risk factor according to the average risk factor for all services that do not explicitly have a separate technical or professional component. We proposed to adopt our contractor’s initial malpractice RVUs for CPT code 22856 in the CY 2010 proposed rule. Application of the average physician
risk factor would have resulted in a significant decrease in malpractice
RVUs for CPT code 22856 in CY 2010.

Several commenters on the CY 2010 PFS proposed rule expressed concern regarding the proposed malpractice RVUs for CPT code 22856, which represented a proposed reduction of more than 77 percent. The commenters stated that this service is predominantly furnished by neurosurgeons and orthopedic surgeons. Given the high risk factors associated with these specialty types and the changes in malpractice RVUs for comparable services, the
commenters stated that a reduction in the malpractice RVUs of this magnitude
for CPT code 22856 could not be

correct.

After consideration of the public comments, for CY 2010, we set the risk
factor for CPT code 22856 as the weighted average risk factor of six comparable procedures mentioned by


### 40065 Federal Register / Vol. 75, No. 133 / Tuesday, July 13, 2010 / Proposed Rules

the commenters: CPT code 22554 (Arthrodesis, anterior interbody technique, including minimal discectomy to prepare interspace (other than for decompression); cervical below C2); CPT code 22558 (Arthrodesis, anterior interbody technique, including minimal discectomy to prepare interspace (other than for decompression); lumbar); CPT code 22857 (Total disc arthroplasty (artificial disc), anterior approach, including discectomy to prepare interspace (other than for decompression), single interspace, lumbar); CPT code 22845 (Anterior instrumentation; 2 to 3 vertebral segments (list separately in addition to code for primary procedure)); CPT code 63075 (Discectomy, anterior, with decompression of spinal cord and/or nerve root(s), including osteophytectomy; cervical, single interspace); and CPT code 20931 (Allograft for spine surgery only; structural (list separately in addition to code for primary procedure)). The weighted average risk factor for these

services is 8.4.

Since publication of the CY 2010 PFS final rule with comment period,
stakeholders have mentioned that we made significant changes to the malpractice RVUs for CPT code 22856
in CY 2010. The commenters also brought to our attention that other services are clinically similar to CPT
code 22856 and have similar work RVUs, and therefore, some stakeholders
believe these services should all have similar malpractice RVUs. Services mentioned by the stakeholders that are clinically similar to CPT code 22856 include CPT code 22857; CPT code 22861 (Revision including replacement of total disc arthroplasty (artificial disc), anterior approach, single interspace; cervical); CPT code 22862 (Revision including replacement of total disc arthroplasty (artificial disc) anterior approach, lumbar); CPT code 22864 (Removal of total disc arthroplasty (artificial disc), anterior approach, single interspace; cervical); and CPT code 22865 (Removal of total disc arthroplasty (artificial disc), anterior approach, single interspace; lumbar).

After further review of this issue, we are proposing to apply the same risk
factor used for CPT code 22856 to certain other services within this family of services (CPT codes 22857 through 22865) for which there were no allowed
services in CY 2008. CPT codes 22861
and 22864 had zero allowed services in CY 2008 and our contractor initially set their malpractice RVUs in the same way as it did for CPT code 22856. Therefore, we will assign the weighted average risk factor we use for CPT code 22856 (that is, the weighted average of the risk factors for CPT codes 20931, 22554, 22558, 22845, 22857, and 63075) to CPT codes 22861 and 22864. However, CPT codes 22857, 22862, and 22865 are low volume services (allowed services under 100). Our policy for low volume services is to apply the risk factor of the dominant specialty as indicated by our claims data. We will continue to apply our policy for low volume services to CPT codes 22857, 22862, and 22865.

C. Potentially Misvalued Services Under the Physician Fee Schedule

1. Valuing Services Under the PFS

As discussed in section I. of this proposed rule, in order to value services under the PFS, section 1848(c) of the Act requires the Secretary to determine relative values for physicians’ services based on three components: the work, practice expense (PE), and malpractice components. Section 1848(c)(1)(A) of the Act defines the work component to
include ‘‘ the portion of the resources used in furnishing the service that reflects physician time and intensity in furnishing the service. ’’ Additionally, the statute provides that the work component shall include activities that occur before and after direct patient contact. Furthermore, the statute specifies that with respect to surgical procedures, the valuation of the work component for the code would reflect a

‘‘ global ’’ concept in which pre-operative and post-operative physicians’ services related to the procedure would also be
included.

In addition, section 1848(c)(2)(C)(i) of the Act specifies that ‘‘ the Secretary
shall determine a number of work relative value units (RVUs) for the
service based on the relative resources incorporating physician time and intensity required in furnishing the

service. ’’ As discussed in detail in
sections I.A.2. and I.A.3 of this proposed rule, the statute also defines the PE and malpractice components and provides specific guidance in the
calculation of the RVUs for each of these components. Section 1848(c)(1)(B) of the Act defines the PE component as

‘‘ the portion of the resources used in furnishing the service that reflects the general categories of expenses (such as office rent and wages of personnel, but excluding malpractice expenses) comprising practice expenses. ’’

Section 1848(c)(2)(C)(ii) of the Act specifies that the ‘‘ Secretary shall determine a number of practice expense
relative value units for the services for years beginning with 1999 based on the relative practice expense resources involved in furnishing the service. ’’ Furthermore, section 1848(c)(2)(B) of the Act directs the Secretary to conduct a periodic review, not less often than every 5 years, of the RVUs established under the PFS. Finally, on March 23, 2010, the Affordable Care Act was enacted, further requiring the Secretary to periodically review and identify potentially misvalued codes and make appropriate adjustments to the relative

values of those services identified as being potentially misvalued. Section 3134(a) of the ACA added a new section 1848(c)(2)(K) of the Act which requires the Secretary to periodically identify potentially misvalued services using certain criteria, and to review and make appropriate adjustments to the relative

values for those services. Section 3134(a) of the ACA also added a new section 1848(c)(2)(L) which requires the Secretary to develop a validation process to validate the RVUs of potentially misvalued codes under the PFS and make appropriate adjustments.

As discussed in section I.A.1. of this proposed rule, we establish physician

work RVUs for new and revised codes

based on our review of

recommendations received from the

AMA RUC. The AMA RUC also provides recommendations to CMS on

the values for codes that have been identified as potentially misvalued. To respond to concerns expressed by MedPAC, the Congress, and other stakeholders regarding accurate valuation of services under the PFS, the

AMA RUC created the Five-Year Review Identification Workgroup. In addition to providing recommendations to CMS for work RVUs, the AMA RUC’s Practice Expense Subcommittee reviews direct PE (clinical labor, medical supplies, and medical equipment) for individual services and examines the many broad and methodological issues relating to the development of PE RVUs.

In accordance with section 1848(c) of the Act, we determine appropriate adjustments to the RVUs, taking into account the recommendations provided by the AMA RUC and MedPAC, and publish the explanation for the basis of these adjustments in the PFS proposed

and final rules. We note that section 1848(c)(2)(A)(ii) of the Act authorizes the use of extrapolation and other techniques to determine the RVUs for physicians’ services for which specific data are not available, in addition to taking into account the results of consultations with organizations representing physicians.


### 40066 Federal Register / Vol. 75, No. 133 / Tuesday, July 13, 2010 / Proposed Rules

2. Identifying, Reviewing, and Validating the RVUs of Potentially
Misvalued Services Under the PFS

a. Background

In its March 2006 Report to Congress,
MedPAC noted that ‘‘ misvalued services can distort the price signals for physicians’ services as well as for other health care services that physicians order, such as hospital services. ’’ In that same report MedPAC postulated that physicians’ services under the PFS can
become misvalued over time for a
number of reasons: ‘‘ For example, when a new service is added to the physician fee schedule, it may be assigned a relatively high value because of the time, technical skill, and psychological stress that are required to perform it. Over time, skill, and stress involved may decline as physicians become more
familiar with the service and more efficient at providing it. The amount of physician work needed to furnish an existing service may decrease when new technologies are incorporated. Services
can also become overvalued when practice expenses decline. This can happen when the costs of equipment and supplies fall, or when equipment is used more frequently, reducing its cost per use. Likewise, services can become undervalued when physician work increases or practice expenses rise. ’’ In the ensuing years since MedPAC’s 2006 report, additional groups of potentially
misvalued services have been identified by Congress, CMS, MedPAC, the AMA RUC, and other stakeholders.

In recent years CMS and the AMA RUC have taken increasingly significant steps to address potentially misvalued
codes. As MedPAC noted in its March 2009 Report to Congress, in the intervening years since MedPAC made the initial recommendations, ‘‘ CMS and the AMA RUC have taken several steps to improve the review process. ’’ Most recently, section 1848(c)(2)(K)(ii) of the Act (as added by section 3134 of the ACA) directed the Secretary to specifically examine potentially misvalued services in seven categories.

(1) Codes and families of codes for which there has been the fastest growth.

(2) Codes or families of codes that have experienced substantial changes in practice expenses.

(3) Codes that are recently established for new technologies or services.

(4) Multiple codes that are frequently billed in conjunction with furnishing a single service.

(5) Codes with low relative values, particularly those that are often billed multiple times for a single treatment.

(6) Codes which have not been subject to review since the implementation of the RBRVS (the so-called ‘Harvardvalued codes’).

(7) Other codes determined to be appropriate by the Secretary.

Section 1848(c)(2)(K)(iii) of the Act (as added by section 3134 of the ACA) also specifies that the Secretary may use existing processes to receive
recommendations on the review and appropriate adjustment of potentially misvalued services. In addition, the Secretary may conduct surveys, other data collection activities, studies, or other analyses as the Secretary determines to be appropriate to facilitate the review and appropriate adjustment of potentially misvalued services. This section authorizes the use of analytic contractors to identify and analyze potentially misvalued codes, conduct surveys or collect data, and make
recommendations on the review and appropriate adjustment of potentially misvalued services. Finally, section 1848(c)(2)(K)(iii)(V) of the Act (as added by section 3134 of the ACA) specifies that the Secretary may make appropriate coding revisions (including using existing processes for consideration of coding changes) which may include
consolidation of individual services into bundled codes for payment under the physician fee schedule.

b. Progress in Identifying and Reviewing Potentially Misvalued Codes

Over the last several years, CMS, in conjunction with the AMA RUC, has
identified and reviewed numerous potentially misvalued codes in all seven of the categories specified in section 1848(c)(2)(K)(ii) (as added by section 3134 of the ACA), and we plan to continue our work examining potentially misvalued codes in these areas over the upcoming years, consistent with the new legislative
mandate on this issue. In the current process, the AMA RUC reviews potentially misvalued codes that are identified either by CMS or through its own processes and recommends revised work RVUs and/or direct PE inputs for
those codes to CMS. CMS then assesses
the recommended revised work RVUs and/or direct PE inputs and, in accordance with section 1848(c) of the Act, we determine if the recommendations constitute appropriate adjustments to the RVUs under the PFS. Since CY 2009, CMS and the AMA RUC have identified over 700 potentially
misvalued codes.

For example, in regards to the first category (codes and families of codes for
which there has been the fastest growth), for CY 2009 CMS identified over 100 potentially misvalued codes for which an analysis of the utilization data showed an annual growth in allowed services of 10 percent (or more) for 3 consecutive years (73 FR 38586). Each of these codes had allowed charges of $1 million or more in CY 2007. We published this list in the CY 2009 proposed rule (73 FR 38586 through 38589) and requested that the AMA RUC immediately begin a review of the codes on this list. Meanwhile, in parallel with CMS’ efforts, the AMA RUC also initiated processes to identify and review potentially misvalued codes on an ongoing basis using certain screens, including screens for ‘‘ CMS fastest growing procedures ’’ and ‘‘ high volume growth. ’’ Both of these AMA RUC screens are applicable to the first category of potentially misvalued codes specified in ACA. We plan to continue to analyze Medicare claims data over future years to identify additional services that exhibit rapid growth and high Medicare expenditures for referral
to the AMA RUC for review as potentially misvalued codes.

Pertaining to the second category specified in section 1848(c)(2)(K)(ii) of the Act (as added by section 3134 of ACA) (codes or families of codes that have experienced substantial changes in practice expenses), in CY 2009 we requested that the AMA RUC continue its review of direct PE inputs, focusing particularly on high-volume codes where the PE payments are increasing significantly under the transition to the new PE methodology (73 FR 38589). The AMA RUC has responded by sending CMS recommendations for revised direct PE inputs for codes identified for PE review on an ongoing
basis.

Additionally in CY 2009, we began an initiative to review and update the prices for high-cost supplies in order to ensure the accuracy and completeness of the direct PE inputs. We discuss our most recent efforts in refining the process to update the prices of high-cost supplies in section II.C.5. of this proposed rule.

For the third category of potentially
misvalued codes identified in section 1848(c)(2)(K)(ii) (as added by section 3134 of the ACA) (codes that are recently established for new technologies or services), the AMA RUC routinely identifies such codes through a screen based on 3 years of Medicare claims data, and sends CMS
recommendations for revised work RVUs and/or direct PE inputs for these codes on an ongoing basis. The AMA RUC may determine that a code for a new service requires reevaluation or does not require reevaluation, or it may conclude, on a case-by-case basis, that more than 3 years of claims data are


### 40067 Federal Register / Vol. 75, No. 133 / Tuesday, July 13, 2010 / Proposed Rules

necessary before the code can be reviewed. In that case, it would determine the appropriate future
timeframe for review.

We also note that in its June 2008 Report to Congress entitled ‘‘ Reforming the Health Care System ’’ and in the context of a discussion about primary care, MedPAC acknowledges, ‘‘ * * * Efficiency can improve more easily for other types of services, such as procedures, with advances in technology, technique, and other factors. Ideally, when such efficiency gains are achieved, the fee schedule’s relative value units (RVUs) for the
affected services should decline accordingly, while budget neutrality
would raise the RVUs for the fee schedule’s primary care services. ’’ (page 27). Section III.C.5. of this proposed rule includes a discussion regarding periodic updates to the costs of high cost supplies. This discussion is highly relevant to new technology services, where growth in volume of a service as it diffuses into clinical practice may
lead to a decrease in the cost of expensive supplies. We also expect that other efficiencies in physician work and PE may be achieved after an initial period of relative inefficiency that
reflects the ‘‘ learning curve. ’’ We plan to pay particular attention to the work values and direct PE inputs for these
new services and the AMA RUC’s periodic review process to ensure that any efficiencies are captured under the PFS over time, recognizing that the appropriate timing for revaluing these
services needs to be considered on a case-by-case basis depending on the growth rate in service volume.

We have also addressed the fourth category (multiple codes that are frequently billed in conjunction with furnishing a single service) in rulemaking prior to the enactment of the
ACA. As discussed in the CY 2009 PFS proposed rule (73 FR 38586), we have a longstanding policy of reducing payment for multiple surgical procedures performed on the same patient, by the same physician, on the same day. Over the ensuing years, the multiple procedure payment reduction (MPPR) policy has been extended to a number of nuclear diagnostic and diagnostic imaging procedures. We continue our work to recognize efficiencies in this area with a proposal to expand the MPPR policy to additional combinations of imaging services and to therapy services for CY
2011 as described in section II.C.4. of this proposed rule.

We note the AMA RUC has also established a screen to identify services performed by the same physician on the same date of service 95 percent of the time or more. Over the past 2 years, the
CPT Editorial Panel has established new
bundled codes to describe a comprehensive service for certain combinations of these existing services that are commonly furnished together,
and the AMA RUC has recommended work values and direct PE inputs to CMS for these comprehensive service codes that recognize the associated
efficiencies. CMS looks forward to working with the AMA RUC in this joint effort to examine codes commonly reported together and more appropriately value common
combinations services.

We address the fifth category of potentially misvalued codes (codes with low relative values, particularly those that are often billed multiple times for a single treatment) in section II.C.3.b. of this proposed rule. That is, we are providing a list of services with low work RVUs that are commonly reported with multiple units in a single encounter and requesting that the AMA
RUC review these codes that we have identified as potentially misvalued.

The sixth category (codes which have not been subject to review since theimplementation of the RBRVS (the socalled ‘Harvard-valued codes’)) also continues to be addressed by CMS and the AMA RUC on an ongoing basis. As we noted in the CY 2009 PFS proposed rule (73 FR 38589), there were at that time approximately 2900 codes, representing $5 billion in annual spending, that were originally valued using Harvard data and have not subsequently been evaluated by the AMA RUC. Consequently, in CY 2009, we requested that the AMA RUC engage in an ongoing effort to review the remaining Harvard-valued codes, focusing first on the high-volume, low intensity codes (73 FR 38589). In response to our request, the AMA RUC initially conducted an analysis of
Harvard-valued services with utilization above 10,000 services per year, which
resulted in a list of 296 distinct services (73 FR 69883). The AMA RUC, in its public comment on the CY 2009 proposed rule, stated that it believes it would be effective to limit any review
to these 296 services and also noted that of the 296 services identified, 23 had already been identified by another screen and were in the process of being reviewed (73 FR 69883). To date, the
AMA RUC has reviewed and submitted
to CMS recommendations for revised work RVUs and/or direct PE inputs for a number of Harvard-valued codes, prioritizing those codes with utilization
of over 1 million services. The AMA
RUC and CMS intend to continue our ongoing assessment of Harvard-valued codes, next targeting codes with utilization of over 100,000 services.

Finally, the seventh category of potentially misvalued codes mentioned in section 1848(c)(2)(K)(ii) (as added by section 3134 of the ACA) is all other codes determined to be appropriate by the Secretary. In this category, CMS has previously proposed policies and requested that the AMA RUC review
codes for which there have been shifts in the site-of-service (site-of-service anomalies), as well as codes that qualify

as ‘‘ 23-hour stay ’’ outpatient services. The policies for valuation of both the site-of-service anomaly codes and the

‘‘ 23-hour stay ’’ codes are developed further in sections II.C.3.d. and e., respectively, of this proposed rule. For CY 2011, we are also identifying codes with low work RVUs but are high
volume based on claims data as another category of potentially misvalued codes and are referring these codes to the AMA RUC for review, as discussed in section II.C.3.b. of this proposed rule. In addition, for CY 2011 we are newly targeting key codes that the AMA RUC uses as reference services for valuing other services, termed ‘‘ multispecialty points of comparison ’’ services, and referring these to the AMA RUC for review as potentially misvalued codes
as described in section II.C.3.a. of this proposed rule. Finally, we note the
AMA RUC has also established screens to identify potentially misvalued codes in additional categories, including codes with a high intra-service work per unit of time (IWPUT) and codes representing services that had been surveyed by one specialty, but are now performed by a different specialty. We will continue to
review AMA RUC recommendations for
revised work RVUs and/or direct PE inputs for codes that fall into these categories.

As a result of the combined efforts of
CMS and the AMA RUC to address potentially misvalued codes, for CY
2009 the AMA RUC recommended revised work values and/or PE inputs for 204 misvalued services (73 FR 69883). For CY 2010, an additional 113
codes were identified as misvalued and the AMA RUC provided new
recommendations for revised work RVUs and/or PE inputs to CMS as
discussed in the CY 2010 PFS final rule with comment period (74 FR 61778).Upon review of the AMA RUCrecommended work RVUs, CMS accepted the majority of the values as appropriate adjustments to the RVUs under the PFS, in accordance with section 1848(c) of the Act. However, fora number of codes, mainly the site-ofservice anomaly codes, we indicated


### 40068 Federal Register / Vol. 75, No. 133 / Tuesday, July 13, 2010 / Proposed Rules

that although we would accept the AMA
RUC valuations for these site-of-service anomaly codes on an interim basis through CY 2010, we had ongoing concerns about the methodology used by the AMA RUC to review these services (73 FR 69883 and 74 FR 61776 through 61778, respectively). In the CY
2010 PFS final rule with comment period, we requested that the AMA RUC reexamine the site-of-service anomaly codes and use the building block methodology to revalue the services (74 FR 61777). In that same rule, we also
stated that we would continue to
examine these codes and consider whether it would be appropriate to propose additional changes in future rulemaking. We discuss our CY 2011 proposal with respect to these codes in section II.C.3.d. of this proposed rule.

c. Validating RVUs of Potentially
Misvalued Codes

In addition to identifying and reviewing potentially misvalued codes, section 1848(c)(2)(L) (as added by section 3134 of the ACA) specifies that the Secretary shall establish a formal process to validate relative value units under the PFS. The validation process may include validation of work elements (such as time, mental effort and professional judgment, technical skill and physical effort, and stress due to risk) involved with furnishing a service and may include validation of the pre, post, and intra-service components of work. The Secretary is directed to validate a sampling of the work RVUs of codes identified through any of the seven categories of potentially misvalued codes specified by section 1848(c)(2)(K)(ii) (as added by section 3134 of the ACA). Furthermore, the Secretary may conduct the validation using methods similar to those used to review potentially misvalued codes, including conducting surveys, other data collection activities, studies, or other analyses as the Secretary determines to be appropriate
to facilitate the validation of RVUs of services. Currently, while CMS does
assess the AMA RUC- recommended
work RVUs to determine if the recommendations constitute appropriate adjustments to the RVUs under the PFS,
we intend to establish a more extensive validation process of RVUs in the future in accordance with the requirements of section 1848(c)(2)(L) (as added by section 3134 of the ACA). Therefore, we are soliciting public comments on this proposed rule on possible approaches and methodologies that we should consider for a validation process. We are especially interested in public comments regarding approaches, including the use of time and motion studies, to validate estimates of physician time and intensity that are

factored into the work RVUs for services with rapid growth in Medicare expenditures, one of the categories that the statute specifically directs CMS to examine. We plan to discuss the validation process in a future PFS rule

once we have considered the matter further in conjunction with any public comments and other input from

stakeholders that we receive.

3. CY 2011 Identification and Review of Potentially Misvalued Services

In this section, we discuss codes that may be misvalued according to five

different criteria:

• Codes on the multi-specialty points of comparison list;

• Codes with low work RVUs commonly billed in multiple units per single encounter;

• Codes with high volume and low work RVUs;

• Codes with site-of-service anomalies; and

• Codes that qualify as ‘‘ 23-hour stay ’’ outpatient services.

a. Codes on the Multispecialty Points of Comparison List

The AMA RUC uses a scale referred to as the multispecialty points of comparison (MPC) to evaluate the reasonableness of a specialty society’s

recommended RVU value for a service.

The MPC list contains reference codes of established comparison services that

are used in the valuation of new codes.

The current MPC list consists of 316 codes which the AMA RUC may use to compare and contrast the relativity of codes under review to existing relative values. Since the AMA RUC may use

the values on the MPC list as a basis for relativity when determining the values for new, revised, and newly reviewed codes (including potentially misvalued codes), it is essential that the services on the MPC list be appropriately valued since any codes misvalued on the MPC list could contribute to the misvaluing

of other codes under review. While we

believe that the entire MPC list should

be assessed to ensure that services are paid appropriately under the PFS, we have prioritized the review of the MPC list, ranking the codes by allowed service units and charges based on CY 2009 claims data. We are proposing to

refer the codes in Table 9 to the AMA

RUC for review. 

### T ABLE 

### 9—C ODES ON THE 

### MPC L IST


### R EFERRED FOR 

### AMA RUC R EVIEW

CPT Code Short descriptor

66984 ...... Cataract surg w/iol, 1 stage. 97110 ...... Therapeutic exercises. 43239 ...... Upper GI endoscopy, biopsy. 20610 ...... Drain/inject, joint/bursa. 78815 ...... Pet image w/ct, skull-thigh. 45385 ...... Lesion removal colonoscopy. 45380 ...... Colonoscopy and biopsy. 11721 ...... Debride nail, 6 or more. 17000 ...... Destruct premalg lesion. 92980 ...... Insert intracoronary stent. 74160 ...... Ct abdomen w/dye. 71020 ...... Chest x-ray. 11100 ...... Biopsy, skin lesion. 66821 ...... After cataract laser surgery. 52000 ...... Cystoscopy. 92083 ...... Visual field examination(s). 73721 ...... Mri jnt of lwr extre w/o dye. 93010 ...... Electrocardiogram report. 77334 ...... Radiation treatment aid(s). 92250 ...... Eye exam with photos. 95810 ...... Polysomnography, 4 or more. 77003 ...... Fluoroguide for spine inject. 11056 ...... Trim skin lesions, 2 to 4. 76700 ...... Us exam, abdom, complete. 77290 ...... Set radiation therapy field. 77300 ...... Radiation therapy dose plan. 43235 ...... Uppr gi endoscopy, diagnosis. 71275 ...... Ct angiography, chest.

95900 ...... Motor nerve conduction test. 31231 ...... Nasal endoscopy, dx. 95165 ...... Antigen therapy services. 94060 ...... Evaluation of wheezing. 31575 ...... Diagnostic laryngoscopy.

b. Codes With Low Work RVUs Commonly Billed in Multiple Units per Single Encounter

Consistent with section 1848(c)(2)(K)(ii) (as added by section 3134 of the ACA) which identifies categories of potentially misvalued codes for our review, we believe
services with low work RVUs that are commonly billed with multiple units in a single encounter are an additional appropriate category for identifying potentially misvalued codes. An example of a high multiple/low work
RVU service is CPT code 95004 (Percutaneous tests (scratch, puncture, prick) with allergenic extracts, immediate type reaction, including test interpretation and report by a physician, specify number of tests). For purposes of compiling a list of the high multiple/ low work RVU services, we defined a high multiple service as one that is commonly performed in multiples of 5 or more per day. Then, we selected from high multiple services with work RVUs of less than or equal to 0.5 RVUs. We note that in selecting 5 per day as the
minimum threshold for the number of common services performed in a multiple service encounter, we intended to establish a meaningful threshold which, in conjunction with the


### 40069 Federal Register / Vol. 75, No. 133 / Tuesday, July 13, 2010 / Proposed Rules

threshold for work RVUs of 0.5 RVUs or less, would produce a reasonable
number of services for the RUC to
review that have substantial total work RVUs for the comprehensive service furnished during a single treatment. That is, as a general example, with a
work RVU threshold of 0.5 RVUs and a multiple threshold of 5 per day, the total work RVUs for a typical treatment would equate to 2.5 RVUs, which is approximately comparable to a high level office visit, an interpretation of a complex imaging procedure, or a minor surgical procedure.

We are asking the AMA RUC to
review the codes in Table 10.



### T ABLE 

### 10—C ODES 

### W ITH 

### L OW 

### W ORK



### RVU S 

### T HAT 

### A RE 

### C OMMONLY 

### B ILLED

IN 

### M ULTIPLE 

### U NITS 

### R EFERRED FOR 

### AMA RUC R EVIEW

CPT Code Short descriptor

95904 ...... Sense nerve conduction test. 17003 ...... Destruct premalg les, 2–14. 95004 ...... Percut allergy skin tests. 11101 ...... Biopsy, skin add-on. 95024 ...... Id allergy test, drug/bug. 76000 ...... Fluoroscope examination. 95144 ...... Antigen therapy services. 95010 ...... Percut allergy titrate test. 88300 ...... Surgical path, gross. 95027 ...... Id allergy titrate-airborne. 95015 ...... Id allergy titrate-drug/bug. 95148 ...... Antigen therapy services.

c. Codes With High Volume and Low
Work RVUs

We believe that codes that have low work RVUs but are high volume based on claims data are another category of potentially misvalued codes. Although these codes have low work RVUs (less than or equal to 0.25 RVUs), the high utilization of these codes represents significant expenditures under the PFS such that their appropriate valuation is especially important. Table 11 contains
a list of such codes and we are requesting that the AMA RUC review
these codes.



### T ABLE 

### 11—C ODES 

### W ITH 

### L OW 

### W ORK



### RVU S 

### T HAT 

### A RE 

### H IGH 

### V OLUME 

### R E



### FERRED FOR 

### AMA RUC R EVIEW

CPT Code Short descriptor

71010 ...... Chest x-ray. 73510 ...... X-ray exam of hip. 97035 ...... Ultrasound therapy. 88313 ...... Special stains group 2. 73630 ...... X-ray exam of foot. 72100 ...... X-ray exam of lower spine. 73030 ...... X-ray exam of shoulder. 73562 ...... X-ray exam of knee, 3. 73560 ...... X-ray exam of knee, 1 or 2. 94010 ...... Breathing capacity test. 

### T ABLE 

### 11—C ODES 

### W ITH 

### L OW 

### W ORK 

### RVU S 

### T HAT 

### A RE 

### H IGH 

### V OLUME 

### R E



### FERRED FOR 

### AMA RUC R EVIEW 

### — Continued

CPT Code Short descriptor

77052 ...... Comp screen mammogram addon. 88304 ...... Tissue exam by pathologist. 73564 ...... X-ray exam, knee, 4 or more. 72170 ...... X-ray exam of pelvis. 74000 ...... X-ray exam of abdomen. 73610 ...... X-ray exam of ankle. 11719 ...... Trim nail(s). 73620 ...... X-ray exam of foot. 92567 ...... Tympanometry. 73110 ...... X-ray exam of wrist. 73130 ...... X-ray exam of hand. 93701 ...... Bioimpedance, cv analysis. 72040 ...... X-ray exam of neck, spine.

92543 ...... Caloric vestibular test

d. Codes With Site-of-Service
Anomalies

In previous years, we requested that the AMA RUC review codes that, according to the Medicare claims database, have experienced a change in the typical site of service since the original valuation of the code. For example, we have found services that originally were provided in the inpatient setting but for which current claims data show the typical case has shifted to being furnished outside the inpatient setting. Since the procedures were typically performed in the inpatient setting when the codes were originally valued, the work RVUs for
these codes would have been valued to include the inpatient physician work provided, as well as to reflect the intensive care and follow-up normally associated with an inpatient procedure. If the typical case for the procedure has shifted from the inpatient setting to an outpatient or physician’s office setting, it is reasonable to expect that there have been changes in medical practice, and that such changes would represent a decrease in physician time or intensity
or both. The AMA RUC reviewed and
recommended to CMS revised work
RVUs for 29 codes for CY 2009 and 11
codes for CY 2010 that were identified as having site-of-service anomalies.

In the CY 2010 PFS proposed and final rules with comment period (74 FR 33556 and 74 FR 61777, respectively), we encouraged the AMA RUC to utilize the building block methodology when revaluing services with site-of-service anomalies. Specifically, where the AMA
RUC has determined in its review that changes in the inclusion of inpatient hospital days, office visits, and hospital discharge day management services (that is, the ‘‘ building blocks ’’ of the code) are warranted in the revaluation of the code, we asked the AMA RUC to adjust the site-of-service anomaly code
for the work RVUs associated with those changes.

Additionally, we suggested that in cases where the AMA RUC has adjustedthe pre-service, intra-service and postservice times of the code under review,
the AMA RUC should also make associated work RVU adjustments to account for those changes. However, we
remain concerned that in the AMA
RUC’s recommendations of the work
RVUs for the CYs 2009 and 2010 siteof-service anomaly codes, the AMA RUC may have determined that eliminating or reallocating pre-service and post-service times, hospital days, office visits, and hospital discharge day management services was appropriate to reflect the typical case that is now occurring in a different setting, but the
work RVUs associated with those changes may not have been systematically extracted or reallocated
from the total work RVU value for the

service.

In the CYs 2009 and 2010 PFS final rules with comment period (73 FR 69883 and 74 FR 61776 through 61778, respectively), we indicated that although we would accept the AMA
RUC valuations for these site-of-service anomaly codes on an interim basis through CY 2010, we had ongoing concerns about the methodology used by the AMA RUC to review these services. We requested that the RUC reexamine the site-of-service anomaly codes and use the building block methodology to revalue the services (74 FR 61777). We also stated that we
would continue to examine these codes
and consider whether it would be appropriate to propose additional changes in future rulemaking.

Accordingly, in preparation for CY 2011 rulemaking, we conducted a comprehensive analysis of the codes
that the AMA RUC reviewed for CYs
2009 and 2010 due to site-of-service anomaly concerns. We systematically applied the reverse building block methodology to the 29 codes from CY
2009 and 11 codes from CY 2010 as
follows:

• First, we obtained the original work RVU value assigned to the code (this is
the ‘‘ starting value ’’ ) and made a list of the building block services with RVUs that were originally associated with the code (that is, before the AMA RUC
reviewed the code for site-of-service anomalies).

• Next, we examined the AMA RUCrecommended changes to the building
blocks of the code.


### 40070 Federal Register / Vol. 75, No. 133 / Tuesday, July 13, 2010 / Proposed Rules

• We then deducted the RVUs
associated with the AMA RUC’s
recommended eliminations from the code’s starting RVU value.

Generally, the AMA RUC eliminated inpatient hospital visit building blocks
from the value of the code since the siteof-service for the code has shifted from the inpatient setting to another setting. We note in some cases, the AMA RUC left an inpatient hospital visit in the
valuation of the code. We believe this is inconsistent with the change in the site of service to non-inpatient settings. Accordingly, we adhered to the methodology and deducted the RVUs associated with all inpatient hospital visits from the starting value. In cases
where the AMA RUC recommended adding or substituting outpatient visits,
we also added or substituted the RVUs associated with those changes to the starting value. If the AMA RUC recommended changes to the pre-, intra-, or post-service times, we calculated the incremental change in
RVUs associated with that time and
either added or deducted that RVU amount from the starting value. We note that the RVU values associated with the incremental time change are calculated using the intensity associated with the particular pre-, intra-, or post period. For the intensity of the intra-service period, we utilized the original IWPUT
associated with the code. The AMA RUC generally recommended allowing only half of a hospital discharge daymanagement service for the site-ofservice anomaly codes. That is, CPT code 99238 (Hospital discharge day management; 30 minutes or less) has a work RVU value of 1.28; therefore, half
the value associated with CPT code 99238 is 0.64. Accordingly, if a code had one CPT code 99238 listed as part of the original valuation, we deducted 0.64 RVUs from the starting value.

We standardized the methodology so that each of the site-of-service anomaly codes has half of a hospital discharge day management service value accounted in the valuation. Finally, we
note that while we eliminated the RVUs associated with all inpatient hospital visits built into the code’s starting value, because the typical case no longer occurs in the inpatient setting, we allowed for the possibility that in some cases, some part of the work which had been performed in the inpatient setting may continue to be provided even in the outpatient setting. Therefore, to be

conservative in our deductions of work RVUs associated with the inpatient hospital codes from the starting values, we allowed the intra-time of any inpatient hospital visits included in theoriginal valuation to migrate to the postservice period of the code. Accordingly,

while we deducted the full RVUs of an inpatient hospital visit from the starting value, we added the intra-service time of the inpatient hospital visit to the post-service time of the code and accounted for the incremental change in RVUs. The following description provides an example of our methodology.

CPT code 21025 (Excision of bone ( e.g., for osteomyelitis or bone abscess); mandible) has a starting value of 11.07 RVUs. Table 12 shows the building blocks that are included in the original

valuation of the code.



### T ABLE 

### 12

Pre-service
time Median intraservice time Immediate post-service
time 99231 99232 99238 99211 99212 99213 Original
IWPUT

75 min ............ 120 min ......... 43 min ........... 1 visit (0.76 RVUs). 1 visit (1.39 RVUs). 1 visit (1.28 RVUs). 2 visits (0.36 RVUs). 2 visits (0.96 RVUs). 2 visits (1.94 RVUs). 0.0145

The AMA RUC removed two inpatient hospital visits and reduced the outpatient visits from 6 to 4 visits. Table 13 shows the building blocks that were recommended for CY 2009 by the AMA RUC after its review of the code for siteof-service anomalies.



### T ABLE 

### 13

Pre-service
time Median intraservice time Immediate post-service
time 99231 99232 99238 99211 99212 99213 Revised
IWPUT

85 min ............ 90 min ........... 30 min ........... ....................... ....................... ....................... ....................... 2 visits ........... 2 visits ........... 0.0530

Next we calculated the RVUs associated with the changes to the building blocks recommended by the
AMA RUC. We note that the immediate post-service value of 0.38 RVUs (Table 14) includes 30 minutes of intra-service time from inpatient hospital CPT code 99231 (Level 1 subsequent hospital care, per day). Also, the median intra-service value of 0.44 RVUs (Table 14) was determined using the starting IWPUT value of 0.0145. Additionally, our methodology accounted for a half of a hospital discharge day management service (CPT code 99238) for the site-ofservice anomaly code. Table 14 shows the RVU changes to the building blocks

that were calculated based on the methodology discussed above.



### T ABLE 

### 14

Pre-service
time Median intraservice time Immediate post-service
time 99231 99232 99238 99211 99212 99213

0.22 RVUs ....

¥ 0.44 RVUs 0.38 RVUs ...

¥ 0.76 RVUs

¥ 1.39 RVUs

¥ 0.64 RVUs

¥ 0.36 RVUs.

In the final step, the RVUs associated with the changes to the building blocks recommended by the AMA RUC (Table 14) were deducted from or added to the starting value of 11.07 RVUs, which resulted in the CY 2011 reverse building


### 40071 Federal Register / Vol. 75, No. 133 / Tuesday, July 13, 2010 / Proposed Rules

block value of 8.08 RVUs (11.07+0.22

¥ 0.44+0.38

¥ 0.76

¥ 1.39 ¥ 0.64

¥ 0.36=8.08)

. The methodology discussed above was applied to each of the site-of-service anomaly codes from CYs 2009 and 2010

and the results are summarized in

Tables 15 and 16.



### T ABLE 

### 15—CY 2009 S ITE



### - OF 

### -S ERVICE 

### A NOMALY 

### C ODES 1

CPT code Short descriptor CY 2008
RVUs ( ‘‘ starting
value ’’ ) RUC
Recommended value for CY 2009 CY 2011 Reverse building

block value

21025 ................ Excision of bone, lower jaw .............................................................. 11.07 9.87 8.09 23415 ................ Release of shoulder ligament ........................................................... 10.09 9.07 10.63
25116 ................ Remove wrist/forearm lesion ............................................................ 7.38 7.38 7.21 42440 ................ Excise submaxillary gland ................................................................ 7.05 7.05 6.52 52341 ................ Cysto w/ureter stricture tx ................................................................. 6.11 5.35 5.62 52342 ................ Cysto w/up stricture tx ...................................................................... 6.61 5.85 6.2 0 52343 ................ Cysto w/renal stricture tx .................................................................. 7.31 6.55 5.90 52344 ................ Cysto/uretero, stricture tx ................................................................. 7.81 7.05 5.58 52345 ................ Cysto/uretero w/up stricture .............................................................. 8.31 7.55 5.76 52346 ................ Cystouretero w/renal strict ................................................................ 9.34 8.58 6.05 52400 ................ Cystouretero w/congen repr ............................................................. 10.06 8.66 7.00

52500 ................ Revision of bladder neck .................................................................. 9.39 7.99 8.72

52640 ................ Relieve bladder contracture .............................................................. 6.89 4.73 5.01 53445 ................ Insert uro/ves nck sphincter ............................................................. 15.21 15.21 11.72 54410 ................ Remove/replace penis prosth ........................................................... 16.48 15.00 14.00

54530 ................ Removal of testis .............................................................................. 9.31 8.35 8 .88 57287 ................ Revise/remove sling repair ............................................................... 11.49 10.97 10.20 62263 ................ Epidural lysis mult sessions ............................................................. 6.41 6.41 6.99 62350 ................ Implant spinal canal cath .................................................................. 8.04 6.00 0.41 62355 ................ Remove spinal canal catheter .......................................................... 6.60 4.35 -0.43 62360 ................ Insert spine infusion device .............................................................. 3.68 4.28 -3.14 62361 ................ Implant spine infusion pump ............................................................. 6.59 5.60 -0.92 62362 ................ Implant spine infusion pump ............................................................. 8.58 6.05 -0.51 62365 ................ Remove spine infusion device .......................................................... 6.57 4.60 -0.35 63650 ................ Implant neuroelectrodes ................................................................... 7.57 7.15 4.25 63685 ................ Insrt/redo spine n generator ............................................................. 7.87 6.00 4.80 64708 ................ Revise arm/leg nerve ........................................................................ 6.22 6.22 6.17 64831 ................ Repair of digit nerve ......................................................................... 10.23 9.00 8 .87 65285 ................ Repair of eye wound ........................................................................ 14.43 14.43 13. 52

1 We note that in this table, we have not adjusted the RVUs for these codes for the RVU changes to the evaluation and management codes that resulted from the CY 2010 elimination of the consultation codes (74 FR 61775). However, we note that we may, if appropriate, adjust the RVUs for services with global periods to account for relevant changes in the RVUs for evaluation and management services as nec essary.



### T ABLE 

### 16—CY 2010 S ITE



### - OF 

### -S ERVICE 

### A NOMALY 

### C ODES 2

CPT code Short descriptor CY 2009
RVUs ( ‘‘ starting
value ’’ ) RUC
Recommended value for CY 2010 CY 2011 Reverse building

block value

28120 ................ Part removal of ankle/heel ................................................................ 5.64 8.08 6.03

28122 ................ Partial removal of foot bone ............................................................. 7.56 7.56 6.79

28725 ................ Fusion of foot bones ......................................................................... 11.97 11.97 1 2.41

28730 ................ Fusion of foot bones ......................................................................... 12.21 12.21 1 0.06 36825 ................ Artery-vein autograft ......................................................................... 10.00 15 13. 12 42415 ................ Excise parotid gland/lesion ............................................................... 17.99 17.99 15.1 7 42420 ................ Excise parotid gland/lesion ............................................................... 20.87 20.87 17.8 0 49507 ................ Prp i/hern init block >5 yr ................................................................. 9.97 9.97 9.37 49521 ................ Rerepairing hernia, blocked .............................................................. 12.36 12.36 11.59 49587 ................ Rpr umbil hern, block > 5 yr ............................................................. 7.96 7.96 7.19 61885 ................ Insrt/redo neurostim 1 array ............................................................. 7.37 7.57 3.22

2 We note that in this table, we have not adjusted the RVUs for these codes for the RVU changes to the evaluation and management codes that resulted from the CY 2010 elimination of the consultation codes (74 FR 61775). However, we note that we may, if appropriate, adjust the RVUs for services with global periods to account for relevant changes in the RVUs for evaluation and management services as nec essary.

For most codes in Tables 15 and 16, the CY 2011 reverse building block methodology produced a value that is

somewhat lower than the AMA RUCrecommended value. While our results suggest that the majority of the codes with site-of-service anomalies continue

to be overvalued under the AMA RUC’s most recent recommendations, we also found that the methodology may produce a result that is considerably reduced or, in several cases, a negative value. We understand that in previous years, stakeholders have expressed confusion as to why the application of a building block methodology would produce negative values. We believe in some cases, the starting value, that is,


### 40072 Federal Register / Vol. 75, No. 133 / Tuesday, July 13, 2010 / Proposed Rules

the original work RVU, may have been misvalued using building block inputs
that were not consistent with the service, although the overall work value of the code may have been consistent
with the values for other similar services. Moreover, a number of these services are the Harvard-valued codes,
for which the RVUs were established many years ago based on historical inputs that may no longer be appropriate for the code. An attempt to
extract the RVUs associated with these inappropriate inputs through the reverse building block methodology could produce aberrant results. Furthermore, in some cases, we noticed that the original IWPUT of the code was negative even before the code wasreviewed by the AMA RUC for a site-ofservice anomaly. A negative value for
the IWPUT is counterintuitive to the IWPUT concept, indicating that the code was originally misvalued at the building block level. At a minimum, we
believe that in cases where the reverse building block methodology produces aberrant results, and where clinical
review indicates a need for further analysis, the codes should be referred
back to the AMA RUC for review and new valuation should be performed based on the building block methodology.

We note the application of the reverse building block methodology is an objective way to account for changes in the resources resulting from the change
in the site-of-service in which the typical service is provided. However,
because relative values under the PFS

are ‘‘ relative, ’’ that is, where work
relative value units for a code are
established relative to work relative value units for other codes, the recommended methodology of valuing services based on input building blocks is best applied within the context of the AMA RUC discussion. For example, we recognize that the AMA RUC looks at families of codes and may assign RVUs based on a particular code ranking within the family. This method of valuing services preserves relativity
within the relative value scale for that code family. However, we have stated
that we believe the relative value scale requires each service to be valued based on the resources used in furnishing the service as specified in section 1848(c)(1)(A) of the Act, which defines the physician work component to
include ‘‘ the portion of the resources used in furnishing the service that reflects physician time and intensity in furnishing the service. ’’ Furthermore, section 1848(c)(2)(C)(i) of the Act specifies that ‘‘ the Secretary shall determine a number of work relative value units (RVUs) for the service based on the relative resources incorporating physician time and intensity required in furnishing the service. ’’ Read together, these two sections of the statute support our intention to rely on the building block methodology to determine appropriate work RVUs for codes.

We note that we continue to rely on the extensive expertise provided by the AMA RUC to recommend appropriate input building blocks for codes. Additionally, the AMA RUC’s unique infrastructure and broad perspective permits the valuation of a code within the context of relativity to the entire relative value system. Therefore, we
believe that the recommended methodology of valuing services based on input building blocks is best applied
within the context of the AMA RUC
discussion.

Accordingly, we are requesting that
the AMA RUC review the CPT codes displayed in Tables 15 and 16. In addition, where the application of the CY 2011 reverse building block methodology produces an aberrant result that is clearly not a reflection of physician work for the service, we are requesting that the AMA RUC review the input building blocks and recommend an appropriate RVU value that is both consistent with the building blocks of the code and appropriate
relative to the values for other codes in the family. For other codes where the application of the CY 2011 reverse building block methodology produces a
result that is consistent with the physician work for the service, we encourage the AMA RUC to confirm the
values and recommend these work values for CY 2011. In this way, we would hope to receive new AMA RUC
recommendations for all of the codes in
Tables 15 and 16 for CY 2011. Furthermore, if the recommendations
that we receive from the AMA RUC are not consistent with the building block methodology and not appropriate relative to the values of other services, and the application of the CY 2011 reverse building block methodology produces a result that CMS medical
advisors believe is consistent with the work for the service, we are proposing to adopt the CY 2011 reverse building block methodology values that are listed
in Tables 15 and 16 for CY 2011. In cases where the reverse building block methodology produces a negative work value, we are suggesting that the AMA RUC review and revise the building
blocks of the code so that a new
valuation can be determined based on the building block methodology. For such codes, if the revised recommendations that we would hope
to receive from the AMA RUC are still not consistent with the building block methodology upon revision, because we cannot pay for these services based on negative work RVUs, we are proposing to modify the AMA RUC-recommended
values for these codes as CMS determines clinically appropriate and adopt the CMS-modified RVUs on a
interim final basis for CY 2011.

In their future work, we urge the AMA RUC to use the building block methodology when valuing services or provide CMS with extensive rationale
for cases where the AMA RUC believes the building block methodology is inappropriate for a specific code. Since section 1848(c)(2)(L) (as added by section 3134 of the ACA) specifies that the Secretary shall establish a process to validate work RVUs of potentially misvalued codes under the PFS, as we have discussed earlier in this section, we believe codes that are valued using the building block methodology would be more likely to meet the standards of a systematic RVU validation process that could be developed in accordance with the requirements of the statute.

e. Codes With ‘‘ 23-hour ’’ Stays

In the CY 2010 PFS proposed rule (74 FR 33557), we requested that the AMA RUC review services that are typically performed in the outpatient setting and require a hospital stay of less than 24 hours. We stated in the proposed rule that we believed these to be primarily outpatient services and expressed
concern that the value of evaluation and management (E/M) visits for inpatients was inappropriately included in the valuation of codes that qualify as ‘‘ 23- hour stay ’’ outpatient services.

We received a number of comments in response to the discussion in the CY 2010 proposed rule. The AMA RUC stated that it already values stays of less than 23 hours appropriately by reducing the hospital discharge day management service (that is, CPT code 99238), from 1 day to a half day. The AMA RUC also explained that when the AMA RUC refers to 23-hour stay services in discussions at AMA RUC meetings, it is referring primarily to services that are reported in the Medicare claims database as typically outpatient services, but where the patient is kept overnight and, on occasion, even longer in the hospital. Because the AMA RUC believes the patient stays overnight in the hospital, it believes the inclusion of inpatient E/M visits to be appropriate in the valuation of this category of codes.

We believe that the 23-hour stay issue encompasses several scenarios. The typical patient is commonly in the


### 40073 Federal Register / Vol. 75, No. 133 / Tuesday, July 13, 2010 / Proposed Rules

hospital for less than 24 hours, which often means the patient may indeed stay overnight in the hospital. On occasion, the patient may stay longer than a single night in the hospital; however, in both cases, the patient is considered for Medicare purposes to be a hospital outpatient, not an inpatient, and our claims data support that the typical 23- hour stay service is billed as an outpatient service. Accordingly, we
believe that the valuation of the codes that fall into the 23-hour stay category should not reflect work that is typically associated with an inpatient service. For example, inpatient E/M visit codes such as CPT codes 99231 (Level 1 subsequent hospital care, per day); 99232 (Level 2 subsequent hospital care, per day); and 99233 (Level 3 subsequent hospital care, per day), should not be included at the
full value in the valuation of 23-hour stay services.

Currently, the valuation of 23-hour stay services is conducted in a nonuniform manner by the AMA RUC.
The AMA RUC has indicated that it currently includes a half hospital discharge day management service and no hospital inpatient visits for outpatient services with expected hospital stays of 23 hours or less. In contrast, for those outpatient services
where the AMA RUC believes that the recovery period could be longer than 23 hours, the AMA RUC stated in its comment on the CY 2010 PFS proposed rule that it currently includes a full hospital discharge day management service and one or more inpatient E/M visits in the code’s value. However, we note the typical 23-hour stay service is billed as an outpatient service and so long as the typical case continues to be billed as an outpatient service, we believe the code should not incorporate physician work values for services that are typically associated with an inpatient service. In the 2010 PFS proposed and final rule with comment period (74 FR 33556 and 74 FR 61777, respectively), we stated that we believed the use of inpatient E/M visit codes for services rendered in the post-service period for outpatient 23-hour stay procedures would result in overpayment for pre- and post-service work that would not be provided. Accordingly, we proposed in the CY 2010 proposed rule (74 FR 33556 through 33557) not to allow any additional inpatient E/M service to be billed for care furnished during the post-procedure period when care is furnished for an outpatient service requiring less than a 24-hour hospital
stay.

However, we find it is plausible that while the patient receiving the 23-hour stay service remains a hospital outpatient, the patient would typically be cared for by the physician furnishingthe procedure during that postprocedure period. While we do not believe that post-procedure hospital

‘‘ visits ’’ would be at the inpatient level since the typical case is an outpatient who would be ready to be discharged from the hospital in 23 hours or less, we agree that the intra-service time of the inpatient hospital visit may be included in the valuation for the 23-hour stay
code.

Accordingly, we are modifying our proposed CY 2010 approach and suggesting that in the future, when the AMA RUC reviews new and potentially
misvalued codes that are identified as 23-hour stay services, the AMA RUC would apply the following methodology:

(1) Begin with the starting RVU value of the 23-hour stay code under review and decrease the hospital discharge day management service from one day to a half day.

(2) Deduct the RVUs of inpatient hospital visits from the starting RVU
value.

(3) Reallocate the time associated with the intra-service portion of the inpatienthospital visits to the immediate postservice time of the 23-hour stay code
under review.

Example: A 23-hour stay code is currently valued at 15 RVUs and has 1 hospital discharge day management service and 1 level 3 subsequent hospital care visit incorporated in this
value.

• Applying step (1): 15

¥ 0.64 * = 14.36

• Applying step (2): 14.36

¥ 2 ** = 12.36

• Applying step (3): 12.36 + (30

minutes × 0.0224) *** = 13.032 RVUs

* Value associated with 1 ⁄ 2 hospital discharge day management service.

** Value associated with an inpatient hospital visit, CPT code 99233.

*** Value associated with the reallocated intra-service time multiplied by the post-service intensity of the 23- hour stay code.

Finally, we note that since work relative value units are established by the Secretary in the context of relativity to other codes in the system, the recommended methodology for the evaluation of 23-hour stay codes is best applied within the context of relativity. We appreciate that the AMA RUC has the ability to assess the 23-hour stay code after application of the recommended methodology to ensure appropriate relativity of this code and other codes within the system. We strongly encourage the AMA RUC to apply the recommended methodology to ensure the consistent and appropriate valuation of the physician work for
these services.

4. Expanding the Multiple Procedure Payment Reduction (MPPR) Policy to Additional Nonsurgical Services

a. Background

Medicare has a longstanding policy to reduce payment by 50 percent for the second and subsequent surgical procedures furnished to the same patient by the same physician on the same day, largely based on the presence of efficiencies in the PE and pre- and post-surgical physician work. Effective January 1, 1995, the multiple procedure payment reduction (MPPR) policy, with the same percentage reduction, was extended to nuclear medicine diagnostic procedures (CPT codes 78306, 78320, 78802, 78803, 78806, and 78807). In the
CY 1995 PFS final rule with comment period (59 FR 63410), we indicated that we would consider applying the policy to other diagnostic tests in the future.

Consistent with recommendations of MedPAC in its March 2005 Report to Congress on Medicare Payment Policy, under the CY 2006 PFS, the MPPR policy was extended to the technical component (TC) of certain diagnostic imaging procedures performed on contiguous areas of the body in a single session (70 FR 70261). The reduction recognizes that, for the second and subsequent imaging procedures, there are some efficiencies in clinical labor, supplies, and equipment time. In particular, certain clinical labor activities and supplies are not duplicated for subsequent procedures and, because equipment time and
indirect costs are allocated based on clinical labor time, those would also be reduced accordingly.

The imaging MPPR policy currently applies to computed tomography (CT) and computed tomographic angiography (CTA), magnetic resonance imaging (MRI) and magnetic resonance angiography (MRA), and ultrasound
services within 11 families of codes based on imaging modality and body region. When we adopted the policy in CY 2007, we stated that we believed efficiencies were most likely to occur when contiguous body areas are the focus of the imaging because the patient and equipment have already been prepared for the second and subsequent procedures, potentially yielding resource savings in areas such as clerical time, technical preparation, and supplies (70 FR 45850). Therefore, the MPPR policy currently applies only to procedures involving contiguous body


### 40074 Federal Register / Vol. 75, No. 133 / Tuesday, July 13, 2010 / Proposed Rules

areas within a family of codes, not across families, and to those procedures that are provided in a single session. Additionally, while the MPPR policy applies to TC-only services and to the TC of global services, it does not apply to professional component (PC) services.

Under the current imaging MPPR policy, full payment is made for the TC of the highest-paid procedure, and payment is reduced by 25 percent of the TC for each additional procedure when an MPPR scenario applies. We had originally planned to phase in the MPPR policy over a 2-year period, with a 25 percent reduction in CY 2006 and a 50 percent reduction in CY 2007 (70 FR 70263). However, the Deficit Reduction Act of 2005 (Pub. L. 109–171) (DRA) capped the PFS payment amount for most imaging procedures at the amount paid under the hospital Outpatient Prospective Payment System (OPPS). In view of the DRA, we determined that it would be prudent to retain the MPPR at 25 percent while we continued to examine the appropriate payment levels (71 FR 69659). The DRA also exempted reduced expenditures attributable to the MPPR policy from the PFS budget neutrality provision. Most recently, effective July 1, 2010, section 3135(b) of
the ACA increased the MPPR on the TC of imaging services under the policy
established in the CY 2006 PFS final rule with comment period from 25 to 50 percent and exempted the reduced expenditures attributable to this further change from the PFS budget neutrality provision.

In the July 2009 GAO report entitled,

‘‘ Medicare Physician Payments: Fees
Could Better Reflect Efficiencies
Achieved when Services are Provided Together, ’’ the GAO recommended that we take further steps to ensure that fees for services paid under the PFS reflect
efficiencies that occur when services are performed by the same physician on the same beneficiary on the same day. The GAO recommended the following: (1) Expanding the existing MPPR policy to
the PC to reflect efficiencies in physician work for certain imaging services; and (2) expanding the MPPR to
reflect PE efficiencies that occur when certain nonsurgical, nonimaging services are provided together. The GAO also encouraged us to focus on service pairs that have the most impact on Medicare spending.

In the March 2010 report, MedPAC noted its concerns about mispricing of
services under the PFS. MedPAC indicated that it would explore whether expanding the unit of payment through packaging or bundling would improve payment accuracy and encourage more
efficient use of services. In the CYs 2009 and 2010 PFS proposed rules (73 FR 38586 and 74 FR 33554, respectively), we stated that we planned to analyze nonsurgical services commonly furnished together (for example, 60 to 75 percent of the time) to assess whether an expansion of the MPPR policy could be warranted. MedPAC encouraged us to consider duplicative physician work, as well as PE, in any expansion of the MPPR policy.

b. Proposed CY 2011 Expansion of the Imaging Technical Component MPPR Policy to Additional Combinations of Imaging Services

Over the past 2 years, the AMA RUC
has examined several services billed 90 percent or more of the time together as part of the potentially misvalued service initiative and, in several cases, created one code to describe the complete service, with a value that reflects the expected efficiencies. Notwithstanding the bundling work of the RUC, there may be additional imaging and other diagnostic services that are furnished together less than 90 percent of the time where we could still expect efficiencies in the TC, and in some cases in the PC, resulting in potential overpayment for these services under current policy when furnished together.

Section 1848(c)(2)(K) of the Act (as added by section 3134 of the ACA) specifies that the Secretary shall identify potentially misvalued codes by examining multiple codes that are frequently billed in conjunction with furnishing a single service, and review and make appropriate adjustments to their relative values. As a first step in applying this provision, we are proposing a limited expansion of the current imaging MPPR policy for CY
2011. We will continue to review other possible expansions of the MPPR policy to the TC and/or PC of imaging procedures or other diagnostic tests for the future. Any further changes would be addressed in future rulemaking.

In a related policy for hospital outpatient payment of imaging services,
in the CY 2009 OPPS/ASC final rule with comment period (73 FR 68559 through 68569), the OPPS adopted a policy to pay for two or more CT and CTA, MRI and MRA, or ultrasound procedures furnished in the same session through a single composite ambulatory payment classification (APC) group. These composite APC payments were based on the 11 families of codes subject to the MPPR under the PFS that were collapsed into 3 imaging families for the OPPS according to their modality—1 for ultrasound, 1 for CT and CTA, and 1 for MRI and MRA

services.

At that time, we stated our belief that the contiguous body area concept that was incorporated in the PFS imaging families was not necessary for potential efficiencies to be achieved in an imaging session. We provided examples to illustrate that we would not expect second and subsequent imaging services of the same modality involving noncontiguous body areas to require duplicate facility resources (comparable to the TC under the PFS) for clinical labor activities such as greeting the patient, providing education and obtaining consent, retrieving prior exams, setting up an intravenous infusion, and preparing and cleaning the room, any more than second and subsequent imaging procedures of the same modality involving contiguous body areas. While we noted that multiple imaging claims under the OPPS are generally within the same imaging modality and involve contiguous body areas the vast majority of the time, we estimated that the collapsed 3 families, as opposed to the 11 PFS families, would add 12 percent additional claims to those eligible for a single composite APC payment under the OPPS based on the provision of 2 or more imaging services in a single session, allowing us to capture
additional claims with efficiencies.

Taking into consideration the OPPS policy that was adopted in the CY 2009
OPPS/ASC final rule with comment period, in this proposed rule, we are proposing to apply the MPPR regardless of family, that is, the policy would apply to multiple imaging services furnished within the same family of codes or across families. This proposal would simplify the current imaging MPPR policy in a way that is consistent with the standard PFS MPPR policy for surgical procedures that does not group procedures by body region. Therefore, the MPPR would apply to CT and CTA, MRI and MRA, and ultrasound procedures services furnished to the same patient in the same session, regardless of the imaging modality, and not limited to contiguous body areas.

Because of the different pieces of equipment used for CT/CTA, MRI/MRA, and ultrasound procedures, it would be highly unlikely that a single practitioner would furnish more than one imaging procedure involving 2 different modalities to one patient in a single session where the proposed MPPR policy would apply. On the other hand, while most multiple procedures furnished with a single modality in one session would involve procedures currently assigned to one of the 11


### 40075 Federal Register / Vol. 75, No. 133 / Tuesday, July 13, 2010 / Proposed Rules

imaging families, it would not be uncommon for more than one imaging procedure of the same modality to be furnished across families and, like the scenario for hospital outpatient imaging services, we would expect efficiencies to occur in these cases. Therefore, we believe that an expansion of the current imaging MPPR policy to account for
efficiencies in such situations would allow us to pay more appropriately for these multiple imaging procedure sessions, consistent with our ongoing
efforts to address misvalued services.

The proposed expansion of the imaging MPPR policy to include all of the current codes in a single family to which the standard 50 percent reduction for second and subsequent procedures would apply would reduce payment for 20 percent more services than the current MPPR policy under the PFS. Thus, under the CY 2011 proposal, we would capture additional efficiencies and pay more appropriately in these cases. We note that, as indicated above, section 3135(b)(2) of the ACA specifies that reduced expenditures attributable to the increase in the imaging MPPR from 25 to 50 percent in CY 2011 are excluded from the PFS budget neutrality adjustment. However, the reduced payment for code combinations that would newly be subject to the imaging MPPR policy under this proposal would be made in a budget neutral manner under the PFS,
as these new combinations are not included under section 1848(b)(4)(D) (added by section 3135(b) of the ACA),
which addresses ‘‘ single-session imaging to consecutive body parts ’’ under the established imaging MPPR policy.

Finally, we are also proposing to add the codes displayed in Table 17 to the list of imaging services subject to the MPPR policy in CY 2011. These codes were newly created for CY 2010 and are similar to codes currently in imaging family 2, titled CT and CTA (Chest/ Thorax/Abdomen/Pelvis).

We further note that new CY 2010 CPT codes 74261 (Computed tomography (CT) colonography, diagnostic, including image postprocessing; without contrast material) and 74262 (Computed tomography (CT) colonography, diagnostic, including image postprocessing; with contrast material(s) including non-contrast images, if performed) were added to the CY 2010 MPPR policy through the July 2010 PFS quarterly update, with a retroactive effective date of January 1, 2010. These codes replaced CPT code 0067T (Computed tomographic (CT) colonography ( i.e., virtual colonoscopy); diagnostic) in CY 2010, which was on the list of procedures subject to the imaging MPPR policy prior to CY 2010.

As discussed earlier in this section, reduced expenditures attributable to the increase in the MPPR for multiple imaging procedures to consecutive body parts (that is, those previously designated in the same family of codes) are exempt from the budget neutrality provision of the PFS. However, the reduced expenditures attributable to the MPPR for combinations of multiple imaging procedures that we are proposing for CY 2011 (the MPPR for multiple imaging procedures not involving consecutive body parts) would be subject to budget neutrality adjustment under the PFS. We note that
this formulation for whether reduced expenditures are exempt from budget neutrality applies both to procedures currently subject to the imaging MPPR and to new codes that are subject to the policy in CY 2011 and in future years. To the extent that imaging procedures described by the new codes are
furnished in combination with other procedures that are subject to the imaging MPPR on consecutive body areas, the reduced expenditures
attributable to the MPPR for these combinations would be exempt from the PFS budget neutrality adjustment.

The complete list of codes subject to the proposed CY 2011 MPPR policy for diagnostic imaging services is included in Addendum F to this proposed rule.



### T ABLE 

### 17—P ROPOSED 

### CPT C ODE 

### A D



### DITIONS TO THE 

### D IAGNOSTIC 

### I MAG



### ING 

### MPPR P OLICY FOR 

### CY 2011

CPT code Short descriptor

75571 ....... Ct hrt w/o dye w/ca test. 75572 ....... Ct hrt w/3d image. 75573 ....... Ct hrt w/3d image, congen. 75574 ....... Ct angio hrt w/3d image.

c. Proposed CY 2011 Expansion of the MPPR Policy to Therapy Services

In the July 2009 GAO report entitled,

‘‘ Medicare Physician Payments: Fees
Could Better Reflect Efficiencies
Achieved when Services are Provided Together, ’’ the GAO found efficiencies when multiple physical therapy services
were furnished in one session and concluded that an MPPR policy could be appropriate for these services. In the report, the GAO noted that officials from the AMA RUC explained that time spent on pre-service and post-service therapy activities is spread across the number of services in a typical session in order to avoid duplication of the PE for the services. Nevertheless, the GAO found that there was duplication of certain activities in the intra-service period, and provided the example of time spent testing range of motion or muscle flexibility that was duplicated in commonly observed code pairs.

In the typical clinical scenario for therapy services, we believe that therapy services are misvalued for PFS payment when multiple services are furnished to a patient in a single session because duplicate clinical labor and supplies are included in the PE of the
services furnished. We believe this duplication should be accounted for under the PFS, as we currently account for efficiencies in multiple surgical and multiple diagnostic imaging procedures furnished in a single session. Over the past 2 years, the AMA RUC has
examined several services billed 90 percent or more of the time together as part of its potentially misvalued service initiative and, in several cases, created one code to describe the complete service, with a value that reflects the expected efficiencies. Notwithstanding the AMA RUC’s analyses, in most cases
it has not created one code to describe a complete therapy service, in part because many of the core therapy CPT
codes are timed codes based on
increments of treatment time.

Therefore, we are proposing a further step to implement section 1848(c)(2)(K) of the Act (as added by section 3134 of the ACA) that specifies that the Secretary shall identify potentially misvalued codes by examining multiple codes that are frequently billed in conjunction with furnishing a single service. For CY 2011 we are proposing an MPPR policy for the HCPCS codes listed in Table 18, specifically the separately payable ‘‘ always therapy ’’ services that are only paid by Medicare when furnished under a therapy plan of care. These services are designated

‘‘ always therapy ’’ services regardless of who furnishes them and always require therapy modifiers to be reported, specifically –GP (Services rendered under outpatient physical therapy plan of care); –GO (Services rendered under outpatient occupational therapy plan of care); or –GN (Services rendered under outpatient speech pathology plan of care). The therapy codes are available in
a file on the CMS Web site at: http:// www.cms.gov/TherapyServices/. We have excluded both contractor-priced
and bundled codes from Table 18 because, under our proposal, an MPPR would not be applicable for ‘‘ always therapy ’’ services furnished in
combination with these codes. In the
case of bundled codes that are not separately paid, there are no explicit
efficiencies in the direct PE to be reflected in payment for the second and subsequent therapy services furnished


### 40076 Federal Register / Vol. 75, No. 133 / Tuesday, July 13, 2010 / Proposed Rules

to the patient on the same day. In the case of contractor-priced codes, there is no nationally established pricing that could be uniformly adjusted to reflect the expected efficiencies when multiple therapy services are furnished.



### T ABLE 

### 18—S EPARATELY 

### P AYABLE



### ‘‘ A LWAYS 

### T HERAPY 

### ’’ S ERVICES 

### S UB



### JECT TO THE 

### P ROPOSED 

### CY 2011

MPPR P OLICY 

### *

CPT/ HCPCS

code Short descriptor

92506 ....... Speech/hearing evaluation. 92507 ....... Speech/hearing therapy. 92508 ....... Speech/hearing therapy. 92526 ....... Oral function therapy. 92597 ....... Oral speech device eval. 92607 ....... Ex for speech device rx, 1hr. 92608 ....... Ex for speech device rx addl. 92609 ....... Use of speech device service. 96125 ....... Cognitive test by hc pro.

97001 ....... Pt evaluation.

97002 ....... Pt re-evaluation.
97003 ....... Ot evaluation.
97004 ....... Ot re-evaluation. 97010 ....... Hot or cold packs therapy. 97012 ....... Mechanical traction therapy. 97016 ....... Vasopneumatic device therapy. 97018 ....... Paraffin bath therapy. 97022 ....... Whirlpool therapy. 97024 ....... Diathermy eg, microwave. 97026 ....... Infrared therapy. 97028 ....... Ultraviolet therapy.

97032 ....... Electrical stimulation. 97033 ....... Electric current therapy. 97034 ....... Contrast bath therapy. 97035 ....... Ultrasound therapy. 97036 ....... Hydrotherapy. 97110 ....... Therapeutic exercises.

97112 ....... Neuromuscular reeducation. 97113 ....... Aquatic therapy/exercises. 97116 ....... Gait training therapy. 97124 ....... Massage therapy. 97140 ....... Manual therapy. 97150 ....... Group therapeutic procedures. 97530 ....... Therapeutic activities. 97533 ....... Sensory integration. 97535 ....... Self care mngment training. 97537 ....... Community/work reintegration. 97542 ....... Wheelchair mngment training. 97750 ....... Physical performance test. 97755 ....... Assistive technology assess. 97760 ....... Orthotic mgmt and training. 97761 ....... Prosthetic training. 97762 ....... C/o for orthotic/prosth use. G0281 ...... Elec stim unattend for press.
G0283 ...... Elec stim other than wound. G0329 ...... Electromagntic tx for ulcers.

* Excludes contractor-priced and bundled
codes. At this time, we are not proposing an MPPR policy for ‘‘ sometimes therapy ’’ services, specifically those services that may be furnished under a therapy plan of care or otherwise by physicians or
NPPs as medical services. We believe that the care patterns are different for the latter group of services that may sometimes be furnished as therapy services, and note that they are less commonly furnished with multiple services in a single session than the

‘‘ always therapy ’’ services. In the discussion that follows, our reference to therapy services means those HCPCS codes designated annually as ‘‘ always therapy ’’ services by CMS.

Based on CY 2009 PFS claims data, we identified over 500 therapy service code pairs billed for the same patient in a single session. We then reviewed a sample of the most common therapy code pairs, specifically those high volume code pairs with more than 250,000 combined services per year, to examine the potential for duplication in the PE. These codes pairs represented
more than half of the occurrences of therapy services billed together. While we acknowledge that the PE inputs per service for some therapy services were
included in the direct PE database based on one-half of the total PE inputs required for two services provided in a single session, which would account for some duplication, this was not the case for all combinations of therapy services. Of the high volume therapy services examined, approximately one-fourth of the code pairs were not valued based on two services. In addition, we note that
the CY 2009 PFS claims data show that when multiple therapy services are
billed on a claim for the same date of service, the median number is four services per day. Therefore, even for those clinical labor times that may
reflect the allocation of total time across two units of therapy services, we believe
that some elements of the current PE inputs are duplicated based on current patterns of therapy service delivery where most multiple service claims involve delivery of more than 2 services

in a session.

Duplicate labor activities currently included in the PE for the service period for these high volume pairs of therapy
services are as follows: clean room/ equipment; education/instruction/ counseling/coordinating home care; greet patient/provide gowning; obtain measurements, for example, ROM/ strength/edema; and post-treatment patient assistance. The most common duplicate supply item included in the PE was the multispecialty visit pack. Examples of duplicated and unduplicated labor activities and supplies for two sample therapy code pairs and our estimates of potential clinically appropriate time and quantity reductions for multiple service sessions are displayed in Table 19. We note that

CY 2009 PFS claims data for these sample code pairs include over 3.4 million pairs of CPT codes 97112 (Therapeutic procedure, 1 or more areas, each 15 minutes; neuromuscular reeducation of movement, balance, coordination, kinesthetic sense, posture, and/or proprioception for sitting and/or standing activities) and 97110 (Therapeutic procedure, 1 or more areas, each 15 minutes; therapeutic exercises to develop strength and endurance, range of motion and flexibility) furnished by the same practitioner on the same day and over 500,000 pairs of CPT codes 97001 (Physical therapy evaluation) and 97140 (Manual therapy techniques ( e.g., mobilization/ manipulation, manual lymphatic drainage, manual traction), 1 or more regions, each 15 minutes).

Table 19: Examples of Duplicate PE Inputs for Therapy Services That

Should Be Accounted for When Multiple Services Are Furnished in One

Session

Example 1: CPT code 97112 (Therapeutic procedure, 1 or more areas, each 15 minutes; neuromuscular reeducation of movement, balance, coordination, kinesthetic sense, posture, and/or proprioception for sitting and/or standing activities) and CPT code 97110 (Therapeutic procedure, 1 or more areas, each 15 minutes; therapeutic exercises to develop strength and endurance, range of motion and flexibility)

Staff description Labor task description Time period Code A
97112 labor task

time Code B
97110 labor task

time Total minute
reduction

Physical Therapy Aide Clean room/equipment .................................... Service Period, PostService. 1 1 1


### 40077 Federal Register / Vol. 75, No. 133 / Tuesday, July 13, 2010 / Proposed Rules

Staff description Labor task description Time period Code A
97112 labor task

time Code B
97110 labor task

time Total minute
reduction

Physical Therapy Assistant. Education/instruction/counseling/coord home

care. Service Period, PostService. 2 .5 2 .5 2 .5

Physical Therapy Aide Greet patient/provide gowning ........................ Service Period, PreService. 1 .5 1 .5 1 .5

Physical Therapy Assistant. Obtain measurements, e.g., ROM/strength/

edema. Service Period, PreService. 1 .5 1 .5 1 .5

Physical Therapy Assistant. Obtain vital signs ............................................ Service Period, PreService. 1 1 1

Physical Therapy Assistant. Phone calls between visits with patient, family Post-Service Period ... 1 1 1

Physical Therapy Aide Post treatment patient assistance .................. Service Period, PostService. 1 1 1

Physical Therapy Assistant. Review/read documentation, plan of care, treatment goals. Pre-Service Period ..... 1 .5 1 .5 1 .5

Physical Therapy Aide Verify/Coordinate availability of resources/ equip. Pre-Service Period ..... 1 .5 1 .5 1 .5

Supply description Price Code A
97112 quantity Code B
97110 quantity Code B
97110quantity reduction

pack, minimum multi-specialty visit ................................................................. $1.14 0.5 0.5 0 Thera-bands (6in width) ................................................................................... 0.06 1.5 1.5 1.5

Example 2: CPT code 97001 (Physical therapy evaluation) and CPT Code 97140 (Manual therapy techniques (eg, mobilization/manipulation, manual lymphatic drainage, manual traction), 1 or more regions, each 15 minutes)

Staff description Labor task description Time period Code A
97001 labor task

time Code B
97140 labor task

time Total minute
reduction

Physical Therapy Aide Clean room/equipment .................................... Service Period, PostService. 3 1 1

Physical Therapy Assistant. Education/instruction/counseling/coord home

care. Service Period, PostService. 2 1 1

Physical Therapy Aide Greet patient/provide gowning ........................ Service Period, PreService. 3 1 .5 1 .5

Physical Therapy Assistant. Obtain measurements, e.g., ROM/strength/

edema. Service Period, PreService. 8 1 .5 1 .5

Physical Therapy Assistant. Obtain vital signs ............................................ Service Period, PreService. 3 1 1

Physical Therapy Assistant. Phone calls between visits with patient, family Post-Service Period ... 2 1 1

Physical Therapy Assistant. Review/read documentation, plan of care, treatment goals. Pre-Service Period ..... 1 .5 .5

Physical Therapy Aide Verify/Coordinate availability of resources/ equip. Pre-Service Period ..... 3 1 .5 1 .5

Physical Therapy Aide Prep and position patient ................................ Service Period, PreService. 2 0 0

Physical Therapy Aide Prepare room, equipment, supplies ................ Service Period, PreService. 2 0 0

Physical Therapy Aide Post treatment assistance .............................. Service Period, PostService. 0 1 0

Supply description Price Code A
97001 quantity Code B
97140 quantity Code B
97140quantity reduction

pack, minimum multi-specialty visit ............................................................. $1 .14 1 0.5 0 .5 lotion, message, unscented ......................................................................... 0 .158 0 0.5 0


### 40078 Federal Register / Vol. 75, No. 133 / Tuesday, July 13, 2010 / Proposed Rules

We did not remove minutes for
clinical labor tasks that were not duplicated. For example, for CPT code pair 97001 and 97140 the following tasks were not duplicated: Post treatment patient assistance; prep and position patient; and prepare room, equipment, and supplies. In addition, we did not remove any supply items that would be required for only one of the separate services because these would not be duplicated in the PE applicable to the combination of
services. We estimated no reduction for equipment time, even though efficiencies would be expected for equipment that is used in both services when they are furnished together. Finally, a corresponding reduction to the indirect expenses is appropriate
since indirect costs are allocated partially based on direct costs. For five high volume therapy code pairs that
each occur over 2 million time in PFS claims for multiple therapy services and account for almost half of such claims, we estimated that the resulting reduction in the PE for the lower paying code would range from 28 to 56 percent.

In summary, given the duplicative clinical labor activities and supplies as
shown in the code combination examples, we believe it would be appropriate to extend the 50 percent MPPR policy that is currently applied to surgical services and the TC of imaging services, to the PE component of certain therapy services. Specifically, we are proposing to apply a 50 percent payment reduction to the PE component of the second and subsequent therapy services for multiple ‘‘ always therapy ’’ services furnished to a single patient in a single day. Because it would be difficult to determine the precise beginning and end of therapy sessions
and we do not believe that beneficiaries would typically have more than one therapy session in a single day, we are proposing to apply the 50 percent MPPR policy to the PE component of subsequent therapy services provided to the same patient on the same day, rather
than in the same session.

We note that many therapy services are time-based CPT codes, so multiple units of a single code may be billed for a single session that lasts for a longer period of time than one unit of the code. The proposed MPPR policy would apply to multiple units of the same therapy service, as well as to multiple different services, when furnished to the same patient on the same day. Full payment would be made for the service or unit with the highest PE and payment would be made at 50 percent of the PE component for the second and subsequent procedures or units of the service. The work and malpractice components of the therapy service payment would not be reduced. For therapy services furnished by a group practice or ‘‘ incident to ’’ a physician’s service, the MPPR would apply to all

‘‘ always therapy ’’ services furnished to a patient on the same day, regardless of whether the services are provided in one therapy discipline or multiple disciplines, for example, physical therapy, occupational therapy, or speech-language pathology. The proposed CY 2011 MPPR policy would apply to both those services paid under
the PFS that are furnished in the office setting and those services paid at the PFS rates that are furnished by outpatient hospitals, home health agencies, comprehensive outpatient rehabilitation facilities (CORFs), and other entities that are paid by Medicare for outpatient therapy services. Table 20 provides a sample calculation of the current and proposed CY 2011 payment for multiple therapy services furnished on the same day. For those services paid under the PFS, the PFS budget neutrality provision would apply so that the estimated reduced expenditures for therapy services would be redistributed to increase payment for other PFS

services.



### T ABLE 

### 20—S AMPLE 

### P ROPOSED 

### P AYMENT 

### C ALCULATION FOR 

### M ULTIPLE 

### T HERAPY 

### S ERVICES 

### F URNISHED TO A 

### S INGLE


### P ATIENT ON THE 

### S AME 

### D AY

Procedure 1
Unit 1 Procedure 1
Unit 2 Procedure 2 Current
total payment Proposed CY 2011

total payment Proposed payment calculation

Work ................................ $7.00 $7.00 $11.00 $25.00 $25.00 no reduction. PE ................................... 10.00 10.00 8.00 28.00 19.00 $10 + (0.5 × $10) + (0.5 × $8). Malpractice ...................... 1.00 1.00 1.00 3.00 3.00 no reduction. Total ......................... 18.00 18.00 20.00 56.00 47.00 $18 + $7 + (0.5 × $10) + $1 + $11 + (0.5 × $8) + $1.

We believe this proposed therapy MPPR policy would provide more appropriate payment for therapy services that are commonly furnished together by taking into account the duplicative clinical labor activities and supplies in the PE that are not furnished more than once in the single therapy session. This approach is consistent with the statutory requirement for the Secretary to identify, review, and adjust the relative values of potentially

misvalued services under the PFS as specified by section 3134 of the ACA. We also believe this proposed policy is responsive to Congressional concerns about significant growth in therapy spending and to MedPAC and GAO recommendations regarding the expansion of MPPR policies under the

PFS to account for additional efficiencies. We note that paying more appropriately for therapy services based on PE relative values that are adjusted

for the clinical scenario under which

the services are furnished would result in reduced therapy expenditures, and

beneficiaries would be able to receive more medically necessary outpatient therapy services before reaching the therapy cap. For a further discussion of potential alternatives to the therapy caps, we refer readers to section III.A.2. of this proposed rule. 5. High Cost Supplies

a. Background

MedPAC and the AMA RUC have long recommended that CMS establish afrequent price update process for highcost supplies that are direct PE inputs in the PE database for services paid

under the PFS because of their speculation that prices for these items may decrease over time as competition increases and new technologies disseminate into medical practice. MedPAC in particular has perennially noted that it is important for CMS to update the prices of high-priced supplies on a regular basis as inaccurate prices can distort PE RVUs over time,


### 40079 Federal Register / Vol. 75, No. 133 / Tuesday, July 13, 2010 / Proposed Rules

contributing to the misvaluing of
established services under the PFS.

Most of the current prices for highcost supplies included in the direct PE
database are from 2004 or earlier. There are currently 62 unique supplies with prices of $150 or more in the proposed CY 2011 PE database, which is available
on the CMS Web site under the supporting data files for the CY 2011 PFS proposed rule at http:// www.cms.gov/PhysicianFeeSched/. Finally, we note that we do not actually pay the supply prices included in the PE database but, instead, use them to develop the PE RVUs according to our standard PE methodology as described in section II.A.2. of this proposed rule. Payment for a procedure that uses a supply is based upon the PE RVUs that result from the PE methodology, and supplies are among the direct PE inputs for procedures. Therefore, it is the relativity of high-cost supply prices to prices for other PE items (equipment, low-cost supplies, and clinical labor) that is important.

Accordingly, in the CY 2009 PFS proposed rule (73 FR 38582), we proposed a process to update the prices for high-cost supplies priced at $150 or more that are included in the PE inputs for procedures paid under the PFS PE methodology. The CY 2009 proposed rule described a publicly transparent process in which CMS would publish a list of the high-cost supplies in the PFS proposed rule (65 supplies were included in the CY 2009 PFS proposed rule), and specialty societies or other relevant organizations would provide acceptable documentation supporting the pricing for the supplies during the 60-day public comment period. Furthermore, in that same proposed rule (73 FR 38582), we provided guidance on what constitutes valid, reliable documentation that reflects the typical price of the high-cost item in the marketplace. We outlined examples of acceptable documentation, such as a detailed description (including system components), sources, and current pricing information, confirmed by copies of catalog pages, invoices, and quotes from manufacturers, vendors, or
distributors. We indicated that
documentation that does not include specific pricing information such as phone numbers and addresses of manufacturers, vendors, or distributors or Web site links without pricing information would not be acceptable. We also noted that if acceptable
documentation was not received within the proposed rule’s 60-day public comment period, we would use prices from the Internet, retail vendors, and supply catalogs to determine the appropriate cost, and that we would use the lowest price identified by these sources (73 FR 38582). Finally, we solicited public comments on alternatives that could be used to update pricing information in the absence of acceptable documentation provided by specialty societies or other interested organizations.

In the CY 2009 PFS final rule with comment period (73 FR 69882), we indicated that we received many comments on the proposed process and, while some commenters expressed support, others believed the proposed process was flawed and burdensome. Moreover, although we received some data in response to our request for information on the 65 high-cost supplies with prices of $150 or more, much of what we received was not complete or did not represent typical market prices. In particular, we expressed concern that the submitted data often represented manufacturer list prices for the premier models of many supplies, while we believed there were less expensive alternatives. Therefore, we were unable to determine the most appropriate, typical supply prices for our PFS payment methodology that prices the typical service described by a HCPCS code. Rather than finalizing the proposed process for updating high-cost supplies and revising the prices for the 65 supplies based on inadequate pricing information, we stated in the CY 2009 PFS final rule with comment period (73 FR 69882) that we would research the possibility of using an independent contractor to assist us in obtaining accurate pricing information. Furthermore, we informed the public that we planned to study the limitations of available pricing data and determine how to revise our proposed process to
elicit better data.

In the CY 2010 PFS proposed rule and final rule with comment period (74 FR 33554 and 61776, respectively), we stated that we were continuing to examine ways to obtain accurate pricing information for high-cost supplies. We noted again in the CY 2010 PFS proposed rule that we would depend upon the cooperation of the medical community to obtain typical prices in the marketplace, and we provided stakeholders with another opportunity to submit public comments on the process. In the CY 2010 PFS final rule with comment period, we acknowledged commenters’ general support for an initiative to ensure accurate pricing of high-cost supplies. In general, the commenters strongly preferred a transparent and public process, and we stated that we would consider this perspective as we explore the best way to ensure that accurate supply pricing information is used in the PFS payment methodology.

b. Future Updates to the Prices of HighCost Supplies

In working towards refining a process to update the prices of high-cost supplies and consistent with our intention expressed in the CY 2009 PFS final rule with comment period (73 FR 69882), we contracted with an independent contractor during CY 2009 to help us study the availability of accurate pricing information. We requested that the independent contractor, L&M Policy Research, research pricing information for the 65 high-cost supplies listed in the CY 2009 proposed rule (73 FR 38583 through 38585) and determine what, if any, pricing information reflecting typical market prices could be obtained for these high-cost supplies.

We first requested that the contractor explore publicly available sources to obtain typical market prices for these supplies. The contractor utilized supply vendor catalogs and Web sites and directly contacted vendors, manufacturers, group purchasing organizations (GPOs), and any other suppliers that the contractor identified in their research in order to identify prices for each of the supplies. Where more than one version of a supply item appeared to match a description of a high-cost supply and/or more than one possible vendor or manufacturer was identified, the contractor attempted to obtain prices from the multiple sources.

Upon review of the high-cost supply list, the contractor refined the list to 62 unique high-cost items with prices of $150 or more for the study. The original list only consisted of 64 items but included one item inadvertently listed twice (CMS Supply Code SD207 (suture device for vessel closure (Perclose A–T)) and one item (CMS Supply Code SH079 (collagen implant)) that was deleted
from the PE database after CY 2007 because it was no longer used as an input for any codes. While the contractor was able to obtain prices for 37 of the 62 unique supplies, the contractor was unable to obtain pricing information for the remaining 25 supplies. Documentation of these prices, a requirement we discussed in the CY 2009 PFS proposed rule (73 FR 38582), was only obtained for 25 of the 36 supplies with new pricing information. For the remainder, while the contractor was given price quotes over the phone, the sales agents or customer service representatives declined to provide any form of written documentation, in some cases because company policies


### 40080 Federal Register / Vol. 75, No. 133 / Tuesday, July 13, 2010 / Proposed Rules

restricted providing pricing documentation to prospective customers without an account. Moreover, information on typical discounts was obtained for only seven products, and only one discount was documented. In the case of these products, companies disclosed the maximum available discounts, ranging from 18 percent to 45 percent. Relative to prices currently included in the PE database, the contractor found higher prices for the majority of the medical supplies that were researched, specifically 23 supplies with higher prices, 8 with lower prices, and 3 with the same price. The high-cost supplies studied by the

contractor and their current database prices are displayed in Table 20.



### T ABLE 

### 20—H IGH 

### -C OST 

### S UPPLIES 

### W ITH 

### P RICES OF 

### $150 OR 

### G REATER IN THE 

### PFS D IRECT 

### PE D ATABASE 

### T HAT 

### W ERE 

### S TUDIED BY THE 

### CMS C ONTRACTOR

CMS supply
code Supply description Current database unit price Associated CPT
codes

stent, ureteral, wguidewire, 3cm flexible tip ........................................................................... $235 52 332 probe, cryoablation, renal ..................................................................................................... . 1,175 50593 catheter, intradiscal (spineCATH) .......................................................................................... 1,38 0 22526, 22527 probe, cryoablation (Visica ICE 30 or 40) ............................................................................. 1,589 191 05 kit, capsule, ESO, endoscopy w-application supplies (ESO) ................................................ 450 91111 catheter, balloon, lacrimal .................................................................................................... .. 306 68816 catheter, CVA, system, tunneled w-port, dual (LifeSite) ....................................................... 1,750 36566 stent, vascular, deployment system, Cordis SMART ............................................................ 1,645 37205, 37206 agent, embolic, 2 ml uou ....................................................................................................... 258 37210 tube, jejunostomy .............................................................................................................. ..... 195 49441, 49446, 49451, 49452 SA005 ......... kit, capsule endoscopy w-application supplies (M2A) ........................................................... 450 91110 SA010 ......... kit, CVA catheter, tunneled, without portpump .................................................................... .. 308 36557, 36558,

36581 SA011 ......... kit, CVA catheter, tunneled, with subcut port .................................................................... .... 495 36560, 36561, 36563, 36582,

36583 SA015 ......... kit, for percutaneous thrombolytic device (Trerotola) ............................................................ 488 36870, 37184, 37186, 37187,

37188 SA020 ......... kit, loop snare (Microvena) ...................................................................................... .............. 275 36595, 37203 SA022 ......... kit, percutaneous neuro test stimulation ......................................................................... ....... 305 63610, 64561 SA024 ......... kit, photopheresis procedure ..................................................................................... ............. 858 36522 SA025 ......... kit, PICC with subcut port ....................................................................................... ............... 586 36570, 36571,

36585 SA036 ......... kit, transurethral microwave thermotherapy ....................................................................... .... 1,149 53850 SA037 ......... kit, transurethral needle ablation (TUNA) ........................................................................ ...... 1,050 53852 SA038 ......... kit, transurethral waterinduced thermotherapy .................................................................... .. 650 53853 SA039 ......... kit, vertebroplasty (LP2, CDO) ................................................................................... ............ 696 22520, 22521 SA074 ......... kit, endovascular laser treatment ................................................................................ ........... 519 36478 SA075 ......... kit, hysteroscopic tubal implant for sterilization ............................................................... ...... 1,245 58565 SA077 ......... kit, pleural catheter insertion .................................................................................. ................ 329 32550, 96440 SA087 ......... tray, RTS applicator (Mammosite) ................................................................................. ........ 2,550 19296 SA091 ......... tray, scoop, fast track system ................................................................................... ............. 750 31730 SA092 ......... kit, gene, MLL fusion ............................................................................................ .................. 1,395 88385 SA093 ......... kit, priming, random .............................................................................................

.................. 1 463 88385, 88386 SC085 ......... tubing set, plasma exchange ...................................................................................... ........... 173 36514 SD018 ......... catheter, balloon, thermal ablation (Thermachoice) .............................................................. 7 27 58353 SD019 ......... catheter, balloon, ureteral-GI (strictures) ...................................................................... ......... 166 43456, 45303, 45340, 45386,

46604 SD020 ......... catheter, CVA, tunneled, dual (Tesio) ............................................................................ ....... 355 36565 SD023 ......... catheter, enteroclysis ........................................................................................... .................. 183 74251, 74260, 89100, 89105, 89130, 89132, 89135, 89136, 89140, 89141 SD058 ......... electrode, grid .................................................................................................. ...................... 475 95829 SD072 ......... eyelid weight implant, gold ...................................................................................... ............... 218 67912 SD073 ......... fiducial screws (set of 4) .......................................................................................

................. 2 558 77011, 77301 SD094 ......... mammotome probe .................................................................................................. .............. 200 19103 SD109 ......... probe, radiofrequency, 3 array (StarBurstSDE) .................................................................... . 1,995 20982, 32998, 41530, 50592 SD151 ......... catheter, balloon, low profile PTA ............................................................................... ........... 432 35470, 35471,

35474 SD152 ......... catheter, balloon, PTA ........................................................................................... ................ 244 35472, 35473, 35475, 35476, G0392, G0393 SD154 ......... catheter, microcatheter (selective 3rd order) .................................................................... ..... 338 36217, 36247, 36481, 37183,

37210


### 40081 Federal Register / Vol. 75, No. 133 / Tuesday, July 13, 2010 / Proposed Rules

T ABLE 

### 20—H IGH 

### -C OST 

### S UPPLIES 

### W ITH 

### P RICES OF 

### $150 OR 

### G REATER IN THE 

### PFS D IRECT 

### PE D ATABASE 

### T HAT 

### W ERE 

### S TUDIED BY THE 

### CMS C ONTRACTOR 

### —Continued

CMS supply
code Supply description Current database unit price Associated CPT
codes

SD155 ......... catheter, RF endovenous occlusion ................................................................................ ...... 725 36475 SD175 ......... guidewire, steerable (Transcend) ................................................................................. ......... 180 36217, 36247, 36481, 37183, 37205, 37206, 37210, 49440, 49441, 49442, 49446, 49450, 49451, 49452,

49460 SD177 ......... hysteroscope, ablation device .................................................................................... ............ 1,146 58563 SD185 ......... plasma antibody adsorption column (Prosorba) .................................................................... 1 ,150 36515 SD186 ......... Plasma LDL adsorption column (Liposorber) ........................................................................ 1,380 36516 SD189 ......... plate, surgical, mini-compression, 4 hole ........................................................................ ...... 226 21208 SD191 ......... plate, surgical, reconstruction, left, 5 × 16 hole ..................................................................... 719 21125, 21127,

21215 SD193 ......... plate, surgical, rigid comminuted fracture ....................................................................... ....... 389 21461, 21462 SD204 ......... sensor, pH capsule (Bravo) ....................................................................................... ............ 225 91035 SD205 ......... sheath, endoscope ultrasound balloon ............................................................................. ..... 154 31620 SD207 ......... suture device for vessel closure (Perclose A–T) .................................................................. . 225 35470, 35471, 35472, 35473, 35474, 35475, 37184, 37187, 37188, 37205,
G0392 SD215 ......... probe, endometrial cryoablation (Her Option) ..................................................................... .. 1,250 58356 SD216 ......... catheter, balloon, esophageal or rectal (graded distention test) ........................................... 165 91040, 91120 SD218 ......... stent, ureteral, without guidewire ............................................................................... ............ 162 50382, 50384,

50385 SF028 .......... laser tip (single use) .......................................................................................... ..................... 290 30117, 52214, 52224, 52317 SF029 .......... laser tip, bare (single use) .................................................................................... ................. 150 46917, 46924 SF030 .......... laser tip, diffuser fiber ....................................................................................... ..................... 850 52647, 52648 SL055 .......... DNA stain kit (per test) ........................................................................................

.................. 3 150 88358 SL209 .......... array kit, Genosensor ........................................................................................... .................. 2,121 88386 SL225 .......... gas, nitogen, ultra-high purity (compressed) grade 5.0 ......................................................... 1 90 88385, 88386

1 Six pack.

2 Set of 4.

3 10 pack.

Next, we directed the contractor to

access the United States General Services Administration (GSA) medical supply schedule to augment the results obtained through review of vendor

materials and direct contact with vendors, manufacturers, and GPOs. We note that the GSA establishes long-term government-wide contracts with commercial firms for many products, negotiating contracts and determining prices to be fair and reasonable prior to placing them on schedule. Included on

the schedule are thousands of medical supplies at prices that, in most cases, are established through competition. The GSA schedule is an open solicitation and a business of any size, if it is stable and financially sound, can request to be included on the schedule. GSA’s vendors usually are nationwide
vendors with substantial nongovernment sales, and products on the
schedule must be manufactured in the
U.S. or in a nation with a trade agreement with the United States. Submissions for the schedule are received 365 days per year, vendor contracts can be of varying lengths, and vendors can add or delete products from the schedule. Depending on the aggregate cost estimate associated with the vendor’s supply items, the time to
achieve inclusion on the schedule can vary from as short as several months to as long as 2 years. The GSA has delegated authority to the Department of Veterans Affairs (VA) to procure medical supplies under the VA Federal Supply Schedules Program.

Using the GSA general search engine under the category ‘‘ Laboratory, Scientific, & Medical ’’ available at https://www.gsaadvantage.gov/advgsa/ advantage/main/start

_

page.do the contractor obtained nine prices for items similar to the high-cost supplies in the PE database and that are displayed in Table 20 from the publicly available information on the Internet, including pricing for one product for which its prior work did not yield an updated price. We believe that additional items that are similar to the high-cost supplies in the PE database and that may be used with the same procedures may be on the GSA schedule but we are still working through the crosswalk between our supplies and the way the supplies are presented on the GSA schedule. Examples of high-cost supplies in the
PE database that the contractor located on the GSA schedule include: (1) Kit, capsule, ESO, endoscopy w-application supplies (ESO), priced at $450 in the PE database and $444 on the GSA schedule; and (2) tube, jejunostomy, priced at $195 in the PE database and $60 to $83 on the GSA schedule, depending on the
characteristics of the tube.

Since the GSA medical supply schedule is a source for pricing information that is public and transparent and reflects the best government contract price for a product,
we believe it is a desirable resource for us to use in a refined process for updating the prices of high-cost


### 40082 Federal Register / Vol. 75, No. 133 / Tuesday, July 13, 2010 / Proposed Rules

supplies. For historical context, CMS has previously proposed to use VA prices that result from the competitive marketplace as comparison points to limit the Medicare prices for oxygen and
certain items of durable medical equipment and prosthetic devices (62 FR 38100 through 38107, and 64 FR 44227 through 44231) in 1997 and 1999, respectively. These prior proposals were
based on our determination that the Medicare payment amounts for these items as durable medical equipment or prosthetics (not as physicians’ services) were not inherently reasonable. We note, however, that our current interestin the GSA schedule for pricing highcost supplies for payment of physicians’
services is not based on considerations of inherent reasonableness, and we do not actually pay the prices in the PE database for supplies under the PFS.

We further note that public commenters on pricing high-cost supplies have consistently requested that CMS ensure that the pricing information used to update the prices is provided publicly. The commenters have observed that this transparency
would enable stakeholders to evaluate and provide feedback to the agency on pricing accuracy (74 FR 61776). We also acknowledge that our past attempts over several years to identify typical market prices for the high-cost supplies have been inhibited by the limited availability of public data that meet the documentation requirements we have previously established. Individual vendors do not always publish their product prices or provide typical discounts. Moreover, discounts may vary depending on suppliers and the volume of supplies purchased. Our understanding of the GSA medical supply schedule is that the publicly listed fair and reasonable prices on the schedule generally do not include
volume and or certain other discounts that may be subsequently negotiated by the buyer. Consequently, we would consider the prices available on the GSA schedule to represent the ‘‘ individual item ceiling ’’ price for a single item purchase, which we believe would be appropriate to estimate the high-cost supply prices for physicians’ office purchases. We are soliciting public comments regarding the high-cost supplies in the direct PE database for the CY 2011 PFS proposed rule,
available on the CMS Web site as noted earlier in this section, and the corresponding supplies or alternative
items that could be used for the same function that are currently on the GSA supply schedule. We encourage commenters to provide a detailed analysis of the current relationships
between the items in the PE database
and those on the GSA schedule.

At this time, we would like to describe a refined process for regularly updating prices for high-cost supplies
under the PFS and solicit comments on how we could improve on this process. The process could occur every 2 years beginning as soon as CY 2013, although we note that we would propose the refined process through rulemakingbefore revising the prices for any highcost supply item based on the GSA
schedule. We could also consider establishing a different price updateperiod depending on whether a highcost supply was a new supply in the PE
database or had been in use for some time, in which case we might expect that the price would have stabilized and, therefore, could be updated less frequently. In general, we would expect that the periodicity of updating prices for high-cost supplies that we eventually adopted would balance the
associated administrative burden with the rate of price changes, to ensure that the associated procedures remain appropriately valued, rather than increasingly misvalued, over time.

We envision that we would base highcost supply price inputs on the publicly available price listed on the GSA medical supply schedule. Since the medical community would have several years to examine the GSA medical supply schedule before the refined process would be adopted, and we have found no apparent limitations on vendors placing products on the GSA schedule, beyond the schedule’s interest in competitive, best value procurements, stakeholders would havethe opportunity to ensure that any highcost direct PE input for a PFS service that may currently be missing from the GSA medical supply schedule would be
included before CMS needs to access the publicly available price for the item. If a supply price were not publicly available on the GSA medical supply schedule by the time CMS needs to access the price, we would propose to reduce the current price input for the supply by a percentage that would be based on the relationship between GSA prices at that time and the existing PE database prices for similar supplies (currently an average 23 percent reduction). We believe that this refined process is desirable because it is consistent with commenters’ repeated requests for the updating methodology to be transparent and predictable.

Moreover, the VA (with responsibility delegated by the GSA) determines whether prices are fair and reasonable by comparing the prices and discounts that a company offers the government with the prices and discounts that the company offers to commercial customers. Therefore, using the GSA medical supply schedule as a source for publicly available prices would also better account for product-specific market dynamics than the alternative of an across-the-board percentage reduction for supplies not on the GSA schedule based on general price trends for the high-cost supplies on the schedule. That is, if the market price of a particular supply were not to dropaccording to broad trends for other highcost supplies, suppliers would have the opportunity to provide their price to the public on the GSA schedule in order to preclude any reduction in Medicare payment for procedures associated with that supply.

Finally, we would like to reiterate that we are interested in receiving detailed public comments on the refined process discussed above, including all aspects of the price update methodology that we have presented. Moreover, we believe a similar approach could potentially be appropriate to update the prices for other supplies in the PE database that
would not fall under our definition of high-cost supplies, and we welcome further public comments on that possible extension. We also invite further suggestions for alternative approaches to updating high-cost supply prices, specifically those that would result in a predictable, public, and transparent methodology that would ensure that the prices in the PE database reflect typical market prices. These principles are particularly important in order to ensure that the services that utilize the high-cost supplies when provided in the physician’s office are appropriately
valued under the PFS and continue to be appropriately valued over time.

D. Geographic Practice Cost Indices (GPCIs)

1. Background

Section 1848(e)(1)(A) of the Act requires us to develop separate Geographic Practice Cost Indices (GPCIs) to measure resource cost differences among localities compared to the national average for each of the three fee schedule components (that is, work, PE, and malpractice). While requiring that the PE and malpractice
GPCIs reflect the full relative cost differences, section 1848(e)(1)(A)(iii) of the Act requires that the physician work GPCIs reflect only one-quarter of the relative cost differences compared to the national average. In addition, section 1848(e)(1)(G) of the Act sets a


### 40083 Federal Register / Vol. 75, No. 133 / Tuesday, July 13, 2010 / Proposed Rules

permanent 1.5 work GPCI floor in Alaska for services furnished beginning January 1, 2009. Section 1848(e)(1)(C) of the Act requires us to review and, if necessary, adjust the GPCIs at least every 3 years. This section also specifies that if more than 1 year has elapsed since the last GPCI revision, we must phase in the adjustment over 2 years, applying only one-half of any adjustment in each year. As discussed
in the CY 2009 PFS final rule with comment period (73 FR 69740), the CY 2009 adjustment to the GPCIs reflected the fully implemented fifth comprehensive GPCI update. CY 2010 would have typically included no adjustments to the GPCIs. However, section 3102(a) of the ACA amends section 1848(e)(1)(E) of the Act to
extend the 1.0 work GPCI floor for services furnished through December 31, 2010. Additionally, section 3102(b) of the ACA adds a new subparagraph 1848(e)(1)(H) to the Act, which specifies that for CY 2010 and CY 2011, the employee compensation and rent portions of the PE GPCI must reflect only one-half of the relative cost differences for each locality compared to the national average. The new subparagraph also includes a ‘‘ hold
harmless ’’ provision for CY 2010 and CY 2011 for any PFS locality that would
otherwise receive a reduction to its PE GPCI resulting from the limited recognition of cost differences. Additionally, section 1848(e)(1)(I) of the Act (as added by section 10324(c) of ACA) establishes a 1.0 PE GPCI floor for
services furnished in frontier States effective January 1, 2011. In May 2010, we provided our Medicare contractors with an updated CY 2010 payment file
that included the 1.0 work GPCI floor and the PE GPCIs calculated according to the methodology required by section 1848(e)(1)(H) of the Act (as added by section 3102(b) of ACA) for CY 2010, to be used for payment of services furnished on or after January 1, 2010.

For the CY 2011 PFS proposed rule, we have completed the sixth review of the GPCIs and are proposing new GPCIs. We note that section 1848(e)(1)(E) of the Act (as amended by section 3102(a) of ACA) extends the 1.0 work GPCI floor only through December 31, 2010. Under current statute, the 1.0 work GPCI floor will expire on January 1, 2011. Therefore, the CY 2011 physician work GPCIs and summarized geographic adjustment factors (GAFs) do not reflect the 1.0 work floor. However, section 1848(e)(1)(G) of the Act (as amended by section 134(b) of the MIPPA) set a permanent 1.5 work GPCI floor in Alaska for services furnished beginning January 1, 2009; and, as noted above, section 1848(e)(1)(I) of the Act (as added by section 10324(c) of ACA) provides for a permanent 1.0 PE GPCI floor for frontier States effective January 1, 2011. Therefore, as required by the statute, the
1.5 work GPCI floor for Alaska and the
1.0 PE GPCI floor for frontier States will
be in effect for CY 2011. In addition to the limited recognition of certain cost differences for the PE GPCIs, section 1848(e)(1)(H) of the Act (as added by section 3102(b) of ACA) also requires us to complete an analysis of the data sources used and cost share weights assigned to the PE GPCIs. Implementation of ACA provisions
related to the CY 2011 PE GPCIs is
discussed in more detail in the GPCI update section below.

See Addenda D and E to this proposed rule for the proposed CY 2011
GPCIs and summarized GAFs.

2. GPCI Update

The proposed updated GPCI values were developed by Acumen, LLC (Acumen) under contract to CMS. As mentioned above, there are three GPCI components (physician work, PE, and malpractice), and all GPCIs are developed through comparison to a national average for each component. Additionally, each of the three GPCIs relies on its own data source(s) and methodology for calculating its value as
described below.

a. Physician Work GPCIs

The physician work GPCIs are designed to capture the relative cost of physician labor by Medicare PFS locality. Previously, the physician work GPCIs were developed using the median hourly earnings from the 2000 Census of workers in seven professional specialty occupation categories which we used as a proxy for physicians’ wages and calculated to reflect one-quarter of the relative cost differences for each locality compared to the national average. Physicians’ wages are not included in the occupation categories because Medicare payments are a key determinant of physicians’ earnings. Including physicians’ wages in the physician work GPCIs would, in effect, have made the indices dependent upon Medicare payments.

The physician work GPCIs were updated in CYs 2001, 2003, 2005, and 2008 using professional earnings data from the 2000 Census. However, wage and earnings data are no longer available from the Census long form and the 2000 data are outdated. Therefore, for the proposed sixth GPCI update, we used the 2006 through 2008 Bureau of Labor Statistics (BLS) Occupational Employment Statistics (OES) data as a replacement for the 2000 Census data.
The use of BLS OES data as a replacement for the 2000 Census data is discussed in more detail in the update of the PE GPCIs section. As noted above, the 1.0 work GPCI floor is set to expire under current statute on December 31, 2010. Therefore, the CY 2011 proposed physician work GPCIs reflect the
removal of this floor.

b. Practice Expense GPCIs

(1) The Affordable Care Act Requirements for PE GPCIs

General Methodology for the CY 2011

GPCIs

ACA added a new subparagraph 1848(e)(1)(H) to the Act which revises the methodology for calculating the PE
GPCIs for CY 2010 and CY 2011 so that the employee compensation and rent portions of the PE GPCIs reflect only
one-half of the relative cost differences for each locality compared to the national average. Additionally, under section 1848(e)(1)(H)(iii) of the Act (as added by section 3102(b) of the ACA), each PFS locality is held harmless so
that the PE GPCI will not be reduced as a result of the change in methodology
for PE GPCIs. In accordance with section 1848(e)(1)(H)(ii) of the Act (as added by section 3102(b) of ACA), the employee compensation and rent components of the proposed CY 2011
PE GPCIs were calculated to reflect onehalf of the cost differences for each PFS locality relative to the national average cost. Additionally, as required by the statute, physicians’ services furnished in each PFS locality would be adjusted by the higher of the locality’s PE GPCI calculated with the limited recognition of employee compensation and rent cost
differences or the PE GPCI calculated without the limited recognition of cost
differences.

Phase-In of PE GPCIs

Section 1848(e)(1)(C) of the Act requires us to phase in GPCI adjustments over 2 years if there was more than 1 year between GPCI adjustments. In accordance with the statute, we are proposing to phase in the updated PE GPCIs using one-half of the CY 2010 values and one-half of the fully implemented values (as described in this section). To apply the phase-in and hold harmless provisions of the Act, we
calculated transitional PE GPCIs based
on two scenarios. Under the first scenario, we calculated transitional CY 2011 PE GPCIs using the full recognition of employee compensation and rent cost differences for each locality as compared to the national average. The


### 40084 Federal Register / Vol. 75, No. 133 / Tuesday, July 13, 2010 / Proposed Rules

CY 2011 transitional PE GPCI values with full recognition of cost differences were calculated using one-half of the CY
2010 PE GPCI values with fullrecognition of cost differences and onehalf of the updated PE GPCIs with full recognition of cost differences. The first scenario represents the transitional PE GPCI values prior to the limited recognition of cost differences. In other words, this scenario does not include the effects of sections 1848(e)(1)(H)(i) and (ii) of the Act (as added by section 3102(b) of ACA). For the second scenario, we
calculated transitional CY 2011 PE GPCIs with the limited recognition of cost differences for the employee compensation and rent components (as required by sections 1848(e)(1)(H)(i) and (ii) of the Act (as added by section 3102(b) of ACA)). The CY 2011
transitional PE GPCI values with the limited recognition of cost differences were calculated using one-half of the CY
2010 PE GPCIs with the limited cost differences and one-half of the updated
PE GPCIs with the limited cost differences. The hold harmless provision under section 1848(e)(1)(H)(iii) of the Act (as added by section 3102(b) of ACA) was applied by selecting the greater of the CY 2011
transitional PE GPCI value calculated with the limited recognition of cost
differences or the CY 2011 transitional
PE GCPI value calculated with full recognition of cost differences. The phase-in of the CY 2011 PE GPCIs and application of the hold harmless provision are illustrated in Table 21
below.



### T ABLE 

### 21—P HASE 

### -I N OF THE 

### CY 2011 PE GPCI S

CY 2010 Updated GPCIs CY 2011 (transitional year) Hold harmless

File 1
PE GPCI Without 3102(b) of

ACA. Without ACA .. Without ACA (Updated Data) ( 1 ⁄ 2 of 2010) + ( 1 ⁄ 2 Updated GPCI). Greater of File 1 Transitional

Value.

File 2
PE GPCI With 3102(b) of

ACA. With ACA ....... With ACA (Updated Data) ..... ( 1 ⁄ 2 of 2010 w/ACA) + ( 1 ⁄ 2 Updated GPCI w/ACA). or File 2 Transitional Value.

*ACA in this table means the Affordable Care Act.

Data Analysis

Section 1848(e)(1)(H)(iv) of the Act (as added by section 3102(b) of ACA) also requires the Secretary to ‘‘ analyze current methods of establishing practice expense adjustments under subparagraph (A)(i) and evaluate data that fairly and reliably establishes distinctions in the cost of operating a medical practice in different fee
schedule areas. ’’ This section also requires the Secretary to make appropriate adjustments to the PE GPCIs no later than by January 1, 2012. To implement this statutory requirement, we are proposing to implement changes
in PE data sources and cost share weights discussed herein effective beginning in CY 2011.

In accordance with section 1848(e)(1)(H)(iv) of the Act (as added by section 3102(b) of ACA), we have analyzed the current methods and data
sources used in the establishment of the PE GPCIs. With respect to the method used, we began with a review of the GAO’s March 2005 Report entitled,

‘‘ MEDICARE PHYSICIAN FEES: Geographic Adjustment Indices Are Valid in Design, but Data and Methods
Need Refinement ’’ (GAO–05–119).
While we have raised concerns in the past about some of the GAO’s GPCI recommendations, we note that with respect to the PE GPCIs, the GAO did not indicate any significant issues with
the methods underlying the PE GPCIs. Rather, the report focused on some of
the data sources used in the method. For example, the GAO stated that the wage data used for the PE GPCIs are not current. Similarly, upon our reexamination of public comments we
have received on the PE GPCIs for previous updates, we note that the commenters predominately focused on
either the data sources used in the
method or raised issues such as incentivizing the provision of care in different geographic areas. However, the latter issue (incentivizing the provision of care) is outside the scope of the statutory requirement that the PE GPCIs
reflect the relative costs of the mix of goods and services comprising practice expenses in the different fee schedule areas relative to the national average.

One key component of the PE GPCI method that our analysis identified involved the office expense portion of the PE GPCIs and the cost share weight assigned to this component. Most significantly, we are proposing that the weight for the office rent component be revised from 12.209 percent to 8.410 percent to reflect our more detailed breakout of the types of office expenses
that are determined in local markets
instead of national markets. For example, for previous GPCI updates, we used the office expenses cost category as the cost share weight for office rent and, therefore, all individual components previously included in the office expenses category were adjusted for local area cost differences by the GPCIs.
As discussed in section II.E.1. of this proposed rule, we are proposing to disaggregate the broader office expenses component into 9 new cost categories as part of the proposed CY 2011 MEI rebasing. The disaggregation of the office expenses category indicates that the fixed capital cost category, for which the consumer price index (CPI) for owner’s equivalent rent is the price proxy, is the office expense category applicable to the office rent component of the PE GPCI. Therefore, the fixed cost capital cost category is the only component of office expenses that we are proposing to adjust for local area cost differences beginning in CY 2011. We are proposing to assign other newly defined components of the office expenses category (for example, utilities, chemicals, paper, rubber and plastics, telephone, postage, and moveable capital) to the medical equipment, supplies, and other miscellaneous expenses cost component
of the PE GPCIs. As discussed later in this section, the medical equipment, supplies, and other miscellaneous expenses component of the PE GPCIs is assumed to have a national market and, therefore, this component is not adjusted for local area cost differences.

The proposed expense categories for the PE GPCIs, along with their respective cost share weights, are primarily derived from the 2006 American Medical Association (AMA) Physician Practice Information Survey (PPIS) for self-employed physicians and selected self-employed non-medical doctor specialties. The PPIS is the most comprehensive, multispecialty, contemporaneous, and consistently
collected PE data source available. It


### 40085 Federal Register / Vol. 75, No. 133 / Tuesday, July 13, 2010 / Proposed Rules

was developed by medical organizations and captures the costs of operating a medical practice, including office rents and nonphysician staff wages.

Moreover, we also examined the feasibility of using the American Community Survey (ACS) and the Bureau of Labor and Statistics (BLS) Occupational Employment Statistics (OES) data for the employee compensation component of the PE GPCI. For previous updates, the employee compensation component was
based on the 2000 Decennial Census long form data. Since the Census data are significantly outdated and the 2010 Census no longer includes occupational wage data, we believed the ACS or BLS OES data might be viable alternatives. While the ACS 3-year public use microsample (PUMS) is currently available, it reflects only about 3 percent
of households and the data exhibit significant variation due to the small sample. In particular, the ACS PUMS
has fewer than 10 observations of pharmacists in the Manhattan, Beaumont Texas, and Southern Maine localities. Therefore, we believe it would be premature to use the ACS data for determining GPCI values. The 2006, 2007, and 2008 panels from the BLS OES represent a larger sample than the
ACS PUMS and more recent data than the 2000 Census. As such, we are proposing to use the BLS OES data for updating the GPCIs. We look forward to exploring the use of the full ACS data when they become available.

Additionally, we explored other sources of rent data (including commercial rental data and survey data) for use in calculating the PE GPCIs. We could not identify a reliable alternative
rental data source available on anational basis with coverage of nonmetropolitan areas. We do not believe there is a national data source better than the Housing and Urban Development (HUD) data for determining the relative cost differences in office rents. Therefore, based on our review of the available data sources, we are proposing to use the 2010 apartment rental data produced by HUD at the 50th percentile as a proxy for the relative cost difference in physician office rents.

We believe our analysis of the current methods of establishing PE GPCIs and our evaluation of data that fairly and reliably establish distinctions in the cost of operating a medical practice in the
different fee schedule areas meet the statutory requirements of section 1848(e)(1)(H)(iv) of the Act (as added by section 3102(b) of ACA). A more detailed discussion of our analysis of current methods of establishing PE
GPCIs and evaluation of data sources is included in Acumen’s draft report. Acumen’s draft report and associated analysis of the sixth GPCI update, including the PE GPCIs, will be posted on the CMS Web site after display of this CY 2011 PFS proposed rule. The draft report may be accessed from the
PFS Web site at: http://www.cms.gov/ PhysicianFeeSched/ under the

‘‘ Downloads ’’ section of the CY 2011 PFS proposed rule web page.

Determining the Proposed PE GPCI Cost Share Weights

To determine the cost share weights for the proposed CY 2011 GPCIs, we used the proposed 2006-based Medicare Economic Index (MEI) as discussed in section II.E.1. of this proposed rule. The proposed MEI was rebased and revised to reflect the weighted-average annual price change for various inputs needed to provide physicians’ services. As discussed in detail in that section, the proposed expense categories in the MEI, along with their respective weights, are primarily derived from data collected in the 2006 AMA PPIS for self-employed physicians and selected self-employed non-medical doctor specialties.

For the cost share weight for the PE GPCIs, we used the 2006-based MEI weight for the PE category of 51.734 percent minus the professional liability insurance category weight of 4.295 percent. Therefore, the proposed cost share weight for the PE GPCIs is 47.439 percent. For the employee compensation portion of the PE GPCIs, we used the nonphysician employee compensation category weight of 19.153 percent. The fixed capital category weight of 8.410, for which the CPI for owner’s equivalent rent is the price proxy, was used for the office rent component. To determine the medical equipment, supplies, and other miscellaneous expenses component, we removed professional liability (4.295 percent), nonphysician employee compensation (19.153 percent), and fixed capital (8.410 percent) from the PE category weight (51.734 percent). Therefore, the proposed cost share weight for the medical equipment, supplies, and other miscellaneous expenses component is 19.876 percent.

Furthermore, the physician compensation cost category and its weight of 48.266 percent reflect the proposed work GPCI cost share weight and the professional liability insurance weight of 4.295 percent was used for the malpractice GPCI cost share weight. We believe our analysis and evaluation of the weights assigned to each of the categories within the PE GPCIs meets the statutory requirements of section 1848(e)(1)(H)(iv) of the Act (as added by section 3102(b) of ACA).

The proposed cost share weights for the CY 2011 GPCIs are displayed in
Table 22 below.



### T ABLE 

### 22—P ROPOSED 

### C OST 

### S HARE 

### W EIGHTS FOR 

### CY 2011 GPCI U PDATE

Expense category Current cost share weight (percent) Proposed cost share weight

(percent)

Physician Work ................................................................................................................. ....................... 52 .466 48 .266 Practice Expense ............................................................................................................... ...................... 43 .669 47 .439 —Employee Compensation ......................................................................................................... ..... 18 .654 19 .153
—Office Rent ................................................................................................................... ................. 12 .209 8 .410 —Equipment, Supplies, Other .................................................................................................... ...... 12 .806 19 .876 Malpractice Insurance .......................................................................................................... .................... 3 .865 4 .295

Total .......................................................................................................................... ................. 100 100

PE GPCI Floor for Frontier States

Section 10324(c) of ACA added a new subparagraph (I) under section 1848(e)(1) of the Act to establish a 1.0 PE GPCI floor for physicians’ services furnished in frontier States. In accordance with section 1848(e)(1)(I) of the Act (as added by section 10324(c) of ACA), beginning in CY 2011, we will apply a 1.0 PE GPCI floor for physicians’ services furnished in States determined to be frontier States. The statute requires us to define any State as a frontier State if at least 50 percent of the State’s

counties are determined to be frontier


### 40086 Federal Register / Vol. 75, No. 133 / Tuesday, July 13, 2010 / Proposed Rules

counties, which the statute defines as counties that have a population density less than 6 persons per square mile. However, section 1848(e)(1)(I) of the Act (as added by section 10324(c) of ACA) also specifies that this provision shall not apply to States receiving a non-labor related share adjustment under section 1886(d)(5)(H) of the Act (which
excludes Alaska and Hawaii from qualifying as a frontier State).

Consistent with the proposed FY 2011 hospital inpatient prospective payment system (IPPS) 1.0 wage index floor for frontier States (as required by section 10324(a) of the ACA) (75 FR 30920 through 30921), we are proposing to identify frontier counties by analyzing population data and county definitions based upon the most recent annual population estimates published by the
U.S. Census Bureau. We divide each county’s population total by each county’s reported land area (according to the decennial census) in square miles to establish population density. We also are proposing to update this analysis from time to time, such as upon publication of a subsequent decennial census, and if necessary, add or remove qualifying States from the list of frontier States based on the updated analysis.

For a State that qualifies as a frontier State, in accordance with section 1848(e)(1)(I) of the Act (as added by section 10324(c) of the ACA), we are proposing that physicians’ services
furnished within that State would receive the higher of the applicable PE GPCI value calculated according to the standard CY 2011 methodology or a minimum value of 1.00. Furthermore, in accordance with section 1848(e)(1)(I) of the Act (as added by section 10324(c) of the ACA), the frontier State PE GPCI floor is not subject to budget neutrality and would only be extended to physicians’ services furnished within a
frontier State.

For determining the proposed CY 2011 PFS PE GPCI values, the frontier States are the following: Montana; Wyoming; North Dakota; Nevada; and South Dakota (as reflected in Table 23).



### T ABLE 

### 23—F RONTIER 

### S TATES 

### U NDER 

### S ECTION 

### 1848( E 

### )(1)(I) OF THE 

### A CT 

### ( AS 

### A DDED BY 

### S ECTION 

### 10324(c) OF THE


### A FFORDABLE 

### C ARE 

### A CT 

### )

State Total counties Frontier counties Percent frontier
counties

Montana ........................................................................................................................ ... 56 45 80 Wyoming ........................................................................................................................ .. 23 17 74

North Dakota ................................................................................................................... . 53 36 68

Nevada ......................................................................................................................... .... 17 11 65
South Dakota ................................................................................................................... 66 34 52

(2) Summary of CY 2011 Proposed PE

GPCIs

The PE GPCIs include three components: employee compensation, office rent, and medical equipment, supplies and miscellaneous expenses as
discussed below:

(i) Employee Compensation: We used the 2006 through 2008 BLS OES data to determine the proposed employee compensation component of the PE GPCIs. Employee compensation accounts for 40.4 percent of the total PE

GPCIs.

(ii) Office Rents: Consistent with the previous GPCI update, we used the most recent residential apartment rental data produced by HUD (2010) at the 50th percentile as a proxy for the relative cost differences in physician office rents. Office rent accounts for 17.7 percent of
the PE GPCIs.

(iii) Medical Equipment, Supplies, and other Miscellaneous Expenses: We
assumed that items such as medical equipment and supplies have a national market and that input prices do not vary among geographic areas. As discussed in previous GPCI updates in the CY 2005 and CY 2008 PFS proposed rules, specifically the fourth GPCI update (69 FR 47503) and fifth GPCI update (72 FR 38138), respectively, some price differences may exist, but we believe these differences are more likely to be
based on volume discounts rather than on geographic market differences. Medical equipment, supplies, and miscellaneous expenses are factored into the PE GPCIs with a component index of 1.000. The medical equipment, supplies, and other miscellaneous expense component are 41.9 percent of

the PE GPCIs.

c. Malpractice GPCIs

The malpractice GPCIs are calculated based on insurer rate filings of premium
data for $1 million to $3 million mature claims-made policies (policies for

claims made rather than services furnished during the policy term). The proposed CY 2011 malpractice GPCI update reflects 2006 and 2007 premium

data.

d. General GPCI Update Process

The periodic review and adjustment of GPCIs is mandated by section 1848(e)(1)(C) of the Act. At each update, the proposed GPCIs are published in the PFS proposed rule the year before they would take effect in order to provide an opportunity for public comment and further revisions in response to comments prior to implementation. As mentioned above, the proposed CY 2011 updated GPCIs for the first year of the 2-year transition and summarized GAFs are displayed in Addenda D and E to this proposed rule. 3. Payment Localities

The current PFS locality structure was developed and implemented in 1997. There are currently 89 localities; 34
localities are Statewide areas. There are 52 localities in the other 18 States, with 10 States having 2 localities, 2 States having 3 localities, 1 State having 4 localities, and 3 States having 5 or more localities. The District of Columbia, Maryland, and Virginia suburbs, Puerto Rico, and the Virgin Islands are additional localities that make up the
remainder of the total of 89 localities. The development of the current locality
structure is described in detail in the CY 1997 PFS proposed rule (61 FR 34615) and the subsequent final rule with comment period (61 FR 59494).

As we have previously noted in the CYs 2008 and 2009 proposed rules (72 FR 38139 and 73 FR 38513), any changes to the locality configuration must be made in a budget neutral
manner within a State and can lead to significant redistributions in payments. For many years, we have not considered making changes to localities without the support of a State medical association in
order to demonstrate consensus for the change among the professionals whose payments would be affected (with some increasing and some decreasing). However, we have recognized that, over time, changes in demographics or local economic conditions may lead us to conduct a more comprehensive


### 40087 Federal Register / Vol. 75, No. 133 / Tuesday, July 13, 2010 / Proposed Rules

examination of existing payment

localities.

For the past several years, we have

been involved in discussions with physician groups and their representatives about recent shifts in relative demographics and economic conditions, most notably within the current California payment locality structure. We explained in the CY 2008 PFS final rule with comment period that we intended to conduct a thorough analysis of potential approaches to reconfiguring localities and would address this issue again in future rulemaking. For more information, we

refer readers to the CY 2008 PFS proposed rule (72 FR 38139) and subsequent final rule with comment period (72 FR 66245).

As a follow-up to the CY 2008 PFS final rule with comment period, we

contracted with Acumen to conduct a preliminary study of several options for revising the payment localities on a

nationwide basis. The contractor’s interim report was posted on the CMS Web site on August 21, 2008, and we requested comments from the public. The report entitled, ‘‘ Review of Alternative GPCI Payment Locality
Structures, ’’ remains accessible from the CMS PFS Web page under the heading

‘‘ Interim Study of Alternative Payment

Localities under the PFS. ’’ The report may also be accessed directly from the following link: http://www.cms.hhs.gov/ PhysicianFeeSched/

10

_ Interim

_ Study.asp#TopOfPage.

We accepted public comments on the interim report through November 3, 2008. The alternative locality configurations discussed in the report are described briefly below in this

section.

Option 1: CMS Core-Based Statistical Area (CBSA) Payment Locality Configuration

This option uses the Office of Management and Budget (OMB’s) Metropolitan Statistical Area (MSA) designations for the payment locality configuration. MSAs would be

considered as urban CBSAs. Micropolitan Areas (as defined by OMB)

and rural areas would be considered as non-urban (rest of State) CBSAs. This approach would be consistent with the IPPS pre-reclassification CBSA assignments and with the geographic payment adjustments used in other Medicare payment systems. This option

would increase the number of PFS

localities from 89 to 439. Option 2: Separate High-Cost Counties From Existing Localities (Separate Counties)

Under this approach, higher cost counties are removed from their existing locality structure and they would each be placed into their own locality. This option would increase the number of PFS localities from 89 to 214, using a 5 percent GAF differential to separate high-cost counties.

Option 3: Separate MSAs From Statewide Localities (Separate MSAs)

This option begins with statewide localities and creates separate localities for higher cost MSAs (rather than removing higher cost counties from their existing locality as described in Option 2). This option would increase

the number of PFS localities from 89 to 130, using a 5 percent GAF differential to separate high-cost MSAs.

Option 4: Group Counties Within a State Into Locality Tiers Based on Costs (Statewide Tiers)

This option creates tiers of counties (within each State) that may or may not be contiguous but share similar practice costs. This option would increase the number of PFS localities from 89 to 140, using a 5 percent GAF differential to group similar counties into statewide

tiers.

As discussed in Acumen’s interim report, all four studied alternative locality configurations would increase the number of localities and separate higher cost areas from rural ‘‘ rest of

state ’’ areas. As a result, payments to urban areas would increase, while rural areas would see a decrease in payment because they would no longer be grouped with higher cost ‘‘ urbanized ’’ areas. A number of public commenters on the draft report expressed support for Option 3 (separate MSAs from Statewide localities) because the

commenters believed this alternative would improve payment accuracy over the current locality configuration and could mitigate possible payment reductions to rural areas as compared to Option 1 (CMS CBSAs). Therefore, Acumen is conducting a more in-depth analysis of the dollar impacts that would result from the application of Option 3.

For a detailed discussion of the public

comments on the contractor’s interim locality study report, we refer readers to the CY 2010 PFS proposed rule (74 FR 33534) and subsequent final rule with comment period (74 FR 61757). E. PFS Update for CY 2010

1. Rebasing and Revising of the Medicare Economic Index (MEI)

a. Background

The Medicare Economic Index (MEI) is required by section 1842(b)(3) of the Act, which states that prevailing charge levels beginning after June 30, 1973 may not exceed the level from the previous year except to the extent that the Secretary finds, on the basis of appropriate economic index data, thatsuch higher level is justified by year-toyear economic changes. Beginning July 1, 1975, and continuing through today, the MEI has met this requirement by reflecting the weighted-average annual price change for various inputs needed to provide physicians’ services. The MEI is a fixed-weight input price index, with an adjustment for the change in economy-wide, private nonfarm business multifactor productivity. This index is comprised of two broad categories: (1) Physician’s own time; and (2) physician’s practice expense (PE).

The current form of the MEI was detailed in the November 25, 1992 Federal Register (57 FR 55896) and was based in part on the recommendations of a Congressionally-mandated meeting of experts held in March 1987. Since that time, the structure of the MEI has remained essentially unchanged, with three exceptions. First, the MEI was rebased in 1998 (63 FR 58845), which
moved the cost structure of the index from 1992 data to 1996 data. Second, the methodology for the productivity adjustment was revised in the CY 2003 PFS final rule (67 FR 80019) to reflect the percentage change in the 10-year moving average of economy-wide private nonfarm business multifactor productivity. Third, the MEI was rebased in 2003 (68 FR 63239), which
moved the cost structure of the index
from 1996 data to 2000 data.

We are proposing to rebase and revise the MEI and incorporate it into the CY 2011 PFS update. The terms ‘‘ rebasing ’’
and ‘‘ revising ’’ , while often used interchangeably, actually denote different activities. Rebasing refers to moving the base year for the structure of costs of an input price index, while revising relates to other types of changes such as changing data sources, cost categories, or price proxies used in the input price index. As is always the case with a rebasing and revising exercise, we have attempted to use the most recently available, relevant, and appropriate information to develop the proposed MEI cost category weights and price proxies. In the following sections


### 40088 Federal Register / Vol. 75, No. 133 / Tuesday, July 13, 2010 / Proposed Rules

of this proposed rule, we detail our proposals regarding the updated cost weights for the MEI expense categories, our rationale for selecting the price proxies in the MEI, and the results of the proposed rebasing and revising of
the MEI.

b. Use of More Current Data

The MEI was last rebased and revised
in 2003 in the CY 2004 PFS final rule with comment period (68 FR 63239). The current base year for the MEI is 2000, which means that the cost weights in the index reflect physicians’ expenses in 2000. However, we believe it is desirable to periodically rebase and revise the index so that the expense shares and their associated price proxies
reflect more current conditions. For this reason, we propose to rebase the MEI to reflect appropriate physicians’ expenses

in 2006.

We are proposing several changes to the expenses that are eligible to be included in the MEI. For instance, we are proposing to remove all costs related to drug expenses as drugs are not paid for under the PFS nor are they included
in the definition of ‘‘ physicians’

services ’’ for purposes of the Sustainable Growth Rate (SGR) system that is used to update the PFS. The details of the decision regarding the removal of physician-administered drugs from the SGR system can be found in the CY 2010 PFS proposed rule and finalized in
the CY 2010 final rule with comment period (74 FR 33651 and 74 FR 61961, respectively). Additionally, we are proposing to remove costs associated with separately billable supplies. The rationale for removing the separately billable supplies is discussed further
below in section III.E.1.X of this proposed rule.

We are proposing to revise the cost categories in the MEI by expanding the Office Expense category into nine detailed categories with additional price proxies associated with these categories. Additionally, we will continue to adjust the MEI for economy-wide multifactor productivity based on the 10-year moving average of total private nonfarm business multi-factor productivity. c. Rebasing and Revising Expense Categories in the MEI

The MEI is used in conjunction with the SGR system to update the PFS and represents the price component of that update. The proposed expense categories in the index, along with their respective weights, are primarily
derived from data collected in the 2006 AMA Physician Practice Information Survey (PPIS) for self-employed physicians and selected self-employed non-Medical Doctor (non-MD) specialties. We included data from the following specialties in the MEI cost weight calculations (optometrists, oral surgeons, podiatrists, and chiropractors)
consistent with the definition of the

term ‘‘ physician ’’ in section 1861(r) of the Act. In summary, the term

‘‘ physician ’’ when used in connection with the performance of functions or actions an individual is legally authorized to perform means the following: (1) A doctor of medicine or osteopathy; (2) a doctor of dental surgery or of dental medicine; (3) a doctor of podiatric medicine; (4) a doctor of optometry; or (5) a chiropractor. For a complete definition, please see section 1861(r) of the Act. We weighted the expense data from the above-referenced specialties with the self-employed physician expense data using physician counts by specialty.

The AMA data from the PPIS were used to determine expenditure weights for total expenses, physicians’ earnings, physicians’ benefits, employed physician payroll, nonphysician compensation, office expenses, professional liability insurance (PLI), medical equipment, medical supplies, and all other expenses. To further disaggregate into subcategories reflecting more detailed expenses, we
used data from the 2002 Bureau of Economic Analysis (BEA) Benchmark Input-Output table (I/O), the 2006
Bureau of the Census Current Population Survey (CPS), the 2006 Bureau of Labor Statistics (BLS) Occupational Employment Survey (OES) and Employment Cost for Employee Compensation Survey (ECEC), and the 2006 Internal Revenue Service (IRS) Statistics of Income (SOI) data. The development of each of the cost categories using these sources is

described in detail below.

(1) Developing the Weights for Use in

the MEI

Developing a rebased and revised MEI requires selecting a base year and determining the appropriate expense categories. We are proposing to rebase

the MEI to CY 2006. We choose CY 2006 as the base year for two primary reasons: (1) CY 2006 is the most recent year for which data were available; and (2) we believe that the CY 2006 data provide a representative distribution of physicians’ compensation and PEs.

Compared to the 2000-based MEI, we are proposing to include 9 new cost categories (along with their respective weights) that disaggregate the costs under the broader Office Expenses cost category. The 2000-based MEI did not break these expenses into individual categories. A more detailed discussion is provided below in this section. In addition, we are proposing to exclude the Pharmaceutical cost category as pharmaceuticals are neither paid for under the PFS nor are they included in

the definition of ‘‘ physicians’ services ’’ for purposes of calculating the physician update via the SGR system (for more details see the CY 2010 PFS final rule with comment period (74 FR 61961 through 61962)). Lastly, we are proposing to exclude the expenses associated with separately billable supplies since these items are not paid

for under the PFS.

We determined the number and composition of expense categories based on the criteria used to develop the current MEI and other CMS input price index expenditure weights. These criteria are timeliness, reliability, relevance, and public availability. Table 24 lists the set of mutually exclusive and exhaustive cost categories that make up the proposed rebased and revised

MEI.



### T ABLE 

### 24—P ROPOSED 

### 2006 MEI C OST 

### C ATEGORIES 

### , W EIGHTS



### , AND 

### P RICE 

### P ROXIES 

### C OMPARED TO THE 

### 2000 MEI
C OST 

### C ATEGORIES AND 

### W EIGHTS

Cost category Proposed
2006–

expense weights 1 2 2000 Expense weights Proposed 2006 price proxies

Total ........................................................................................................... 100.00 100.000

Physician’s Own Time 3 ............................................................................. 48.266 52.466 Wages and Salaries ........................................................................... 43.880 42.730 AHE Total Nonfarm Pr ivate. 5


### 40089 Federal Register / Vol. 75, No. 133 / Tuesday, July 13, 2010 / Proposed Rules

T ABLE 

### 24—P ROPOSED 

### 2006 MEI C OST 

### C ATEGORIES 

### , W EIGHTS



### , AND 

### P RICE 

### P ROXIES 

### C OMPARED TO THE 

### 2000 MEI
C OST 

### C ATEGORIES AND 

### W EIGHTS 

### —Continued

Cost category Proposed
2006–

expense weights 1 2 2000 Expense weights Proposed 2006 price proxies

Benefits 3 4

........................................................................................... 4.386 9.735 ECI–Benefits Total Nonfarm Private. 6 Physician’s Practice Expense .................................................................... 51.734 47.534 Nonphysician Employee Compensation ............................................. 19.153 18.654 Nonphysician Employee Wages and Salaries ................................... 13.752 13.809 Prof/Tech Wages ......................................................................... 6.006 5.887 ECI–Wages/Salaries: Private Professional &Technical. Managerial Wages ...................................................................... 1.446 3.333 ECI–Wages/Salaries: Private M anagerial. Clerical Wages ............................................................................ 4.466 3.892 ECI–Wages/Salaries: Priva te Clerical. Services Wages .......................................................................... 1.834 0.696 ECI–Wages/Salaries: Private Service. Nonphysician Employee Benefits 4

.................................................... 5.401 4.845 ECI–Ben: Private Blend. Office Expenses ................................................................................. 20.035 12.209

Utilities ................................................................................................ 1.139 ................ ........ CPI Fuel & Utilities. 7
Chemicals .................................................................................... 0.679 ........................ PPI for Other Basic Organic Chemical Manufacturing PPI325190. 8 Paper ........................................................................................... 0.616 ........................ P PI for converted paper.

Rubber & Plastics ........................................................................ 0.563 ........................ PPI for rubber and plastics. Telephone .................................................................................... 1.415 ........................ CPI for Telephone Services. Postage ....................................................................................... 0.661 ........................ CPI for Postage.

All Other Labor-Related .............................................................. 4.718 ........................ ECI Compensa tion Services Occupations (ECIPCSONS). Fixed Capital ............................................................................... 8.410 ........................ CPI for Owner’s Equivalent Rent. Moveable Capital ......................................................................... 1.834 ........................ PPI for Machinery and Equipment.

PLI ...................................................................................................... 4.295 3.865 CMS–Prof. Liab. Phys. Premiums. Medical Equipment ............................................................................. 1.978 2.055 PPI–Medical Instruments & Equip. Pharmaceuticals and Medical Materials and Supplies ...................... 1.760 4.320

Pharmaceuticals ........................................................................................ ........................ 2.309 Medical Materials and Supplies .................................................. 1.760 2.011 PPI Surg. Appliances and Supplies/ CPI(U) Med Supplies. Other Professional Expenses ............................................................. 4.513 6.433 CPI–U All Items Less Food and Energy.

(1) Due to rounding, weights may not sum to 100.000 percent.(2) Sources: 2006 Physician Practice Information Survey (PPIS), Center for Health Policy Research, American Medical Association; 2006 Employment Cost for Employee Compensation, U.S. Department of Labor, Bureau of Labor Statistics; 2006 Occupational Employment Sta tistics(OES), BLS; U.S. Department of Commerce, Bureau of Economic Analysis 2002 Benchmark Input Output Tables, and U.S. Department of Commerce, Bureau of the Census, 2006 Current Population Survey.

(3) Includes employed physician payroll. (4) Includes paid leave. (5) Average Hourly Earnings (AHE). (6) Employment Cost Index (ECI). (7) Consumer Price Index (CPI). (8) Producer Price Index (PPI).

The development of each of the cost categories in the proposed 2006 MEI is described, in detail, below.

(2) Physician’s Own Time

The component of the MEI that reflects the physician’s own time is represented by the net income portion of business receipts. The proposed 2006 cost weight associated with the physician’s own time (otherwise referred to as the Physician’s Compensation cost weight) is based on
2006 AMA PPIS data for mean physician net income (physician compensation) for self-employedphysicians and for the selected selfemployed specialties referenced previously in this rule. We are proposing to continue to add employed physician compensation to self-employed physician compensation in order to calculate an aggregate Physician Compensation cost weight. By including the compensation of employed physicians in the physician compensation expense category, these expenses will be adjusted by the appropriate price proxies for a physician’s own time. The proposed 2006 Physician Compensation cost weight is 48.266 percent as compared to a 52.466 percent share in the 2000-based MEI. We split the physician compensation component into subcategories: Wages & Salaries and Benefits. For Physician Compensation, the ratio for Wages & Salaries and Benefits was calculated using data from the PPIS. Self-employed physician wages & salaries accounted for 92.3 percent of physician earnings while physician benefits accounted for the remaining 7.8 percent. For employed physician payroll, the distribution for wages & salaries and benefits for 2006 was 85.8 percent and 14.2 percent, respectively. This ratio was determined by calculating a weighted average of available SOI data for partnerships, corporations, and S-corporations specific to physicians and outpatient care centers. Based on these proposed methods, the proposed 2006 Physician Wages & Salaries cost weight is 43.880 percent and the proposed 2006


### 40090 Federal Register / Vol. 75, No. 133 / Tuesday, July 13, 2010 / Proposed Rules

Physician Benefits cost weight is 4.386
percent.

(3) Physician’s Practice Expenses

To determine the remaining individual Practice Expenses cost weights, we use mean expense data from the 2006 PPIS survey. The detailed explanations for the derivation of the individual weights under Practice Expenses are listed below.

(A) Nonphysician Employee Compensation

The cost weight for Nonphysician Employee Compensation was developed using the 2006 AMA PPIS mean expenses for these costs. We further divided this cost share into Wages & Salaries and Benefits using 2006 BLS Employer Costs for Employee Compensation (ECEC) data for the
Health Care and Social Assistance (private industry). Although this survey does not contain data specifically for offices of physicians, data are available to help determine the shares associated with wages & salaries and benefits for private industry health care and social assistance services (which include hospitals, nursing homes, offices of physicians, and offices of dentists). We believe these data provide a reasonable estimate of the split between wages and benefits for employees in physicians’

offices. Data for 2006 in the ECEC for

Health Care and Social Assistance indicate that wages and benefits are 71.8 percent and 28.2 percent of compensation, respectively. The 2000- based MEI included a wage and benefit split of 74.0 percent and 26.0 percent of compensation.

As in the 2000-based MEI, we are proposing to use 2006 Current Population Survey (CPS) data and 2006 BLS Occupational Employment Statistics (OES) data to develop cost weights for wages for nonphysician occupational groups. We determined total annual earnings for offices of physicians using employment data from the CPS and mean annual earnings from

the OES. To arrive at a distribution for these separate categories, we determined annual earnings for each of the four categories (which are Professional & Technical workers, Managers, Clerical workers, and Service workers), using the Standard Occupational Classification (SOC) system. We then determined the overall share of the total for each. The proposed distribution, as well as the distribution from the 2000-based MEI are presented

in Table 25.



### T ABLE 

### 25—P ERCENT 

### D ISTRIBUTION OF 

### N ONPHYSICIAN 

### P AYROLL 

### E XPENSE BY 

### O CCUPATIONAL 

### G ROUP 

### : 2006 AND 

### 2000

BLS Occupational Group 2006 Expenditure

shares 2000 Expenditure

shares

Total .......................................................................................................................... ....................................... 100.000 100.000

Professional & Technical Workers ............................................................................................... ............ 43.671 42.635 Managers ....................................................................................................................... ........................... 10.517 24.138
Clerical Workers ............................................................................................................... ........................ 32.477 28.187
Service Workers ................................................................................................................ ....................... 13.336 5.040

Values may not sum to 100 due to rounding.

The decrease in the Management expenditure share is directly related to

a decrease in the total number of employees in Management occupations in physicians’ offices, in particular,

‘‘ Medical and health service managers. ’’ The decrease in expenditure share may also be due, in part to the methods used in this rebasing. That is, for the 2006- based MEI, we are using data limited to

‘‘ Offices of physicians. ’’ In the 2000- based version of the index, the only data

that were available to inform these estimates were inclusive of physician offices and clinics ( ‘‘ Offices of physicians and clinics ’’ ). An

examination of 2006 CPS and OES data comparing ‘‘ Outpatient care centers ’’ to

‘‘ Offices of physicians ’’ indicates that there is a higher share of management occupations in the ‘‘ Outpatient care

centers ’’ than in ‘‘ Offices of physicians. ’’

The increase in the Service Workers expenditures share is attributable to a

substantive increase in the number of employees in service occupations, particularly, ‘‘ Medical assistants and other health care support occupations ’’

. (B) Office Expenses
The aggregate Office Expenses cost weight was derived using the 2006 AMA PPIS and is explained in more
detail below in this section. This calculation resulted in a 20.035 percent share of total costs in 2006 compared to a 12.209 percent share in the 2000-based
index.

For the 2006-based MEI, we propose to further disaggregate the Office Expenses into more detailed cost categories using the BEA 2002–
Benchmark I/O data for Offices of physicians, dentists, and other health practitioners (NAICS 621A00). We used this data to develop the nine detailed 2002 costs weights as a percent of total office expenses, as measured by the BEA I/O data. The total Office Expenses cost category was calculated by matching the BEA I/O data as closely as possible to the AMA survey data, the latter of which defined office expenses as ‘‘ office (non-medical) equipment and office (non-medical) supplies, as well as rent, mortgage, interest, maintenance, refrigeration, storage, security, janitorial, depreciation on medical buildings used in your practice, utilities, or other office computer systems (including information management systems/ electronic medical record systems) and telephone. ’’

We then aged the 2002 weights
forward to 2006 to derive the 2006 detailed office expense cost weights as a percent of total Office Expenses. The methodology we used to age the data forward involved applying the annual price changes from each respective price proxy to the appropriate cost categories. We repeated this practice for each year of the interval. We then applied the resulting 2006 distributions to the aggregate 2006 AMA Office Expenses weight to yield the detailed 2006 Office Expenses’ weights as a percent of total

expenses.

We are proposing to introduce these new, more detailed weights for the
2006-based index based on our intent to derive an increased level of precision while maintaining appropriate levels of aggregation in the market basket. The proposed proxies are described in section X. of this proposed rule. The following is a description of what is
included in each of the detailed cost categories.

• Utilities: The Utilities cost weight includes expenses classified in the fuel,


### 40091 Federal Register / Vol. 75, No. 133 / Tuesday, July 13, 2010 / Proposed Rules

oil and gas, water and sewage, and electricity industries. The proposed cost weight for utilities is 1.139 percent.

• Paper: The Paper cost weight includes expenses classified in the paper (including but not limited to paper, paperboard, and sanitary paper products) and printing industries. The proposed cost weight for paper is 0.616
percent.

• Chemicals: The Chemicals cost weight includes expenses classified in the basic organic and inorganic chemical manufacturing industry (accounting for about 45 percent of the chemical expenses), as well as other chemical industries including but not limited to industrial gas manufacturing and all other chemical product manufacturing. The proposed cost weight for chemicals is 0.679 percent.

• Rubber and Plastics: The Rubber and Plastics cost weight includes expenses classified in the rubber and plastic industries, including but not limited to, urethane and other foam product manufacturing and other plastic and rubber manufacturing industries. The proposed cost weight for Rubber and Plastics is 0.563 percent.

• Telephone: The telephone cost weight includes expenses classified in the telecommunications (accounting for the majority of the telephone expenses) and cable industries. The proposed cost weight for Telephone services is 1.415
percent.

• Postage: The Postage cost weight includes postal service expenses. The proposed cost weight for Postage is
0.661 percent.

• All Other Services: The All Other Services cost weight includes other service expenses including, but not limited to, nonresidential maintenance and repair, machinery repair, janitorial, and security services. This cost weight does not include expenses associated with professional services such as accounting, billing, legal and marketing
which are included in the All Other Expenses cost weight derived using the AMA PPIS survey. The proposed cost weight for All Other Services is 4.718
percent.

• Fixed Capital: The Fixed Capital cost weight includes expenses for building leases and depreciation. The proposed cost weight for Fixed Capital is 8.410 percent.

• Moveable Capital: The Moveable Capital cost weight includes expenses for non-medical equipment including but not limited to, computer equipment and software, as well as the rental and leasing of automotive and industrial machinery equipment. The proposed cost weight for Moveable Capital is
1.834 percent. (C) Professional Liability Insurance (PLI) Expense

The weight for PLI expense was derived from the 2006 AMA survey and was calculated as the mean PLI expense expressed as a percentage of total expenses. This calculation resulted in a 4.513 percent share of total costs in 2006 compared to a 3.865 percent share
in the 2000-based index. The increase in the weight for PLI reflects the current prices of premiums, as well as an update to the level of coverage purchased by physicians in 2006 compared to 2000.

(D) Medical Equipment Expenses

The proposed weight for Medical Equipment was calculated using the 2006 AMA PPIS mean expense data.
This calculation resulted in a 1.978 percent share of total costs in 2006 compared to a 2.055 percent share in the 2000-based index. By definition, this category includes the expenses related to depreciation, maintenance contracts, leases/rental of medical equipment used in diagnosis or treatment of patients. The category would also include the tax-deductible portion of the purchase price or replacement value of medical equipment, if not leased.

(E) Medical Supplies Expenses

The proposed weight for Medical Supplies was calculated using the 2006 AMA PPIS mean expense data. This calculation resulted in a 1.760 percent share of total costs in 2006 compared to a 2.011 percent share in the 2000-based index. By definition, this category includes the expenses related to medical supplies such as sterile gloves, needles, bandages, specimen containers, and catheters. Additionally, we are proposing to exclude the expenses related to separately billable supplies as these expenses are not paid for under the PFS. The Medical Supply cost category does not include expenses related to drugs.

(F) All Other Professional Expenses

The proposed weight for All Other Professional expenses was calculated using the 2006 AMA PPIS mean expense data. This calculation resulted in a 4.513 percent share of total costs in 2006 compared to a 6.433 percent share in the 2000-based index. By definition, this category includes the expenses related to tax-deductible expenses for any other expenses not reported in another category from the PPIS. These expenses would include fees related to legal, marketing, accounting, billing, office management services, professional association memberships,
maintenance of certification or licensure, journals and continuing education, professional car upkeep and depreciation, and any other professional expenses not reported elsewhere on the

PPIS.

d. Selection of Price Proxies for Use in
the MEI

After the proposed 2006 cost weights
for the rebased and revised MEI were developed, we reviewed all of the price proxies to evaluate their appropriateness. As was the case in the development of the 2000-based MEI (68 FR 63239), most of the proxy measures
we considered are based on BLS data and are grouped into one of the following five categories:

• Producer Price Indices (PPIs): PPIs measure price changes for goods sold in
markets other than retail markets. These fixed-weight indexes are a measure of price change at the intermediate or final stage of production. They are the preferred proxies for physician purchases as these prices appropriately reflect the product’s first commercial

transaction.

• Consumer Price Indices (CPIs): CPIs measure change in the prices of final goods and services bought byconsumers. Like the PPIs, they are fixedweight indexes. Since they may not represent the price changes faced by producers, CPIs are used if there are no appropriate PPIs or if the particular expenditure category is likely to contain purchases made at the final point of
sale.

• Average Hourly Earnings (AHEs): AHEs are available for production and nonsupervisory workers for specific industries, as well as for the nonfarm business economy. They are calculated by dividing gross payrolls for wages & salaries by total hours. The series reflects shifts in employment mix and, thus, is representative of actual changes in hourly earnings for industries or for the nonfarm business economy.

• ECIs for Wages & Salaries: These ECIs measure the rate of change in employee wage rates per hour worked. These fixed-weight indexes are not affected by employment shifts among industries or occupations and thus, measure only the pure rate of change in

wages.

• ECIs for Employee Benefits: These ECIs measure the rate of change in employer costs of employee benefits, such as the employer’s share of Social Security taxes, pension and other retirement plans, insurance benefits (life, health, disability, and accident), and paid leave. Like ECIs for wages & salaries, the ECIs for employee benefits are not affected by employment shifts among industries or occupations.


### 40092 Federal Register / Vol. 75, No. 133 / Tuesday, July 13, 2010 / Proposed Rules

When choosing wage and price proxies for each expense category, we evaluate the strengths and weaknesses of each proxy variable using the following four criteria.

• Relevance: The price proxy should appropriately represent price changes for specific goods or services within the expense category. Relevance may encompass judgments about relative efficiency of the market generating the price and wage increases.

• Reliability: If the potential proxy demonstrates a high sampling variability, or inexplicable erratic patterns over time, its viability as an appropriate price proxy is greatly diminished. Notably, low sampling variability can conflict with relevance— since the more specifically a price variable is defined (in terms of service, commodity, or geographic area), the higher the possibility of high sampling variability. A well-established time series is also preferred.

• Timeliness of actual published
data: For greater granularity and the need to be as timely as possible, we prefer monthly and quarterly data to
annual data.

• Public availability: For transparency, we prefer to use data sources that are publicly available.

The BLS price proxy categories previously described meet the criteria of relevance, reliability, timeliness, and public availability. Below we discuss the proposed price-wage proxies for the rebased and revised MEI (as shown in Table 23).

(1) Expense Categories in the MEI

(A) Physician’s Own Time (Physician Compensation)

In the proposed revised and rebased MEI, we are using the AHE for the private nonfarm economy as the proxy for the Physician Wages & Salaries component (BLS series code: CEU0500000008).

As discussed extensively in the November 2, 1998 final rule (63 FR 58848), and again in the December 31, 2002 final rule (67 FR 80019), we believe that this price proxy represents the most appropriate proxy for use in
the MEI. The AHE for the nonfarm business economy reflects the impacts of supply, demand, and economy-wide productivity for the average worker in the economy. As such, use of this proxy is consistent with the original legislative intent that the change in the physicians’ earnings portion of the MEI follow the change in general earnings for the economy. Since earnings are expressed per hour, a constant quantity of labor input per unit of time is reflected. Finally, the use of the AHE data is also consistent with our using the BLS economy-wide private nonfarm business sector multifactor productivity measures since economy-wide wage increases reflect economy-wide productivity

increases.

The current 2000-based MEI uses the ECI for Total Benefits (BLS series code: CIU2030000000000I) for total private industry as the price proxy for Physician Benefits. We are proposing to use the same proxy for the 2006-based MEI. This means that both the wage and benefit proxies for physician earnings are derived from the private nonfarm business sector and are computed on a per-hour basis.

(B) Nonphysician Employee Compensation

For the 2006-based MEI, we are proposing to use Current Population Survey (CPS) data on employment by occupation and earnings from the BLS Occupational Employment Statistics for NAICS 6211, Office of Physicians, to develop labor cost shares for the nonphysician occupational groups

shown in Table 23. The 2000-based MEI

was based on CPS data for the Standard Industrial Classification 801 and 803,

which included both office of physicians and outpatient care centers. Beginning in 2003, BLS began publishing CPS data on a NAICS basis which provided data for office of physicians (NAICS 6211)and outpatient care centers (NAICS 6214) separately. We believe using data for office of physicians is appropriate for the 2006-

based MEI. The BLS maintains an ECI for each selected industry group. We propose to use these ECIs as price proxies for nonphysician employee wages in the same manner they are used

in the current MEI.

As described in the CY 2008 PFS proposed rule (72 FR 38190), as a result

of the discontinuation of the White Collar Benefit ECI for private workers, we are currently using a composite ECI benefit index. We are proposing to continue to use the composite ECI for nonphysician employees in the proposed rebased and revised MEI; however, we are proposing to revise the weights within that blend in order to

reflect the more recent 2006 data. Table

26 lists the four ECI series and corresponding weights used to construct the 2006 composite benefit index. 

### T ABLE 

### 26—CMS C OMPOSITE 

### P RICE


### I NDEX FOR 

### N ONPHYSICIAN 

### E M



### PLOYEE 

### B ENEFITS

ECI series 2006 Weight

(%)

Benefits, Private, Professional &

Related ...................................... 44 Benefits, Private, Management,

Business, Financial ................... 11Benefits, Private, Office & Administrative Support ........................ 32Benefits, Private, Service Occupations ........................................... 13

(C) Utilities

For the 2006-based MEI, we are proposing to use the CPI for Fuel and Utilities (BLS series code #CUUR0000SAH2) to measure the price growth of this cost category. This cost category was not broken-out separately
in the 2000-based MEI.

(D) Chemicals

For the 2006-based MEI, we are proposing to use the PPI for Other Basic Organic Chemical Manufacturing (BLS series code #PCU32519–32519) to measure the price changes of this cost category. We are proposing this industry-based PPI because BEA’s 2002
benchmark I/O data show that the majority of the office of physicians’ chemical expenses are attributable to Other Basic Organic Chemical Manufacturing (NAICS 32519). This cost category was not broken-out separately
in the 2000-based MEI.

(E) Paper

For the 2006-based MEI, we are proposing to use the PPI for Converted Paper and Paperboard (BLS series code #WPU0915) to measure the price growth of this cost category. This cost category was not broken-out separately in the
2000-based MEI.

(F) Rubber and Plastics

For the 2006-based MEI, we are proposing to use the PPI for Rubber and Plastic Products (BLS series code #WPU07) to measure the price growth of this cost category. This cost category was not broken-out separately in the
2000-based MEI.

(G) Telephone

For the 2006-based MEI, we are proposing to use the CPI for Telephone Services (BLS series code #CUUR0000SEED) to measure the price growth of this cost category. This cost category was not broken-out separately
in the 2000-based MEI.


### 40093 Federal Register / Vol. 75, No. 133 / Tuesday, July 13, 2010 / Proposed Rules

(H) Postage

For the 2006-based MEI, we are proposing to use CPI for Postage (BLS series code #CUUR0000SEEC01) to measure the price growth of this cost category. This cost category was not broken-out separately in the 2000-based

MEI.

(I) All Other Services

For the 2006-based MEI, we are proposing to use the ECI for Compensation for Service Occupations (private industry) (BLS series code #CIU2010000300000I) to measure the price growth of this cost category. This cost category was not broken-out separately in the 2000-based MEI.

(J) Fixed Capital

For the 2006-based MEI, we are proposing to use the CPI for Owner’s Equivalent Rent (BLS series code #CUUS0000SEHC) to measure the price growth of this cost category. This price index represents about 50 percent of the CPI for Housing which was used to in the 2000-based MEI to proxy total office

expenses.
(K) Moveable Capital

For the 2006-based MEI, we are proposing to use the PPI for Machinery and Equipment (series code #WPU11) to measure the price growth of this cost category. This cost category was not broken-out separately in the 2000-based

MEI.

(L) Professional Liability Insurance

In order to accurately reflect the price changes associated with PLI, each year, we solicit PLI premium data for physicians from a sample of commercial
carriers. This information is not collected through a survey form, but instead is requested directly from, and provided by (on a voluntary basis),
several national commercial carriers. As we require for our other price proxies, the professional liability price proxy is intended to reflect the pure price change associated with this particular cost category. Thus, it does not include changes in the mix or level of liability coverage. To accomplish this result, we obtain premium information from a sample of commercial carriers for a fixed level of coverage, currently $1 million per occurrence and a $3 million
annual limit. This information is collected for every State by physician specialty and risk class. Finally, the State-level, physician-specialty data are aggregated by effective premium date to compute a national total, using counts of physicians by State and specialty as provided in the AMA publication, Physician Characteristics and
Distribution in the U.S.

The resulting data provide a quarterly time series, indexed to a base year consistent with the MEI, and reflect the national trend in the average professional liability premium for a given level of coverage, generally $1 million/$3 million of claims-made mature policies. From this series, quarterly and annual percent changes in
PLI are estimated for inclusion in the

MEI.

The most comprehensive data on professional liability costs are held by the State insurance commissioners, but these data are available only with a substantial time lag and hence, the data currently incorporated into the MEI are much timelier. We believe that, given
the limited data available on professional liability premiums, the information and methodology described above adequately reflect the PLI price trends facing physicians.

(M) Medical Equipment

The Medical Equipment cost category includes depreciation, leases, and rent on medical equipment. We are proposing to use the PPI for Medical Instruments and Equipment (BLS series code: WPU1562) as the price proxy for this category, consistent with the price proxy used in the 2000-based MEI and other CMS input price indexes.

(N) Medical Materials and Supplies

As is used in the 2000-based MEI, we are proposing to use a blended index comprised of 50/50 blend of the PPI Surgical Appliances (BLS series code: WPU156301) and the CPI–U for Medical Equipment and Supplies (BLS series code: CUUR0000SEMG). We believe physicians purchase the types of supplies contained within these proxies, including such items as bandages, dressings, catheters, I.V. equipment, syringes, and other general disposable medical supplies, via wholesale purchase, as well as at the retail level. Consequently, we are proposing to
combine the two aforementioned
indexes to reflect those modes of purchase.

(O) Other Professional Expenses

This category includes the residual subcategory of other professional expenses such as accounting services, legal services, office management services, continuing education, professional association memberships, journals, professional car expenses, and other professional expenses. Given this heterogeneous mix of goods and services, we are proposing to use the
CPI–U for All Items Less Food and Energy, consistent with the price proxy
used in the 1996 and 2000-based MEI.

(2) Productivity Adjustment to the MEI

The MEI has been adjusted for changes in productivity since its inception. In the CY 2003 PFS final rule (67 FR 80019), we implemented a change in the way the MEI was adjusted to account for those changes in productivity The MEI used for the 2003 physician payment update incorporated changes in the 10-year moving averageof private nonfarm business (economywide) multifactor productivity that were applied to the entire index. Previously, the index incorporated changes in productivity by adjusting the labor portions of the index by the 10-year moving average of economy-wide private nonfarm business labor productivity.

We are proposing to continue to use the current method for adjusting the full MEI for multifactor productivity in the
rebased and revised MEI.

As described in the CY 2003 PFS final rule, we believe this adjustment is appropriate because it explicitly reflects the productivity gains associated with all inputs (both labor and non-labor). We believe that using the 10-year moving average percent change in economy-wide multifactor productivity is appropriate for deriving a stable measure that helps alleviate the influence that the peak (or a trough) of a business cycle may have on the measure. The adjustment will be based
on the latest available historical economy-wide nonfarm business multifactor productivity data as measured and published by BLS.

e. Results of Rebasing

Table 27 illustrates the results of updating the MEI from the following changes to the weights for the Physician Compensation, Practice Expenses (excluding PLI), and PLI.



### T ABLE 

### 27—P ERCENT 

### D ISTRIBUTION OF



### S ELECTED 

### P HYSICIAN 

### E XPENSES 

### U SED 

### T O 

### C ALIBRATE 

### RVU S 

### : CY S


### 2006 AND 

### 2000

CY 2006 weight

(%) CY 2000 weight

(%)

Physician Compensation (Own Time) .... 48.266 52.466 Practice Expenses

(less PLI) ............... 47.439 43.669

PLI ............................ 4.295 3.865

The rebased and revised MEI has several differences as compared to the 2000-based MEI; these changes have been discussed in detail in prior


### 40094 Federal Register / Vol. 75, No. 133 / Tuesday, July 13, 2010 / Proposed Rules

sections of this rule. Table 28 shows the average calendar year percent change
from CY 2004 to CY 2011 for both the
2000- and 2006-based MEIs. The 2006- based MEI annual percent changes differ from the 2000-based MEI annual percent changes by 0.0 to 0.8 percentage point. In the 5 most recent years (CYs 2007– 2011), the annual percent change in the
rebased and revised MEI was within 0.3 percentage point of the percent change
in the 2000-based MEI. In the earlier years, there were bigger differences between the annual percent change in
the rebased and revised MEI and the 2000-based MEI. The majority of these differences can be attributed to the lower benefit cost weight, as measured by the 2006 AMA data, and the exclusion of the drug cost weight. The remaining differences are attributable to the higher cost weight for PLI, as measured by the 2006 AMA data.



### T ABLE 

### 28—A NNUAL 

### P ERCENT 

### C HANGE IN THE 

### C URRENT AND 

### P ROPOSED 

### R EVISED AND 

### R EBASED 

### MEI

Update year A Proposed
2006-based
MEI Current
2000-based
MEI

CY 2004 ........................................................................................................................ ........................................... 2.4 2.7
CY 2005 ........................................................................................................................ ........................................... 2.1 2.9
CY 2006 ........................................................................................................................ ........................................... 2.0 2.5
CY 2007 ........................................................................................................................ ........................................... 1.7 2.0
CY 2008 ........................................................................................................................ ........................................... 1.9 1.8
CY 2009 ........................................................................................................................ ........................................... 1.7 1.7
CY 2010 ........................................................................................................................ ........................................... 1.4 1.2
CY 2011 B

............................................................................................................................... ................................. 0.3 0.3 Avg. Change for CYs 2004–2011 .................................................................................................. ......................... 1.7 1.9

A Update year based on historical data through the second quarter of the prior calendar year. For example, the 2010 update is based on historical data through the second quarter 2009.

B Based on the 1st quarter 2010 forecast by HIS Global Insight. With historical data through the 4th quarter 2009.

As shown in Table 29, the projection of the proposed rebased and revised MEI for the CY 2011 PFS proposed rule is an increase of 0.3 percent, identical to the projected increase using the 2000-
based MEI. In the CY 2011 PFS final rule, we will incorporate historical data through the second quarter of 2010; therefore, the current estimated increase of 0.3 percent for 2011 may differ in the

final rule.



### T ABLE 

### 29—F ORECASTED 

### A NNUAL 

### P ERCENT 

### C HANGE IN THE 

### C URRENT AND 

### P ROPOSED 

### R EVISED AND 

### R EBASED 

### MEI FOR 

### CY 2011

Proposed
2006-based
MEI 2000-based
MEI

CY 2011 ........................................................................................................................ ........................................... 0.3 0.3



### T ABLE 

### 30—F ORECASTED 

### A NNUAL 

### P ERCENT 

### C HANGE IN THE 

### P ROPOSED 

### R EVISED AND 

### R EBASED 

### MEI CY 2011, A LL 

### C ATEGORIES 1

Cost categories 2006 Weight 2 (%) Projected CY 2011 percent changes

MEI Total, productivity adjusted ............................................................................................... ............................... 100.000 0.3 Productivity: 10-year moving average of MFP .................................................................................... .................... N/A 1.3 MEI Total, without productivity adjustment ..................................................................................... ......................... 100.000 1.6 Physician Compensation (Own Time) 3 ............................................................................................................ 48.266 2.4 Wages and Salaries ............................................................................................................. ..................... 43.880 2.5
Benefits ....................................................................................................................... ............................... 4.386 1.5 Practice Expenses .............................................................................................................. .............................. 51.734 0.9 Nonphysician Compensation ...................................................................................................... ............... 19.153 1.5 Nonphysician Wages ............................................................................................................. ............ 13.752 1.5

P&T ............................................................................................................................ ................. 6.006 1.2 Management ..................................................................................................................... .......... 1.446 1.0
Clerical ....................................................................................................................... ................. 4.466 1.8
Services ....................................................................................................................... ............... 1.834 2.0 Nonphysician Benefits .......................................................................................................... .............. 5.401 1.4 Other Practice Expenses ........................................................................................................ .................. 26.308 0.4 Office Expenses ................................................................................................................ ................. 20.035 0.8

Utilities ......................................................................................................................................... 1.139

¥ 3.0
Chemicals ................................................................................................................................... 0.679

¥ 1.1 Paper ........................................................................................................................................... 0.616

¥ 1.0

Rubber & Plastics .............................................................................................................. ......... 0.563

¥ 0.7 Telephone ...................................................................................................................... ............. 1.415 1.1 Postage ........................................................................................................................ ............... 0.661 5.5
All Other Services ............................................................................................................. .......... 4.718 2.0


### 40095 Federal Register / Vol. 75, No. 133 / Tuesday, July 13, 2010 / Proposed Rules

T ABLE 

### 30—F ORECASTED 

### A NNUAL 

### P ERCENT 

### C HANGE IN THE 

### P ROPOSED 

### R EVISED AND 

### R EBASED 

### MEI CY 2011, A LL 

### C ATEGORIES 1 

### —Continued

Cost categories 2006 Weight 2 (%) Projected CY 2011 percent changes

Fixed Capital .................................................................................................................. ............. 8.410 0.9 Moveable Capital ............................................................................................................... ......... 1.834

¥ 0.1

PLI 4

.................................................................................................................................................... 4.295

¥ 2.2 Medical Equipment .............................................................................................................. ............... 1.978 0.8 Medical supplies ............................................................................................................... .................. 1.760 0.5 All Other Expenses ............................................................................................................. ...................... 4.513 1.4

1 The forecasts are based upon the latest available Bureau of Labor Statistics data as of December 2009.

2 The weights shown for the MEI components are the 2006 base-year weights, which may not sum to subtotals or totals because of ro unding. The MEI is a fixed-weight, Laspeyres-type input price index whose category weights indicate the distribution of expenditures among the inputs to physicians’ services for CY 2006. To determine the MEI level for a given year, the price proxy level for each component is multiplied by its 2006 weight. The sum of these products (weights multiplied by the price index levels) overall cost categories yields the composite MEI level for a given year. The annual percent change in the MEI levels is an estimate of price change over time for a fixed market basket of inputs to physicians’
services.

3 The measures of productivity, average hourly earnings, Employment Cost Indexes, as well as the various Producer and Consumer Price Indexes can be found on the Bureau of Labor Statistics Web site at http://stats.bls.gov

. 4 Derived from a CMS survey of several major commercial insurers N/A Productivity is factored into the MEI categories as an adjustment to the price variables; therefore, no explicit weight exists for productivity in the MEI.

In addition to the proposed revisions

to the MEI mentioned earlier in this section, we are also proposing to convene a technical advisory panel later this year to review all aspects of the MEI, including the inputs, input weights, price-measurement proxies, and productivity adjustment. We will ask the panel to assess the relevance and accuracy of these inputs to current physician practices. The panel’s analysis and recommendations will be considered in future rule making to ensure that the MEI accurately and appropriately meets its intended statutory purpose. We are requesting comments from the physician community and other interested members of the public on any other specific issues that should be considered by the technical panel.

f. Adjustments to the RVU Shares To Match the Proposed Rebased MEI Weights

As described in the previous section, we are proposing to rebase the MEI for

CY 2011 based on the most current data and establish new weights for physician work, PE, and malpractice under the MEI. As stated in the previous section,

the MEI was rebased to a CY 1996 base year beginning with the CY 1999 MEI (63 FR 58845), and to a CY 2000 base year beginning with the CY 2004 MEI (68 FR 63239). For both the CY 1999 and CY 2004 rebasing, we made adjustments to ensure that our estimates of aggregate PFS payments for work, PE, and malpractice were in proportion to the weights for these categories in the rebased MEI (63 FR 58829 and 69 FR 1095). Consistent with our past practice when the MEI has been rebased, we are proposing to make adjustments to ensure that estimates of aggregate CY 2011 PFS payments for work, PE, and malpractice are in proportion to the weights for these categories in the
rebased CY 2011 MEI.

Our proposal would necessitate increasing the proportion of aggregate CY 2011 PFS payments for PE and malpractice and decreasing the proportion for work. This could be accomplished by applying adjustments directly to the work, PE, and malpractice RVUs. However, we are cognizant of the public comments made during prior rulemaking on issues related to scaling the work RVUs. Many commenters have indicated a preference
for the work RVUs to remain stable over time and for any necessary adjustments that would otherwise be made broadly to the work RVUs to be accomplished in an alternative manner. For example, in past 5-Year Reviews of the work RVUs, many commenters have cited stability in the work RVUs, among other reasons, in their requests that any required budget neutrality adjustments not be made directly to the work RVUs. Given these prior comments, we are proposing to make the necessary MEI rebasing adjustments without adjusting the work RVUs. Instead, we are proposing to increase the PE RVUs by an adjustment factor of 1.168 and the malpractice RVUs by an adjustment factor of 1.413.
The RVUs in Addendum B to this proposed rule reflect the application of these adjustment factors. We note that an application of the 1.413 adjustment factor to the malpractice RVUs for services with malpractice RVUs of 0.01 will, due to rounding, result in malpractice RVUs of 0.01.

Section 1848(c)(2)(B)(ii)(II) of the Act requires that changes to RVUs cannot cause the amount of expenditures for a year to differ by more than $20 million from what expenditures would have been in the absence of the changes. Therefore, as required by section 1848(c)(2)(B)(ii) of the Act, we are proposing to make an adjustment of
0.921 to the CY 2011 conversion factor to ensure that the 1.168 adjustment to the PE RVUs and the 1.413 adjustment to the malpractice RVUs do not cause an increase in CY 2011 PFS expenditures.
The current law estimate of the CY 2011
CF is $26.6574.

III. Code-Specific Issues for the PFS

A. Therapy Services

1. Outpatient Therapy Caps for CY 2011

Section 1833(g) of the Act applies an annual, per beneficiary combined cap on expenses incurred for outpatient physical therapy and speech-language pathology services under Medicare Part B. A similar separate cap for outpatient occupational therapy services under Medicare Part B also applies. The caps do not apply to expenses incurred for therapy services furnished in an outpatient hospital setting. The caps were in effect during 1999, from September 1, 2003 through December 7, 2003, and beginning January 1, 2006. The caps are a permanent provision, that is, there is no end date specified in the statute for therapy caps. Beginning January 1, 2006, the Deficit Reduction Act (Pub. L. 109–171) (DRA) provided for exceptions to the therapy caps until December 31, 2006. The exceptions


### 40096 Federal Register / Vol. 75, No. 133 / Tuesday, July 13, 2010 / Proposed Rules

process for therapy caps has been extended through December 31, 2009 pursuant to three subsequent amendments (in MEIA–TRHCA, MMSEA, and MIPPA).

Section 1833(g)(5) of the Act (as amended by section 3103 of the ACA) extended the exceptions process for therapy caps through December 31,

2010. We will announce the amount of the therapy cap for CY 2011 in the CY

2011 PFS final rule with comment period. The annual change in the therapy cap is computed by multiplying the cap amount for CY 2010, which is $1,860, by the MEI for CY 2011, and rounding to the nearest $10. This amount is added to the CY 2010 cap to obtain the CY 2011 cap. The agency’s authority to provide for exceptions to therapy caps (independent of the outpatient hospital exception) will expire on December 31, 2010, unless the Congress acts to extend it. If the current exceptions process expires, the caps will be applicable in accordance with the statute, except for services furnished and billed by outpatient hospitals.

2. Alternatives to Therapy Caps

a. Background

In section 4541 of the Balanced Budget Act of 1997 (Pub. L. 105–33) (BBA), the Congress enacted the financial limitations on outpatient therapy services (the ‘‘ therapy caps ’’ discussed above for physical therapy,occupational therapy, and speechlanguage pathology). At the same time, the Congress requested that the Secretary submit a Report to Congress
that included recommendations on the establishment of a revised coverage policy for outpatient physical therapy services and outpatient occupational therapy services under the statute. The Balanced Budget Refinement Act of 1999 (Pub. L. 106–113) (BBRA) placed
the first of a series of moratoria on implementation of the limits. In addition, it required focused medical review of claims and revised the report requirements in section 4541(d)(2) of the BBA to request a report that
included recommendations on the following: (A) The establishment of a mechanism for assuring appropriate utilization of outpatient physical therapy services, outpatient occupational therapy services, and speech-language pathology services; and (B) the establishment of an alternative payment policy for such services based on classification of individuals by diagnostic category, functional status, prior use of services (in both inpatient and outpatient settings), and such other criteria as the Secretary determines appropriate, in place of the limits.

In 1999, therapy services were not defined, but services documented as therapy were billed and reported when furnished by a variety of individuals in many different settings. These services were not identified in a way that would allow analysis of utilization or development of alternative payment policies.

We have studied therapy services
with the assistance of a number of contractors over the past 11 years. Reports of these projects are available
on the CMS Web site at http:// www.cms.gov/TherapyServices/ . On November 9, 2004, we delivered the Report to Congress, Number 137953,

‘‘ Medicare Financial Limitations on Outpatient Therapy Services ’’ that referenced two utilization analyses. We periodically updated the utilization analyses and posted other contracted reports in order to further respond to the requirements of the BBRA. Subsequent reports highlighted the expected effects of limiting services in various ways and presented plans to collect data about patient condition using available tools. The general belief was that if patient condition could be reliably determined, an objective payment policy could be developed that would ensure appropriate payment for appropriately
utilized services.

Over the past decade, significant progress has been made in identifying the outpatient therapy services that are billed to Medicare, the demographics of
the beneficiaries who utilize those services, the types of services, the HCPCS codes used to bill the services, the allowed and paid amounts of the services, and the settings, geographic locations, and provider types where
services are furnished.

Some of the information that is necessary to ensure appropriate utilization and develop objective and equitable payment alternatives to therapy caps based on patient condition has proven difficult to develop. The influence of prior use of inpatient services on outpatient use of therapy
services was not accessible due to systems issues and differences in the policies, billing, and reporting practices for inpatient and outpatient therapy
services. The weakness of the ICD–9– CM diagnostic codes in describing the condition of the rehabilitation patient obscured analyses of claims to assess the need for therapy services. The primary diagnosis on the claim is a poor predictor for the type and duration of therapy services required, which complicates assignment of patient cohorts for analysis. Although changes to the guidance in the Medicare Benefit Policy Manual (Pub. 100–02) on documentation of therapy services in 2005 improved the consistency of records and facilitated chart review, it became increasingly obvious that neither claims analysis nor chart review
could serve as a reliable and valid method to determine a patient’s need for
services or to form the basis for equitable payment. We concluded that in order to develop alternative payment approaches to the therapy caps, we needed a method to identify patients with similar risk-adjusted conditions (cohorts) and then we would identify the therapy services that are necessary for the patients to attain the best
outcomes with the most efficient use of

resources.

While we studied therapy utilization, a number of proprietary tools were developed by researchers in the professional community to assess the outcomes of therapy. Some tool sponsors collected sufficient information to predict with good reliability the amount or length of
treatment that would result in the best expected outcomes. We encouraged the use of these proprietary tools in manual instructions, but proprietary tools do not serve CMS’ purposes because modification of proprietary tools may only be done by the tool sponsor. There
now are some versions of the tools in the public domain and they are being utilized widely to identify patient conditions and, by some insurers, to pay
for efficient and effective treatment. Examples of such tools including the
National Outcomes Measurement System (NOMS) by the American Speech-Language Hearing Association and Patient Inquiry by Focus On Therapeutic Outcomes, Inc. (FOTO).

In 2006, Focus on Therapeutic Outcomes, Inc. delivered to CMS a report titled, ‘‘ Pay for Performance for Physical Therapy and Occupational Therapy, ’’ which is also available on the
CMS Web site at http://www.cms.gov/ TherapyServices . The purpose of thisproject was to simulate a pay-forperformance implementation, designed to align financial incentives with the
achievement of better clinical outcomes
from services that were delivered efficiently. The project, funded by HHS/ CMS Grant #18–P–93066/9–01, demonstrated the predictive validity of the risk-adjusted pay-for-performance model and the feasibility of reducing payments without affecting services to
beneficiaries who need them.

b. Current Activities

The Tax Relief and Health Care Act of 2006 (TRHCA) extended the therapy cap


### 40097 Federal Register / Vol. 75, No. 133 / Tuesday, July 13, 2010 / Proposed Rules

exceptions process through December 31, 2007 and provided funds used for two CMS projects related to developing alternative payment approaches for therapy services that are based on beneficiary needs. A 5-year project titled

‘‘ Development of Outpatient Therapy
Alternatives ’’ (DOTPA), awarded to RTI International, was initiated in order to develop a comprehensive and uniform therapy-related data collection instrument, assess its feasibility, and
determine the subset of the measures that we could routinely and reliably collect in support of payment alternatives. While DOTPA will identify measurement items relevant to payment, the project will not deliver a
standardized measurement tool. We may either develop a tool or allow other tools to be used for payment purposes when they include those items that identify the following: (a) Beneficiary need; and (b) outcomes (that is effectiveness of therapy services). In addition to therapy caps, the DOTPAproject addresses our interest in valuebased purchasing by identifying components of value, including beneficiary need and the effectiveness of therapy services.

The DOTPA project reports are
available on the contractor’s Web site at http://optherapy.rti.org/ . The data collection design and instrument development have been completed, and a Paperwork Reduction Act (PRA) package was submitted for approval of the data collection forms by the Office of Management and Budget (OMB). The Federal Register notice for the second round of public comment on this package was published on April 23, 2010 (75 FR 21296). Once the PRA package is approved, the contractor will begin data collection. While approval is pending, the contractor is recruiting potential participants in the data collection, developing training materials for participants, and updating the project web site. We are not seeking public comments on the DOTPA project in this proposed rule.

The TRCHA also funded the 2-year project contracted to Computer Sciences Corporation (CSC) titled ‘‘ Short Term Alternatives for Therapy Services ’’ (STATS). STATS will provide recommendations regarding alternative payment approaches to therapy caps
that could be considered before completion of the DOTPA project. The STATS project draws upon the analytical and clinical expertise of
contractors and stakeholders to consider policies, measurement tools, and claims data that are currently available to provide further information about patient condition and the outcomes of therapy services. The final report, due in the fall of CY 2010, will include
recommended actions we could take within 2 or 3 calendar years to replace the current cap limits on therapy services with a policy that pays appropriately for necessary therapy

services.

c. Potential Short-Term Approaches to Therapy Caps

On June 30, 2009, we received a draft of the CSC report titled ‘‘ STATS Outpatient Therapy Practice Guidelines, ’’ a summary of expert workgroup discussions, and several short-term payment alternatives for consideration. CSC discussed options based on the assumption that short-term policy changes should facilitate the development of adequate function and/or outcomes reporting tools. In the longterm, CSC recommended that payment be based on function or quality measurements that adequately perform risk adjustment for episode-based
payment purposes.

Based on the draft report, additional stakeholder input, and subsequent communications with the contractor, in this proposed rule we are discussing several potential alternatives to the therapy caps that could lead to more appropriate payment for medically necessary and effective therapy services that are furnished efficiently. We are soliciting public comments on this proposed rule regarding all aspects of these alternatives, including the potential associated benefits or problems, clinical concerns, practitioner administrative burden, consistency with other Medicare and private payer payment policies, and claims processing considerations. We are not proposing either short-term or long-term payment alternatives to the therapy caps at this time. However, we refer readers to section II.C.4.(c) of this proposed rule for our CY 2011 proposal to expand the MPPR policy to ‘‘ always therapy ’’ services furnished in a single session in order to pay more appropriately for therapy services, taking into consideration the expected efficiencies when services are furnished together. While we are not proposing the adoption of an MPPR policy for therapy services specifically as an alternative to the therapy caps, we acknowledge that by paying more appropriately for combinations of therapy services that are commonly furnished in a single session, practitioners would be able to furnish more medically necessary therapy services to a given beneficiary before surpassing the caps. This proposed policy would have the potential to reduce the number of beneficiaries impacted by the therapy caps in a given year.

The three specific short-term options that we are discussing in this proposed rule would not require statutory changes. Some would require moderate reporting changes that would yield more detailed information about patient function and progress to inform future payment approaches and facilitate the
medical review of services above the therapy caps at the present time. Othersrequire new coding and bundled persession payment that would be a first step toward episode-based payment. They are not necessarily independent of
each other. Under each of these alternatives, administrative simplification with respect to current policies, such as HCPCS code edits and

‘‘ ICD–9–CM to HCPCS code ’’ crosswalk
edits that serve to limit utilization without regard to the patient’s clinical presentation, could be pursued in the context of these options.

The first option would modify the current therapy caps exceptions process to capture additional clinical information regarding therapy patient severity and complexity in order to facilitate medical review. This approach would complement the DOTPA project, which is identifying items to measure patient condition and outcomes. We believe the first option may have the greatest potential for rapid implementation that could yield useful
information in the short-term. We are especially interested in detailed public comments on this option that could inform a potential proposal to adopt such an alternative through future rulemaking. The second option would involve introducing additional claims edits regarding medical necessity, in
order to reduce overutilization. Thethird option would be to adopt a persession bundled payment that would vary based on patient characteristics and the complexity of evaluation and
treatment services furnished in the session. Each option would require significant provider and contractor education, and all would necessitate major claims processing systems changes. Moreover, some of the options may affect beneficiaries by changing the type or amount of services covered by Medicare or the beneficiary’s cost sharing obligations.

Option (1): Revise therapy caps exceptions process by requiring thereporting of new patient functionrelated Level II HCPCS codes and severity modifiers

.

This option would require thatclinicians submit beneficiary functionrelated nonpayable HCPCS codes to replace the –KX modifier (Specific


### 40098 Federal Register / Vol. 75, No. 133 / Tuesday, July 13, 2010 / Proposed Rules

required documentation on file). Codes would not be submitted on every claim, but at episode onset and at periodic intervals (for example, progress report intervals of 12 sessions or 30 days— whichever is less). Codes would be submitted for all patients in order for the claims to be paid and not only those claims approaching or surpassing the therapy caps. The current –KX modifier is not useful to identify claims exceeding therapy caps, because it is
used for services both before and after the caps are exceeded, and it must be
used on the entire claim for facilities. New codes also would not identify claims above the cap, but they would perform the same function as the current –KX modifier to signal that
documentation in the medical record supported medical necessity that should lead to an exception to the therapy caps. The codes would also provide more
information for medical review.

Six Level II HCPCS G-codes representing functions addressed in the plan of care and 5 (or 7) modifiers representing severity/complexity would be utilized to report information on the
claim.

Examples of six new function-related
G-codes:

• GXXXU—Impairments to body
functions and/or structures—current.

• GXXXV—Impairments to body functions and/or structures—goal.

• GXXXW—Activity limitations and/ or participation restrictions—current.

• GXXXX—Activity limitations and/ or participation restrictions—goal.

• GXXXY—Environmental barriers—

current.

• GXXXZ—Environmental barriers— goal.

Two potential severity/complexity scales have been suggested that would require the adoption of 5 or 7 new severity modifiers, respectively. Under one scenario, modifiers based on the
International Classification of Function could identify severity as follows:

• None (0 to 4 percent);

• MILD (5 to 24 percent);

• MODERATE (25 to 49 percent);

• SEVERE (50 to 95 percent); or

• COMPLETE (96 to 100 percent). Alternatively, a proportional severity/ complexity scale would use 7 modifiers to describe impairments, limitations, or
barriers:

• 0 percent;

• 1 to 19 percent;

• 20 to 39 percent;

• 40 to 59 percent;

• 50 to 79 percent;

• 80 to 99 percent; or

• 100 percent. Implementation of this general approach would require 6 months to 2 years to modify claims processing for the current therapy caps and exceptions processing of claims, and to develop, pilot test, and refine coding before applying the approach nationally. While therapists initially would need to learn the new codes and update their billing systems, ultimately their reporting
burden would be reduced because the –KX modifier would not be required on each claim line for patients with expenditures approaching or exceeding the therapy caps. This option could potentially result in a small reduction in outpatient therapy expenditures due to increased Medicare contractor scrutiny of episodes where functional severity scores did not change over time, or to other atypical reporting patterns
associated with the new codes.

In the long-term, these codes and modifiers could be mapped to reliable and validated measurement tools (either currently available tools in the public domain or newly developed tools from
items on the DOTPA instrument or the Continuity Assessment Record and Evaluation (CARE) tool). When statistically robust patient condition
information has been collected from claims data, it may be possible to develop Medicare payment approaches for outpatient therapy services that would pay appropriately and similarly
for efficient and effective services
furnished to beneficiaries with similar conditions who have good potential to
benefit from the services furnished. At a minimum, the new codes would allow contractors to more easily identify and
limit the claims for beneficiaries that show no improvement over reasonable periods of time.

Option (2): Enhance existing therapy caps exceptions process by applyingmedical necessity edits when perbeneficiary expenditures reach a predetermined value.

The existing automatic process for exceptions, and the revised exceptions process described in Option 1 above, pay practitioners indefinitely for services if they attest on the claim by appending a specific modifier to therapy HCPCS codes that the services being furnished are medically necessary and that supporting documentation is
included in the medical record. Unless
the contractor uses claims edits or does post payment review, these processes do not identify or limit unusually high annual per-beneficiary utilization. High
utilization is not limited to beneficiaries with multiple or complex conditions. We could use existing therapyutilization data to develop annual perbeneficiary medical necessity payment edits, such as limits to the number of services per session, per episode, or per diagnostic grouping, for exceptions to the therapy caps which could be set at benchmark payment levels that only a small percentage of beneficiaries would surpass in a single year. Once these levels were reached, additional claims would be denied and practitioners would need to appeal those denials if they wished to challenge Medicare’s
nonpayment.

This alternative would require 1 to 2 years to implement as an expansion of existing policy, and its effects could be anticipated by analysis of the current utilization of therapy services. Additional practitioner burden would
be incurred in the small number of cases exceeding the per-beneficiary expenditure edits when the practitioner chooses to appeal the medical necessity
denial.

Option (3): Introduce per-session

‘‘ Evaluation/Assessment and

Intervention ’’ (E&I) codes to bundle payment for groups of current therapy HCPCS codes into a single per-session
payment.

As discussed in section II.C.4.(c) of this proposed rule, multiple therapy services are often furnished in a single session, and we are proposing to expand the MPPR policy to ‘‘ always therapy ’’
services in CY 2011 in order to take into
consideration the efficiencies that occur when multiple services (the typical therapy scenario) are furnished in one session to a beneficiary. Furthermore, we note that section 1848(c)(2)(K) of the Act (as added by section 3134 of the ACA) regarding potentially misvalued codes under the PFS specifies that the Secretary may make appropriate coding changes, which may include
consolidation of individual services into bundled codes for payment under the PFS, as part of her review and adjustment of the relative values for services identified as potentially
misvalued.

This option would require that practitioners submit a single new Level II HCPCS code to represent all the therapy services currently reported and paid separately for an outpatient therapy session. Payment for the HCPCS code would be based on patient characteristics (as identified through prior CMS contractor analyses) and the complexity of the evaluation/assessment
and intervention services furnished during the session. The new coding requirements would not disrupt the current exceptions process or the revised exceptions process described in Option (1) above. Approximately 12 E&I codes would be needed, taking into consideration the basic algorithm shown
in Table 31.


### 40099 Federal Register / Vol. 75, No. 133 / Tuesday, July 13, 2010 / Proposed Rules

T ABLE 

### 31—E VALUATION 

### /A SSESSMENT 

### & I NTERVENTION 

### L EVEL 

### II HCPCS C ODES

Evaluation/Assessment complexity

Minimal Moderate Significant

Intervention Level:
None ................................................................ E&I Code #1 E&I Code #2 E&I Code #3.

Minimal ............................................................ E&I Code #4 E&I Code #5 E&I Code #6.

Moderate .......................................................... E&I Code #7 E&I Code #8 E&I Code #9. Significant ........................................................ E&I Code #10 E&I Code #11 E&I Code #12.

We would need to develop and test operational definitions for each E&I code so that practitioners would be able to properly report services and appropriate relative values could be established for each per-session code. We believe that a pilot study might reveal that the different practice patterns for the three therapy professions (physical therapy,occupational therapy, and speechlanguage pathology) could necessitate separate relative value determinations for each E&I code by type of therapy service furnished. As a result, up to 36
total new Level II HCPCS codes could be needed (12 per discipline).

We anticipate that the definitions of E&I codes 1 through 3 and 7 through 12 would describe services that may only be furnished by a ‘‘ clinician ’’ (therapist, physician, or nonphysician practitioner). E&I codes 1 through 3 would be reported for sessions that consisted only of evaluations. In addition, the definitions of E&I codes 4 through 6 would describe services that could be furnished by or under the permissible supervision of all qualified outpatient therapy professionals. Based upon historical therapy utilization patterns, the vast majority of E&I codes submitted would likely fall in the 4 through 9 code range. We would expect
the RVUs under the PFS for all E&I
codes to take into consideration the efficiencies when multiple services (those that would be currently reported under multiple CPT codes) are
furnished.

This option would require 2 to 4 years
to add new codes and conduct a shortterm pilot study to refine coding and value the 12 new HCPCS codes (or 36 if they are specific to each therapy discipline). There would be significant initial practitioner administrative burden to learn new codes and update billing systems. However, ultimately, with elimination of the practitioner’s reporting of 76 different codes and many of the associated claims processing edits, the administrative burden of reporting therapy services to
Medicare would be minimized. This bundled approach to reporting and payment could result in more appropriate valuation of therapy
services that reflects efficiencies when individually reported services are
furnished in the same session. As a result, it could lead to reduced therapy expenditures, as well as a reduction in the number of beneficiaries affected by the therapy caps in a given year.

In conclusion, we emphasize that we continue to be committed to developing alternatives to the therapy caps that would provide appropriate payment for medically necessary and effective therapy services furnished to Medicare beneficiaries based on patient needs, rather than the current therapy caps
which establish financial limitations on Medicare payment for therapy services in some settings regardless of medical necessity. The Congress has repeatedly intervened to allow exceptions to these caps for certain time periods, and the current exceptions are automatically processed based on a practitioner’s attestation that medical necessity is
documented in the chart for an individual patient. We believe that, ultimately, payment for therapy services
should incentivize the most effective and efficient care, consistent with
Medicare’s focus on value in its purchasing.

Therefore, we are soliciting public comments on potential alternatives to the therapy caps, including those
discussed in this section of this proposed rule. The STATS contractor has worked closely with a broad variety of clinicians, administrators, scientists, researchers, and other contractors to develop the 3 alternatives presented this discussion. We welcome all public comments on this propose rule from interested stakeholders, including individual therapists from both facility and nonfacility settings treating Part B (outpatient) beneficiaries. Among the topics of interest to us are the following:

• Recommendations for alternative payment policies (options discussed in this proposed rule or others) that address patient needs, while minimizing payment for inefficient services or those of limited patient benefit; • Assessment of the practitioner
burden associated with the recommended policies;

• Likelihood that recommended changes would minimize fraud, abuse, and waste;

• Whether the recommendations could assist CMS in obtaining meaningful information on patient
function and how that information could be utilized;

• Whether measurement tools relevant to assessing the need for therapy services exist in the public domain and how they might be utilized;

• What function information should
be collected and how it could be utilized to ensure necessary care, while minimizing payment for inefficient services or those of limited patient benefit; and

• How therapist behavior, plans of care, or patient scheduling would be affected by the recommended
alternatives.

We are committed to finding alternatives to the current therapy cap limitations on expenditures for outpatient therapy services that will
ensure that beneficiaries continue to receive those medically necessary therapy services that maximize their
health outcomes. We continue to dedicate our resources to identifying alternatives that would encourage the
most efficient and cost-effective
treatments. We believe motivated therapists, with attention to the most cost-effective practices, can incorporate practice efficiencies that benefit patients by achieving the best possible results at
the lowest cost.

Our STATS and DOTPA projects, which are currently engaged in datacollection and analysis to inform shortterm and long-term alternatives to the therapy caps, respectively, lay the foundation for future payment alternatives for outpatient therapy services. We are optimistic that the STATS project will identify short-term, feasible alternatives that may be tested in the future. The DOTPA project will
create a tool and test its use to collect patient condition information that can then be applied to identify patient need


### 40100 Federal Register / Vol. 75, No. 133 / Tuesday, July 13, 2010 / Proposed Rules

for therapy services. Together, these projects may provide the basis for a long-term plan to reshape Medicare’s payment policy for outpatient therapy services to align with the value-based purchasing principles that are now guiding principles of the Medicare program. We encourage the public to provide comments so that we may consider all perspectives as we continue our work in this important area.

B. Diabetes Self-Management Training (DSMT) Services (HCPCS Codes G0108 and G0109)

1. Background

Section 4105(a) of BBA provided coverage for DSMT in outpatient settings without limiting this coverage to hospital outpatient departments.
DSMT services consist of educational and training services furnished to an individual with diabetes by a certified provider in an outpatient setting.

Section 4105(a) of the BBA stipulated that training would be furnished by a

‘‘ certified provider ’’ which is a physician or other individual or entity that also provides other items or services for which payment may be made under Medicare. This program is intended to
educate beneficiaries in the successful self-management of diabetes. Theprogram includes instructions in selfmonitoring of blood glucose; education about diet and exercise; an insulin treatment plan developed specificallyfor the patient who is insulindependent; and motivation for patients to use the skills for self-management. DSMT services are reported under HCPCS codes G0108 (Diabetes outpatient self-management training services, individual, per 30 minutes)and G0109 (Diabetes outpatient selfmanagement training services, group session (2 or more), per 30 minutes).

2. Proposed Payment for DSMT Services

In accordance with section 4105(a) of the BBA, Medicare payment for outpatient DSMT services is made under the PFS as specified in § 414.1 through § 414.48. When we created HCPCS codes G0108 and G0109, the only direct costs included in the PE were registered nurse labor. Section 410.144(a)(4)(a) states that the DSMT team includes at least a registered
dietitian and a certified diabetes
educator. We did not establish work
RVUs for DSMT services because we believed training would typically be performed by individuals other than a physician, such as a registered nurse (65 FR 83130). However, since that time, we have received requests from a number of stakeholders, including the American Association of Clinical Endocrinologists (AACE), the American Association of Diabetes Educators (AADE), and the Juvenile Diabetes Research Foundation, to include physician work in valuing
DSMT services that is similar to the physician work that has been included in medical nutrition therapy (MNT) services since CY 2007 and kidney disease education (KDE) services since CY 2010. The stakeholders argued that because physicians coordinate DSMT programs, provide patient instruction, and communicate with referring physicians, physician work should be
included in the RVUs for DSMT
services. The stakeholders also requested that we reconsider the direct PE inputs for DMST services and
include clinical labor for diabetes educators at a higher hourly rate instead of registered nurse labor. In addition, they stated that the supplies and equipment in the PE for DSMT services should be the same as for KDE services, with additional direct PE inputs for a diabetic educator curriculum, data tracking software, and DSMT program
accreditation.

For CY 2011, we are proposing to assign physician work RVUs to DSMT services that are comparable, as adjusted
for the service times of the HCPCS codes, to the work RVUs for MNT services. We are proposing that HCPCS
G0108 for 30 minutes of individual
DSMT services would be crosswalked to CPT code 97803 (Medical nutrition therapy; re-assessment and intervention, individual, face-to-face with the patient, each 15 minutes) for purposes of assigning work RVUs, with the physician work RVUs for CPT code 97803 multiplied by two to account for the greater time associated with HCPCS code G0108 (that is, 30 minutes). We are also proposing that HCPCS G0109 for 30 minutes of group DSMT services would
be crosswalked to CPT code 97804 (Medical nutrition therapy; group (2 or more individuals(s)), each 30 minutes) for purposes of assigning work RVUs. The rationale for the proposed work
RVUs for the DSMT HCPCS G-codes is based on the similarity of DSMT
services to MNT services in the individual (CPT code 97803) and group (CPT code 97804) setting.

For CY 2011, we are also proposing to modify the PE inputs for DSMT services to reflect the current equipment and supplies for the KDE HCPCS G-codes implemented in the CY 2010 PFS final rule with comment period (74 FR 61901) (that is, HCPCS codes G0420 (Face-to-face educational services related to the care of chronic kidney disease; individual, per session, per one hour) and G0421 (Face-to-face educational services related to the care of chronic kidney disease; group, per session, per one hour)), based on the similarity in the equipment and supplies necessary for DSMT and KDE services. We have made adjustments to some of the equipment times for the 30 minute DSMT individual and group services as compared to the 1 hour individual and group KDE services. We are also including a diabetic educator curriculum and data tracking software in the PE inputs for DSMT services, but it is our general practice not to include program accreditation costs in those PE inputs. With respect to clinical labor, rather than changing the current labor type for DSMT services, we are proposing to utilize the same approach as we adopted for MNT services when we provided physician work RVUs for those services in CY 2007 (71 FR 69645). Specifically, we are removing all of the clinical labor from the group
DSMT code and most of the clinical labor from the individual DSMT code, given that we are proposing work RVUs
for both DSMT codes for CY 2011.

We believe these proposals would value DSMT services more consistently with other similar services that are paid
under the PFS. As a result of our proposed CY 2011 changes, the proposed work RVUs for HCPCS codes G0108 and G0109 are 0.90 and 0.25, respectively. As described above, we are also proposing to modify the direct PE inputs for these codes for CY 2011.

C. End-Stage Renal Disease Related Services for Home Dialysis (CPT Codes 90963, 90964, 90965, and 90966)

1. End-Stage Renal Disease Home Dialysis Monthly Capitation Payment Services (CPT Codes 90963, 90964, 90965, and 90966)

In the CY 2004 PFS final rule with comment period (68 FR 63216), we
established new Level II HCPCS G-codes for end-stage renal disease (ESRD) monthly capitation payment (MCP) services. For center-based patients, payment for the G-codes varied based on the age of the beneficiary and the
number of face-to-face visits furnished each month (for example, 1 visit, 2–3 visits and 4 or more visits). Under the MCP methodology, the lowest payment applied when a physician provided one visit per month; a higher payment was provided for two to three visits per month. To receive the highest payment, a physician would have to provide at least four ESRD-related visits per month. However, payment for home dialysis MCP services only varied by the age of beneficiary. Although we did not initially specify a frequency of required


### 40101 Federal Register / Vol. 75, No. 133 / Tuesday, July 13, 2010 / Proposed Rules

visits for home dialysis MCP services,
we stated that we ‘‘ expect physicians to provide clinically appropriate care to manage the home dialysis patient ’’ (68 FR 63219).

Effective January 1, 2009, the CPT
Editorial Panel created new CPT codes to replace the G-codes for monthly ESRD-related services, and we accepted
the new codes for use under the PFS in CY 2009. The CPT codes for monthly ESRD-related services for home dialysis patients include the following, as displayed in Table 32: 90963, 90964, 90965, and 90966. In addition, the clinical vignettes used for the valuation of CPT codes 90963, 90964, 90965, and 90966 include scheduled (and unscheduled) examinations of the ESRD patient.

Given that we pay for a physician (or practitioner) to evaluate the ESRD patient over the course of an entire month under the MCP, we believe that it is clinically appropriate for the physician (or practitioner) to have at least one in-person, face-to-face encounter with the patient per month. Therefore, we are proposing to require the MCP physician (or practitioner) to furnish at least one in-person patient visit per month for home dialysis MCP services (as described by CPT codes 90963 through 90966). This requirement would be effective for home dialysis MCP services beginning January 1, 2011. We believe this requirement reflects appropriate, high quality medical care for ESRD patients being dialyzed at home and generally would be consistent

with the current standards of medical practice.

2. Daily and Monthly ESRD–Related Services (CPT Codes 90951 through 90970)

In CY 2008, the AMA RUC submitted recommendations for valuing the new CY 2009 CPT codes displayed in Table32 that replaced the MCP HCPCS Gcodes for monthly ESRD-related services. We accepted these codes for

use under the PFS.



### T ABLE 

### 32—MCP C ODES 

### R ECOGNIZED 

### U NDER THE 

### PFS

MCP code Long descriptor

90951 ................ End-stage renal disease (ESRD) related services monthly, for patients younger than 2 years of age to include monitoring for the adequacy of nutrition, assessment of growth and development, and counseling of parents; with 4 or more face-to-face physician visits per month. 90952 ................ End-stage renal disease (ESRD) related services monthly, for patients younger than 2 years of age to include monitoring forthe adequacy of nutrition, assessment of growth and development, and counseling of parents; with 2–3 face-to-face physician visits per month. 90953 ................ End-stage renal disease (ESRD) related services monthly, for patients younger than 2 years of age to include monitoring for the adequacy of nutrition, assessment of growth and development, and counseling of parents; with 1 face-to-face physician visit per month.90954 ................ End-stage renal disease (ESRD) related services monthly, for patients 2–11 years of age to include monitoring for the adequacy of nutrition, assessment of growth and development, and counseling of parents; with 4 or more face-to-face physician visits per month.90955 ................ End-stage renal disease (ESRD) related services monthly, for patients 2–11 years of age to include monitoring for the adequacy of nutrition, assessment of growth and development, and counseling of parents; with 2–3 face-to-face physician visits per month.90956 ................ End-stage renal disease (ESRD) related services monthly, for patients 2–11 years of age to include monitoring for the adequacy of nutrition, assessment of growth and development, and counseling of parents; with 1 face-to-face physician visit per month.90957 ................ End-stage renal disease (ESRD) related services monthly, for patients 12–19 years of age to include monitoring for the adequacy of nutrition, assessment of growth and development, and counseling of parents; with 4 or more face-to-face physician visits per month.90958 ................ End-stage renal disease (ESRD) related services monthly, for patients 12–19 years of age to include monitoring for the adequacy of nutrition, assessment of growth and development, and counseling of parents; with 2–3 face-to-face physician visits per month.90959 ................ End-stage renal disease (ESRD) related services monthly, for patients 12–19 years of age to include monitoring for the adequacy of nutrition, assessment of growth and development, and counseling of parents; with 1 face-to-face physician visit per month. 90960 ................ End-stage renal disease (ESRD) related services monthly, for patients 20 years of age and older; with 4 or more face-to-face physician visits per month.90961 ................ End-stage renal disease (ESRD) related services monthly, for patients 20 years of age and older; with 2–3 face-to-face physician visits per month.90962 ................ End-stage renal disease (ESRD) related services monthly, for patients 20 years of age and older; with 1 face-to-face physician visit per month. 90963 ................ End-stage renal disease (ESRD) related services for home dialysis per full month, for patients younger than 2 years of age to include monitoring for the adequacy of nutrition, assessment of growth and development, and counseling of parents. 90964 ................ End-stage renal disease (ESRD) related services for home dialysis per full month, for patients 2–11 years of age to include monitoring for the adequacy of nutrition, assessment of growth and development, and counseling of parents. 90965 ................ End-stage renal disease (ESRD) related services for home dialysis per full month, for patients 12–19 years of age to include monitoring for the adequacy of nutrition, assessment of growth and development, and counseling of parents. 90966 ................ End-stage renal disease (ESRD) related services for home dialysis per full month, for patients 20 years of age and older.

There are four additional CPT codes

for ESRD-related services that are reported on a per-day basis. These daily CPT codes are: 90967 (End-stage renal disease (ESRD) related services for dialysis less than a full month of service, per day; for patients younger than 2 years of age); 90968 (End-stage renal disease (ESRD) related services for dialysis less than a full month of service, per day; for patients 2–11 years of age); 90969 (End-stage renal disease (ESRD) related services for dialysis less than a full month of service, per day; for patients 12–19 years of age); and 90970 (End-stage renal disease (ESRD) related services for dialysis less than a full month of service, per day; for patients 20 years of age and older).

For the MCP codes displayed in Table 32, the AMA RUC initially


### 40102 Federal Register / Vol. 75, No. 133 / Tuesday, July 13, 2010 / Proposed Rules

recommended 36 minutes of clinical labor time for the pre-service period. They also recommended an additional 6 minutes in the post-period for CPT codes 90960, 90961, 90962, and 90966. For the four codes describing daily services (CPT codes 90967 through 90970), the AMA RUC recommended including 1.2 minutes of clinical labor per day, which is the prorated amount of pre-service clinical labor included in the monthly codes. The AMA RUC also
recommended that CPT codes 90952 and 90953 be contractor-priced.

In the CY 2009 PFS final rule with comment period (73 FR 69898), we
asked the AMA RUC to reconsider their recommended PE inputs in the interest of making certain that they accurately reflected the typical direct PE resources required for these services. In addition,
we asked the AMA RUC to review the physician times for CPT codes 90960
and 90961 that are used in the
calculation of the PE RVUs. We accepted the work values for the new
CPT codes for ESRD-related services that were recommended by the AMA

RUC.

Since CY 2009, we have continued to
calculate the PE RVUs for the entire series of MCP codes displayed in Table 32 by using the direct PE inputs from the predecessor HCPCS G-codes, except
for CPT codes 90952 and 90953 which are contractor-priced. We have also continued to use the physician time associated with the predecessor HCPCS
G-codes for CPT codes 90960 and 90961 for purposes of calculating the PE RVUs.

In CY 2009, the AMA RUC submitted
new recommendations for CPT codes 90951 and 90954 through 90970. For each of the MCP codes (CPT code 90951 and CPT codes 90954 through 90966),
the AMA RUC recommended an increased pre-service clinical staff time of 60 minutes. For each of the daily dialysis service codes (CPT codes 90967 through 90970), the AMA RUC
recommended an increased clinical labor time of two minutes, which is the prorated amount of clinical labor included in the monthly codes. The
AMA RUC also recommended an additional 38 minutes of physician time
for CPT codes 90960 and 90961. This resulted in a total physician time of 128 minutes and 113 minutes, respectively,
for these codes. The AMA RUC
continued to recommend that CPT
codes 90952 and 90953 be contractorpriced.

For CY 2011, we are proposing to accept these AMA RUC
recommendations as more accurate reflections of the typical direct PE resources required for these services. Therefore, we are proposing to develop the PE RVUs for CPT code 90951 and CPT codes 90954 through 90970 using the direct PE inputs as recommended by

the AMA RUC and reflected in the proposed CY 2011 PE database, which

is available on the CMS Web site under the supporting data files for the CY 2011 PFS proposed rule at: http:// www.cms.gov/PhysicianFeeSched/. Weare also proposing to use the AMA RUCrecommended physician times for CPT

codes 90960 and 90961. Consistent with the AMA RUC’s recommendations, weare proposing to continue to contractorprice CPT codes 90952 and 90953.

D. Portable X-Ray Set-Up (HCPCS Code Q0092)

When a portable x-ray is furnished to a single patient, as many as four component HCPCS codes may be billed and paid for the service, including the portable x-ray transportation (HCPCS code R0070 (Transportation of portable x-ray equipment and personnel to home or nursing home, per trip to facility or location, one patient seen)); the portablex-ray set-up (HCPCS code Q0092 (Setup of portable x-ray equipment)); and the professional and technical components of the x-ray service itself (CPT 70000 series). Currently, the direct PE database contains x-ray equipment in both the radiology codes in the 70000 series of CPT and HCPCS code Q0092,the code for the set-up of a portable xray. In the technical component of the x-ray service is the direct PE input of a radiology room which contains x-ray equipment for the various radiology

codes in the 70000 series of CPT. In addition, portable x-ray equipment is included as a direct PE input for HCPCS code Q0092. Thus, x-ray equipment currently is recognized within the direct

PE values for two of the HCPCS codes that would be reported for the portable x-ray service, resulting in an overvaluation of the comprehensive portable x-ray service.

Therefore, for CY 2011 we are proposing to remove portable x-ray equipment as a direct PE input for HCPCS code Q0092, in order to pay more appropriately for the x-rayequipment used to furnish a portable xray service. We believe the resulting payment for the comprehensive portable x-ray service would more appropriately

reflect the resources used to furnish portable x-ray services by providing payment for the x-ray equipment solely through payment for the technical component of the x-ray service that is

furnished. E. Pulmonary Rehabilitation Services (HCPCS Code G0424)

In the CY 2010 PFS proposed rule (74 FR 33614), we proposed to create new HCPCS G-code G0424 (Pulmonary rehabilitation, including aerobic exercise (includes monitoring), per session, per day) to describe the services of a pulmonary rehabilitation (PR) program as specified in section 144(a) of the Medicare Improvements for Patients and Providers Act of 2008 (MIPPA). Using CPT code 93797 (Cardiac rehab without telemetry) as a reference code, we proposed to assign 0.18 work RVUs and 0.01 malpractice RVUs to G0424. To establish PE RVUs, we reviewed the PE inputs of similar services, particularly those of the respiratory therapy HCPCS codes G0237 (Therapeutic procedures to increase strength or endurance or respiratory muscles, face to face, one on one, each 15 minutes (includes monitoring)) and G0238 (Therapeutic procedures to improve respiratory function, other than described by G0237, one on one, face to face, per 15 minutes (includes monitoring)), as well as the cardiac rehabilitation codes, CPT codes 93797 and 93798 (Physician services for outpatient cardiac rehabilitation; with continuous ECG monitoring (per session)). In the CY
2010 PFS final rule with comment period (74 FR 61886), we finalized our proposal with modifications to the code descriptor and PE inputs, as recommended by some commenters.

Based on commenters’
recommendations from the CY 2010 PFS final rule with comment period and further information furnished by stakeholders, we are proposing to
increase the work RVUs for HCPCS code
G0424 to 0.28 for CY 2011 to be comparable to the work RVUs for cardiac rehabilitation with monitoring (CPT code 93798) in view of the monitoring required for HCPCS code

G0424.

In addition, we are also proposing to
increase the clinical labor time for the respiratory therapist from 15 minutes to
30 minutes and to crosswalk the PE equipment inputs for HCPCS code G0424 to those for respiratory treatment services (HCPCS code G0238), which include a 1-channel ECG and a pulse
oximeter. We would retain the treadmill currently assigned to HCPCS code G0424 and adjust the equipment time to 45 minutes. While several public
commenters recommended this equipment, these commenters also requested a full 60 minutes of respiratory therapist time be included in the PE for HCPCS code G0424, comparable to the 15 minutes of


### 40103 Federal Register / Vol. 75, No. 133 / Tuesday, July 13, 2010 / Proposed Rules

respiratory therapist time included in
the one-on-one codes for 15 minutes of respiratory treatment services (HCPCS codes G0237 and G0238). However, because PR services reported under
HCPCS code G0424 can be furnished either individually or in groups, we believe that 30 minutes of respiratory therapist time would be more appropriate for valuing the typical PR

service.

F. Application of Tissue-Cultured Skin
Substitutes to Lower Extremities (HCPCS Codes GXXX1 and GXXX2)

There are currently two biological products, Apligraf and Dermagraft, which are FDA-approved for the
treatment of diabetic foot ulcers. While commonly used by podiatrists for this purpose, these products are also used by other specialists in the treatment of other clinical conditions, such as burns.

Many Medicare contractors have established local coverage determinations specifying the
circumstances under which these
services are covered. In the case of diabetic foot ulcers, clinical studies of Apligraf weekly application were based on up to 5 treatments over a 12-week period. In contrast, Dermagraft was applied weekly, up to 8 treatments over a 12-week period.

The skin substitute CPT codes were
reviewed and new codes were last created by the CPT Editorial Panel for CY 2006. There are currently 2 skin repair CPT codes that describe Apligraf application, one primary code, CPT code 15340 (Tissue cultured allogeneic skin substitute; first 25 sq cm or less) and one add-on code, CPT code 15341 (Tissue cultured allogeneic skin substitute; each additional 25 sq cm, or part thereof (List separately in addition to code for primary procedure)) and 4 codes that describe Dermagraft application, two initial codes based on body area, CPT codes 15360 (Tissue cultured allogeneic dermal substitute, trunk, arms, legs; first 100 sq cm or less, or 1 percent of body area of infants and children) and 15365 (Tissue cultured allogeneic dermal substitute, face, scalp, eyelids, mouth, neck, ears, orbits, genitalia, hands, feet, and/or multiple digits; first 100 sq cm or less, or 1 percent of body area of infants and children) and two add-on codes, CPT codes 15361 (Tissue cultured allogeneic dermal substitute, trunk, arms, legs; each additional 100 sq cm, or each additional 1 percent of body area of infants and children, or part thereof (List separately in addition to code for primary procedure)) and 15366 (Tissue cultured allogeneic dermal substitute, face, scalp, eyelids, mouth, neck, ears, orbits, genitalia, hands, feet, and/or multiple digits; each additional 100 sq cm, or each additional 1 percent of body area of infants and children, or part thereof (List separately in addition to code for primary procedure)).

Several stakeholders have expressed concern about the appropriateness and equity of the coding and payment for these services, given their similar uses and the office resources required when the products are applied repeatedly over
a number of weeks for treatment of lower extremity ulcers. They are concerned that current coding, with the associated payment policies and relative values, does not provide for appropriate payment for the services based on how they are furnished. In addition, some
stakeholders believe that the current coding and payment provides a
financial incentive for the selection of one tissue-cultured product over another, rather than facilitating clinical decisionmaking based solely on the most clinically appropriate product for the patient’s case. For example, the Dermagraft and Apligraf application codes have 90-day and 10-day global periods, respectively, and their current values include several follow-up office visits. When patients are treated periodically with repeated applications of the products over several weeks, the patients may be seen in follow-up by the physician. However, those encounters
would not be evaluation and management visits but, instead, would be procedural encounters that would typically be valued differently under the PFS than the follow-up office visits currently included in the values for the Dermagraft and Apligraf application codes. Furthermore, while different
stakeholders have indicated that debridement and site preparation are variably performed when these products are applied, the CPT codes for Dermagraft application allow separate reporting of these preparation services when they are performed, while the Apligraf application codes bundle these services. Since CY 2006, the PFS has accepted the RUC work and PE recommendations for the Dermagraft and Apligraf application codes and has paid accordingly.

With respect to Medicare payment policy, some Medicare contractors allow the use of modifier -58 (Staged or related procedure or service by the same physician during the postoperative period) to be reported with the skin substitute application codes and provide full payment for the service each time it is performed, even if the subsequent application(s) is within the global period of the service. Other
contractors do not allow the use of modifier -58, and therefore, provide a single payment for a series of applications over 90 days or 10 days, as applicable to the particular code reported for the product’s initial application.

Because of the current inconsistencies in valuing similar skin substitute application services and the common
clinical scenarios for their use for Medicare beneficiaries, we believe that it would be appropriate to temporarily create Level II HCPCS G-codes to report application of tissue-cultured skin substitutes applied to the lower extremities in order to provide appropriate and consistent payment for the services as they are commonly furnished. Therefore, we are proposing
to create two new HCPCS G-codes for CY 2011, GXXX1 (Application of tissue cultured allogeneic skin substitute or dermal substitute; for use on lower limb, includes the site preparation and debridement if performed; first 25 sq cm or less) and GXXX2 (Application of tissue cultured allogeneic skin or dermal substitute; for use on lower limb, includes the site preparation and debridement if performed; each additional 25 sq cm), that would be recognized for payment under the PFS for the application of Apligraf or Dermagraft to the lower limb. These codes would not allow separate reporting of CPT codes for site preparation or debridement. We emphasize that we would expect that
the use of these HCPCS G-codes for payment under Medicare would be temporary, while stakeholders work through the usual channels to establish appropriate coding for these services
that reflects the current common
clinical scenarios in which the skin substitutes are applied. Furthermore, we would expect to receive
recommendations from the AMA RUC for appropriate work values and direct practice expense inputs for the applicable codes, according to the usual process for new or revised codes.

Under the PFS, as a temporary measure, the HCPCS G-codes would be assigned a 0-day global period so payment would be made each a time a
covered service was furnished. We are proposing to base payment on the physician work relative values and the direct PE inputs for the existing CPT codes for Apligraf application, with adjustments for the global period
differences because the HCPCS G-codes and the Apligraf application CPT codes.
These CPT codes resemble the new
HCPCS G-codes in terms of wound size description and the inclusion of site preparation and debridement in their current values so we believe they


### 40104 Federal Register / Vol. 75, No. 133 / Tuesday, July 13, 2010 / Proposed Rules

appropriately represent the physician work involved in the proposed HPCPCS G-codes. However, we would adjust the work RVUs of the Apligraf application
codes to derive the HCPCS G-code proposed CY 2011 work values by extracting the values for any office visits and discharge day management services
because the HCPCS G-codes have a 0- day global period. In addition, we would adjust the direct PE inputs of the Apligraf application codes to develop the proposed CY 2011 direct PE inputs of the HPCPS G-codes that have a 0-day global period.

Our crosswalks and adjustments result in proposed CY 2011 work RVUs
of 2.22 for HPCPCS code GXXX1 and 0.50 for HCPCPS GXXX2. The proposed direct PE inputs for HCPCS codes
GXXX1 and GXXX2 are included in the
direct PE database for the CY 2011 proposed rule that is posted on the CMS
Web site at http://www.cms.gov/ PhysicianFeeSched/PFSFRN/list.asp.

We note that many Medicare contractors currently have local coverage policies that specify the
circumstances under which Medicare covers the application of skin substitutes. The local coverage policies may include diagnostic or prior treatment requirements, as well as frequency limitations on the number and periodicity of treatments. We expect that these policies would be updated in the context of the temporary new HCPCS G-codes that we are proposing for use in CY 2011 to report the application of tissue cultured allogeneic
skin or dermal substitutes. We areproposing to establish the HCPCS Gcodes for temporary use in CY 2011 in order to improve the consistency and resource-based nature of PFS payments for skin substitute application services that require similar resources. However,
we note our continued interest in ensuring that skin substitutes are properly utilized for Medicare
beneficiaries who will benefit from that
treatment. We will continue to monitor the utilization of these services and plan to identify any concerning trends in utilization that contractors may want to examine further through medical review or other approaches.

G. Canalith Repositioning (CPT Code 95992)

For CY 2009, CPT created a new code for canalith repositioning, specifically CPT code 95992 (Canalith repositioning procedure(s) ( e.g., Epley maneuver, Semont maneuver), per day). This service may be furnished by both physicians and therapists. Although we accepted the RUC-recommended work RVUs and PE inputs, we initially bundled this procedure on an interim
basis in the CY 2009 PFS final rule with comment period (73 FR 69896), indicating that we believed it would be paid through the E/M service that it would accompany. Subsequently, in view of concerns from therapists who cannot furnish E/M services, we clarified that therapists could report one of the generally defined therapy CPT codes when canalith repositioning was
furnished. In the CY 2010 PFS final rule with comment period (74 FR 61766), we changed the code’s status under the PFS

to ‘‘ not recognized for payment under Medicare, ’’ consistent with our expectation that another payable code would be reported when the service was
furnished.

Based on further information from stakeholders regarding the distinct and separate nature of this procedure from an E/M service and their request that we recognize this CPT code for payment, similar to our separate payment for most other procedures commonly furnished in association with an E/M service, we are proposing to recognize CPT code 95992 for payment under the CY 2011 PFS, consistent with our typical
treatment of most other codes for minor procedures. In doing so, we are proposing to change the code’s status to

‘‘ A ’’ and utilize the CY 2009 RUC recommendations for work RVUs (0.75) and PE inputs for establishing its payment in CY 2011. (That is, status ‘‘ A ’’
means Active code. These codes are separately payable under the PFS if covered.) Because canalith repositioning (CPT code 95992) can be furnished by physicians or therapists as therapy services under a therapy plan of care or by physicians as physicians’ services outside of a therapy plan of care, we
would add CPT code 95992 to the

‘‘ sometimes therapy ’’ list on the therapy
code abstract file.

H. Intranasal/Oral Immunization Codes (CPT Codes 90467, 90468, 90473, and 90474)

To ensure that the PE RVUs are
consistent between the intranasal/oral and injectable immunization
administration CPT codes that describe
services that utilize similar PE resources, we are proposing to
crosswalk the PE values for CPT code 90471 (Immunization administration (includes percutaneous, intradermal, subcutaneous, or intramuscular injections); one vaccine (single or combination vaccine/toxoid)) to CPT codes 90467 (Immunization administration younger than age 8 years (includes intranasal or oral routes of administration) when the physician counsels the patient/family; first administration (single or combination vaccine/toxoid), per day) and 90473 (Immunization administration by intranasal or oral route; one vaccine (single or combination vaccine/toxoid)).

Similarly, we are also proposing to
crosswalk the PE values for CPT code 90472 (Immunization administration (includes percutaneous, intradermal, subcutaneous, or intramuscular injections); each additional vaccine (single or combination vaccine/toxoid) (List separately in addition to code for primary procedure)) to CPT codes 90468 (Immunization administration younger than age 8 years (includes intranasal or oral routes of administration) when the physician counsels the patient/family; each additional administration (single or combination vaccine/toxoid), per day (List separately in addition to code for primary procedure)) and 90474 (Immunization administration by intranasal or oral route; each additional vaccine (single or combination vaccine/ toxoid) (List separately in addition to code for primary procedure)).

I. Refinement Panel Process

As discussed in the November 25, 1992 PFS final rule (57 FR 55938), we adopted a refinement panel process to assist us in reviewing the public comments on interim physician work
RVUs for CPT codes with that status in each year and developing final work values for the subsequent year. Our decision to convene multispecialty panels of physicians was based on our
need to balance the interests of those
who commented on the work RVUs against the budgetary and redistributive effects that could occur if we accepted
extensive increases in work RVUs across a broad range of services. The refinement panel reviews and discusses the work involved in each procedure and then each member individually rates the work of the procedure. Since 1992, the refinement panels’ recommendation to change a work value or to retain the interim value has hinged solely on the outcome of a statistical test on the ratings (an F-test).

Depending on the number and range of codes that public commenters, typically specialty societies, request be subject to refinement, we establish refinement panels with representatives from 4 groups of physicians: Clinicians representing the specialty most identified with the procedures in question; physicians with practices in related specialties; primary care physicians; and contractor medical directors (CMDs). Typically the refinement panels meet in the summer prior to the promulgation of the final rule finalizing the RVUs for the codes.


### 40105 Federal Register / Vol. 75, No. 133 / Tuesday, July 13, 2010 / Proposed Rules

Typical panels have included 8 to 10 physicians across the 4 groups. Over time, the statistical test used to evaluate the RVU ratings of individual panel
members have become less reliable as the physicians in each group have tended to select a previously discussed value, rather than independently evaluating the work. In addition, the resulting RVUs have occasionally exhibited rank order anomalies (that is, a more complex procedure is assigned lower RVUs than a less complex procedure).

Most recently, section 1848(c)(2)(K) of the Act (as added by section 3134 of the ACA) authorizes the Secretary to review potentially misvalued codes and make appropriate adjustments to the relative values. In addition, MedPAC has encouraged CMS to critically review the values assigned to the services under
the PFS. MedPAC has stated its belief that CMS has historically relied too heavily on specialty societies to identify services that are misvalued by accepting so many recommendations of the RUC.

We believe the refinement panel process continues to provide stakeholders with a meaningful opportunity for review and discussion
of the interim work RVUs with a clinically diverse group of experts that then provides informed recommendations to CMS. Therefore,
we would like to continue the refinement process, including the established composition that includes representatives from the 4 groups of physicians, but with administrative
modification and clarification. Specifically, for refinement panels beginning in CY 2011 (that is, for those
codes with CY 2011 interim values that would be subject to refinement during CY 2011), we are proposing to eliminate
the use of the F-test and instead base
revised RVUs on the median work value of the panel members’ ratings. We believe this approach will simplify the refinement process administratively, while resulting in a final panel
recommendation that reflects the summary opinion of the panel members based on a commonly used measure of central tendency that is not significantly affected by outlier values. In addition, we are clarifying that we have the final authority to set the RVUs, and therefore, may make adjustments to the work RVUs resulting from refinement if policy concerns warrant their
modification.

J. Remote Cardiac Monitoring Services (CPT Codes 93012, 93229, 93268, and 93271)

In the CY 2010 PFS final rule with comment period (74 FR 61755), we indicated that we continued to have concerns about the issue of developing
PE RVUs for services that are utilized 24 hours a day, 7 days a week (24/7), such as those that require certain monitoring system equipment. The PE equipment methodology was developed for equipment that is in use during standard physician’s office business hours and not this type of 24/7 equipment. We stated that we would conduct further analysis of this issue. Services that were contractor-priced in CY 2009 remained contractor-priced in CY 2010. We also indicated that any proposed changes will be communicated through future rulemaking.

Since publication of the CY 2010 PFS final rule with comment period, we have focused our additional analysis on
four of the CPT codes that commenters have brought to our attention because they involve concurrent, remote, 24/7 attended monitoring of multiple patients from a central location: CPT code 93012 (Telephonic transmission of post-symptom electrocardiogram rhythm strip(s); 24-hour attended monitoring, per 30 day period of time; tracing only); CPT code 93229 (Wearable mobile cardiovascular telemetry with electrocardiographic recording, concurrent computerized real time data analysis and greater than 24 hours of accessible ECG data storage (retrievable with query) with ECG triggered and patient selected events
transmitted to a remote attended surveillance center for up to 30 days; technical support for connection and patient instructions for use, attended surveillance, analysis and physician prescribed transmission of daily and emergent data reports); CPT code 93268 (Wearable patient activated electrocardiographic rhythm derived event recording with presymptom memory loop, 24-hour attended monitoring, per 30 day period of time; includes transmission, physician review and interpretation); and CPT 93271 code (Wearable patient activated electrocardiographic rhythm derived event recording with presymptom memory loop, 24-hour attended monitoring, per 30 day period of time; monitoring, receipt of transmissions, and analysis).

Of these four codes, CPT code 93229 is currently contractor-priced in CY 2010, meaning that the local Medicare contractors determine payment rates for the service within the PFS geographic areas in their jurisdiction. The threeservices that are currently nationallypriced on the PFS are in the first year of a 4-year transition to lower payment
rates based on the use of the PPIS data adopted in the CY 2010 PFS final rule with comment period. We refer readers to section II.A.2. of this proposed rule for a description of the general PFS PE methodology that is the basis for the following discussion of approaches to establishing PE RVUs for these four CPT
codes.

We examined several alternative methods for developing PE RVUS upon which PFS payment rates for these four
CPT codes could be based. Each of these
services involves transmission of information from multiple patients who wear individual monitoring devices that transmit patient-specific information to centralized equipment that is simultaneously in use for multiple patients. We believe it would be most consistent with the principles underlying the PFS PE methodology to classify the centralized monitoring equipment as an indirect cost since it is servicing multiple patients at the same time. After classifying this equipment as an indirect cost, we used our standard methodology to calculate an indirect practice cost index value for each code based on the PE/HR survey data of the historical mix of specialties providing these services. Establishing payment
rates for these codes based on this approach would result in decreases in the payment rates for these services, including the typical contractor’s price
for CPT code 93229. For the three services that are nationally priced, these
decreases would be relative to the lower payment rates based on the use of the PPIS data after the 4-year transition.

We also received PE/HR data from the
Remote Cardiac Services Provider Group (RCSPG), a group of IDTF suppliers of these types of services. For sensitivity analysis purposes, we
substituted these data for the PE/HR data of the specialties performing these services, while continuing to treat the centralized monitoring equipment as an indirect cost. We found that establishing payment rates for these codes based on the approach of using the submitted RCSPG PE/HR data would again result in decreases in the payment rates for these services, including the typical contractor’s price for CPT code 93229. As in the prior alternative, the decreases for the nationally priced codes would be relative to the payment rates reflecting the 4-year transition to the PPIS data.

Although we believe that it would be most consistent with the principles underlying the PE methodology to classify the centralized monitoring equipment as an indirect cost, we also performed a sensitivity analysis of the payment rates if the centralized monitoring equipment were classified as a direct cost. In this simulation, we


### 40106 Federal Register / Vol. 75, No. 133 / Tuesday, July 13, 2010 / Proposed Rules

assumed that the centralized monitoring equipment was in year-round use, 7 days per week for 24 hours per day. We found that establishing payment rates for these codes based on the approach of classifying the centralized monitoring equipment as a direct cost would again result in decreases in the payment rates for the nationally priced services relative to their payment rates after the 4-year transition to the use of the PPIS data, as well as to the typical current contractor’s price for CPT code 93229.

Finally, we considered proposing contractor-pricing for all four of these services for CY 2011. However, we are cognizant of past public comments on this issue that have requested that all of these services be priced nationally on the PFS, including the one service (CPTcode 93229) that is currently contractorpriced.

We also considered that the services currently priced nationally on the PFS are scheduled to receive lower payment rates under the 4-year transition to the PPIS data and that the contractor’s price for CPT 93229 was recently reduced in the area where the majority of the billings for this service currently occur.

After taking all these factors into consideration, we are not proposing CY 2011 methodological or direct cost input changes for CPT codes 93012, 93268, or 93271—the services that are currently nationally priced under the PFS. We arealso proposing to continue contractorpricing for CPT 93229 for CY 2011. We continue to be interested in public comments on this issue, including responses to our analysis of alternative approaches to establishing PE RVUs for 24/7 services, and further discussion of

the issues we have identified in our alternative pricing methodologies. In addition, while we have focused the 24/ 7 services analysis to date on developing the PE RVUs for remote cardiac monitoring services, there may

be 24/7 services in other areas of medicine, either currently paid under the PFS or in development for the future. Therefore, we are also interested in public comments on these current or emerging 24/7 services, including descriptions of the similarities or

differences between these other services and remote cardiac monitoring services, particularly with respect to the issues we have identified in our analysis of alternative approaches to establishing PE RVUs for remote cardiac monitoring

services under the PFS. IV. Medicare Telehealth Services for the Physician Fee Schedule

A. Billing and Payment for Telehealth

Services

1. History

Prior to January 1, 1999, Medicare coverage for services delivered via a telecommunications system was limitedto services that did not require a faceto-face encounter under the traditional model of medical care. Examples of these services included interpretation of an x-ray or electrocardiogram or electroencephalogram tracing, and cardiac pacemaker analysis.

Section 4206 of the BBA provided for coverage of, and payment for,
consultation services delivered via a telecommunications system to Medicare beneficiaries residing in rural health professional shortage areas (HPSAs) as defined by the Public Health Service Act. Additionally, the BBA required that a Medicare practitioner (telepresenter) be with the patient at the time of a teleconsultation. Further, the BBA specified that payment for a
teleconsultation had to be shared between the consulting practitioner and the referring practitioner and could not exceed the fee schedule payment which
would have been made to the consultant for the service provided. The BBA prohibited payment for any telephone line charges or facility fees associated
with the teleconsultation. We implemented this provision in the CY
1999 PFS final rule with comment period (63 FR 58814).

Effective October 1, 2001, section 223 of the Medicare, Medicaid and SCHIP Benefits Improvement Protection Act of 2000 (Pub. L. 106–554) (BIPA) added a new section 1834(m) to the Act which significantly expanded Medicare
telehealth services. Section 1834(m)(4)(F)(i) of the Act defines
Medicare telehealth services to include consultations, office visits, office psychiatry services, and any additional service specified by the Secretary, when
delivered via a telecommunications system. We first implemented this provision in the CY 2002 PFS final rule with comment period (66 FR 55246). Section 1834(m)(4)(F)(ii) required the Secretary to establish a process that provides for annual updates to the list
of Medicare telehealth services. We established this process in the CY 2003 PFS final rule with comment period (67 FR 79988).

As specified in regulations at § 410.78(b), we generally require that a
telehealth service be furnished via an interactive telecommunications system. Under § 410.78(a)(3), an interactive telecommunications system is defined

as multimedia communications equipment that includes, at a minimum, audio and video equipment permitting two-way, real-time interactive communication between the patient and the practitioner at the distant site. Telephones, facsimile machines, and electronic mail systems do not meet the

definition of an interactive telecommunications system. An interactive telecommunications system is generally required as a condition of payment; however, section 1834(m)(1)

of the statute does allow the use of asynchronous ‘‘ store-and-forward ’’ technology in delivering these services when the originating site is a Federal telemedicine demonstration program in Alaska or Hawaii. As specified in regulations at § 410.78(a)(1), store and forward means the asynchronous

transmission of medical information from an originating site to be reviewed at a later time by the practitioner at the

distant site.

Medicare telehealth services may be provided to an eligible telehealth individual notwithstanding the fact that the individual practitioner providing

the telehealth service is not at the same location as the beneficiary. An eligible

telehealth individual means an

individual enrolled under Part B who

receives a telehealth service furnished at an originating site. As specified in BIPA, originating sites are limited under section 1834(m)(3)(C) of the statute to specified medical facilities located in specific geographic areas. The initial list of telehealth originating sites included the office of a practitioner, a critical access hospital (CAH), a rural health clinic (RHC), a federally qualified health center (FQHC) and a hospital. More recently, section 149 of the Medicare Improvements for Patients and Providers Act of 2008 (Pub. L. 110–275) (MIPPA) expanded the list of telehealthoriginating sites to include hospitalbased renal dialysis centers, skilled nursing facilities (SNFs), and community mental health centers (CMHCs). In order to serve as a telehealth originating site, these sites must be located in an area designated as a rural health professional shortage area (HPSA), in a county that is not in a metropolitan statistical area (MSA), or must be an entity that participates in a

Federal telemedicine demonstration project that has been approved by (or receives funding from) the Secretary of

Health and Human Services as of December 31, 2000. Finally, section 1834(m) of the statute does not require the eligible telehealth individual to be


### 40107 Federal Register / Vol. 75, No. 133 / Tuesday, July 13, 2010 / Proposed Rules

presented by a practitioner at the originating site.

2. Current Telehealth Billing and Payment Policies

As noted above, Medicare telehealth services can only be furnished to an eligible telehealth beneficiary in an originating site. An originating site is defined as one of the specified sites where an eligible telehealth individual is located at the time the service is being
furnished via a telecommunications system. In general, originating sites
must be located in a rural HPSA or in a county outside of an MSA. The originating sites authorized by the
statute are as follows:

• Offices of a physician or practitioner

• Hospitals

• CAHs

• RHCs

• FQHCs

• Hospital-Based or Critical Access

Hospital-Based Renal Dialysis Centers (including Satellites)

• SNFs

• CMHCs

Currently approved Medicare
telehealth services include the following:

• Initial inpatient consultations

• Follow-up inpatient consultations

• Office or other outpatient visits

• Individual psychotherapy

• Pharmacologic management

• Psychiatric diagnostic interview

examination

• End Stage Renal Disease (ESRD)

related services

• Individual medical nutrition therapy

(MNT)

• Neurobehavioral status exam

• Individual health and behavior

assessment and intervention (HBAI) In general, the practitioner at the distant site may be any of the following, provided that the practitioner is
licensed under State law to furnish the service being furnished via a telecommunications system:

• Physician

• Physician assistant (PA)

• Nurse practitioner (NP)

• Clinical nurse specialist (CNS)

• Nurse midwife

• Clinical psychologist

• Clinical social worker

• Registered dietitian or nutrition

professional

Practitioners furnishing Medicare
telehealth services are located at a distant site, and they submit claims for
telehealth services to the Medicare contractors that process claims for the
service area where their distant site is located. Section 1834(m)(2)(A) of the Act requires that a practitioner who
furnishes a telehealth service to an eligible telehealth individual be paid an amount equal to the amount that the practitioner would have been paid if the
service had been furnished without the use of a telecommunications system. Distant site practitioners must submit the appropriate HCPCS procedure code for a covered professional telehealth service, appended with the –GT (Via
interactive audio and video telecommunications system) or –GQ (Via asynchronous telecommunications system) modifier. By reporting the –GT or –GQ modifier with a covered telehealth procedure code, the distant site practitioner certifies that the beneficiary was present at a telehealth originating site when the telehealth
service was furnished. The usual
Medicare deductible and coinsurance policies apply to the telehealth services reported by distant site practitioners.

Section 1834(m)(2)(B) of the Act provides for payment of a facility fee to the originating site. To be paid the originating site facility fee, the provider or supplier where the eligible telehealth
individual is located must submit a claim with HCPCS code Q3014 (Telehealth originating site facility fee), and the provider or supplier is paid according to the applicable payment methodology for that facility or location.
The usual Medicare deductible and coinsurance policies apply to HCPCS code Q3014. By submitting HCPCS code Q3014, the originating site authenticates
that it is located in either a rural HPSA or non-MSA county or is an entity that participates in a Federal telemedicine demonstration project that has been approved by (or receives funding from) the Secretary of Health and Human Services as of December 31, 2000 as specified in section 1834(m)(4)(C)(i)(III)
of the Act.

As described above, certain professional services that are commonly furnished remotely using telecommunications technology, but that do not require the patient to be present in-person with the practitioner when they are furnished, are covered and paid in the same way as services
delivered without the use of telecommunications technology when the practitioner is in-person at the medical facility furnishing care to the patient. Such services typically involve circumstances where a practitioner is able to visualize some aspect of the patient’s condition without the patient being present and without the interposition of a third person’s judgment. Visualization by the practitioner can be possible by means of x-rays, electrocardiogram or electroencephalogram tracings, tissue samples, etc. For example, the interpretation by a physician of an actual electrocardiogram or electroencephalogram tracing that has been transmitted via telephone (that is, electronically, rather than by means of a verbal description) is a covered physician’s service. These remote
services are not Medicare telehealth
services as defined under section 1834(m). Rather, these remote services
that utilize telecommunications technology are considered physicians’ services in the same way as services that are furnished in-person without the use of telecommunications technology; they are paid under the same conditions as in-person physicians’ services (with no requirements regarding permissible originating sites), and should be reported in the same way (that is, without the –GT or –GQ modifier appended).

B. Requests for Adding Services to the List of Medicare Telehealth Services

As noted above, in the December 31,

2002 Federal Register (67 FR 79988), we established a process for adding services to or deleting services from the list of
Medicare telehealth services. This process provides the public with an ongoing opportunity to submit requests for adding services. We assign any request to make additions to the list of
Medicare telehealth services to one of the following categories:

• Category 1: Services that are similar to professional consultations, office visits, and office psychiatry services. In reviewing these requests, we look for similarities between the requested and existing telehealth services for the roles of, and interactions among, the beneficiary, the physician (or other practitioner) at the distant site and, if necessary, the telepresenter. We also
look for similarities in the telecommunications system used to deliver the proposed service, for example, the use of interactive audio and video equipment.

• Category 2: Services that are not
similar to the current list of telehealth services. Our review of these requests
includes an assessment of whether the use of a telecommunications system to deliver the service produces similar diagnostic findings or therapeuticinterventions as compared with the inperson delivery of the same service. Requestors should submit evidence showing that the use of a telecommunications system does not affect the diagnosis or treatment plan as compared to in-person delivery of the requested service.


### 40108 Federal Register / Vol. 75, No. 133 / Tuesday, July 13, 2010 / Proposed Rules

Since establishing the process to add

or remove services from the list of approved telehealth services, we have added the following to the list of

Medicare telehealth services: Individual HBAI services; psychiatric diagnostic
interview examination; ESRD services with 2 to 3 visits per month and 4 or more visits per month (although we require at least 1 visit a month to be furnished in-person by a physician, CNS, NP, or PA in order to examine the vascular access site); individual MNT; neurobehavioral status exam; and initial and follow-up inpatient telehealth

consultations for beneficiaries in hospitals and skilled nursing facilities (SNFs).

Requests to add services to the list of

Medicare telehealth services must be

submitted and received no later than December 31 of each calendar year to be considered for the next rulemaking cycle. For example, requests submitted

before the end of CY 2010 are considered for the CY 2012 proposed rule. Each request for adding a service

to the list of Medicare telehealth services must include any supporting documentation the requester wishes us to consider as we review the request.

Because we use the annual PFS rulemaking process as a vehicle for making changes to the list of Medicare telehealth services, requestors should be advised that any information submitted is subject to public disclosure for this purpose. For more information on submitting a request for an addition to the list of Medicare telehealth services, including where to mail these requests,

we refer readers to the CMS Web site at http://www.cms.gov/telehealth/.

C. Submitted Requests for Addition to the List of Telehealth Services for CY

2011

We received requests in CY 2009 to add the following services as Medicare

telehealth services effective for CY 2011: (1) Individual kidney disease education (KDE) services; (2) individual diabetes self-management training (DSMT) services; (3) group KDE, DSMT, MNT, and HBAI services; (4) initial, subsequent, and discharge day management hospital care services; (5) initial, subsequent, discharge day management, and other nursing facility care services; (6) neuropsychological testing services; (7) speech-language pathology services; and (8) home wound care services. The following presents a discussion of these requests, including our proposals for additions to the CY

2011 telehealth list. 1. Individual KDE Services

The American Society of Nephrology, Dialysis Patient Citizens, AMGEN, and Kidney Care Partners submitted requests to add individual KDE services,reported by HCPCS code G0420 (Faceto-face educational services related to the care of chronic kidney disease; individual, per session, per one hour), to the list of approved telehealth services for CY 2011 on a category 1
basis.

Individual KDE services, covered
under the new Medicare KDE benefit
effective for services furnished beginning in CY 2010, are defined as
face-to-face educational services provided to a patient with stage IV chronic kidney disease (CKD). We
believe the interaction between a practitioner and a beneficiary receiving
individual KDE services is similar to the education, assessment, and counseling elements of individual MNT services, reported by HCPCS code G0270 (Medical nutrition therapy; reassessment and subsequent intervention(s) following second referral in same year for change in diagnosis, medical condition or treatment regimen (including additional hours needed for renal disease), individual, face to face with the patient, each 15 minutes); CPT code 97802 (Medical nutrition therapy; initial assessment and intervention, individual, face-to-face with the patient, each 15 minutes); and CPT code 97803(Medical nutrition therapy; reassessment and intervention, individual, face-to-face with the patient, each 15 minutes), all services that are currently on the telehealth list.

Therefore, we are proposing to add
HCPCS code G0420 to the list of
telehealth services for CY 2011 on a category 1 basis. Consistent with this proposal, we are also proposing to revise our regulations at § 410.78(b) and § 414.65(a)(1) to include individual KDE
as a Medicare telehealth service.

2. Individual DSMT Services

The Tahoe Forest Health System and
the Marshfield Clinic submitted requests to add individual DSMT services, reported by HCPCS codeG0108 (Diabetes outpatient selfmanagement training services, individual, per 30 minutes), to the list
of telehealth services for CY 2011 on a category 1 basis. In the CY 2009 PFS final rule with comment period (73 FR 69743), we stated that we believe
individual DSMT services are not analogous to individual MNT services
because of the element of skill-based training that is encompassed within
individual DSMT services that is not an aspect of individual MNT services (or any other services currently approved for telehealth). Due to the statutory requirement that DSMT services include teaching beneficiaries the skills necessary for the self-administration of injectable drugs, we have stated our belief that DSMT, whether provided to an individual or a group, must be evaluated as a category 2 service as specified in the CY 2009 PFS proposed rule (73 FR 38516). We have considered several previous requests to add DSMT
to the list of Medicare telehealth
services. We have not added individual
DSMT to the list of telehealth services
because we believe that skill-based training, such as teaching patients how to inject insulin, would be difficult to accomplish effectively without the physical presence of the teaching practitioner (70 FR 45787 and 70157, and 73 FR 38516 and 69743).

In considering the new request to add
individual DSMT services to the list of telehealth services in CY 2011, we have taken into account requestors’ argument
that individual DSMT services are highly similar to individual MNT services and that injection training constitutes just a small proportion of DSMT services. Except for the component of individual DSMT services
that involves instruction in selfadministration of injectable drugs for eligible beneficiaries, we agree with the requestors that individual DSMT
services are similar to individual MNT services, which are currently on the list
of Medicare telehealth services. We note that Medicare coverage of DSMT services was initially authorized in the Balanced Budget Act of 1997. After
more than a decade of Medicare coverage, the most recent information
shows that DSMT continues to be significantly underutilized in the context of the eligible population of
Medicare beneficiaries. While we are uncertain to what extent geographic
barriers to care contribute to this underutilization, given the morbidity associated with poorly managed diabetes and the growing evidence-base regarding effective DSMT services, we believe it is very important to facilitate Medicare beneficiary access to these
underutilized services. While we have previously been concerned about treating the components of DSMT services differently in the context of considering DSMT services for the telehealth list, we believe that our concern regarding the skill-based injection training component of DSMT services can be addressed by imposing a requirement that a minimum portion of the training be furnished in-person.


### 40109 Federal Register / Vol. 75, No. 133 / Tuesday, July 13, 2010 / Proposed Rules

We note that for beneficiaries who meet the coverage criteria, Medicare covers 10 hours of DSMT services in the year following the initial training, as described in the Medicare Benefit Policy Manual (Pub. 100–02, Chapter 15, Section 300.3). Taking into consideration the initial year coverage of DSMT services, we are proposing that
a minimum of 1 hour of instruction ininjection training must be furnished inperson during the year following the initial DSMT service. Imposing this condition would allow us to expand access to DSMT services by adding
individual DSMT services to the list of telehealth services, while ensuring effective injection training for
beneficiaries.

Therefore, we are proposing to add
HCPCS code G0108 to the list of telehealth services beginning in CY 2011. We are also proposing that, as a condition of payment for individual
DSMT services furnished as telehealth services to an eligible telehealthindividual, a minimum of 1 hour of inperson instruction in the selfadministration of injectable drugs must be furnished to the individual during the year following the initial DSMT service. The injection training may be furnished through either individual or group DSMT services. By reporting the –GT or –GQ modifier with HCPCS code G0108 as a telehealth service, the distant site practitioner would certify that the beneficiary has received or will receive 1 hour of in-person DSMT services for purposes of injection training during the year following the
initial DSMT service. Consistent with this proposal, we are proposing to revise our regulations at § 410.78(b) and § 414.65(a)(1) to include individual
DSMT services as a Medicare telehealth service, with the exception of 1 hour ofin-person instruction in selfadministration of injectable drugs which must be furnished to the eligible
telehealth individual as individual or group DSMT services during the year following the initial DSMT service.

We note that, as specified in § 410.141(e), individual DSMT services may be furnished by a physician, individual, or entity that furnishes other
services for which direct Medicare payment may be made and that submits necessary documentation to, and is accredited by, an accreditation organization approved by CMS. However, consistent with the statutory requirements of section 1834(m)(1) of the Act and as provided in § 410.78(b)(1) and (b)(2) of our regulations, Medicare telehealth services, including individual DSMT furnished as a telehealth service, could only be furnished by a licensed PA, NP, CNS, certified nurse-midwife, clinical psychologist, clinical social worker, or registered dietitian or nutrition professional.

3. Group KDE, MNT, DSMT, and HBAI

Services

The American Society of Nephrology, Dialysis Patient Citizens, AMGEN, Tahoe Forest Health Systems, Kidney Care Partners, the American Telemedicine Association, and the Marshfield Clinic submitted requests to add one or more of the following group
services to the telehealth list for CY

2011:

• Group KDE services, reported by HCPCS code G0421 (Face-to-face
educational services related to the care of chronic kidney disease; group, per session, per one hour);

• Group MNT services, reported by CPT code 97804 (Medical nutrition therapy; group (2 or more individual(s)), each 30 minutes);

• Group DSMT services, reported by HCPCS code G0109 (Diabetes outpatient self-management training services, group session (2 or more), per 30 minutes); and/or

• Group HBAI services, reported by CPT code 96153 (Health and behaviorintervention, each 15 minutes, face-toface; group (2 or more patients)) and 96154 (Health and behaviorintervention, each 15 minutes, face-toface; family (with the patient present)).

When furnished as individual services, HBAI and MNT services are currently on the list of Medicare telehealth services. Furthermore, we are proposing to add individual KDE and
DSMT services to the list of Medicare telehealth services beginning in CY
2011 as described above.

In the CY 2007 and CY 2010 PFS rulemaking cycles (70 FR 45787 and 70157, and 74 FR 33543 and 61764), we stated that we did not believe that group services could be appropriately delivered through telehealth. We have observed that currently there are no group services approved as Medicare
telehealth services and that there is a different interactive dynamic between the practitioner and his or her patients in group services as compared to individual services. We previously have considered requests to add various group services to the list of Medicare telehealth services on a category 2 basis because we have believed that, especially given the interactive dynamic between practitioners and their patients, group services are not similar to other
services on the list of Medicare telehealth services. Therefore, we have maintained that it is necessary to evaluate the addition of group services by comparing diagnostic findings or therapeutic interventions when services
are furnished via telehealth versus when services are furnished in-person.

We continue to believe that the group dynamic may be a critical and defining element for certain services, and that this characteristic precludes many group services from being considered on a category 1 basis for addition to the list
of Medicare telehealth services. For example, we believe that due to the therapeutic nature of the group dynamic that is integral to group psychotherapy, group psychotherapy is fundamentally
different from other Medicare telehealth services and, therefore, could not be considered on a category 1 basis for
addition to the telehealth services list. For the same reason, in the absence of evidence to the contrary, we do not believe group psychotherapy services could be appropriately delivered through telehealth.

However, upon further consideration, with regard to the particular group education and training services for which we received requests for addition to the Medicare telehealth services list, we believe the group dynamic is not
central to the core education and training components of these particular services, specifically DSMT, MNT, KDE,
and HBAI services. We believe that these group services are sufficiently similar to the individual, related services that are already on the telehealth services list or are proposed for addition beginning in CY 2011. Specifically, we believe that for these group services, which consist principally of an information exchange for the purpose of education and training, the roles of, and interactions between, the patients and the practitioner are sufficiently similar to
the related individual education and training services that the services can be furnished appropriately as a telehealth

service.

Therefore, we are proposing to add HCPCS code G0421 for group KDE services, CPT code 97804 for group MNT services, HCPCS code G0109 for group DSMT services, and CPT codes 96153 and 96154 for group HBAI
services to the Medicare telehealth services list on a category 1 basis. Furthermore, because the concerns we raised above regarding adequate injection training with the addition of individual DSMT are also present for group DSMT, we are proposing to require the same minimum of 1 hour of in-person instruction for injection training within the year following the initial DSMT service for any beneficiary
that receives DSMT services via


### 40110 Federal Register / Vol. 75, No. 133 / Tuesday, July 13, 2010 / Proposed Rules

telehealth. By reporting the –GT or –GQ modifier with HCPCS code G0109, the distant site practitioner would certify that the beneficiary has received or will receive 1 hour of in-person DSMT services for purposes of injection training during the year following the
initial DSMT service. Consistent with this proposal to add these group education and training services, we are also proposing to revise our regulations at § 410.78(b) and § 414.65(a)(1) to include group KDE, MNT, DSMT, and
HBAI services as Medicare telehealth services, with the exception of 1 hour of in-person instruction of individual or group DSMT services in the year following the initial DSMT service.

As described above for individual DSMT services, we note that group DSMT services may be furnished by a physician, individual, or entity that
furnishes other services for which direct Medicare payment may be made and that submits necessary documentation to, and is accredited by, an accreditation organization approved by CMS, as specified in § 410.141(e) for DSMT services. However, consistent with the statutory requirements of section 1834(m)(1) of the Act and as provided in § 410.78(b)(1) and (b)(2) of our regulations, Medicare telehealth services, including group DSMT furnished as a telehealth service, could only be furnished by a licensed PA, NP, CNS, certified nurse-midwife, clinical psychologist, clinical social worker, or registered dietitian or nutrition professional.

4. Initial, Subsequent, and Discharge Day Management Hospital Care Services

The University of Louisville School of Medicine, the American Telemedicine Association, and Mille Lacs Health System submitted various requests to add initial hospital care services (reported by CPT codes 99221 (Level 1 initial hospital care), 99222 (Level 2 initial hospital care), and 99223 (Level 3 initial hospital care)); subsequent hospital care services (reported by CPT codes 99231 (Level 1 subsequent hospital care), 99232 (Level 2 subsequent hospital care), and 99233 (Level 3 subsequent hospital care)); and/ or hospital discharge day management services (reported by CPT codes 99238 (Hospital discharge day management; 30 minutes or less) and 99239 (Hospital discharge day management; more than 30 minutes) to the Medicare telehealth services list beginning in CY 2011, generally on a category 1 basis. Some of the requestors also recommended that we limit the delivery of these services through telehealth to the provision of services to patients with a psychiatric diagnosis or to those treated in a psychiatric hospital or licensed psychiatric bed.

We appreciate the recommendations of the requestors to substantially expand
the list of Medicare telehealth services. The requestors submitted a number of studies regarding the outcomes of telehealth services in caring for patients with psychiatric diagnoses. However, we note that the CPT codes for hospital care services are used to report care for hospitalized patients with a variety of diagnoses, including psychiatric diagnoses. We do not believe it would be appropriate to add services to the telehealth list only for certain diagnoses because the service described by a HCPCS code is essentially the same service, regardless of the patient’s diagnosis. When evaluating the addition of services for telehealth on a category 1 basis, our focus is on the roles of, and interactions among, the beneficiary, the physician or practitioner, and the telepresenter (if applicable), which generally are similar across diagnoses for services that may be reported with
the same HCPCS codes. Even in the unique case of certain ESRD services,
we limited additions to the list of
Medicare telehealth services based on the appropriateness of certain specific codes, taking into consideration the full service descriptions (69 FR 47511). Therefore, we continue to believe that it is most appropriate to consider
additions to the list of telehealth services based on the overall suitability of the services described by the relevant HCPCS codes to delivery through
telehealth.

In the CY 2005, CY 2008, and CY 2009 PFS rulemakings (69 FR 47510 and 66276, 72 FR 38144 and 66250, and 73 FR 38517 and 69745, respectively), we did not add initial, subsequent, or discharge day management hospital care services to the list of approved
telehealth services because of our concern regarding the use of telehealth for the ongoing evaluation and management (E/M) for the generally high acuity of hospital inpatients. While
we continue to have some concern in this area, we also share the requestors’ interest in improving access for hospitalized patients to care furnished by treating practitioners. Therefore, we
have reevaluated these services in the context of the CY 2011 requests, including considering the possibility
that these services could be added on a category 1 basis based on their resemblance to services currently on the telehealth list, such as initial and follow-up inpatient telehealth consultations. The following presents a
discussion of our review of the subcategories of hospital care services included in these requests.

Currently, one of the three codes for an initial hospital care service (specifically CPT codes 99221, 99222, or 99223) is reported for the first hospital inpatient E/M visit to the patient by the admitting or a consulting practitioner when that visit is furnished in-person. In addition, we note that currently there
are several HCPCS G-codes on the
Medicare telehealth services list thatmay be reported for initial and followup inpatient consultations through telehealth, specifically HCPCS codes G0406 (Follow-up inpatient telehealth consultation, limited, physicians typically spend 15 minutes communicating with the patient via telehealth); G0407 (Follow-up inpatient telehealth consultation, intermediate, physicians typically spend 25 minutes communicating with the patient via telehealth); G0408 (Follow-up inpatient telehealth consultation, complex, physicians typically spend 35 minutes or more communicating with the patient via telehealth); G0425 (Initial inpatient telehealth consultation, typically 30 minutes communicating with the patient via telehealth); G0426 (Initial inpatient telehealth consultation, typically 50 minutes communicating with the patient via telehealth); and G0427 (Initial inpatient telehealth consultation, typically 70 minutes or more communicating with the patient via telehealth).

While initial inpatient consultation services are currently on the list of approved telehealth services, there are
no services on the current list of
telehealth services that resemble initial hospital care for an acutely ill patient by the admitting practitioner who has ongoing responsibility for the patient’s treatment during the hospital course. Therefore, we are unable to consider initial hospital care services on a category 1 basis for the telehealth list.

We have reviewed the documentation submitted in support of adding the initial hospital care codes to the
Medicare telehealth services list as category 2 requests. Most of the studies provided by the requestors were specific to the treatment of patients with particular diagnoses. Additionally, the studies were not specific to initial hospital care visits by admitting practitioners. Finally, most of the
studies concluded that more research was required in order to establish medical equivalence between telehealth and in-person services. Therefore, we received no information that provides robust support for the addition of initial hospital care services to the approved telehealth list on a category 2 basis. The


### 40111 Federal Register / Vol. 75, No. 133 / Tuesday, July 13, 2010 / Proposed Rules

initial hospital care codes describe the first visit to the hospitalized patient by the admitting practitioner who may or may not have seen the patient in the decision-making phase regarding hospitalization. We believe it is critical that the initial hospital visit by theadmitting practitioner be conducted inperson to ensure that the practitioner with ongoing treatment responsibility comprehensively assesses the patient’s condition upon admission to the hospital through a thorough in-person examination. Therefore, we are not proposing to add initial hospital care
services to the Medicare telehealth
services list for CY 2011.

We have again considered adding subsequent hospital care services reported by CPT codes 99231 through
99233 to the telehealth list for CY 2011 on a category 1 basis. In the CY 2005 and CY 2008 PFS proposed rules (69 FR 47511 and 72 FR 38155), we stated that the potential acuity of patients in the hospital setting precludes consideration of subsequent hospital visits as similar to existing telehealth services. However, as stated earlier, we also note that HCPCS codes for initial and follow-up inpatient consultation services are on
the list of telehealth services. These E/ M services are furnished to high acuity hospitalized patients, although not by the admitting practitioner himself or herself. However, in light of the increasingly prevalent care model that entails multidisciplinary team care for patients with complex medical illnesses that involve multiple body systems, consulting practitioners may often play a key, intensive, and ongoing role in caring for hospitalized patients. Therefore, we believe that subsequent hospital care visits by a patient’s admitting practitioner may sufficiently resemble follow-up inpatient
consultation services to consider these subsequent hospital care services on a category 1 basis for the telehealth list. While we still believe the potential acuity of hospital inpatients is greater than those patients likely to receive currently approved Medicare telehealth services, we also believe that it would be appropriate to permit some subsequent hospital care services to be furnished through telehealth in order to ensure that hospitalized patients have frequent encounters with their admitting practitioner. However, we
also continue to believe that themajority of these visits should be inperson to facilitate the comprehensive, coordinated, and personal care that medically volatile, acutely ill patients require on an ongoing basis.

Therefore, we are proposing that subsequent hospital care services, specifically CPT codes 99231, 99232, and 99233, be added to the list of telehealth services on a category 1 basis for CY 2011, but with some limitations on the frequency that these services may be furnished through telehealth. Because of our concerns regarding the potential acuity of hospital inpatients, we are proposing to limit the provision of subsequent hospital care services through telehealth to once every 3 days. We are confident that admitting practitioners will continue to make appropriate in-person visits to all patients who need such care during their hospitalization. Consulting practitioners should continue to use the inpatient telehealth consultation HCPCS G-codes, specifically G0406, G0407, G0408, G0425, G0426, or G0427 when reporting consultations furnished to inpatients via telehealth.

Consistent with this proposal, we are proposing to revise § 410.78(b) and § 414.65(a)(1) to include subsequent hospital care services as Medicare telehealth services, with the limitation of one telehealth subsequent hospital care service every 3 days.

We also considered adding hospital discharge day management services to
the list of telehealth services. These services, reported by CPT codes 99238 and 99239, include the final examination of the patient, discussion of the hospital stay, instructions for continuing care to all relevant caregivers, and preparation of discharge records, prescriptions, and referral
forms. These services are furnished when a practitioner deems it medically reasonable and necessary to assess a patient’s readiness for discharge and to prepare a patient for discharge from an
acute care environment to a less intensive setting. There are no services
on the current list of telehealth services that resemble such preparation of a patient for discharge. We believe it is especially important that, if a practitioner furnishes a discharge day management service, the service be furnished in-person in order to allow the practitioner to comprehensively assess the patient’s status in preparation for discharge so that the patient will have a higher likelihood of making a
successful transition to the less intensive setting. Therefore, we are not considering hospital discharge day management services for addition to the
Medicare telehealth services list on a category 1 basis.

We have reviewed the documentation submitted by requestors in support of adding these codes to the Medicare telehealth services list on a category 2
basis. Most of the submitted studies were specific to the treatment of patients with specific diagnoses and were not specific to discharge services. Additionally, most of the studies
concluded that more research was required in order to establish medicalequivalence between telehealth and inperson services. The submitted documentation did not provide the necessary evidence to alter our previous conclusion that hospital discharge day management services should be provided in-person in light of the acuity of hospitalized patients, their typically complex post-hospitalization care needs, and the importance of patient education by the admitting practitioner who had ongoing responsibility for the patient’s treatment during the hospital stay. Therefore, we are not proposing to add hospital discharge day management
services to the list of telehealth services
for CY 2011.

5. Initial, Subsequent, Discharge Day Management, and Other Nursing Facility Care Services

The American Telemedicine
Association and the Marshfield Clinic submitted requests to add nursing facility care codes, covering the spectrum of initial (reported by CPT codes 99304 (Level 1 initial nursing facility care), 99305 (Level 2 initial nursing facility care) and 99306 (Level 3 initial nursing facility care)); subsequent (reported by CPT codes 99307 (Level 1 subsequent nursing facility care), 99308 (Level 2 subsequent nursing facility care), 99309 (Level 3 subsequent nursing facility care), and 99310 (Level 4 subsequent nursing facility care)); discharge day management (reported by CPT codes 99315 (Nursing facility discharge day management; 30 minutes or less) and 99316 (Nursing facility discharge day management; more than 30 minutes)); and other (reported by CPT code 99318 (Evaluation and management of a patient involving an annual nursing facility assessment)) services, to the
Medicare telehealth services list beginning in CY 2011. The requests for the addition of these services expressed concerns regarding limited access to
care if we do not allow these services to be furnished through telehealth, and requested that CMS acknowledge the recent Congressional inclusion of nursing facilities as telehealth originating sites by adding these codes
to the list of Medicare telehealth

services.

In the CY 2010 PFS proposed and final rules (74 FR 33544 and 74 FR 61762), we discussed concerns about potential disparities in patient acuity between nursing facility services and
the current list of Medicare telehealth


### 40112 Federal Register / Vol. 75, No. 133 / Tuesday, July 13, 2010 / Proposed Rules

services. We have also declined to add
HCPCS codes to the Medicare telehealth services list that are used exclusively to describe Federally-mandated nursing facility visits. As discussed in the CY 2010 PFS proposed rule (74 FR 33543), the long-term care regulations at § 483.40(c) require that residents of SNFs receive initial and periodic personal visits. These regulations ensure that at least a minimal degree of personal contact between a practitioner and a SNF resident is maintained, both at the point of admission to the facility and periodically during the course of the resident’s stay. We continue to believe that these federally-mandated visits should be conducted in-person,
and not as Medicare telehealth services. Therefore, in the CY 2010 PFS final rule with comment period, we revised § 410.78 to preclude physicians and other practitioners from furnishing the physician visits required under § 483.40(c) through telehealth.

We reviewed the use of telehealth for each of the subcategories of nursing facility services included in the requests
for CY 2011. We identified the E/M services that fulfill Federal requirements for personal visits under § 483.40(c), and we are not proposing for CY 2011 to add any HCPCS codes to the
Medicare telehealth services list that are used exclusively to describe these Federally-mandated visits. These codes
include the CPT codes for initial nursing facility care (CPT codes 99304 through 99306) that are used to report
the initial E/M visit that fulfills Federally-mandated requirements under § 483.40(c) and other nursing facility service (CPT code 99318) that is only payable by Medicare if the visit is substituted for a federally-mandated visit under § 483.40(c).

The nursing facility discharge day management services reported under
CPT code 99315 and 99316 are E/M visits that prepare a nursing facility resident for discharge from the facility. There are no Medicare requirements
that such a service be furnished. If a practitioner chooses to furnish this service, we continue to believe that an in-person visit is most appropriate in order to ensure the resident is prepared for discharge from the nursing facility.
These services are furnished when a practitioner deems it medically reasonable and necessary to assess a patient’s readiness for and to prepare a patient being discharged from the monitored nursing facility environment to another typically less intensive setting. There are no services on the
current list of telehealth services that resemble such preparation of a patient for discharge. As in the case of hospital discharge day management services, we believe it is especially important that, if a practitioner furnishes a nursing facility discharge day managementservice, the service be furnished inperson. The practitioner must be able to comprehensively assess the patient’s status in preparation for discharge so that the patient will have a higher likelihood of making a successful transition from the nursing facility to another setting. Therefore, we are not considering nursing facility discharge day management services for addition to
the Medicare telehealth services list on a category 1 basis. When we considered
the addition of these services under category 2, we had no evidence that nursing facility discharge services furnished through telehealth are equivalent to in-person discharge services. Therefore, we are not proposing to add nursing facility discharge day management services to
the CY 2011 telehealth list.

Subsequent nursing facility services, reported by CPT codes 99307 through 99310, may be used to report either a federally-mandated periodic visit under § 483.40(c) or another E/M visit, prior to or after the initial nursing facility care visit, as long as the subsequent nursing facility care visit is medically reasonable and necessary for the
resident’s care. While we continue to believe that many SNF residents have complex medical care needs, we believe that it is appropriate to consider the
addition of these codes to the telehealth list on a category 1 basis. As we state
above in the context of our discussion of subsequent hospital care services, the HCPCS codes for initial and follow-up inpatient consultation services for nursing facility patients are on the list of Medicare telehealth services, and subsequent nursing facility services are
similar to those services. These E/M services are furnished to high acuity, complex SNF patients, although not by the admitting practitioner himself or herself. Therefore, we believe that subsequent nursing facility visits by a patient’s admitting practitioner sufficiently resemble follow-up inpatient consultation services to consider them on a category 1 basis for
the telehealth list. We have concluded that it would be appropriate to permit some subsequent nursing facility care services to be furnished through telehealth to ensure that complex nursing facility patients have frequent encounters with their admitting practitioner, although we continue to believe that the federally-mandated visits should be in-person to facilitate the comprehensive, coordinated, and personal care that these complex patients require on an ongoing basis.

Therefore, we are proposing that subsequent nursing facility care services, specifically CPT codes 99307, 99308, 99309 and 99310, be added to
the list of Medicare telehealth services on a category 1 basis beginning in CY 2011, with some limitations on furnishing these services through
telehealth. Because of our concerns regarding the potential acuity and complexity of SNF inpatients, we are proposing to limit the provision of subsequent nursing facility care services furnished through telehealth to once every 30 days. We are especially interested in public comments, including any evidence regarding patterns of high quality care and clinical outcomes, regarding this proposal to limit the provision of subsequent nursing facility care services furnished through telehealth to once every 30 days. We remain committed to ensuring that SNF inpatients receive appropriate in-person visits and that Medicare pays only for medically reasonable and necessary care. Currently and continuing in CY 2011, an unlimited number of initial and follow-up consultation services may be furnished through telehealth to these patients so we believe that only a limited number of subsequent nursing facility care services by the admitting practitioner would be appropriate for SNF inpatients. Finally, we are specifying that subsequent nursing facility careservices reported for a Federallymandated periodic visit under § 483.40(c) may not be furnished through telehealth. In light of this proposal for CY 2011, we remain confident that admitting practitionerswill continue to make appropriate inperson visits to all patients who need such care during their SNF stay.

Consistent with this proposal, we are proposing to revise § 410.78(b) and § 414.65(a)(1) to include subsequent nursing facility care services as Medicare telehealth services, with the limitation of one telehealth subsequent nursing facility care service every 30 days. Federally-mandated periodic visits may not be furnished through telehealth, as specified currently in § 410.78(e)(2).

6. Neuropsychological Testing

The American Telemedicine Association submitted a request to add neuropsychological testing services, described by CPT codes 96119 (Neuropsychological testing ( e.g., Halstead-Reitan Neuropsychological Battery, Wechsler Memory Scales and Wisconsin Card Sorting Test), per hour


### 40113 Federal Register / Vol. 75, No. 133 / Tuesday, July 13, 2010 / Proposed Rules

1 The 12 geographic areas are: Boston, MA, Syracuse, NY, Northern New Jersey, Greenville, SC, Miami, FL, Little Rock, AR, Indianapolis, IN, Cleveland, OH, Lansing, MI, Phoenix, AZ, Seattle, WA, and Orange County, CA. of the psychologist’s or physician’s time, both face-to-face time administering tests to the patient and time interpreting these test results and preparing the report); and 96119 (Neuropsychological testing ( e.g., Halstead-Reitan Neuropsychological Battery, Wechsler Memory scales and Wisconsin Card Sorting Test), with qualified health care professional interpretation and report, administered by technician, per hour of technician time, face-to-face), to the list of
telehealth services for CY 2011 based on their similarity to other telehealth

services.

In the CY 2008 PFS final rule with comment period (72 FR 66251), we stated that we have received conflicting comments and data regarding the appropriateness of furnishing neuropsychological testing via telehealth. While we appreciate the recent request for addition of these same
services to the Medicare telehealth services list, we do not believe that
these services are similar to services currently on the Medicare telehealth services list and, therefore, we conclude that they would not be appropriate for
consideration or addition under category 1. In this year’s request for the addition of the these services, we
received no information to indicate that the diagnostic findings of neuropsychological testing through
telehealth are similar to those based upon in-person testing, and therefore, that testing through telehealth does not affect the patient’s diagnosis. Therefore, we are not proposing to add neuropsychological testing services to the list of approved Medicare telehealth
services for CY 2011.

7. Speech-Language Pathology Services

The Marshfield Clinic submitted a request to add various speech-language pathology services to the list of approved telehealth services for CY 2011. Speech-language pathologists are not permitted under section 1842(b)(18)(C) of the Act to furnish and receive payment for Medicare telehealth services. Therefore, we are not proposing to add any speech-language pathology services to the list of
Medicare telehealth services for CY
2011. For further discussion of these services in the context of telehealth, we
refer readers to the CY 2005 and CY 2007 PFS proposed and final rules with comment period (69 FR 47512 and 66276, and 71 FR 48995 and 69657).

8. Home Wound Care Services

Wound Care Associates, LLC, submitted a request to add wound care in the home setting to the list of Medicare telehealth services. A patient’s home is not permitted under current statute to serve as an originating site for Medicare telehealth services. Therefore, we are not proposing to add home
wound care services to the list of
Medicare telehealth services for CY

2011.

D. Summary of CY 2011 Telehealth Proposals

In summary, we are proposing to add the following requested services to the
list of Medicare telehealth services for

CY 2011:

• Individual and group KDE services (HCPCS codes G0420 and G0421, respectively);

• Individual and group DSMT services, with a minimum of 1 hour of in-person instruction to be furnished in the year following the initial DSMT service to ensure effective injection training (HCPCS codes G0108 and G0109, respectively);

• Group MNT and HBAI services (CPT codes 97804, and 96153 and 96154, respectively);

• Subsequent hospital care services, with the limitation for the patient’s admitting practitioner of one telehealth visit every 3 days (CPT codes 99231, 99232, and 99233); and

• Subsequent nursing facility care services, with the limitation for the patient’s admitting practitioner of one telehealth visit every 30 days (CPT codes 99307, 99308, 99309, and 99310).

Furthermore, we are proposing to revise § 410.78(b) and § 414.65(a)(1) accordingly. Specifically, we are proposing to add individual and group KDE services, individual and group DSMT services, group MNT services, group HBAI services, and subsequent hospital care and nursing facility care
services to the list of telehealth services for which payment will be made at the applicable PFS payment amount for the service of the practitioner. In addition, we have reordered the listing of services
in these two sections and removed

‘‘ initial and follow-up inpatient
telehealth consultations furnished to beneficiaries in hospitals and SNFs ’’ in § 410.78(b) because these are described by the more general term ‘‘ professional
consultations ’’ that is in the same section. Finally, we are continuing to specify that the physician visits required under § 483.40(c) may not be
furnished as telehealth services.

V. Provisions of the Patient Protection
and Affordable Care Act of 2010

The following section addresses certain provisions of the Patient
Protection and Affordable Care Act (Pub. L. 111–148), enacted on March 23, 2010, as amended by the Health Care
and Education Reconciliation Act of 2010 (Pub. L. 111–152) enacted on March 30, 2010 (collectively known as the Affordable Care Act (ACA)).

A. Section 3002: Improvements to the Physician Quality Reporting System

Section 3002 of ACA makes a number of changes to the Physician Quality Reporting Initiative (PQRI), including authorizing incentive payments through 2014, and requiring a penalty beginning in 2015, for eligible professionals who do not satisfactorily submit quality data.
For a more detailed discussion of the provisions of section 3002 of the ACA, please refer to section VI.G.1. of this proposed rule.

B. Section 3003: Improvements to the Physician Feedback Program and Section 3007: Value-based Payment Modifier Under the Physician Fee
Schedule

1. Background

As required under section 1848(n) of the Act, as added by section 131(c) of MIPPA, we established and implemented by January 1, 2009, the Physician Resource Use Measurement & Reporting (RUR) Program for purposes of providing confidential reports to physicians that measure the resources involved in furnishing care to Medicare beneficiaries. Section 1848(n) of the Act
also authorizes CMS to include information on the quality of care furnished to Medicare beneficiaries by a physician or group of physicians.

We are continuing a phased implementation of the program. Phase I was discussed in the CY 2010 proposed and final rules (74 FR 33589, and 74 FR 61844, respectively), and has been completed. Phase I consisted of several activities including extensive data analysis to inform decisions about topics such as measures, attribution, and risk adjustment and formative testing of report design with practicing physicians. We concluded Phase I by sending to individual practicing physicians in 12 geographic areas 1 several hundred reports that contained per capita and episode-based cost
information.

Phase I of the Program focused on providing confidential feedback on

resource use measures. Section 1848(n)(1)(A)(iii) of the Act states that the Secretary may also include information on the quality of care


### 40114 Federal Register / Vol. 75, No. 133 / Tuesday, July 13, 2010 / Proposed Rules

furnished to Medicare beneficiaries by physicians (or groups of physicians) in the feedback reports. We believe that providing physicians with feedback on both quality and cost is consistent with
the direction of other CMS value based purchasing (VBP) initiatives. As a result, we decided to include quality measures in Phase II of the program and, in particular, we considered measures used in PQRI and claims-based measures such as GEM measures (74 FR 61846).

Section 1848(n)(1)(A)(ii) also states that the Secretary may provide reports at the physician group level. Accordingly, as part of Phase II of the program, we will also include reporting to group practices, defined as more than one physician practicing medicine together (74 FR 61846). In addition, we noted that the definition applies to the following types of physician groups: (1)Formally established single or multispecialty group practices; (2) physicians practicing in defined geographic regions; and (3) physicians practicing within facilities or larger systems of care (74 FR 61846). As we continue with Phase II, we plan to report to both physician group practices and their affiliated practitioners, recognizing that many physicians practice in arrangements other than solo practices. We believe that using both group and individual level reporting will also allow us to gain experience with the sample size issues that arise when individual physicians have too few Medicare beneficiaries with specific conditions to generate reliable information. ( See the CY 2010 final rule with comment period (74 FR 61844) for a detailed discussion of plans for Phase II.)

2. Effect of the ACA of 2010 on the Program

The ACA contains two provisions relevant to the RUR program. Section
3003 continues the confidential feedback program and requires the Secretary, beginning in 2012, to provide reports that compare patterns of resource use of individual physicians to other physicians. In addition, section 3007 of the ACA requires the Secretary to apply a separate, budget-neutral payment modifier to the Fee-For-Service physician fee schedule payment formula. The payment modifier, which will be phased in beginning January 1, 2015 through January 1, 2017, will provide for differential payment under the fee schedule to a physician or groups of physicians, and later, possibly to other eligible professionals, based upon the relative quality and cost of
care of their Medicare beneficiaries. Accordingly, our goal is to have Medicare physicians receive a confidential feedback report prior to implementation of the payment modifier. We view these two provisions as complementary, as we expect the
work done for the confidential feedback program under section 3003 of the ACA will inform our implementation of the payment modifier under section 3007 of the ACA. The approach used in the confidential feedback reports will serve as the foundation for implementing the payment modifier. Specifically, throughout future phases of reports under the RUR program, we will
continue to enhance our measures and methods and improve the content of the reports based on both our research and
the feedback of stakeholders before the payment modifier begins to affect physician payments in 2015.

We plan to engage in a large-scale effort to garner widespread stakeholder involvement with regard to how we continue to build and expand the confidential feedback program and transition to implementation of the payment modifier. We recognize that such a payment modifier may have an impact on the delivery of care to Medicare beneficiaries. Reports that will be produced in the future based on changes as a result of section 3003 of the ACA will contain both cost and quality data, and work done to improve these reports with regard to fair and
actionable measures in each of these domains will aid our decision making in how to apply the payment modifier. We intend to seek stakeholder input on various aspects of program design, including cost and quality measures, methodologies for compositing measures, and feedback report content and delivery. Such feedback may be gathered through rulemaking, open door forums, or other mechanisms.

3. Phase II Proposed Changes

We anticipate that reports in Phase II of the RUR Program will be distributed in the fall of 2010. We are proposing, however, several changes to the program parameters for Phase II that were finalized in prior rules. First, we plan todiscontinue our use of commerciallyavailable proprietary episode grouping software. In particular, section 3003 of the ACA requires that the Secretary develop a Medicare-specific episode grouper by January 1, 2012, the details of which must be made public. This grouper will address the limitations found in the proprietary software.

We recognize that episode-specific cost information is meaningful and actionable for physicians, and we plan to provide such information in feedback reports after the public grouper software is developed. Prior to that, we may consider other potential interim options for grouping to provide such
information. We believe that our use of proprietary episode grouping software in previous phases of the program had limitations. These software products
were not intended for use with Medicare claims data, and we discovered several problems with the data outputs. Specifically, the groupers do not work well to create episodes for beneficiaries with multiple chronic conditions, which is a significant portion of Medicare beneficiaries.

For example, when a beneficiary with a chronic disease is hospitalized for an acute condition, that beneficiary most likely also receives treatments unrelated
to the condition for which he or she is hospitalized, but related to the chronic disease. The groupers, which are proprietary and often referred to as

‘‘ black boxes, ’’ do not enable users to understand the coding to determine
how to accomodate these issues. Therefore, CMS had to make several decisions about how to pre-process the claims data so that the groupers could recognize and attempt to deal with these issues in the clinical grouping logic. After report production in Phase I, we discovered several problems with the pre-processing, which resulted in inaccurate episode cost information being disseminated.

Until a Medicare-specific episode grouping software is developed, we plan to produce reports for Phase II that contain per capita cost information.More specifically, instead of episodespecific cost information, we plan to provide overall per capita cost information, as well as per capita cost
information for those beneficiaries with five common chronic diseases: (1) Diabetes, (2) congestive heart failure, (3) coronary artery disease, (4) chronic obstructive pulmonary disease, and (5) prostate cancer. This information will not be specific to the cost of treating the disease itself, but will provide total Part A/B per capita cost information, as well as service category breakdowns, for treating the subset of attributed
beneficiaries with that disease.

Second, while commenters have been generally supportive of including PQRI measures in the reports, we propose not including data from PQRI in the reports. The current support contractor for this program has only 2007 PQRI data. This was the first year of PQRI, and participation was still quite low.
Because of the low number of physicians reporting under PQRI, and because providers have the flexibility to choose which measures to report under


### 40115 Federal Register / Vol. 75, No. 133 / Tuesday, July 13, 2010 / Proposed Rules

2 http://www.cms.gov/GEM. PQRI, we believe it would be difficult to make meaningful peer comparisons for purposes of these reports. Instead, forPhase II, we propose using the claimsbased measures developed by CMS in the Generating Medicare Physician Quality Performance Measurement Results (GEM) project. 2 This is a core set of 12 process quality measures that can be calculated using only administrative claims data. However, in future phases of the program, we intend to explore the possibility of linking this program to the HITECH incentive program for meaningful use of electronic health records, and the group practice reporting option in PQRI. Both of these programs offer measures and measure sets, as well as methods of reporting data which may be more conducive to meaningful peer comparisons among physicians.

Third, we propose to distribute reports electronically in Phase II, by leveraging the infrastructure used to distribute PQRI feedback reports. This infrastructure will enable groups to utilize an electronic portal to download their Phase II reports. Individual practitioners will be able to contact their
MACs/fiscal intermediaries to receive an e-mailed copy of their reports. We have received feedback from physicians that the reports distributed in Phase I were too long and cumbersome to manage in hard copy. Our intent is a condensed report with electronic
dissemination that allows for easier navigation. We are seeking public comment on the above proposals.

4. Implementation of Sections 3003 and
3007 of the ACA

The Affordable Care Act provisions
that we mention above contain several important implementation dates. In addition to developing an episode grouper by January 1, 2012, we are required to publish the cost and quality
measures we intend to use in determining the payment modifier to be effective on January 1, 2012. We are also required to begin implementing the program parameters through rulemaking in 2013. The payment modifier is effective on January 1, 2015, with a phased implementation so that all physicians paid under the physician fee schedule will be subject to the modifier by January 1, 2017. On or after January 1, 2017, we have the authority to also apply the payment modifier to other eligible professionals.

In anticipation of implementing sections 3003 and 3007 of the ACA, we intend to perform extensive data analysis and research, and to seek stakeholder input on issues related to cost and quality measures so that we can be prepared to publish, by January 1, 2012, those measures we intend to use for the payment modifier. We intend for the work done in determining measures for use in the payment
modifier to inform the continued
dissemination of confidential feedback reports to both individual physicians and physician groups. Specifically, the measures chosen for use in the payment
modifier will be candidates for inclusion in future phases of the confidential feedback reports.

As mentioned above, Phase I included reports to several hundred physicians. In Phase II we anticipate disseminating reports to about 40 large physician groups and the approximately 2,000 physicians affiliated with those groups. We anticipate future phases of the reports to include additional dissemination to increasing numbers of practitioners and groups such that virtually every applicable Medicare practitioner receives a report prior to implementation of the payment
modifier.

5. Comments Sought on Specific
Statistical Issues Related to the ACA
Sections 3003 and 3007

We recognize that there are many important decisions to be made when implementing a program that compares physicians to their peers, especially
when such information can lead to differential payment. Since the inception of the RUR program, all data have been price standardized which includes accounting for geographic adjustments. We have identified important statistical issues in previous rules, and as we have done in previous rules, CMS seeks input on several of these topics as they relate to future phases of reports. These include, but are not limited to: risk adjustment; attribution; benchmarking; peer groups; minimum case sizes; cost and quality measures; and compositing methods. To date, the public comments we have received have not led us to a single methodology to propose for dealing with any of these issues. Therefore, we do not make formal proposals in this proposed rule. Specific parameters of the RUR program are based on the most
current information we have available to us. These parameters will continue to
evolve and we will continue to evaluate
them as the state of the art in these areas continues to improve. Therefore, we seek public comment on these issues.

a. Risk Adjustment

The cost data used in Phase I will be risk adjusted. For the per capita costs, we used the Hierarchical Condition Categories (HCC) model developed for risk adjustment in Medicare Advantage plans. This model takes into account beneficiary characteristics such as age, sex, and Medicaid status, and then predicts costs for beneficiaries based on their unique mix of health conditions. Several other socioeconomic factors, such as the median income per capita in the county where the physician practices, were used. For the episode costs, we used the risk adjustment/ severity levels in the proprietary grouper software.

The cost data in Phase II are risk adjusted using the HCC model, but excluding the additional socioeconomic factors such as the median income per capita in the county where the physician practices, as mentioned above. Regression analyses indicated
that these additional socioeconomic factors did little to improve the fit of the model, so we will not include them. And since there are no episode-based costs in Phase II—only annual per capita costs—the HCC model will be the only method used. Other methods of risk adjustment exist that we have not used, such as the CC (complications and comorbidities) and MCC (major complications and comorbidities) indicators implemented in the 2008 MS–DRG system.

The quality data included in Phase II will not be risk adjusted because the GEM measures are all clinical process measures, and it is generally accepted
that such measures need not be risk adjusted. Beneficiaries should receive the indicated preventive services (for example, breast cancer screening) regardless of their demographic characteristics or presence or absence of
health conditions.

We seek comment on the appropriate method for risk adjusting cost data, as well as our reasoning for not risk adjusting clinical process quality

measures.

b. Attribution

Deciding which physician(s) is/are responsible for the care of which beneficiaries is an important aspect of
measurement. CMS must strike a balance between only attributing cost information to physicians for the services they personally delivered, and attributing costs to physicians based on a more encompassing view of the services provided to each beneficiary so as to encourage better care coordination and accountability for patient outcomes.

There are several methods that are generally used for attributing beneficiaries’ costs to physicians for the purposes of measuring and comparing


### 40116 Federal Register / Vol. 75, No. 133 / Tuesday, July 13, 2010 / Proposed Rules

performance. In Phase I, we used two different attribution methodologies. Half of the reports used the ‘‘ multipleproportional ’’ attribution, in which a beneficiary’s costs were summed, and then divided among the physicians who treated that beneficiary in the same proportion as their share of evaluation and management (E&M) services provided. The other half of the reports
used the ‘‘ plurality-minimum ’’ method, in which a beneficiary’s entire cost (either for the episode or for the year) was attributed to the physician who performed the plurality of the E&M services, subject to a minimum percentage (in that case, 10 percent).

In Phase II reports, we plan to use the

‘‘ plurality-minimum ’’ method with a minimum percentage threshold of E&M services of 20 percent for individual physicians and a minimum percentage threshold of E&M services of 30 percent of the E&M services for physician group level reports. These minimum threshold
determinations were based on our analysis of the claims data. We recognize that other attribution methods exist, which may be either more or less appropriate given the aspect of care one is measuring. For example, it may be
desirable to attribute the entire cost of a surgical episode to the performing surgeon. Another method for attributing
costs is referred to as ‘‘ multiple-even, ’’ in which the entire beneficiary’s cost is attributed to multiple physicians who treated the beneficiary.

We seek comment on the topic of attribution methodologies, including both of those we have already used in the program, as well as others that may or may not be mentioned here.

c. Benchmarking and Peer Groups

Determining the relevant comparisons to make among physicians is also an important policy aspect of the program.
CMS’ research conducted in Phase I of the program indicated that physicians prefer to be compared only to those physicians most like them (that is, the narrowest peer group). We recognize the importance of fair comparison, but are also faced with the challenge that very narrow peer groups are most often not large enough to make statistically significant comparisons.

The individual-level reports in both phases of the program have contained, or will contain, two peer group comparisons: (1) Physicians in the same specialty in the same geographic area; and (2) physicians in the same specialty across all 12 geographic areas. In each of these peer groups, a physician is
shown where he or she falls on a distribution that specifically identified the 10th, 50th, and 90th percentiles. These benchmarks were finalized on an interim basis in the CY 2010 proposed rule (74 FR 33589).

In determining applicability for episode measures in Phase I, we used a statistical reliability test. For per capita measures in Phase I, a physician had to
have 20 or more beneficiaries to be measured and compared. There was no minimum peer group size requirement.

The original MIPPA mandate requires CMS to make comparisons among physicians on cost, and gives the Secretary the authority to include comparisons on quality. The use of quality measures in the program was finalized in the CY 2010 final rule (74 FR 61846). In Phase II, comparisons with appropriate peer groups will be made for both cost and quality. Phase II reports will be provided only to those physicians that have 30 or more patients
for each of the cost measures. For the quality measures, we plan to use the measure specifications in the GEM project to define minimum case sizes,
which are at least 11 beneficiaries. We also plan to impose a minimum peer group size of 30 in Phase II for both the cost and quality measures. A minimum sample size of 30 is generally accepted in the research community as the minimum sample size to represent a group and make comparisons.

We seek comment on the most appropriate and relevant peer groups for comparison, including the appropriate minimum case sizes and minimum peer group sizes. We are also interested in methodologies that can account for
small case sizes.

d. Cost and Quality Measures and Compositing Methods

As mentioned above, and in previous rules, section 1848(n)(1)(A)(ii) of the Act gives the Secretary the authority to include both cost and quality information in the feedback reports. In Phase I, we chose to use only cost information, and used both per capita and episode cost measurements. As mentioned above, we previously finalized the use of quality measures in Phase II (74 FR 61846), but propose to discontinue our use of episode cost measurements. We have yet to include any composite measures of cost or quality in the feedback reports.

Section 3007 of the ACA requires CMS to pay physicians differentially
based on a modifier derived with composites of both quality and cost measures. Accordingly, we will need to devise a methodology in the future for compositing cost measures and quality measures, including considering, among other things, possible methodologies to develop a single score. In the future, episode-based cost measures developed using the public Medicare-specific episode grouper software also may be considered in developing a composite
score. Other domains of measures that may be considered include patient-level utilization statistics (for example, emergency department visits per 1,000 patients) and structural measures such as whether a provider has adopted an electronic health record. We recognize that measure composites are methodologically and operationally complex and, therefore, we are seeking comment on this topic.

We plan to continue a phased approach in the future. Although wewill continue to move from phase-tophase, any substantive changes to the RUR program will be implemented through rulemaking. We also anticipate continuing to gather feedback fromstakeholders about the important datadriven policy topics that affect the feedback reports.

C. Section 3102: Extension of the Work Geographic Index Floor and Revisions to the Practice Expense Geographic Adjustment Under the Medicare Physician Fee Schedule, and Protections for Frontier States as Amended by

Section 10324

Section 1848(e)(1)(E) of the Act (as amended by section 3102(a) of the ACA) extends application of the 1.0 work
GPCI floor for services furnished through December 31, 2010. In addition, section 1848(e)(1) of the Act (as amended by section 3102(b) of the ACA) specifies that for CY 2010 and CY 2011, the employee wage and rent portions of the PE GPCI must reflect only one-half
of the relative cost differences for each locality compared to the national average and includes a ‘‘ hold harmless ’’ provision for any PFS locality that
would receive a reduction to its PE GPCI resulting from the limited recognition of cost differences. Section 1848(e)(1) of the Act (as amended by section 3102(b) of the ACA) also requires an analysis of
the current methods and data sources
used to determine the relative cost differences in office rent and employee wages compared to the national average and the cost share weights assigned to each PE GPCI component: Employee wages, office rent, and supplies. Finally, section 1848(e)(1) of the Act (as amended by section 3102(b) of the ACA) requires the Secretary to make appropriate adjustments to the PE GPCI by no later than January 1, 2012. In addition, section 1848(e)(1) of the Act (as amended by section 10324(c) of the ACA) establishes a 1.0 PE GPCI floor for
services furnished in frontier states effective January 1, 2011. The


### 40117 Federal Register / Vol. 75, No. 133 / Tuesday, July 13, 2010 / Proposed Rules

provisions of the ACA related to the
GPCIs are discussed in detail in section II.D. of this proposed rule.

D. Section 3103: Extension of Exceptions Process for Medicare Therapy Caps

Section 1833(g)(5) of the Act (as amended by section 3103 of the ACA) extends the exceptions process for therapy caps through December 31, 2010. Therapy caps are discussed in detail in section III.A. of this proposed
rule.

E. Section 3104: Extension of Payment for Technical Component of Certain Physician Pathology Services

Section 542(c) of the Medicare, Medicaid, and SCHIP Benefits Improvement and Protection Act of 2000 (BIPA) (Pub. L. 106–554), as amended by section 732 of the Medicare Prescription Drug, Improvement, and Modernization Act of 2003 (MMA) (Pub. L. 108–173), section 104 of division B of
the Tax Relief and Health Care Act of 2006 (MIEA–TRHCA) (Pub. L. 109–432), section 104 of the Medicare, Medicaid,
and SCHIP Extension Act of 2007 (MMSEA) (Pub. L. 110–173), and
section 136 of the Medicare Improvements for Patients and Providers Act of 2008 (MIPPA) (Pub. L. 110–275) is amended by section 3104 of the ACA to continue payment to independent laboratories for the TC ofphysician pathology services for fee-forservice Medicare beneficiaries who are inpatients or outpatients of a covered hospital through CY 2010. The technical component (TC) of physician pathology services refers to the preparation of the slide involving tissue or cells that a pathologist interprets. The professional component (PC) of physician pathology services refers to the pathologist’s interpretation of the slide.

When the hospital pathologist furnishes the PC service for a hospital patient, the PC service is separately billable by the pathologist. When an independent laboratory’s pathologist furnishes the PC service, the PC service is usually billed with the TC service as
a combined service.

Historically, any independent laboratory could bill the Medicare
contractor under the PFS for the TC of physician pathology services for hospital patients even though the payment for the costs of furnishing the pathology service (but not its interpretation) was already included in the bundled inpatient stay payment to the hospital. In the CY 2000 PFS final rule with comment period (64 FR 59408 through 59409), we stated that this policy has contributed to the Medicare program paying twice for the TC service: (1) To the hospital, through the inpatient prospective payment rate, when the patient is an inpatient; and (2) to the independent laboratory that bills the Medicare contractor, instead of the hospital, for the TC service. While the policy also permits the independent laboratory to bill for the TC of physician pathology services for hospital outpatients, in this case, there generally would not be duplicate payment because we would expect the hospital to not also bill for the pathology service, which would be paid separately to the hospital only if the hospital were to specifically bill for it. We further indicated that we would implement a policy to pay only the hospital for the TC of physician pathology services furnished to its inpatients.

Therefore, in the CY 2000 PFS final rule with comment period, we revised § 415.130(c) to state that for physician pathology services furnished on or after January 1, 2001 by an independent laboratory, payment is made only to the hospital for the TC furnished to a hospital inpatient. Ordinarily, the provisions in the PFS final rule with comment period are implemented in the following year. However, the change to § 415.130 was delayed 1 year (until January 1, 2001), at the request of the industry, to allow independent laboratories and hospitals sufficient time to negotiate arrangements.

Full implementation of § 415.130 was further delayed by section 542 of the BIPA and section 732 of the MMA, which directed us to continue payment to independent laboratories for the TC of physician pathology services for hospital patients for a 2-year period beginning on January 1, 2001 and for CYs 2005 and 2006, respectively.

In the CY 2007 MPFS final rule with comment period (71 FR 69624 and 69788), we amended § 415.130 to provide that, for services furnished after December 31, 2006, an independent laboratory may not bill the carrier for the TC of physician pathology services furnished to a hospital inpatient or outpatient. However, section 104 of the MIEA–TRHCA continued payment to independent laboratories for the TC of physician pathology services for hospital patients through CY 2007, and
section 104 of the MMSEA further extended such payment through the first
six months of CY 2008.

Section 136 of the MIPPA extended the payment through CY 2009. Most recently, section 3104 of the ACA amended the prior legislation to extend the payment through CY 2010.

Consistent with this legislative change, we are proposing to revise § 415.130(d) to: (1) Amend the effective date of our payment policy to reflect
that for services furnished after December 31, 2010, an independent laboratory may not bill the Medicare contractor for the TC of physician pathology services furnished to a hospital inpatient or outpatient; and (2)
reformat this subsection into subparagraphs.

F. Sections 3105 and 10311: Extension of Ambulance Add-Ons

1. Amendment to Section 1834(l)(13) of
the Act

Section 146(a) of the MIPPA amended section 1834(l)(13)(A) of the Act to specify that, effective for ground
ambulance services furnished on or after July 1, 2008 and before January 1, 2010,
the ambulance fee schedule amounts for ground ambulance services shall be
increased as follows:

• For covered ground ambulance transports which originate in a rural
area or in a rural census tract of a metropolitan statistical area, the fee schedule amounts shall be increased by
3 percent.

• For covered ground ambulance transports which do not originate in a
rural area or in a rural census tract of a metropolitan statistical area, the fee schedule amounts shall be increased by
2 percent.

Sections 3105(a) and 10311(a) of the
ACA further amend section 1834(l)(13)(A) of the Act to extend the payment add-ons described above for an additional year, such that these add-ons also apply to covered ground ambulance transports furnished on or after January 1, 2010 and before January 1, 2011. We are revising § 414.610(c)(1)(i) to conform the regulations to this statutory requirement. This statutory requirement is self-implementing. A plain reading of the statute requires only a ministerial application of the mandated rate increase, and does not require any
substantive exercise of discretion on the part of the Secretary. For further information regarding the extension of these payment add-ons, please see Transmittal 706 (Change Request 6972) dated May 21, 2010.

2. Amendment to Section 146(b)(1) of

MIPPA

Section 146(b)(1) of the MIPPA amended the designation of rural areas for payment of air ambulance services. The statute specified that any area that was designated as a rural area for purposes of making payments under the
ambulance fee schedule for air
ambulance services furnished on December 31, 2006, shall continue to be


### 40118 Federal Register / Vol. 75, No. 133 / Tuesday, July 13, 2010 / Proposed Rules

treated as a rural area for purposes of making payments under the ambulance
fee schedule for air ambulance services furnished during the period July 1, 2008 through December 31, 2009. Sections 3105(b) and 10311(b) of the ACA amend section 146(b)(1) of MIPPA to extend this provision for an additional year, through December 31, 2010. Accordingly, for areas that were designated as rural on December 31,2006, and were subsequently redesignated as urban, we have reestablished the ‘‘ rural ’’ indicator on the ZIP Code file for air ambulance services, effective January 1, 2010 through December 31, 2010. We are revising § 414.610(h) to conform the regulations to this statutory requirement. Thisstatutory requirement is selfimplementing. A plain reading of the statute requires only a ministerial application of a rural indicator, and does not require any substantive exercise of discretion on the part of the Secretary. For further information regarding the extension of this MIPPA provision, please see Transmittal 706 (Change Request 6972) dated May 21,

2010.

3. Amendment to Section 1834(l)(12) of
the Act

Section 414 of the MMA added paragraph (12) to section 1834(l) of the Act, which specified that in the case of ground ambulance services furnished on or after July 1, 2004, and before January 1, 2010, for which transportation originates in a qualified rural area (as described in the statute), the Secretary shall provide for a percent increase in

the base rate of the fee schedule for such transports. The statute requires this percent increase to be based on the Secretary’s estimate of the average cost per trip for such services (not taking into account mileage) in the lowest quartile of all rural county populations as compared to the average cost per trip for such services (not taking into account mileage) in the highest quartile of rural county populations. Using the methodology specified in the July 1, 2004 interim final rule (69 FR 40288), we determined that this percent increase was equal to 22.6 percent. As required by the MMA, this payment increase was applied to ground ambulance transports that originated in

a ‘‘ qualified rural area ’’ ; that is, to transports that originated in a rural area included in those areas comprising the lowest 25th percentile of all rural populations arrayed by population density. For this purpose, rural areas included Goldsmith areas (a type of rural census tract). Sections 3105(c) and 10311(c) of the ACA amend section 1834(l)(12)(A) of the Act to extend this rural bonus for an additional year through December 31, 2010. Therefore, as directed by the ACA, we are continuing to apply the rural bonus described above (in the same manner as in previous years), to ground ambulance
services with dates of service on or after January 1, 2010 and before January 1, 2011 where transportation originates in a qualified rural area.

We are revising § 414.610(c)(5)(ii) to conform the regulations to this statutory requirement. This statutory requirement is self-implementing. The statute requires a one-year extension of the rural bonus (which was previously established by the Secretary), and does not require any substantive exercise of discretion on the part of the Secretary. For further information regarding the extension of this rural bonus, please see Transmittal 706 (Change Request 6972) dated May 21, 2010.

G. Section 3107: Extension of Physician
Fee Schedule Mental Health Add-On

Section 3107 of the ACA amends section 138(a)(1) of the MIPPA to continue the 5 percent increase in Medicare payment for specified mental health services through December 31, 2010. This payment increase was originally authorized under section 138 of the MIPPA from July 1, 2008 until December 31, 2009. Accordingly, payment for the 24 psychiatry CPT codes in Table 33, representing

‘‘ specified services, ’’ remains increased by 5 percent until December 31, 2010.



### T ABLE 

### 33—S PECIFIED 

### M ENTAL 

### H EALTH 

### S ERVICES 

### S UBJECT TO THE 

### F IVE 

### P ERCENT 

### I NCREASE IN 

### M EDICARE 

### P AYMENT 

### T HROUGH 

### D ECEMBER 

### 31, 2010

**Office or Other Outpatient Facility Insight Oriented, Behavior Modifying and/or Supportive Psychotherapy** 

90804 (Individual psychotherapy, insight oriented, behavior modifying and/or supportive, in an office or outpatient facility, approximately 20 to

30 minutes face-to-face with the patient). 90805 (Individual psychotherapy, insight oriented, behavior modifying and/or supportive, in an office or outpatient facility, approximately 20 to

30 minutes face-to-face with the patient; with medical evaluation and management services). 90806 (Individual psychotherapy, insight oriented, behavior modifying and/or supportive, in an office or outpatient facility, approximately 45 to

50 minutes face-to-face with the patient). 90807 (Individual psychotherapy, insight oriented, behavior modifying and/or supportive, in an office or outpatient facility, approximately 45 to

50 minutes face-to-face with the patient; with medical evaluation and management services). 90808 (Individual psychotherapy, insight oriented, behavior modifying and/or supportive, in an office or outpatient facility, approximately 75 to

80 minutes face-to-face with the patient). 90809 (Individual psychotherapy, insight oriented, behavior modifying and/or supportive, in an office or outpatient facility, approximately 75 to

80 minutes face-to-face with the patient; with medical evaluation and management services).

**Interactive Psychotherapy**

90810 (Individual psychotherapy, interactive, using play equipment, physical devices, language interpreter, or other mechanisms of non-verbal

communication, in an office or outpatient facility, approximately 20 to 30 minutes face-to-face with the patient). 90811 (Individual psychotherapy, interactive, using play equipment, physical devices, language interpreter, or other mechanisms of non-verbal

communication, in an office or outpatient facility, approximately 20 to 30 minutes face-to-face with the patient; with medical evaluation and management services). 90812 (Individual psychotherapy, interactive, using play equipment, physical devices, language interpreter, or other mechanisms of non-verbal

communication, in an office or outpatient facility, approximately 45 to 50 minutes face-to-face with the patient). 90813 (Individual psychotherapy, interactive, using play equipment, physical devices, language interpreter, or other mechanisms of non-verbal

communication, in an office or outpatient facility, approximately 45 to 50 minutes face-to-face with the patient; with medical evaluation and management services). 90814 (Individual psychotherapy, interactive, using play equipment, physical devices, language interpreter, or other mechanisms of non-verbal

communication, in an office or outpatient facility, approximately 75 to 80 minutes face-to-face with the patient).


### 40119 Federal Register / Vol. 75, No. 133 / Tuesday, July 13, 2010 / Proposed Rules

T ABLE 

### 33—S PECIFIED 

### M ENTAL 

### H EALTH 

### S ERVICES 

### S UBJECT TO THE 

### F IVE 

### P ERCENT 

### I NCREASE IN 

### M EDICARE 

### P AYMENT 

### T HROUGH 

### D ECEMBER 

### 31, 2010—Continued

90815 (Individual psychotherapy, interactive, using play equipment, physical devices, language interpreter, or other mechanisms of non-verbal

communication, in an office or outpatient facility, approximately 75 to 80 minutes face-to-face with the patient; with medical evaluation and management services).

**Inpatient Hospital, Partial Hospital or Residential Care Facility Insight Oriented, Behavior Modifying and/or Supportive Psychotherapy** 

90816 (Individual psychotherapy, insight oriented, behavior modifying and/or supportive, in an inpatient hospital, partial hospital or residential

care setting, approximately 20 to 30 minutes face-to-face with the patient). 90817 (Individual psychotherapy, insight oriented, behavior modifying and/or supportive, in an inpatient hospital, partial hospital or residential

care setting, approximately 20 to 30 minutes face-to-face with the patient; with medical evaluation and management services). 90818 (Individual psychotherapy, insight oriented, behavior modifying and/or supportive, in an inpatient hospital, partial hospital or residential

care setting, approximately 45 to 50 minutes face-to-face with the patient). 90819 (Individual psychotherapy, insight oriented, behavior modifying and/or supportive, in an inpatient hospital, partial hospital or residential

care setting, approximately 45 to 50 minutes face-to-face with the patient; with medical evaluation and management services). 90821 (Individual psychotherapy, insight oriented, behavior modifying and/or supportive, in an inpatient hospital, partial hospital or residential

care setting, approximately 75 to 80 minutes face-to-face with the patient). 90822 (Individual psychotherapy, insight oriented, behavior modifying and/or supportive, in an inpatient hospital, partial hospital or residential

care setting, approximately 75 to 80 minutes face-to-face with the patient; with medical evaluation and management services).

**Interactive Psychotherapy**

90823 (Individual psychotherapy, interactive, using play equipment, physical devices, language interpreter, or other mechanisms of non-verbal

communication, in an inpatient hospital, partial hospital or residential care setting, approximately 20 to 30 minutes face-to-face with the patient). 90824 (Individual psychotherapy, interactive, using play equipment, physical devices, language interpreter, or other mechanisms of non-verbal

communication, in an inpatient hospital, partial hospital or residential care setting, approximately 20 to 30 minutes face-to-face with the patient; with medical evaluation and management services). 90826 (Individual psychotherapy, interactive, using play equipment, physical devices, language interpreter, or other mechanisms of non-verbal

communication, in an inpatient hospital, partial hospital or residential care setting, approximately 45 to 50 minutes face-to-face with the patient). 90827 (Individual psychotherapy, interactive, using play equipment, physical devices, language interpreter, or other mechanisms of non-verbal

communication, in an inpatient hospital, partial hospital or residential care setting, approximately 45 to 50 minutes face-to-face with the patient; with medical evaluation and management services). 90828 (Individual psychotherapy, interactive, using play equipment, physical devices, language interpreter, or other mechanisms of non-verbal

communication, in an inpatient hospital, partial hospital or residential care setting, approximately 75 to 80 minutes face-to-face with the patient). 90829 (Individual psychotherapy, interactive, using play equipment, physical devices, language interpreter, or other mechanisms of non-verbal

communication, in an inpatient hospital, partial hospital or residential care setting, approximately 75 to 80 minutes face-to-face with the patient; with medical evaluation and management services).

H. Section 3108: Permitting Physician Assistants To Order Post-Hospital
Extended Care Services

The ACA included a selfimplementing provision relating to SNFs. Section 3108 adds physician assistants (PAs) to the list of practitioners (that is, physicians, nurse practitioners (NPs), and clinical nurse specialists) that can perform the required initial certification and periodic recertifications under section 1814(a)(2)(B) of the Act with respect to the SNF level of care. Accordingly, we are proposing to make appropriate
revisions to include PAs in § 424.20(e)(2), in which we refer to NPs, clinical nurse specialists, and PAs collectively as ‘‘ physician extenders. ’’

I. Section 3111: Payment for Bone Density Tests

Section 1848(b) of the Act (as amended by section 3111 of the ACA) changes the payment calculation for dual-energy X-ray absorptiometry (DXA) services described by two specified DXA CPT codes for CYs 2010 and 2011. This provision requires payment for these services at 70 percent of the product of the CY 2006 RVUs for these DXA codes, the CY 2006 conversion factor (CF), and the geographic adjustment for the relevant payment

year.

Effective January 1, 2007, the CPT
codes for DXA services were revised. The former DXA CPT codes 76075 (Dual energy X-ray absorptiometry (DXA), bone density study, one or more sites; axial skeleton ( e.g., hips, pelvis, spine)); 76076 (Dual energy X-ray absorptiometry (DXA), bone density study, one or more sites; appendicular skeleton (peripheral) ( e.g., radius, wrist, heel)); and 76077 (Dual energy X-ray absorptiometry (DXA), bone density study, one or more sites; vertebral fracture assessment) were deleted and replaced with new CPT codes 77080, 77081, and 77082 that have the same respective code descriptors as the predecessor codes. Section 1848(b) of the Act (as amended by section 3111 of the ACA) specifies that the revised payment applies to two of the predecessor codes (CPT codes 76075 and 76077) and ‘‘ any succeeding codes, ’’ which are, in this case, CPT codes
77080 and 77082.

Section 1848(b) (as amended by section 3111 of the ACA) revises the payment for CPT codes 77080 and 77082 during CY 2010 and CY 2011. We have provided payment in CY 2010
under the PFS for CPT codes 77080 and 77082 at the specified rates. We note
that the RVUs included in Addendum B to this proposed rule reflect the RVUs that result from application of this statutory provision and the proposed CY
2011 conversion factor. Because the statute specifies a payment amount for these services as described previously, we imputed RVUs for CY 2011 to
include in Addendum B that would provide the specified payment amount for these services when multiplied by the CY 2011 CF. Specifically, we divided the payment amount based on the statutory requirements by the CY


### 40120 Federal Register / Vol. 75, No. 133 / Tuesday, July 13, 2010 / Proposed Rules

2011 CF for this proposed rule, and distributed the imputed total RVUs across the work, PE, and malpractice components proportionately to their CY 2006 distribution. Therefore, these imputed RVUs for CPT codes 77080 and 77082 are displayed in Addendum B to this proposed rule.

J. Section 3114: Improved Access for Certified Nurse-Midwife Services

Section 1833(a)(1)(K) of the Act (as amended by section 3114 of the ACA)
increases the amount of Medicare payment made under the PFS for certified nurse-midwife (CNM) services. Currently, section 1833(a)(1)(K) of the Act specifies that the payment amount for CNM services is 80 percent of the lesser of the actual charge or 65 percent
of the PFS amount. Under section 1833(a)(1)(K) of the Act (as amended by section 3114 of the ACA), effective for services furnished on or after January 1, 2011, Medicare payment for CNM services is increased to 100 percent of the PFS amount (or 80 percent of the actual charge if that is less). We are proposing to revise our regulations at§ 414.54 (Payment for certified nursemidwives’ services) accordingly to reflect the increased payment for CNM
services effective for services furnished on or after January 1, 2011.

Although CNMs are currently paid
under Medicare Part B for their professional services, there is no mention of CNMs under the regulatory provision that lists the providers and suppliers of services to whom payment
is made under the Medicare Part B program. Accordingly, we are proposing to make a technical revision to § 410.150 (To whom payment is made) to specify that Medicare Part B pays CNMs for professional services in all settings, as well as services and supplies furnished
incident to those services.

CNMs are authorized under the statute to be paid directly for services that they are legally authorized to
furnish under State law and that are of the type that would otherwise be covered if furnished by a physician or incident to a physician’s services. Additionally, there is no requirement under the CNM benefit for physician oversight or supervision. Accordingly, CNMs are authorized to personally furnish diagnostic tests that fall under their State scope of practice without regard to the levels of physician supervision required under the diagnostic tests benefit. Therefore, we are amending § 410.32(b)(2) (Exceptions to the levels of physician supervision required for diagnostic tests) to include CNMs who furnish diagnostic tests that fall within their State scope of practice. K. Section 3122: Extension of Medicare Reasonable Costs Payments for Certain Clinical Diagnostic Laboratory Tests Furnished to Hospital Patients in
Certain Rural Areas

Section 416 of the MMA established a reasonable cost payment for outpatient clinical diagnostic laboratory tests furnished by hospitals with fewer than 50 beds that are located in qualified rural areas for cost reporting periods beginning during the 2-year period beginning on July 1, 2004.

Section 105 of the Tax Relief and Health Care Act of 2006 (Pub. L. 109– 432) (TRHCA) extended the 2-year period in section 416(b) of the MMA for an additional cost-reporting year.

Section 107 of the Medicare, Medicaid, and SCHIP Extension Act of 2007 (Pub. L. 110–173) (MMSEA) extended the time period for cost reporting periods beginning on July 1, 2004, and ending on June 30, 2008. For some hospitals with cost reports that began as late as June 30, 2008, this extension affected services performed as late as June 29, 2009, because this was the date those cost reports would have
closed.

Section 3122 of the ACA reinstitutes reasonable cost payment for clinical diagnostic laboratory tests performed by hospitals with fewer than 50 beds that are located in qualified rural areas as part of their outpatient services for cost reporting periods beginning on or after July 1, 2010, through June 30, 2011. For some hospitals with cost reports that begin as late as June 30, 2011, this reinstitution of reasonable cost payment could affect services performed as late as June 29, 2012, because this is the date those cost reports will close.

L. Section 3134: Misvalued Codes Under the Physician Fee Schedule

Section 1848(c)(2)(K) of the Act (as added by section 3134 of the ACA) requires the Secretary to periodically review and identify potentially misvalued codes and make appropriate adjustments to the relative values of those services identified as being potentially misvalued. Section 1848(c)(2)(K) of the Act (as added by section 3134 of the ACA) further specifies that the Secretary may use existing processes to receive
recommendations on the review and appropriate adjustment of potentially misvalued services, as well as conduct surveys or implement other data collection activities, studies, or other analyses as the Secretary determines to be appropriate to facilitate the review and appropriate adjustment of the relative values of potentially misvalued codes. Finally, section 1848(c)(2)(L) of the Act (as added by section 3134 of the ACA) provides that the Secretary shall establish a process to validate relative

value units under the PFS.

We note that over the past several years, we have been working with the AMA RUC to identify approaches to addressing the issue of potentially misvalued services. Our proposed CY 2011 approaches to categories of potentially misvalued codes are

discussed in section II.C. of this proposed rule.

M. Section 3135: Modification of Equipment Utilization Factor for Advanced Imaging Services

1. Adjustment in Practice Expense To Reflect Higher Presumed Utilization

Section 1848(b)(4)(C) of the Act (as added by section 3135(a) of the ACA) adjusts the utilization rate for expensive diagnostic imaging equipment to 75 percent in the methodology for establishing the PE of the associated procedures. As discussed further in section II.A.3.a. of this proposed rule, effective January 1, 2011, we are proposing to assign a 75 percent equipment utilization rate assumption to expensive diagnostic imaging equipment used in services described by the HCPCS codes displayed in Table 4.

In the CY 2010 PFS final rule with comment period (74 FR 61755), we finalized a policy to increase the utilization rate to 90 percent for expensive diagnostic equipment priced at more than $1 million (CT and MRI scanners), providing for a 4-year transition to the 90 percent utilization

rate from the CY 2009 utilization rate of 50 percent. Therefore, in CY 2010 we were transitioning to a 90 percent equipment utilization rate assumption, applying a 25/75 blend of the new and old PE RVUs, respectively, for the associated procedures. Section 1848(b)(4)(C) of the Act (as added by section 3135(a) of the ACA) does not provide for any further transition and, therefore, we are assigning a 75 percent equipment utilization rate assumption to CT and MRI scanners, effective January 1, 2011. Under section 1848(b)(4) of the Act (as amended by section 3135(a) of the ACA), this change in the equipment utilization rate assumption from CY 2010 to CY 2011 is not budget neutral under the PFS. The equipment utilization rate assumption remains at 50 percent for all other equipment included in the PFS PE methodology.


### 40121 Federal Register / Vol. 75, No. 133 / Tuesday, July 13, 2010 / Proposed Rules

2. Adjustment in Technical Component

‘‘ Discount ’’ on Single-Session Imaging to Consecutive Body Parts

Section 1848(b)(4)(D) of the Act (as added by section 3135(a) of the ACA) increases the established PFS multiple procedure payment reduction (MPPR) for the technical component (TC) of certain single-session imaging services to consecutive body areas from 25 to 50 percent, effective July 1, 2010, and section 1848(c)(2)(B)(v)(VI) of the Act (as added by section 3135(b) of the ACA) exempts this change from the PFS budget neutrality provision. This policy
is discussed in detail in section II.C.4 of this proposed rule.

Effective January 1, 2006, we adopted an MPPR of 25 percent for the technical component (TC) of certain diagnostic imaging procedures, applied to the second and subsequent services when
more than one service in one of 11 imaging families, defined by imaging modality and contiguous body area, is furnished in a single session (70 FR 70261 through 70263). The established imaging MPPR applies to TC-only services and to the TC of global services. It does not apply to professional component (PC) services. Under this policy, full payment was made for the TC of the highest priced procedure, while payment was made at 75 percent of the TC for each additional procedure. As of July 1, 2010, and continuing in CY 2011, payment is made at 50 percent of the TC for each additional procedure, consistent with the statutory provision.

N. Section 3136: Revision for Payment for Power-Driven Wheelchairs

1. Payment Rules for Power Wheelchairs

Durable medical equipment (DME) is defined at section 1861(n) of the Act and includes wheelchairs necessary for use in the patient’s home. Section 1861(n) provides that wheelchairs
included in the definition of DME ‘‘ may include a power-operated vehicle that may be appropriately used as a wheelchair, but only where the use of
such a vehicle is determined to be necessary on the basis of the individual’s medical and physical
condition. ’’ The general Medicare payment rules for DME are set forth in section 1834(a) of the Act and 42 CFR part 414, subpart D of our regulations. Section 1834(a)(1) of the Act and § 414.210(a) of our regulations establish that the Medicare payment for a DME item is generally equal to 80 percent of either the lower of the actual charge or
the fee schedule amount for the item. The beneficiary coinsurance is generally equal to 20 percent of either the lower of the actual charge or the fee schedule amount for the item once the deductible

is met.

For Medicare payment purposes, power wheelchairs or power-driven
wheelchairs are classified under various
codes in the Healthcare Common Procedure Coding System (HCPCS) based on the level of performance and functional characteristics of each power
wheelchair that accommodate the specific needs of patients. Power
wheelchairs classified under performance Groups 1 through 3 are
covered under Medicare for use in the patient’s home. Power wheelchair groups were established in 2006 with the release of the Power Mobility Device Coding Guidelines published by the Durable Medical Equipment Regional Carriers (DMERCs) currently called the Durable Medical Equipment Medicare Administrative Contractors (DME MACs). The DMEPOS quality standards define certain power wheelchairs falling

as ‘‘ complex, rehabilitative ’’ power wheelchairs, and these ‘‘ complex,
rehabilitative ’’ power wheelchairs are treated as a separate product category for the purpose of implementing the DMEPOS Competitive Bidding Program (CBP) mandated by section 1847(a) of the Act. In both the quality standards and the DMEPOS competitive bidding program, complex, rehabilitative power
wheelchairs are defined or identified as power wheelchairs classified as Group 2 power wheelchairs with power options
that can accommodate rehabilitative features (for example, tilt in space) or Group 3 power wheelchairs.

With the exception of power wheelchairs furnished during calendar year 1990, power wheelchairs have been paid under the capped rental category of DME since January 1, 1989. The payment rules for capped rental DME are provided at section 1834(a)(7) of the Act and § 414.229 of our regulations. Payment for these items is generally on a monthly rental basis, with rental payments capped at 13 months. After a 13-month period of continuous use during which rental payments are made, the statute and regulations require that the supplier transfer title to the wheelchair to the beneficiary. In addition, effective for power
wheelchairs furnished on or after January 1, 1***, section 1834(a)(7) of the Act, as amended by section 4152(c)(2) (D) of the Omnibus Budget Reconciliation Act of 1990 (Pub. L. 101– 508), mandates that the supplier of the power wheelchair offer the patient the option to purchase rather than rent the item. Since 1991, over 95 percent of
Medicare beneficiaries have exercised this lump-sum purchase option for power wheelchairs. Consistent with payment for other DMEPOS items, § 414.210(f)(1) permits payment for replacement of capped
rental DME if the item has been in continuous use for the equipment’s reasonable useful lifetime or is lost, stolen, or irreparably damaged. Section 414.210(f)(1) states the reasonable useful lifetime for equipment is determined through program instructions. In the absence of CMS program instructions, the carrier may determine the
reasonable useful lifetime for equipment, but in no case can it be less than 5 years. Computation is based on when the equipment is delivered to the beneficiary, not the age of the equipment. If the beneficiary elects to obtain a new capped rental item after the reasonable useful lifetime, a new 13- month rental payment period would begin for the new equipment in accordance with the requirements of § 414.229.

Section 1834(a)(7)(A) of the Act, § 414.229(b) and (c) set forth the current fee schedule amounts for capped rental

items. Pursuant to section 1834(a)(7)(A)(i)(II) of the Act and § 414.229(b), the current rental fee
schedule amounts for months 1 thru 3 of the 13-month capped rental period are calculated to pay 10 percent of the average of allowed purchase price for
the item. The rental fee schedule
amounts for months 4 thru 13 of the 13- month capped rental period are calculated to pay 7.5 percent of the average of allowed purchase price for the item. The purchase price is
determined consistent with section 1834(a)(8) of the Act and § 414.229(c) and § 414.220(e) and (f) and is updated by the covered item update, as required by section 1834(a)(14) of the Act and § 414.229(d). The current purchase price amount for power wheelchairs acquired on a lump sum purchase basis is 100 percent of the purchase price calculated for the item when rented, as discussed
above.

2. Revision of Payment Amounts for
Power Wheelchairs

Section 3136(a) of the ACA made several changes to section 1834(a)(7)(A) of the Act. Section 3136(a)(1) of the ACA amends section 1834(a)(7)(A) of the Act by adding a new subclause (III) to section 1834(a)(7)(A)(i) of the Act. Subclause (III) revises the capped rental fee schedule amounts for all power wheelchairs, modifying the current payment structure of 10 percent of the purchase price for months 1 thru 3 and 7.5 percent of that purchase price for months 4 through 13 that was discussed
above. The rental fee schedule amount
for months 1 thru 3 of the 13-month


### 40122 Federal Register / Vol. 75, No. 133 / Tuesday, July 13, 2010 / Proposed Rules

capped rental period for power wheelchairs is revised to 15 percent of the purchase price for the item. The
rental fee schedule amounts for months 4 thru 13 of the 13-month capped rental period for power wheelchairs is revised to 6 percent of the purchase price for the item. The statutory provision does not change the methodologies used to calculate and subsequently update of the purchase price of power wheelchairs. Therefore, the methodology described above for determining the purchase price amounts will continue to apply.

Pursuant to section 3136(c) of the ACA, the changes made by section3136(a) of the ACA apply to powerdriven wheelchairs furnished on or after January 1, 2011.

Furthermore, as discussed above, section 3136(c)(2) of the ACA states that the changes made by section 3136(a), including the new payment structure for power wheelchairs, do not apply to payment made for items and services furnished pursuant to contracts entered
into under section 1847 of the Act for the DMEPOS CBP prior to January 1, 2011 which applies to the implementation of the first round of the DMEPOS CBP. As a result, contract suppliers furnishing power wheelchairs in competitive bidding areas (CBA) pursuant to contracts entered into prior to January 1, 2011 as part of Round 1 of
the DMEPOS CBP will continue to be paid based under the current regulations using 10 percent of the purchase price for months 1 through 3 and 7.5 percent for each of the remaining months. As a result, we are proposing to make changes to §§ 414.202, 414.229 and 414.408 to reflect these statutory requirements.

3. Elimination of Lump Sum Payment
for Standard Power Wheelchairs

Section 3136(a)(2) of the ACA further amends section 1834(a)(7)(A)(iii) by inserting the term ‘‘ complex
rehabilitative ’’ before the term ‘‘ powerdriven wheelchairs. ’’ As a result, section 1834(a)(7)(A)(iii) of the Act now extends the lump sum purchase option only to complex rehabilitative power wheelchairs. As discussed above,

‘‘ complex rehabilitative power wheelchairs are power wheelchairs that are classified as: (1) Group 2 power wheelchairs with power options that
can accommodate rehabilitative features (for example, tilt in space), or (2) Group 3 power wheelchairs. We consider all other power wheelchairs to be standard power wheelchairs. Therefore, we propose to interpret the language

‘‘ complex rehabilitative ’’ in section 1834(a)(7)(A) of the Act consistent with this longstanding classification. As a result, the changes made by section 3136 to section 1834(a)(7)(A)(iii) eliminate the lump sum purchase option for standard power wheelchairs.

Pursuant to section 3136(c) of the ACA, the changes made to section 1834(a)(7)(A)(iii) of the Act apply to power-driven wheelchairs furnished on or after January 1, 2011. The lump sum purchase payment option will no longer extend to standard power driven
wheelchairs furnished on or after January 1, 2011.

Furthermore, section 3136(c)(2) of the ACA states that the changes made by section 3136(a), including the limitation of the lump sum purchase payment option to complex, rehabilitative power wheelchairs, do not apply to payment
made for items and services furnished pursuant to contracts entered into under
section 1847 of the Act for the DMEPOS CBP prior to January 1, 2011 pursuant to the implementation of the first round of the DMEPOS CBP. As a result, contract suppliers furnishing power wheelchairs in CBAs pursuant to contracts entered into prior to January 1, 2011 as part of Round 1 of the DMEPOS
CBP must continue to offer beneficiaries the lump sum purchase option for all power wheelchairs.

We are proposing changes to §§ 414.229 and 414.408 to reflect our interpretation of these statutory requirements.

O. Section 3139: Payment for Biosimilar Biological Products

Section 3139 of the ACA amends section 1847A of the Act to provide for Medicare payment of biosimilar biological products using the average sale price (ASP) methodology.

Section 1847A of the Act, as amended by the ACA, defines a biosimilar biological product as a biological product approved under an abbreviated application for a license of a biological product that relies in part on data or information in an application for another biological product licensed
under section 351 of the Public Health Service Act (PHSA). The reference biological product for a biosimilar biological product is defined by the statute as the biological product
licensed under such section 351 of the
PHSA that is referred to in the application of the biosimilar biological product.

The ACAct also amends section 1847A of the Act to specify that the payment amount for a biosimilar biological product will be the sum of the following two amounts: the ASP of all NDCs assigned to the biosimilar biological drug product determined using the methodology in section 1847A(b)(6) of the Act, and 6 percent of the payment amount determined using the methodology in section 1847A(b)(4) of the Act for the corresponding reference biological product. Sections
7001 to 7003 of the ACA also established a licensing pathway for biosimilar biological products, and in accordance with the statute, the
effective date for Medicare ASP statutory provisions is July 1, 2010. We are proposing conforming regulation text changes at § 414.902 and § 414.904
and we welcome comments on these conforming changes.

We anticipate that as biosimilar biological drug products are approved, we will receive ASP sales data through the ASP data submission process and publish national payment amounts in a
manner that is consistent with our current approach to other drugs and biologicals that are paid under section
1847A of the Act and set forth in 42 CFR part 414 subpart J. Until we have collected sufficient sales data, as reported by manufacturers, payment
limits will be determined in accordance with the provisions in section 1847A(c)(4) of the Act. If no manufacturer data is collected, prices will be determined by local contractors using any available pricing information, including provider invoices. More information about the ASP payment methodology and the data submission process may be found on the CMS Web

site at http://www.cms.gov/ McrPartBDrugAvgSalesPrice/

01

_ overview.asp and in this rule, in the section VI.A.1. of this proposed rule,

‘‘ Carry Over ’’ ASP.

P. Section 3401: Revision of Certain Market Basket Updates and Incorporation of Productivity Improvements Into Market Basket Updates That Do Not Already Incorporate Such Improvements.

1. ESRD Market Basket Discussion

Section 3401(h) of the ACA amended section 1881(b)(14)(F) of the Act and directs the Secretary to annually increase payment amounts established
under the ESRD market basket. Please see section VI.E. of this proposed rule for a detailed description of these provisions.

2. Productivity Adjustment Regarding Ambulatory Surgical Center, Ambulance, Clinical Laboratory and
DMEPOS Fee Schedules

Section 3401 of the ACA requires that the update factor under certain payment systems be annually adjusted by changes in economy-wide productivity.


### 40123 Federal Register / Vol. 75, No. 133 / Tuesday, July 13, 2010 / Proposed Rules

The year that the productivity adjustment is effective varies by payment system. Specifically, section 3401 of the ACA requires that in CY 2011 (and in subsequent years) update factors under the ambulatory surgical center (ASC) payment system, the ambulance fee schedule (AFS), and the clinical laboratory fee schedule (CLFS)be adjusted by changes in economywide productivity. Section 3401(a) amends section 1886(b)(3)(B) of the Act to add clause (xi)(II) which sets forth the definition of this productivity adjustment. The statute defines the productivity adjustment to be equal to the 10-year moving average of changes in annual economy-wide private
nonfarm business multifactor productivity (MFP) (as projected by the Secretary for the 10-year period ending with the applicable fiscal year, year, cost reporting period, or other annual period) (the ‘‘ MFP adjustment ’’ ). Please

see http://www.bls.gov/mfp for more
information on MFP. This is the link to the Bureau of Labor Statistics (BLS) historical published data on the
measure of MFP.

The projection of MFP will be produced by an economic forecasting firm, currently HIS Global Insight (IGI). In order to generate a forecast of MFP, IGI would replicate the MFP measure calculated by the BLS using a series of proxy variables derived from the IGI US
Macro-economic models. These models take into account a very broad range of
factors that influence the total US economy. IGI forecasts the underlying proxy components such as Gross Domestic Product (GDP), capital, and labor inputs required to estimate MFP, and will combine those projections according to the BLS methodology. For
more information on the BLS measure of MFP, including technical notes, visit: http://www.bls.gov/mfp/. Table 34 lists the MFP component series employed by the BLS and the corresponding concepts estimated by IGI.



### T ABLE 

### 34—M ULTIFACTOR 

### P RODUCTIVITY 

### C OMPONENT 

### S ERIES 

### E MPLOYED BY THE 

### B UREAU OF 

### L ABOR 

### S TATISTICS AND 

### HIS G LOBAL 

### I NSIGHT

BLS Series IGI Series

Real value-added output, constant 2000 dollars ..................................... Real gross non-farm value added output, chained 2005 dollar billions. Private non-farm business sector labor input; 2000=100.00 ................... Hours of all persons-private nonfarm business sector; 1992=1.0. Aggregate capital inputs; 2000=100.00 .................................................... Real effective capital stock used for full employment GDP, chained

2005 dollar billions.

To identify the appropriate proxy variables, IGI compared the historical growth rates of the BLS and IGI components listed above and found they
were consistent across all series and therefore suitable proxies for calculating MFP. IGI would use the growth rates of the forecasted IGI concepts to project BLS’ components of MFP, and derive the MFP adjustment that would be used under section 3401 to adjust the updates for the ASC payment system, the AFS,
and the CLFS.

As discussed below, for each of these payment systems, the update factor is the percentage increase (or percentage decrease for the CLFS) in the consumer price index for all urban consumers (CPI–U) (referred to as the ‘‘ CPI–U update factor ’’ ).

The statute for all three payment systems generally states that the Secretary shall reduce the CPI–U adjustment by the MFP adjustment. In order to calculate the MFP-adjusted updates to these payment systems, the MFP percentage adjustment would be subtracted from the CPI–U update factor (for the most recent 12-month period beginning with July 1 of the previous year and ending with June 30 of the current year). For example, if the update factor (CPI–U) is 4.0 percent, and the projected MFP is 1.3 percent, the MFP– Adjusted update factor (or MFP– Adjusted CPI–U for these payment systems) would be a 2.7 percent

increase.

The period on which the CPI–U is
calculated is for the most recent 12- month period beginning with July 1 of the previous year and ending with June 30 of the current year, and we propose that the end of the 10-year moving average of changes in the MFP should
coincide with the end of this CPI–U timeframe. Since the CPI–U update factor is reduced by the MFP adjustment to determine the annual update for these payment systems, we believe it is appropriate for the numbers associated with both parts of the calculation to be projected as of the same end date (in this case, the end date of the time frame for both estimates would be June 30th of the year preceding the update year itself). In this way, changes in market conditions are aligned. We will roundthe final annual adjustment to the onetenth of one percentage point level up or down as applicable according to conventional rounding rules (that is, if the number we are rounding is followed by 5, 6, 7, 8, or 9, we will round the number up; if the number we are rounding is followed by 0, 1, 2, 3, or 4, we will round the number down).

Below, we provide more information on the statutory requirements and proposals for each of the three payment systems. The statutory requirements for the ASC payment system will also be
addressed in the CY 2011 OPPS/ASC proposed rule. We note that, in this proposed rule, we are describing the legislative provision and outlining the methodology we propose to use to calculate and apply the MFP adjustment to determine the annual updates for ASCs, the AFS, and the CLFS for CY 2011 and each subsequent year. We will set forth the final MFP adjustment for
CY 2011 in the CY 2011 PFS final rule. Once we finalize the methodology for determining and applying the MFP adjustment to the CPI–U update factors for these payment systems, for subsequent calendar years, as we have done in the past, we intend to notify the general public of the annual update to
the AFS and CLFS via CMS instruction
and on the CMS Web site. These
notifications would set forth both the CPI–U percentage increase or decrease and the MFP adjustment for the applicable year. For ASCs, for subsequent calendar years, as we have done in the past, we would continue to notify the general public of the annual update to the ASC payment amount via OPPS/ASC rulemaking.

We welcome comments on these proposals.

a. Ambulatory Surgical Centers (ASCs)

Section 1833(i)(2)(C) of the Act requires that, if the Secretary has not updated the ASC payment amounts in a calendar year, the payment amounts shall be increased by the percentage increase in the CPI–U as estimated by the Secretary for the 12-month period ending with the midpoint of the year involved. Because the Secretary does update the ASC payment amounts annually, we adopted a policy, which we codified at § 416.171(a)(2)(ii), to update the ASC conversion factor using the CPI–U for CY 2010 and subsequent calendar years. Therefore, the annual


### 40124 Federal Register / Vol. 75, No. 133 / Tuesday, July 13, 2010 / Proposed Rules

update to the ASC payment system is the CPI–U (referred to as the CPI–U update factor). Section 3401(k) of the ACA amends section 1833(i)(2)(D) of the Act by adding a new clause (v) which requires that ‘‘ any annual update under [the ASC payment] system for the year * * * shall be reduced by the productivity adjustment described in section 1886(b)(3)(B)(xi)(II) ’’ (which we refer to as the MFP adjustment) effective with the calendar year beginning January 1, 2011. Section 3401(k) of the ACA states that application of the MFP adjustment to the ASC payment system may result in the update to the ASC payment system being less than zero for a year and may result in payment rates under the ASC payment system for a year being less than such payment rates for the preceding year.

In accordance with section 1833(i)(2)(C)(i) of the Act, before applying the MFP adjustment, the Secretary first determines the

‘‘ percentage increase ’’ in the CPI–U, which we interpret cannot be a negative number. Thus, in the instance where the percentage change in the CPI–U for a year is negative, we propose to hold the CPI–U update factor for the ASC payment system to zero. Section 1833(i)(2)(D)(v) of the Act, as added by section 3401(k) of the ACA, then requires that the Secretary reduce the CPI–U update factor (which would be held to zero if the CPI–U percentage change is negative) by the MFP adjustment, and states that application of the MFP adjustment may reduce this percentage change below zero. If the application of the MFP adjustment to the CPI–U percentage increase would result in a MFP-adjusted CPI–U update factor that is less than zero, then the annual update to the ASC payment rates would be negative and payments would decrease relative to the prior year.

Table 35 provides illustrative examples of how the MFP would be applied to the ASC payment system. These examples show the implication of a positive CPI–U update factor with a smaller MFP, a positive CPI–U update factor with a large MFP, and a CPI–U update factor of 0. We discuss the application of the MFP to the CPI–U update factor for the ASC payment system under the OPPS/ASC CY 2001 proposed rule (1504–P), which will be published around the same time as this proposed rule. Comments on the specific mathematical calculation of the
MFP should be made to this PFS proposed rule. Comments on the application of the MFP to the CPI–U update factor under the ASC payment system should be made to the OPPS/ ASC CY 2011 proposed rule (1504–P).



### T ABLE 

### 35—M ULTIFACTOR 

### P RODUC



### TIVITY 

### A DJUSTED 

### P AYMENT 

### U PDATE 

### : I LLUSTRATIVE 

### E XAMPLE

CPI–U (percent) MFP (percent) MFP–Adjusted CPI–U update
factor (percent)

4.0 1.3 2 .7

4.0 4.7

¥ 0 .7

0.0 0.2

¥ 0 .2

b. Ambulance Fee Schedule (AFS)

In accordance with section 1834(l)(3)(B) of the Act, the AFS is required to be increased each year by the percentage increase in the CPI–U (U.S. city average) for the 12-month period ending with June of the previous year. We refer to this update as the Ambulance Inflation Factor (AIF). Section 3401(j) of the ACA amends section 1834(l)(3) of the Act to add a new subparagraph (C) which states that, for CY 2011 and each subsequent year, after determining the percentage increase under section 1834(l)(3)(B) (that is, the CPI–U percentage increase, or AIF), the Secretary shall reduce such percentage increase by the MFP adjustment described in section 1886(b)(3)(B)(xi)(II) (as discussed above). Section 3401(j) further amends section 1834(l)(3) to state that the application of subparagraph (C) (that is, the reduction of the CPI–U percentage increase by the MFP adjustment) may result in that percentage increase being less than zero for a year, and may result in payment rates for a year being less than such payment rates for the preceding year.

In accordance with section 1834(l)(3) of the Act as amended by section 3401(j) of the ACA, before applying the MFP adjustment, the Secretary first
determines the ‘‘ percentage increase ’’ in the CPI–U, which we interpret cannot be a negative number. Thus, in the instance where the percentage change in the CPI–U for a year is negative, we propose to hold the AIF to zero. The statute then requires that the Secretary reduce the CPI–U percentage increase (which would be held to zero if the CPI– U percentage change is negative) by the MFP adjustment, and states that application of the MFP adjustment may reduce this percentage increase below zero. If the application of the MFP adjustment to the CPI–U percentage
increase would result in an MFPadjusted AIF that is less than zero, then the annual update to the AFS would be negative and payments would decrease relative to the prior year.

Table 36 provides illustrative examples of how the MFP would be applied to the AFS. Finally, we propose to revise § 414.610(f) to require that the AIF be reduced by the MFP adjustment as required by the statute in determining the annual update under the ambulance
fee schedule for CY 2011 and each subsequent year, and to revise § 414.620 to state that changes in payment rates resulting from the incorporation of the AIF and the MFP adjustment will be announced by CMS by instruction and on the CMS Web site, as we discussed
above.



### T ABLE 

### 36—E XAMPLES OF THE 

### A PPLICATION OF THE 

### M ULTIFACTOR 

### P RODUCTIVITY 

### A DJUSTMENT TO THE 

### A MBULANCE 

### F EE 

### S CHEDULE

A B C D

CPI–UA AIF MFP Final update rounded

2.0% 2.0% 1.3% 0.7%

0.0% 0.0% 1.3%

¥ 1.3%

¥ 2.0% 0.0% 1.3%

¥ 1.3%

1.0% 1.0% 1.3%

¥ 0.3%

c. Clinical Laboratory Fee Schedule

Section 1833(h)(2)(A)(i) of the Act, as amended by section 3401(l) of the ACA, requires the Secretary to annually adjust the CLFS ‘‘ by a percentage increase or decrease equal to the percentage

increase or decrease in the Consumer

Price Index for All Urban Consumers (United States city average minus, for each of the years 2009 through 2010, 0.5 percentage points. ’’ Therefore, the


### 40125 Federal Register / Vol. 75, No. 133 / Tuesday, July 13, 2010 / Proposed Rules

adjustment to the fee schedule can be an
increase or a decrease.

Section 3401(l) of the ACA also adds new clause (iv) that applies in CY 2011 and each subsequent year. This clause requires the Secretary to reduce the adjustment in clause (i): (1) By the MFP adjustment described in section 1886(b)(3)(B)(xi)(II) for 2011 and each subsequent year and (2) by 1.75 percentage points for each of 2011 through 2015 (the ‘‘ percentage adjustment ’’ ). However, section 3401(l)
of the ACA states that the MFP adjustment will not apply in a year where the adjustment to the fee schedule determined under clause (i) is zero or a percentage decrease for a year. Further, the application of the MFP adjustment may not result in an adjustment to the fee schedule under clause (i) of less than zero for a year.

Therefore, we are proposing to apply the MFP adjustment as follows:

• If the CPI–U update factor is positive, it would be reduced by the MFP. However, if application of the MFP would result in a negative update, the update would be held to zero.

• If the CPI–U update factor is zero or negative, the MFP adjustment would not be applied.

Section 3401(l) of the ACA also states that the application of the percentage adjustment may result in an adjustment to the fee schedule under clause (i) being less than zero for a year and may result in payment rates for a year being less than such payment rates for the preceding year. Therefore, we are proposing to apply the percentage reduction of 1.75 percentage points to any adjustment to the fee schedule under the CLFS as directed by Section 3401(l) of the ACA.

Table 37 provides illustrative examples of how these adjustments would be applied to fees under the

CLFS.



### T ABLE 

### 37—E XAMPLES OF THE 

### A PPLICATION OF THE 

### M ULTIFACTOR 

### P RODUCTIVITY 

### A DJUSTMENT TO THE 

### C LINICAL 

### L AB 

### F EE 

### S CHEDULE

CPI–U MFP Productivity adjusted update (

¥ 1.75%) Percentage point reduction Resultant change to CLFS

Greater of 0.0% or

(Col.A)

¥ (Col.B) Col.C

¥ Col.D

A B C D E

2.0% 1.3% 0.7%

¥ 1.75%

¥ 1.05%
0.0% N/A 0.0%

¥ 1.75%

¥ 1.75%

¥ 2.0% N/A 0.0%

¥ 1.75%

¥ 1.75%

d. DMEPOS Fee Schedule

Sections 1834(a)(14), 1834(h)(4), and 1842(s)(1) of the Act mandate annual updates to the fee schedule amounts
established in accordance with these respective sections for covered items of durable medical equipment defined in section 1834(a)(13) of the Act, prosthetic devices, orthotics, and prosthetics defined in section 1834(h)(4)(B) and (C) of the Act, and parenteral and enteral nutrients, equipment, and supplies described in section 1842(s)(2)(D) of the Act. The annual updates for 2011 for
these sections are based on the percentage increase in the CPI–U for the 12-month period ending with June 2010. The annual updates for years subsequent to 2011 are based on the percentage increase in the CPI–U for the 12-month period ending with June of the previous year (that is, June 2011 for 2012, June 2011 for 2013, etc. ). Since 1990 for durable medical equipment, prosthetic devices, orthotics, and prosthetics and 2003 for parenteral and enteral nutrients, equipment, and supplies, these annual fee schedule updates have been implemented on an annual basis through program

instructions.

Section 3401(m) of the ACA amends section 1834(a)(14) of the Act to add a new subparagraph (L) which provides that, for CY 2011 and each subsequent year, the fee schedule update factor based on the CPI–U for the 12-month period ending with June of the previous year is to be reduced by the MFP adjustment described in section 1886(b)(3)(B)(xi)(II) of the Act (as discussed above). Section 3401(m) of
the ACA further amends section 1834(a)(14) of the Act to state that the application of subparagraph (L) (that is, the reduction of the CPI–U percentage increase by the MFP adjustment) may result in that percentage increase being less than zero for a year, and may result in payment rates for a year being less than such payment rates for the preceding year.

Section 3401(n) of ACA amends section 1834(h)(4)(A) of the Act to add a new clause (xi) which provides that, for CY 2011 and each subsequent year, the fee schedule update factor based on the CPI–U for the 12-month period ending with June of the previous year is to be reduced by the MFP adjustment described in section 1886(b)(3)(B)(xi)(II) of the Act (as discussed above). Section 3401(n) of the ACA further amends section 1834(h)(4) of the Act to state that the application of subparagraph (A)(xi) (that is, the reduction of the CPI–U percentage increase by the MFP adjustment) may result in that percentage increase being less than zero for a year, and may result in payment rates for a year being less than such payment rates for the preceding year. Section 3401(o) of ACA amends section 1842(s)(1) of the Act to add a new subparagraph (B) and clause (ii) which provides that, for CY 2011 and each subsequent year, the fee schedule update factor based on the CPI–U for the 12-month period ending with June of the previous year is to be reduced by the MFP adjustment described in section 1886(b)(3)(B)(xi)(II) (as discussed above). Section 3401(o) further amends section 1842(s)(1) to state that the application of subparagraph (B)(ii) (that is, the reduction of the CPI–U percentage increase by the MFP adjustment) may result in that percentage increase being less than zero for a year, and may result in payment rates for a year being less than such payment rates for the preceding year.

The MFP adjustments to the CPI–U percentage increases used in calculating the fee schedule adjustment factors for

these DMEPOS items and services as mandated by sections 3401(m), (n), and (o) of ACA are simple mathematical

calculations and are ministerial in nature. Therefore, we plan to implement these adjustments for 2011 and subsequent years as part of the annual program instructions related to the DMEPOS fees schedule updates.


### 40126 Federal Register / Vol. 75, No. 133 / Tuesday, July 13, 2010 / Proposed Rules

Q. Section 4103: Medicare Coverage of Annual Wellness Visit Providing a
Personalized Prevention Plan

1. Background

a. Medicare Coverage of Preventive Physical Examinations and Routine Checkups

Section 1862(a)(7) of the Act explicitly prohibits Medicare payment for routine physical checkups with certain exceptions. One exception is for the Initial Preventive Physical Exam (also referred to as the ‘‘ Welcome to
Medicare ’’ exam) established for new
beneficiaries effective for services furnished on or after January 1, 2005. Section 4103 of the ACA has provided another exception to section 1862(a)(7). Congress has expanded Medicare coverage under part B to include an Annual Wellness Visit Providing
Personalized Prevention Plan Services (hereinafter referred to as the annual wellness visit) in sections 1861(s)(2)(FF) and 1861(hhh) of the Act. This expanded benefit will be effective on January 1, 2011. Preventive care has become an increasing focus of the Medicare program. For instance, section 101 of the MIPPA expanded Medicare’s authority to establish coverage for preventive services that meet specified criteria. Among other things, the annual wellness visit will encourage beneficiaries to obtain the preventive services already covered by Medicare, and that are appropriate for each individual beneficiary.

b. Requirements for Coverage of an
Annual Wellness Visit

Section 4103 of the ACA provides for coverage of an annual wellness visit,
which includes and/or takes into account a health risk assessment (HRA), and creates a personalized prevention plan for beneficiaries, subject to certain eligibility and other limitations. Section 4103 of the ACA also requires the
identification of elements that must be provided to a beneficiary as part of the first visit for personalized prevention plan services and requires the establishment of a yearly schedule for appropriate provision of such elements
thereafter.

The Affordable Care Act specifies elements that may be included in a personalized prevention plan, including establishment of, or update to, the individual’s medical and family history,
a list of the individual’s current providers and suppliers and medications prescribed for the individual; measurement of height, weight, body-mass index (BMI) or waist circumference, and blood pressure; detection of any cognitive impairment; establishment or update of an appropriate screening schedule for the next 5 to 10 years; establishment or update of a list of risk factors and conditions (including any mental health conditions) for which interventions are recommended or underway; and furnishing of personalized health advice and referral, as appropriate, to health education or preventive counseling services or programs. The Affordable Care Act also permits the Secretary to
add other elements to the annual
wellness visit determined to be appropriate.

2. Proposed Revisions

a. Proposed Revisions to § 411.15,
Particular Services Excluded From Coverage

To conform the regulations to the statutory requirements of the ACA, we are proposing to revise § 411.15 by specifying an exception to the routine physical checkups exclusion from coverage in § 411.15(a)(1) and modifying § 411.15(k)(15). We would add a provision to permit coverage of annual wellness visits that meet the eligibility
limitation and the conditions for coverage we are specifying in § 410.15 (Annual Wellness Visit Providing Personalized Prevention Plan Services). Coverage of the annual wellness visit is furnished under Medicare Part B only. As provided in the statute, this new coverage allows payment for an annual wellness visit if provided after January 1, 2011 for an individual who is no longer within 12 months after the
effective date of his or her first Medicare Part B coverage period, and has not
received either an IPPE or an annual wellness visit within the past 12
months.

b. Proposed Revisions to Part 410, Subpart B—Medical and Other Health

Services

We propose to add § 410.15(a), Condition for Coverage of Annual Wellness Visits Providing Personalized Prevention Plan Services, and § 410.15(b), Limitation on Coverage of Annual Wellness Visits Providing Personalized Prevention Plan Services, to codify the coverage of the annual wellness visit providing personalized prevention plan services.

We are proposing to define several terms in § 410.15. These include the following terms: (1) Detection of any cognitive impairment; (2) Review of the individual’s functional ability and level of safety; (3) Health professional; (4) Establishment of, or update to the individual’s medical and family history; (5) Eligible beneficiary; (6) First annual wellness visit providing personalized prevention plan services; and (7) Subsequent annual wellness visit providing personalized prevention plan

services.

Further, the ACA allows the addition of any other element determined appropriate by the Secretary for
inclusion in an annual wellness visit.
We reviewed the relevant medical literature, current clinical practice guidelines, and the recommendations of
the United States Preventive Services Task Force (USPSTF). Pursuant to that review, we propose to add depression screening and functional status screening as elements of the first annual wellness visit only. In their December 2009 Recommendation Statement, the
U.S. Preventive Services Task Force (USPSTF) recommends screening adults for depression when staff-assisted depression care supports are in place to assure accurate diagnosis, effective treatment and follow-up (Grade: B recommendation). That is, the USPSTF recommends the service; and there is high certainty that the net benefit is moderate or there is moderate certainty
that the net benefit is moderate to
substantial.

The USPSTF is currently updating its 1996 recommendation regarding screening for hearing impairment in
older adults as well as its recommendation on falls in the elderly.
Until those recommendations can be published, functional status screening (including assessment of hearing impairment, ability to successfully perform activities of daily living, fall risk and home safety) appears supportable by evidence only for the
first annual wellness visit.

We also are proposing that the
definition of the term ‘‘ Establishment of, or an update to the individual’s medical and family history ’’ include more than a list of all of an individual’s prescribed medications as provided in the statute, but also supplements such as vitamins and calcium that an individual may use or be exposed to. Supplements such as these are commonly used by many
beneficiaries and the medical literature supports that their use be closely monitored by health professionals because they can interact with prescribed medications and may result in unintended medical problems in individual cases. The statute expressly permits the Secretary to add other
elements such as this to the annual
wellness visits.

(1) Definitions

We are proposing to add the following definitions to § 410.15:


### 40127 Federal Register / Vol. 75, No. 133 / Tuesday, July 13, 2010 / Proposed Rules

• Detection of any cognitive impairment, for purposes of this section,
means assessment of an individual’s cognitive function by direct observation,
with due consideration of information obtained by way of patient report, concerns raised by family members, friends, caretakers, or others.

• Review of the individual’s functional ability and level of safety, for purposes of this section includes, at a minimum, assessment of the following topics: ++ Hearing impairment; ++ Ability to successfully perform

activities of daily living; ++ Fall risk; ++ Home safety.

• Health professional, for purposes of
this section means: ++ A physician who is a doctor of

medicine or osteopathy (as defined in section 1861(r)(1) of the Act); or ++ A practitioner as described in clause

(i) of section 1842(b)(18)(C) of the Act, that is, a physician assistant, nurse practitioner, or clinical nurse specialist (as defined in section 1861(aa)(5) of the Social Security Act); or ++ A medical professional (including a

health educator, registered dietitian, or nutritionist) or a team of medical professionals, who are working under the supervision of a physician as
defined in this definition.

• Establishment of, or an update to the individual’s medical and family history, for purposes of this section,
means at a minimum the collection and documentation of the following: ++ Past medical and surgical history,

including experiences with illnesses, hospital stays, operations, allergies, injuries, and treatments. ++ Use or exposure to medications and

supplements, including calcium and

vitamins. ++ Medical events experienced by the

beneficiary’s parents and any siblings and children, including diseases that may be hereditary or place the
individual at increased risk.

• Eligible beneficiary, for purposes of this section, means an individual who is no longer within 12 months after the
effective date of his or her first Medicare Part B coverage period, and has not received either an initial preventive physical examination or an annual wellness visit providing a personalized prevention plan within the past 12
months.

(2) Requirements of the First Visit for
Personalized Prevention Plan Services

We are proposing that the first annual wellness visit for purposes of this benefit include the following: • Establishment of the individual’s medical and family history;

• Establishment of a list of current providers and suppliers that are regularly involved in providing medical care to the individual;

• Measurement of the individual’s height, weight, body mass index (or waist circumference, if appropriate), blood pressure, and other routine measurements as deemed appropriate,
based on the individual’s medical and family history;

• Detection of any cognitive impairment that the individual may have;

• Review of the individual’s potential (risk factors) for depression, including current or past experiences with depression or other mood disorders, based on the use of an appropriate screening instrument for persons without a current diagnosis of depression, which the health professional as defined in this section may select from various available screening questions or standardized questionnaires designed for this purpose and recognized by national professional medical organizations;

• Review of the individual’s functional ability and level of safety,
based on direct observation or the use of appropriate screening questions or a screening questionnaire, which the health professional as defined in this section may select from various available screening questions or standardized questionnaires designed for this purpose and recognized by national professional medical organizations;

• Establishment of the following: ++ A written screening schedule, such

as a checklist, for the next 5 to 10 years as appropriate, based on
recommendations of the USPSTF and the Advisory Committee on Immunization Practices, and the individual’s health status, screening history, and age-appropriate preventive services covered by Medicare; and
++ A list of risk factors and conditions

for which primary, secondary or tertiary interventions are recommended or are underway, including any mental health conditions or any such risk factors or
conditions that have been identified through an initial preventive physical examination (as described under § 410.16), and a list of treatment options and their associated risks and benefits;

• Furnishing of personalized health advice and a referral, as appropriate, to health education or preventive counseling services or programs aimed at reducing identified risk factors and improving self management, or community-based lifestyle interventionsto reduce health risks and promote selfmanagement and wellness, including weight loss, physical activity, smoking cessation, fall prevention, and nutrition;
and

• Any other element determined appropriate by the Secretary through the National Coverage Determination

process.
(3) Requirements of Subsequent Visits
for Personalized Prevention Plan

Services

We are proposing that subsequent annual wellness visits providing personalized prevention plan services for purposes of this benefit include the following:

• An update of the individual’s medical and family history;

• An update of the list of current providers and suppliers that are regularly involved in providing medical care to the individual, as that list was developed for the first annual wellness visit providing personalized prevention plan services;

• Measurement of an individual’s weight, blood pressure, and other
routine measurements as deemed appropriate, based on the individual’s medical and family history;

• Detection of any cognitive impairment, as that term is defined in this section, that the individual may have;

• An update to the following: ++ The written screening schedule for

the individual as that schedule was developed at the first annual wellness visit providing personalized prevention plan services; and
++ The list of risk factors and

conditions for which primary, secondary or tertiary interventions are recommended or are underway for the individual as that list was developed
at the first annual wellness visit providing personalized prevention plan services;

• Furnishing of personalized health advice to the individual and a referral, as appropriate, to health education or preventive counseling services or programs as that advice and related services are defined in paragraph (a) of this section;

• Any other element determined appropriate by the Secretary through the National Coverage Determination process. Body-mass index (BMI) should
be calculated at the first annual wellness visit and may be recalculated at subsequent visits, if indicated. Given


### 40128 Federal Register / Vol. 75, No. 133 / Tuesday, July 13, 2010 / Proposed Rules

the general stability of adult height, we would not expect the BMI to meaningfully change in the absence of significant weight change. We have not in the definition of the subsequent annual visit required measurement of the individual’s height.

We are proposing to add two distinct

elements to the definition of the first annual wellness visit only: depression screening and functional status

assessment. Our review of the medical

literature and the USPSTF

recommendations indicates that the optimum frequency for those services is

unknown. Thus we believe it would be premature and beyond the current evidence to require that they be included in the definition of subsequent visits, but they may be performed at these visits, if indicated.

In addition, to facilitate future consideration of coverage of additional

elements in the definitions of the first and subsequent annual wellness visits in § 410.15(a), we are proposing that the determination of other required elements for those purposes will be made through the National Coverage Determination (NCD) process. The NCD process is evidence based, transparent and furnishes the opportunity for public comment, and is described in sections 1862(l) of the Act.

While section 4103 of the ACA ultimately requires that an HRA be

included in the new annual wellness visit benefit beginning January 1, 2011, the HRA guidelines (with standards for interactive telephonic and web-based HRAs) and the model HRA tool also required by section 4103 are not yet available. As a result, we have not included requirements related to the HRA in this proposed rule. When HRA guidelines and standards have been established, and a model HRA

instrument is available and determined by the Secretary to be appropriate for the Medicare population, we will revise these regulations to include the HRA as

an element in the definition of the

annual wellness visit.

We are requesting public comments on the components of both the first and subsequent annual wellness visits, as

well as the definitions of related terms

in the document. We ask that commenters making specific recommendations on this or any related issue provide documentation from the medical literature, current clinical practice guidelines, or the USPSTF or Advisory Committee on Immunization

Practices recommendations. 3. Payment for the Annual Wellness Visit Providing Personalized Prevention Plan Services (PPPS)

Section 4103 of the ACA created a
new benefit for the ‘‘ annual wellness

visit ’’ with personalized prevention plan
services. The Affordable Care Act amends section 1861(s)(2) of the Act by adding a new subsection (FF) to provide for coverage of the annual wellness visit beginning January 1, 2011. Section 4103 also adds new subsection (hhh) to
section 1861 of the Act to define

‘‘ personalized prevention plan services ’’ and to specify who may furnish these services. Finally, section 4103 amends section 1848(j)(3) of the Act to provide for payment of annual wellness visits under the PFS, and specifically
excludes the annual wellness visit from the hospital outpatient prospective payment system (OPPS). Therefore, a single payment under the PFS will be
made when an annual wellness visit is furnished by a physician, physician assistant, nurse practitioner, or clinical nurse specialist, or by a medical professional or team of medical professionals, as determined appropriate by the Secretary, under the supervision of a physician.

To allow for Medicare reporting and payment of the annual wellness visit, we are proposing to create two new HCPCS G-codes for reporting the first
wellness visit and creation of the PPPS and the subsequent visits available to the beneficiary every 12 months. Specifically, we are proposing to establish the following two new HCPCS codes for CY 2011: GXXXA (Annual wellness visit; includes a personalized prevention plan of service (PPPS), first visit) and GXXXB (Annual wellness visit; includes a personalized prevention plan of service (PPPS), subsequent visit). A beneficiary’s first annual wellness visit to a practitioner would be reported to Medicare under HCPCS code GXXXA, even if the beneficiary had previously received an initial preventive physical examination (IPPE) that was covered by Medicare. Beneficiaries, in their first 12 months of Part B coverage, will continue to be eligible only for an IPPE. After the first 12 months of Part B coverage, on and after January 1, 2011, beneficiaries will be eligible for an annual wellness visit described by HCPCS code GXXXA or GXXXB, provided that the beneficiary
has not received an IPPE or annual wellness visit within the preceding 12- month period.

A beneficiary would be eligible for
one initial annual wellness visit covered by Medicare that must include all of the required elements that we are proposing for the first visit as described in the preceding section. All other annual
wellness visits that would include the required elements for those visits would be reported as subsequent visits, even if a different practitioner furnished the subsequent annual wellness visit. We would expect there to be continuity and communication among the practitioners caring for beneficiaries over time with respect to the PPPS, and that would
include the case where a different practitioner furnishing a subsequent annual wellness visit would update the information in the patient’s medical record based on the patient’s interval history since the previous annual
wellness visit.

The first wellness visit described by
HCPCS code GXXXA is similar to the IPPE that is currently reported with HCPCS code G0402 (Initial preventive physical examination; face-to-face visit, services limited to new beneficiary during the first 12 months of Medicare enrollment). We believe that the physician work and nonfacility PE of
the IPPE and the first annual wellness visit are very similar, given that both represent an initial beneficiary visit focused on prevention. In the CY 2010 PFS final rule with comment period discussion of payment for the IPPE (74 FR 61767), we noted that in the context of physician work and intensity, HCPCS code G0402 was most equivalent to CPT code 99204 (Level 4 new patient office or other outpatient visit). Therefore, for CY 2011, we are proposing to crosswalk the same physician work RVUs of 2.43
from CPT code 99204 to HCPCS codes G0402 and GXXXA. Similarly, we believe the direct PE inputs for all of these services are similar and, therefore, we are proposing to assign the same direct PE inputs to HCPCS codes G0402
and GXXXA as are included for CPT code 99204. We note that currently, the direct PE inputs for HCPCS code G0402 also include preventive assessment forms, and we are proposing to add this supply to the PE for HCPCS code
GXXXA as well because we believe it
would be used in the first wellness visit. The proposed CY 2011 PE and malpractice RVUs for HCPCS code GXXXA are displayed in Addendum B to this proposed rule. We also note that we are proposing no facility PE RVUs for HCPCS code GXXXA because only a single payment will be made under the
PFS when this service is furnished. There is no separate facility payment for GXXXA when a practitioner furnishes this service in the facility setting.

Moreover, we believe that a subsequent annual wellness visit described by HCPCS code GXXXB is most similar, from the perspectives of


### 40129 Federal Register / Vol. 75, No. 133 / Tuesday, July 13, 2010 / Proposed Rules

physician work and PE, to CPT code 99214 (Level 4 established patient office or other outpatient visit). The subsequent annual wellness visit is a patient visit for PPPS that includes certain required elements, such as updating information regarding the patient’s history, risk factors, and regular medical care providers and suppliers since the prior annual visit, and obtaining routine measurements. We believe the physician work and direct PE of a subsequent annual wellness visit are similar, in terms of evaluation and management (E/M) visit level, to the first wellness visit, which we are proposing to value like a level 4 new patient office or other outpatient visit, as we have previously valued the IPPE. However, the subsequent annual wellness visit would typically be for an established patient and, as described earlier in this section, we are proposing that certain wellness visit elements only
must be furnished in the first wellness visit. As a result, we believe it would be most appropriate to value the subsequent annual wellness visit based upon an E/M visit for an established patient. Therefore, for CY 2011 we are proposing to crosswalk the same physician work RVUs of 1.50 from CPT
code 99214 to HCPCS code GXXXB. Furthermore, we believe the direct PE inputs for these two services are also similar and, therefore, we are proposing to assign the same direct PE inputs to HCPCS code GXXXB as are assigned to
CPT code 99214. We note that we are also proposing to add the same preventive assessment forms to the PE
for HCPCS code GXXXB as we are proposing to add for HCPCS code GXXXA because we believe this supply
would be used in both the first and subsequent annual wellness visits. The proposed CY 2011 PE and malpractice
RVUs for HCPCS code GXXXB are displayed in Addendum B to this proposed rule. Similar to our treatment
of HCPCS code GXXXA for the first wellness visit, we are proposing no facility PE RVUs for HCPCS code GXXXB as only a single payment will be
made under the PFS when this service is furnished. There is no separate facility payment for GXXXB when a practitioner furnishes this service in the facility setting.

While we believe there could be overlap in the direct PE, malpractice expense, and physician work in both history taking and examination of the patient in the context of the initial or subsequent wellness visit and another E/M service, we are not proposing to limit the level of a medically necessary
E/M visit when furnished and billed with a wellness visit. As we stated in
the CY 2005 PFS final rule with comment period with respect to the IPPE (69 FR 66289 through 66290), we do not want to prohibit the reporting of an appropriate level of service when it is necessary to evaluate and treat the beneficiary for acute and chronic conditions. However, at the same time, we believe the practitioner is better able to discuss health promotion, disease prevention, and the educational opportunities available with
beneficiaries when their health status has been stabilized and the beneficiary is physically receptive. Therefore, depending on the clinical circumstances, a CPT code for a medically necessary E/M visit may be reported and appended with CPT modifier -25 (significant, separately identifiable evaluation and management service by the same physician on the same day of the procedure or other service) to designate the E/M visit as a separately identifiable service from the initial or subsequent wellness visit. However, we believe this scenario would be uncommon, and we expect that no components of an encounter
attributable to the annual wellness visit would be used in determining the level of a separate E/M visit that would also be reported.

With respect to beneficiary costsharing, section 4103(c) of the ACA amends section 1833(a)(1) of the Act by adding subparagraph (X), referring to the PPPS to state that the amount paid shall be 100 percent of the lesser of the actual charge for the services or the amount determined under the payment
basis determined under section 1848 of the Act, thereby eliminating
coinsurance for the annual wellness visit. Finally, section 4103(b)(4) of the ACA amends section 1833(b) of the Act to specify that the Part B deductible does not apply to the annual wellness visit. We expect that practitioners will
work to ensure that this valuable new
Medicare benefit is furnished to the beneficiaries that they care for in their practices, effective January 1, 2011.

R. Section 4104: Removal of Barriers to
Preventive Services in Medicare

1. Definition of ‘‘ Preventive Services ’’

Section 4104 of the ACA revises section 1861(ddd) of the Act to add paragraph (3), which defines the term

‘‘ preventive services ’’ as follows:

• The specific services currently listed in section 1861(ww)(2) of the Act with the explicit exclusion of electrocardiograms (as specified in section 1861(ww)(2)(M) of the Act); • The initial preventive physical examination (IPPE) established by
section 611 of the MMA and defined in section 1861(ww)(1) of the Act; and

• The annual wellness visit, as specified by section 1861(hhh) of the Act as added by section 4103 of the ACA. We refer readers to section V.Q. of this proposed rule for the proposed provisions related to the coverage of and payment for the annual wellness visit. The regulations regarding coverage of the IPPE are specified in § 410.16 and remain unchanged by the ACA.

The specific preventive services
included in the definition of ‘‘ preventive

services ’’ in section 1861(ddd)(3)(A) of
the Act as cross-referenced to section 1861(ww)(2) of the Act, excluding electrocardiograms, include the following:

• Pneumococcal, influenza, and hepatitis B vaccine and administration.

• Screening mammography.

• Screening pap smear and screening pelvic exam.

• Prostate cancer screening tests.

• Colorectal cancer screening tests.

• Outpatient diabetes selfmanagement training (DSMT).

• Bone mass measurement.

• Screening for glaucoma.

• Medical nutrition therapy (MNT)

services.

• Cardiovascular screening blood

tests.

• Diabetes screening tests.

• Ultrasound screening for abdominal aortic aneurysm (AAA).

• Additional preventive services identified for coverage through the national coverage determination (NCD)

process.

We note that currently the only additional preventive service identified for coverage through the NCD process is HIV testing. A proposed NCD for smoking cessation services for asymptomatic patients was released in May 2010 on the CMS Web site at: http://www.cms.gov/mcd/
index

_ list.asp?list

_ type=nca. We will address the applicability of section 1861(ddd)(3)(A) of the Act (as added by section 4104 of the ACA) to these services if an NCD establishing them as additional preventive services is
finalized.

We are proposing to add the
definition of ‘‘ preventive services ’’ in § 410.2 to implement the provisions of section 1861(ddd)(3) of the Act (as amended by section 4104 of the ACA).

2. Deductible and Coinsurance for

Preventive Services

Section 4104(b)(4) of the ACA amends section 1833(a)(1) of the Act by requiring 100 percent Medicare


### 40130 Federal Register / Vol. 75, No. 133 / Tuesday, July 13, 2010 / Proposed Rules

payment for the IPPE and for those preventive services recommended by
the United States Preventive Services Task Force (USPSTF) with a grade of A or B for any indication or population and that are appropriate for the individual. This provision waives any
coinsurance that would otherwise be applicable under section 1833(a)(1) of
the Act for those items and services listed in section 1861(ww)(2) of the Act (excluding electrocardiograms) to which the USPSTF has given a grade of A or B. In addition, section 4103(c)(1) of the ACA amends section 1833(c)(1) of the
Act to waive the coinsurance for the
annual wellness visit. The coinsurance represents the beneficiary’s share of the payment to the provider or supplier for
furnished services. Coinsurance generally refers to a percentage (for example, 20 percent) of the Medicare payment rate for which the beneficiary is liable and is applicable under the PFS, while copayment generally refers
to an established amount that the beneficiary must pay that is not necessarily related to a particular percentage of the Medicare payment, and is applicable under the hospital Outpatient Prospective Payment System (OPPS). We refer readers to the CY 2011 OPPS/ASC proposed rule for proposed provisions related to payment for preventive services, including waiver of the deductible and copayment, under
the OPPS.

Section 4104(c) of the ACA amends section 1833(b)(1) of the Act to waive the Part B deductible for preventive services described in subparagraph (A) of section 1861(ddd)(3) of the Act that have a grade of A or B from the USPSTF. In addition, section 1833(b)(1) of the Act (as amended by section 4103(c)(4) of the ACA) waives the Part
B deductible for the annual wellness visit. These provisions are effective for services furnished on and after January 1, 2011. Section 101(b)(2) of the MIPPA amended section 1833(b) of the Act to
waive the deductible for the IPPE effective January 1, 2009.

Not all preventive services described in subparagraph (A) of section 1861(ddd)(3) are recommended by the USPSTF with a grade of A or B and, therefore, some of the preventive
services do not meet the criteria in sections 1833(a)(1) and (b)(1) of the Act
for the waiver of the deductible and coinsurance. However, with certain exceptions noted below, the changes made by section 4104 of the ACA do not affect most of the preexisting specific provisions in sections 1833(a) and 1833(b) of the Act (that are codified in regulations in § 410.160(b) and § 410.152) that waive the deductible and coinsurance for specific services. For example, section 1833(a)(1)(D) of the Act already waives the coinsurance and section 1833(b)(3) of the Act waives the deductible for clinical laboratory tests (including tests furnished for screening purposes). Section 4104 of the ACA does not change this provision and, therefore, the waiver of both the
deductible and coinsurance remains in place for all laboratory tests, regardless of whether the particular clinical laboratory test meets the USPSTF grading criteria specified in sections 1833(a)(1) and 1833(b)(1) of the Act (as amended by section 4104 of the ACA)
for waiver of the deductible and coinsurance as a preventive service.

The following preventive services listed in section 1833(ddd)(3)(A) of the Act are not recommended by the USPSTF with a grade of A or B for any indication or population: digital rectal examination furnished as a prostate cancer screening service; glaucoma screening; DSMT services; and barium
enema furnished as a colorectal cancer screening service.

Specifically, HCPCS code G0102 (Prostate cancer screening; digital rectal exam), which does not have a grade of A or B from the USPSTF for any indication or population, will continue to be subject to the deductible and coinsurance as there is no statutory provision to the contrary. However, the
deductible and coinsurance for HCPCS code G0103 (Prostate cancer screening; prostate specific antigen test (PSA)) will
continue to be waived in accordance with section 1833(a)(1)(D) of the Act, even though this service also does not have a grade of A or B from the

USPSTF.

Glaucoma screening services, described by HCPCS codes G0117 (Glaucoma screening for high risk patients furnished by an optometrist or ophthalmologist) and G0118 (Glaucoma screening for high risk patient furnished under the direct supervision of an optometrist or ophthalmologist), will continue to be subject to the deductible
and coinsurance because these services are not recommended with a grade of A or B by the USPSTF for any indication or population and there is no other statutory provision to except them. Similarly, DSMT services are currently not rated by the USPSTF, and there is no other statutory provision to except them from applicability of the
deductible and coinsurance. Therefore
the deductible and coinsurance requirements will continue to apply.

Barium enemas furnished as colorectal cancer screening tests, described by HCPCS codes G0106 (Colorectal cancer screening; alternative to G0104, screening sigmoidoscopy, barium enema) and G0120 (Colorectal cancer screening; alternative to G0105, screening colonoscopy, barium enema), do not have a grade of A or B from the USPSTF for any indication or population. However, the deductible does not apply to barium enemas furnished as colorectal cancer screening tests, because colorectal cancer screening tests are explicitly excluded
from the deductible in section 1833(b)(8) of the Act. However, there is no specific exclusion of barium enemas from the coinsurance requirement in section 1833(b)(1) of the Act and, therefore, this requirement, as applicable, continues to apply to barium
enemas. We note that the USPSTF has given a grade of A to screening colonoscopy, screening flexible sigmoidoscopy, and fecal occult blood screening tests, and that, as a result, these colorectal cancer screening tests are subject to the statutory waiver of
both the deductible and coinsurance.

We note also that the USPSTF ceased to make recommendations with regard
to vaccines and vaccine administration after CY 1996, so as not to conflict with
the recommendations of the Centers for
Disease Control and Prevention’s Advisory Committee on Immunization Practices. However, the USPSTF’s most recent vaccine recommendations gave a grade of B to influenza and pneumococcal vaccines and their administration and a grade of A to hepatitis B vaccine and its
administration. While sections 1833(a)(1) and 1833(b)(1) of the Act require that the preventive services receive a grade of A or B from the
USPSTF for the coinsurance and deductible to be waived, the statute does not specify that the recommended grade must be furnished by the USPSTF within any given timeframe. The USPSTF grades for these preventive
services are the most current USPSTF grade and have never been withdrawn. Therefore, we believe that these preventive services meet the requirements of the statute for the
waiver of the deductible and
coinsurance. We also note that the
Centers for Disease Control and Prevention’s Advisory Committee on Immunization Practices currently recommends influenza, pneumococcal, and hepatitis B vaccines.

We are proposing to update § 410.160(b), which lists the services for which expenses incurred are not subject
to the Part B annual deductible and do not count toward meeting that deductible. Specifically, we are proposing to revise § 410.160(b)(2) to include influenza and hepatitis B


### 40131 Federal Register / Vol. 75, No. 133 / Tuesday, July 13, 2010 / Proposed Rules

vaccines and their administration, in addition to pneumococcal vaccine and its administration. In addition, in § 410.160(b), we are also proposing to add exceptions for bone mass measurement, MNT services, and the
annual wellness visit.

In § 410.152, we are proposing to revise paragraph (l) to establish the amount of payment under the applicable payment system for providers and suppliers of the services listed in the paragraph and displayed in Table 38. Table 38 displays the HCPCS codes that we are proposing as

‘‘ preventive services ’’ under section 1861(ddd)(3)(A) of the Act and
identifies the HCPCS codes for the IPPE
and the annual wellness visit. Table 38
also indicates the most recent USPSTF grade, if any, that is the basis for our proposed policy with regard to waiver of the deductible and coinsurance, as applicable, and the Medicare payment system under which the HCPCS code would be paid when furnished outside of the facility setting. We note that the changes made by section 4104 of the ACA with respect to the deductible and coinsurance apply in all settings in
which the services are furnished.

In developing recommendations regarding preventive services, we recognize that the USPSTF may make recommendations that are specific to an indication or population, at times including characteristics such as gender and age in its recommendations. While we are proposing to waive the deductible and coinsurance for any Medicare covered preventive service recommended with a grade of A or B for any indication or population, with no limits on the indication or population as long as the USPSTF has recommended the preventive service for at least one indication and/or population with a grade of A or B, we note that all existing Medicare coverage policies for such services, including any limitations based on indication or population, continue to apply. In some cases, national coverage policies may currently limit Medicare coverage based on the indication or population, consistent
with the USPSTF recommendations with a grade of A or B for the indication or population. In other cases where Medicare does not explicitly noncover preventive services for a specific population or indication, we would expect that, particularly in those cases
where the USPSTF recommendation grade is a D (that is, the USPSTF recommends against the service because there is moderate or high certainty that
the service has no net benefit or that the harms outweigh the benefits), practitioners would only order those preventive services that are clinically appropriate for the beneficiary. If we
have concerns in the future about the appropriateness of preventive services for an indication or population in light of the USPSTF’s recommendations, we may consider using our authority under section 1834(n)(1) of the Act (as added by section 4105 of the ACA) to modify Medicare coverage of any preventive
service to be consistent with the
recommendations of the USPSTF.

Section 10501(i)(2) of the ACA amended the definition of Federally Qualified Health Center (FQHC) services as defined in section 1861(aa)(3)(A) of the Act by replacing the specific references to services provided under section 1861(qq) and (vv) of the Act (diabetes outpatient self-management training services and medical nutrition therapy services, respectively) with preventive services as defined in section 1861(ddd)(3) of the Act, as established by section 4014(a)(3) of the ACA. These changes are effective for services provided on or after January 1, 2011. Accordingly, we are proposing to conform the regulations to the new statutory requirement by adding a new section § 405.2449 which would add the new preventive services definition to the definition of FQHC services effective for services provided on or after January

1, 2011.

Section 1861(ddd)(3) of the Act
defines ‘‘ preventive services ’’ as consisting of the following three
components: • Screening and preventive services described in section 1861(ww)(2) of the Act (other than electrocardiograms described in subparagraph (M) of that same subsection).

• An initial preventive physical examination, as defined in section 1861(ww) of the Act.

• Personalized prevention plan
services as defined in section 1861(hhh)(1) of the Act.

We are proposing to add each of these three components into the new Medicare FQHC preventive services definition in a new § 405.2449.

Section 4104(b)(1) of the ACA, as amended by section 10406 of the same Act, waives coinsurance for preventive services by adding section 1833(a)(1)(Y) to the Act to require, essentially, waiver of coinsurance for preventive services that are recommended with a grade of A or B by the USPSTF for any indication or population. This provision is specifically designed to remove barriers to affording and obtaining such preventive services under Medicare.

In addition, section 10501(i)(3)(B)(ii) of the ACA added section 1833(a)(1)(Z) to the Act to require a 20-percent copay on all FQHC services after implementation of the FQHC prospective payment system. We believe we can give both section 1833(a)(1)(Y) and (Z) of the Act, and the definition of FQHC services (revised to include the broader scope of preventive services) their best effect by permitting a 100 percent reimbursement rate for preventive services as defined at section 1861 (ddd)(3) of Act, effective January 1,

2011.

Section 1833(b)(4) of the Act stipulates that the Medicare Part B deductible shall not apply to Federally qualified health center services. The ACA makes no change to this provision,
therefore Medicare shall continue to
waive the Part B deductible for all federally qualified health center services, including preventive services added by the ACA.



### T ABLE 

### 38—P ROPOSED 

### CY 2011 D EDUCTIBLE AND 

### C OINSURANCE FOR 

### P REVENTIVE 

### S ERVICES 

### U NDER 

### S ECTION 

### 1861(ddd)(3)(A) OF THE 

### A CT 

### (I NCLUDES THE 

### IPPE AND THE 

### A NNUAL 

### W ELLNESS 

### V ISIT 

### )

Preventive

service CPT/ HCPCS

Code Long descriptor USPSTF rating 1 Payment
method CY 2010 coins./
deductible CY 2011 coins./
deductible

Initial Preventive Physical

Examination, IPPE. G0402 Initial preventive physical examination; face to face visits, services limited to new beneficiary during the first 12

months of Medicare enrollment. * Not

Rated. PFS .......... Coins. applies and

ded. is waived. WAIVED.

G0403 Electrocardiogram, routine ECG with 12 leads; performed as a screening for the initial preventive physical examination with interpretation and report. .................. PFS .......... Not Waived ............. Not Waived.


### 40132 Federal Register / Vol. 75, No. 133 / Tuesday, July 13, 2010 / Proposed Rules

T ABLE 

### 38—P ROPOSED 

### CY 2011 D EDUCTIBLE AND 

### C OINSURANCE FOR 

### P REVENTIVE 

### S ERVICES 

### U NDER 

### S ECTION 

### 1861(ddd)(3)(A) OF THE 

### A CT 

### (I NCLUDES THE 

### IPPE AND THE 

### A NNUAL 

### W ELLNESS 

### V ISIT 

### )—Continued

Preventive

service CPT/ HCPCS

Code Long descriptor USPSTF rating 1 Payment
method CY 2010 coins./
deductible CY 2011 coins./
deductible

G0404 Electrocardiogram, routine ECG with 12leads; tracing only, without interpretation and report, performed as a screening for the initial preventive physical examination. .................. PFS .......... Not Waived ............. Not Waived.

G0405 Electrocardiogram, routine ECG with 12 leads; interpretation and report only, performed as a screening for the initial preventive physical examination. .................. PFS .......... Not Waived ............. Not Waived.

Ultrasound

Screening

for Abdominal Aortic Aneurysm (AAA). G0389 Ultrasound, B-scan and/or real time with image documentation; for abdominal aortic aneurysm (AAA) ultrasound screening. B .............. PFS .......... Coins. applies and

ded. is waived. WAIVED.

Cardiovascular

Disease Screening. 80061 Lipid panel ................................................ A .............. CLFS ....... WAIVED .................. WAIVED.

82465 Cholesterol, serum or whole blood, total .. .................. CLFS ....... WAIVED .................. WAIVED. 83718 Lipoprotein, direct measurement; high density cholesterol (hdl cholesterol). .................. CLFS ....... WAIVED .................. WAIVED.

84478 Triglycerides .............................................. .................. CLFS ....... WAIVED .................. WAIVED.

Diabetes

Screening

Tests. 82947 Glucose; quantitative, blood (except reagent strip). B .............. CLFS ....... WAIVED .................. WAIVED.

82950 Glucose; post glucose dose (includes glucose). .................. CLFS ....... WAIVED .................. WAIVED.

82951 Glucose; tolerance test (gtt), three specimens (includes glucose). * Not

Rated. CLFS ....... WAIVED .................. WAIVED.

Diabetes SelfManagement Training Services. (DSMT) .......... G0108 Diabetes outpatient self-management training services, individual, per 30

minutes. * Not

Rated. PFS .......... Not Waived ............. Not Waived.

G0109 Diabetes outpatient self-management training services, group session (2 or more), per 30 minutes. .................. PFS .......... Not Waived ............. Not Waived.

Medical Nutrition Therapy(MNT) Services. 97802 Medical nutrition therapy; initial assessment and intervention, individual, faceto-face with the patient, each 15 minutes. B .............. PFS .......... Not Waived ............. WAIVED.

97803 Medical nutrition therapy; re-assessmentand intervention, individual, face-toface with the patient, each 15 minutes. .................. PFS .......... Not Waived ............. WAIVED.

97804 Medical nutrition therapy; group (2 or more individual(s)), each 30 minutes. .................. PFS .......... Not Waived ............. WAIVED.

G0270 Medical nutrition therapy; reassessmentand subsequent intervention(s) following second referral in same year for change in diagnosis, medical conditionor treatment regimen (including additional hours needed for renal disease), individual, face to face with the patient,

each 15 minutes. B .............. PFS .......... Not Waived ............. WAIVED.

G0271 Medical nutrition therapy, reassessmentand subsequent intervention(s) following second referral in same year for change in diagnosis, medical condition,or treatment regimen (including additional hours needed for renal disease), group (2 or more individuals), each 30

minutes. .................. PFS .......... Not Waived ............. WAIVED.


### 40133 Federal Register / Vol. 75, No. 133 / Tuesday, July 13, 2010 / Proposed Rules

T ABLE 

### 38—P ROPOSED 

### CY 2011 D EDUCTIBLE AND 

### C OINSURANCE FOR 

### P REVENTIVE 

### S ERVICES 

### U NDER 

### S ECTION 

### 1861(ddd)(3)(A) OF THE 

### A CT 

### (I NCLUDES THE 

### IPPE AND THE 

### A NNUAL 

### W ELLNESS 

### V ISIT 

### )—Continued

Preventive

service CPT/ HCPCS

Code Long descriptor USPSTF rating 1 Payment
method CY 2010 coins./
deductible CY 2011 coins./
deductible

Screening Pap

Test. G0123 Screening cytopathology, cervical or vaginal (any reporting system), collected in preservative fluid, automated thin layer preparation, screening bycytotechnologist under physician supervision. A .............. CLFS ....... WAIVED .................. WAIVED.

G0124 Screening cytopathology, cervical or vaginal (any reporting system), collected in preservative fluid, automated thin layer preparation, requiring interpretation by physician. .................. PFS .......... Coins. applies and

ded. is waived. WAIVED.

G0141 Screening cytopathology smears, cervical or vaginal, performed by automatedsystem, with manual rescreening, requiring interpretation by physician. A .............. PFS .......... Coins. applies and

ded. is waived. WAIVED.

G0143 Screening cytopathology, cervical or vaginal (any reporting system), collected in preservative fluid, automated thin layer preparation, with manual screening and rescreening by cytotechnologist under physician supervision. A .............. CLFS ....... WAIVED .................. WAIVED.

G0144 Screening cytopathology, cervical or vaginal (any reporting system), collected in preservative fluid, automated thin layerpreparation, with screening by automated system, under physician supervision. A .............. CLFS ....... WAIVED .................. WAIVED.

G0145 Screening cytopathology, cervical or vaginal (any reporting system), collected in preservative fluid, automated thin layerpreparation, with screening by automated system and manual rescreening under physician supervision. A .............. CLFS ....... WAIVED .................. WAIVED.

G0147 Screening cytopathology smears, cervical or vaginal, performed by automated system under physician supervision. A .............. CLFS ....... WAIVED .................. WAIVED.

G0148 Screening cytopathology smears, cervical or vaginal, performed by automated system with manual rescreening. A .............. CLFS ....... WAIVED .................. WAIVED.

P3000 Screening papanicolaou smear, cervicalor vaginal, up to three smears, by technician under physician supervision. .................. CLFS ....... WAIVED .................. WAIVED.

P3001 Screening papanicolaou smear, cervicalor vaginal, up to three smears, requiring interpretation by physician. .................. PFS .......... Coins. applies &

ded. is waived. WAIVED.

Q0091 Screening papanicolaou smear; obtaining, preparing and conveyance of cervical or vaginal smear to laboratory. .................. PFS .......... Coins. applies &

ded. is waived. WAIVED.

Screening Pelvic Exam. G0101 Cervical or vaginal cancer screening; pelvic and clinical breast examination. A .............. PFS .......... Coins. applies and

ded. is waived. WAIVED.

Screening

Mammography. 77052 Computer-aided detection (computer algorithm analysis of digital image datafor lesion detection) with further physician review for interpretation, with or without digitization of film radiographic images; screening mammography (listseparately in addition to code for primary procedure). B .............. PFS .......... Coins. applies and

ded. is waived. WAIVED.

77057 Screening mammography, bilateral (2- view film study of each breast). B .............. PFS .......... Coins. applies and

ded. is waived. WAIVED.

G0202 Screening mammography, producing direct digital image, bilateral, all views. .................. PFS .......... Coins. applies &

ded. is waived. WAIVED.

Bone Mass

Measurement. G0130 Single energy x-ray absorptiometry (sexa) bone density study, one or more sites; appendicular skeleton (peripheral) ( e.g., radius, wrist, heel). B .............. PFS .......... Not Waived ............. WAIVED.


### 40134 Federal Register / Vol. 75, No. 133 / Tuesday, July 13, 2010 / Proposed Rules

T ABLE 

### 38—P ROPOSED 

### CY 2011 D EDUCTIBLE AND 

### C OINSURANCE FOR 

### P REVENTIVE 

### S ERVICES 

### U NDER 

### S ECTION 

### 1861(ddd)(3)(A) OF THE 

### A CT 

### (I NCLUDES THE 

### IPPE AND THE 

### A NNUAL 

### W ELLNESS 

### V ISIT 

### )—Continued

Preventive

service CPT/ HCPCS

Code Long descriptor USPSTF rating 1 Payment
method CY 2010 coins./
deductible CY 2011 coins./
deductible

77078 Computed tomography, bone mineral density study, 1 or more sites; axial skeleton ( e.g., hips, pelvis, spine). .................. PFS .......... Not Waived ............. WAIVED.

77079 Computed tomography, bone mineraldensity study, 1 or more sites; appendicular skeleton (peripheral) ( e.g., radius, wrist, heel). .................. PFS .......... Not Waived ............. WAIVED.

77080 Dual-energy x-ray absorptiometry (dxa), bone density study, 1 or more sites; axial skeleton ( e.g., hips, pelvis, spine). .................. PFS .......... Not Waived ............. WAIVED.

77081 Dual-energy x-ray absorptiometry (dxa), bone density study, 1 or more sites; appendicular skeleton (peripheral) ( e.g., radius, wrist, heel). .................. PFS .......... Not Waived ............. WAIVED.

77083 Radiographic absorptiometry ( e.g., photodensitometry, radiogrammetry), 1

or more sites. .................. PFS .......... Not Waived ............. WAIVED.

76977 Ultrasound bone density measurement and interpretation, peripheral site(s), any method. B .............. PFS .......... Not Waived ............. WAIVED.

Colorectal

Cancer Screening. G0104 Colorectal cancer screening; flexible sigmoidoscopy. A .............. PFS .......... Coins. applies and

ded. is waived. WAIVED.

G0105 Colorectal cancer screening; colonoscopy on individual at high risk. .................. PFS .......... Coins. applies and;

ded. is waived. WAIVED.

G0106 Colorectal cancer screening; alternative to G0104, screening sigmoidoscopy,

barium enema. * Not

Rated. PFS .......... Coins. applies and

ded. is waived. Coins. applies and

ded. is waived.

G0120 Colorectal cancer screening; alternativeto G0105, screening colonoscopy, barium enema.. .................. PFS .......... Coins. applies and

ded. is waived. Coins. applies and

ded. is waived.

G0121 Colorectal cancer screening; colonoscopy on individual not meeting criteria for high risk. A .............. PFS .......... Coins. applies and

ded. is waived. WAIVED.

82270 Blood, occult, by peroxidase activity ( e.g., guaiac), qualitative; feces, consecutive. .................. CLFS ....... WAIVED .................. WAIVED.

G0328 Colorectal cancer screening; fecal occultblood test, immunoassay, 1–3 simultaneous. .................. CLFS ....... Coins. applies and

ded. is waived. WAIVED.

Prostate Cancer Screening. G0102 Prostate cancer screening; digital rectal

examination. D .............. PFS .......... Not Waived ............. Not Waived.

G0103 Prostate cancer screening; prostate specific antigen test (PSA). .................. CLFS ....... WAIVED .................. WAIVED.

Glaucoma

Screening. G0117 Glaucoma screening for high risk patientsfurnished by an optometrist or ophthalmologist. I ................ PFS .......... Not Waived ............. Not Waived.

G0118 Glaucoma screening for high risk patient furnished under the direct supervision of an optometrist or ophthalmologist. .................. PFS .......... Not Waived ............. Not Waived.

Influenza

Virus Vaccine. 90655 Influenza virus vaccine, split virus, preservative free, when administered to children 6–35 months of age, for

intramuscular use. B .............. Drug Pricing File. WAIVED .................. WAIVED.

90656 Influenza virus vaccine, split virus, preservative free, when administered to individuals 3 years and older, for

intramuscular use. .................. Drug Pricing File. WAIVED .................. WAIVED.

90657 Influenza virus vaccine, split virus, when

administered to children 6–35 months of age, for intramuscular use. .................. Drug Pricing File. WAIVED .................. WAIVED.

90658 Influenza virus vaccine, split virus, when administered to individuals 3 years of age and older, for intramuscular use. .................. Drug Pricing File. WAIVED .................. WAIVED.

90660 Influenza virus vaccine, live, for intranasal

use. .................. Drug Pricing File. WAIVED .................. WAIVED.


### 40135 Federal Register / Vol. 75, No. 133 / Tuesday, July 13, 2010 / Proposed Rules

T ABLE 

### 38—P ROPOSED 

### CY 2011 D EDUCTIBLE AND 

### C OINSURANCE FOR 

### P REVENTIVE 

### S ERVICES 

### U NDER 

### S ECTION 

### 1861(ddd)(3)(A) OF THE 

### A CT 

### (I NCLUDES THE 

### IPPE AND THE 

### A NNUAL 

### W ELLNESS 

### V ISIT 

### )—Continued

Preventive

service CPT/ HCPCS

Code Long descriptor USPSTF rating 1 Payment
method CY 2010 coins./
deductible CY 2011 coins./
deductible

90662 Influenza virus vaccine, split virus, preservative free, enhanced immunogenicity via increased antigen content, for intramuscular use. .................. Drug Pricing File. WAIVED .................. WAIVED.

G0008 Administration of influenza virus vaccine .................. PFS .......... WAIVED .................. WAIVED.G9141 Influenza A (H1N1) immunization administration (includes the physician counseling the patient/family). .................. PFS .......... WAIVED .................. WAIVED.

G9142 Influenza A (H1N1) vaccine, any route of

administration. .................. Drug Pricing File (if not supplied

at no cost). WAIVED .................. WAIVED.

Pneumococcal

Vaccine. 90669 Pneumococcal conjugate vaccine, polyvalent, when administered to children younger than 5 years, for intramuscular

use. B .............. Drug Pricing File. WAIVED .................. WAIVED.

90670 Pneumococcal conjugate vaccine, 13 valent, for intramuscular use.. .................. Drug Pricing File. WAIVED .................. WAIVED.

90732 Pneumococcal polysaccharide vaccine, 23-valent, adult or immunosuppressed patient dosage, when administered toindividuals 2 years or older, for subcutaneous or intramuscular use. .................. Drug Pricing File. WAIVED .................. WAIVED.

G0009 Administration of pneumococcal vaccine .................. PFS .......... WAIVED .................. WAIVED. Hepatitis B

Vaccine. 90740 Hepatitis B vaccine, dialysis or immunosuppressed patient dosage (3 dose schedule), for intramuscular use. A .............. Drug Pricing File. Not Waived ............. WAIVED.

90743 Hepatitis B vaccine, adolescent (2 dose schedule), for intramuscular use. .................. Drug Pricing File. Not Waived ............. WAIVED.

90744 Hepatitis B vaccine, pediatric/adolescent dosage (3 dose schedule), for

intramuscular use. .................. Drug Pricing File. Not Waived ............. WAIVED.

90746 Hepatitis B vaccine, adult dosage, for

intramuscular use. .................. Drug Pricing File. Not Waived ............. WAIVED.

90747 Hepatitis B vaccine, dialysis or immunosuppressed patient dosage (4 dose schedule), for intramuscular use. .................. Drug Pricing File. Not Waived ............. WAIVED.

G0010 Administration of hepatitis B vaccine ....... A .............. PFS .......... Not Waived ............. WAIVED. HIV Screening 86689 HTLV or HIV antibody, confirmatory test ( e.g., Western Blot). A .............. CLFS ....... WAIVED .................. WAIVED.

G0432 Infectious agent antigen detection by enzyme immunoassay (EIA) technique,qualitative or semi-qualitative, multiplestep method, HIV–1 or HIV–2, screening. .................. CLFS ....... WAIVED .................. WAIVED.

G0433 Infectious agent antigen detection by enzyme-linked immunosorbent assay (ELISA) technique, antibody, HIV–1 or HIV–2, screening. .................. CLFS ....... WAIVED .................. WAIVED.

G0435 Infectious agent antigen detection by rapid antibody test of oral mucosa transudate, HIV–1 or HIV–2, screening. .................. CLFS ....... WAIVED .................. WAIVED.

Annual

Wellness

Visit. GXXXA Annual wellness visit, including PPPS,

first visit. * Not

Rated. PFS .......... N/A .......................... WAIVED.

GXXXB Annual wellness visit, including PPPS, subsequent visit. .................. PFS .......... N/A .......................... WAIVED.

1 U.S. Preventive Services Task Force Recommendations. A—The USPSTF strongly recommends that clinicians routinely provide [the service] to eligible patients. (The USPSTF found good e vidence that [the service] improves important health outcomes and concludes that benefits substantially outweigh harms.)

B—The USPSTF recommends that clinicians routinely provide [the service] to eligible patients. (The USPSTF found at least fair evidence that [the service] improves important health outcomes and concludes that benefits outweigh harms.)

C—The USPSTF makes no recommendation for or against routine provision of [the service]. (The USPSTF found at least fair evidence that[the service] can improve health outcomes but concludes that the balance of benefits and harms is too close to justify a general recommendation.)

D—The USPSTF recommends against routinely providing [the service] to asymptomatic patients. (The USPSTF found at least fair evi dence that [the service] is ineffective or that harms outweigh benefits.)


### 40136 Federal Register / Vol. 75, No. 133 / Tuesday, July 13, 2010 / Proposed Rules

I—The USPSTF concludes that the evidence is insufficient to recommend for or against routinely providing [the service]. (Evidence that [the service] is effective is lacking, of poor quality, or conflicting and the balance of benefits and harms cannot be determined.)

4. Extension of Waiver of Deductible to

Services Furnished in Connection With

or in Relation to a Colorectal Cancer Screening Test That Becomes Diagnostic or Therapeutic

Section 4104(c) of the ACA amends section 1833(b) of the Act to waive the

Part B deductible for colorectal cancer screening tests that become diagnostic. Specifically, section 1833(b)(1) of the Act (as amended by section 4104(c)(2) of the ACA) waives the deductible with respect to a colorectal cancer screening test regardless of the code that is billed for the establishment of a diagnosis as a result of the test, or for the removal of tissue or other matter or other procedure that is furnished in connection with, as a result of, and in the same clinical encounter as a screening test. We are proposing that all surgical services furnished on the same date as a planned screening colonoscopy, planned flexible sigmoidoscopy, or barium enema be

considered to be furnished in connection with, as a result of, and in

the same clinical encounter as the screening test. In the event of a legislative change to this policy (for example, a statutory change that would
waive the coinsurance for these related services in addition to the deductible), we would reassess the appropriateness of this proposed definition of services that are furnished in connection with, as a result of, and in the same clinical
encounter as the colorectal cancer screening test that becomes diagnostic. We also note that the beneficiary’s annual deductible would likely be met when any surgical procedure (related or not) is furnished on the same day as the scheduled screening test.

We are proposing to implement this provision by creating a HCPCS modifier that providers and practitioners would append to the diagnostic procedure code that is reported instead of the screening colonoscopy or screening flexible sigmoidoscopy HCPCS code or

as a result of the barium enema when the screening test becomes a diagnostic service. The claims processing system would respond to the modifier by waiving the deductible for all surgical

services on the same date as the diagnostic test. Coinsurance would continue to apply to the diagnostic test

and to other services furnished in connection with, as a result of, and in

the same clinical encounter as the screening test.

S. Section 5501: Expanding Access to Primary Care Services and General Surgery Services

1. Section 5501(a): Incentive Payment Program for Primary Care Services

a. Background

Section 5501(a) of the ACA revises section 1833 of the Act by adding a new paragraph (x), ‘‘ Incentive Payments for Primary Care Services. ’’ Section 1833(x)

of the Act states that in the case of primary care services furnished on or after January 1, 2011 and before January 1, 2016 by a primary care practitioner, there shall also be paid on a monthly or quarterly basis an amount equal to 10 percent of the payment
amount for such services under Part B. Section 1833(x)(2)(A) of the Act (as added by section 5501(a) of the ACA) defines a primary care practitioner as: (1) A physician, as described in section 1861(r)(1) of the Act, who has a primary specialty designation of family medicine, internal medicine, geriatric medicine, or pediatric medicine; or (2) a nurse practitioner, clinical nurse specialist, or physician assistant as defined in section 1861(aa)(5) of the Act, and in all cases, for whom primary
care services accounted for at least 60 percent of the allowed charges under Part B for the practitioner in a prior period as determined appropriate by the Secretary.

Section 1833(x)(2)(B) (as added by section 5501(a)(2)(B) of the ACA) defines primary care services as those services identified by the following HCPCS codes as of January 1, 2009 (and as subsequently modified by the Secretary, as applicable):

• 99201 through 99215 for new and established patient office or other outpatient evaluation and management (E/M) visits;

• 99304 through 99340 for initial, subsequent, discharge, and other nursing facility E/M services; new and established patient domiciliary, rest home ( e.g., boarding home), or custodial care E/M services; and domiciliary, rest home ( e.g., assisted living facility), or home care plan oversight services; and

• 99341 through 99350 for new and established patient home E/M visits.

These codes are displayed in Table
39. All of these codes remain active in
CY 2010 and there are no other codes
used to describe these services.



### T ABLE 

### 39—P RIMARY 

### C ARE 

### S ERVICES 

### E LIGIBLE FOR 

### P RIMARY 

### C ARE 

### I NCENTIVE 

### P AYMENTS IN 

### CY 2011

CPT codes Description

99201 ................ Level 1 new patient office or other outpatient visit. 99202 ................ Level 2 new patient office or other outpatient visit. 99203 ................ Level 3 new patient office or other outpatient visit. 99204 ................ Level 4 new patient office or other outpatient visit. 99205 ................ Level 5 new patient office or other outpatient visit. 99211 ................ Level 1 established patient office or other outpatient visit. 99212 ................ Level 2 established patient office or other outpatient visit. 99214 ................ Level 4 established patient office or other outpatient visit. 99215 ................ Level 5 established patient office or other outpatient visit. 99304 ................ Level 1 initial nursing facility care. 99305 ................ Level 2 initial nursing facility care. 99306 ................ Level 3 initial nursing facility care. 99307 ................ Level 1 subsequent nursing facility care. 99308 ................ Level 2 subsequent nursing facility care. 99309 ................ Level 3 subsequent nursing facility care. 99310 ................ Level 4 subsequent nursing facility care. 99315 ................ Nursing facility discharge day management;. 30 minutes. 99316 ................ Nursing facility discharge day management; more than 30 minutes. 99318 ................ Other nursing facility services; evaluation and management of a patient involving an annual nursing facility assessment. 99324 ................ Level 1 new patient domiciliary, rest home, or custodial care visit.


### 40137 Federal Register / Vol. 75, No. 133 / Tuesday, July 13, 2010 / Proposed Rules

T ABLE 

### 39—P RIMARY 

### C ARE 

### S ERVICES 

### E LIGIBLE FOR 

### P RIMARY 

### C ARE 

### I NCENTIVE 

### P AYMENTS IN 

### CY 2011—Continued

CPT codes Description

99325 ................ Level 2 new patient domiciliary, rest home, or custodial care visit. 99326 ................ Level 3 new patient domiciliary, rest home, or custodial care visit. 99327 ................ Level 4 new patient domiciliary, rest home, or custodial care visit. 99328 ................ Level 5 new patient domiciliary, rest home, or custodial care visit. 99334 ................ Level 1 established patient domiciliary, rest home, or custodial care visit. 99335 ................ Level 2 established patient domiciliary, rest home, or custodial care visit. 99336 ................ Level 3 established patient domiciliary, rest home, or custodial care visit. 99337 ................ Level 4 established patient domiciliary, rest home, or custodial care visit. 99339 ................ Individual physician supervision of a patient in home, domiciliary or rest home recurring complex and multidisciplinary care modalities; 30 minutes. 99340 ................ Individual physician supervision of a patient in home, domiciliary or rest home recurring complex and multidisciplinary care modalities; 30 minutes or more. 99341 ................ Level 1 new patient home visit. 99342 ................ Level 2 new patient home visit. 99343 ................ Level 3 new patient home visit. 99344 ................ Level 4 new patient home visit. 99345 ................ Level 5 new patient home visit. 99347 ................ Level 1 established patient home visit. 99348 ................ Level 2 established patient home visit. 99349 ................ Level 3 established patient home visit. 99350 ................ Level 4 established patient home visit.

b. Proposed Primary Care Incentive Payment Program (PCIP)

For primary care services furnished on or after January 1, 2011 and before January 1, 2016, we are proposing to provide a 10 percent incentive payment to primary care practitioners, identified as the following: (1) In the case of physicians, enrolled in Medicare with a primary specialty designation of 08— family practice, 11—internal medicine, 37—pediatrics, or 38—geriatrics; or (2) in the case of nonphysician practitioners (NPPs), enrolled in Medicare with a primary care specialty designation of 50—nurse practitioner, 89—certified clinical nurse specialist, or 97—physician assistant; and (3) for whom the primary care services displayed in Table 39 accounted for at least 60 percent of the allowed charges under Part B for such practitioner during the time period that is specified by the Secretary, and proposed in this

section.

We are proposing to use the most current full year of claims data to identify primary care practitioners eligible for the PCIP for a CY based on the practitioner’s primary specialty (as identified on claims) and the practitioner’s percentage of all allowed charges for the primary care services displayed in Table 39. We commonly use the most recent full year of claims data for purposes of establishing annual payment amounts under a number of Medicare’s fee-for-service programs. A practitioner with a primary care specialty designation would be eligible for the PCIP in a CY if the percentage of his or her allowed charges for primary care services (identified in Table 39) on claims where the practitioner is identified as one of the primary care specialties described above meets or exceeds the 60 percent
threshold. We note that the practitioner’s specialty is applied to the claim by the claims processing system and reflects the physician’s primary specialty designation for purposes of
Medicare enrollment on the date the claim is processed, which would usually be close to the date on which the service was actually furnished to the beneficiary. We would identify primary care practitioners eligible for the PCIP for a year by the individual physician/ practitioner national provider identifier (NPI) number using the most current full year of claims data available.

Therefore, for determining PCIP practitioner eligibility for CY 2011, we would use CY 2009 PFS claims data, processed through June 30, 2010. This would ensure analysis of about 99 percent of CY 2009 claims to determine practitioner eligibility for PCIP payment beginning January 2011. We note that the MMA changed the requirements for critical access hospital (CAH) billing for practitioners’ professional services and, therefore, modifications were made to the Medicare claims processing system to require CAHs to identify the practitioner furnishing a service on the CAH claim for that professional service. However, because the rendering practitioner has only been identified on CAH claims since July 1, 2009, for the first year of the PCIP we are proposing to identify eligible practitioners using only 6 months of CAH data for those CAHs paid under the optional method. Thereafter, we would update the list of practitioners eligible for the PCIP annually based on the most recent available full year of PFS and CAH
claims data.

To the extent practitioners were paid under the PFS during the historical claims data year for some primary services and, for other services, CAHs were paid under the optional method for those same practitioners’ professional services, we would aggregate the historical claims data from all settings by the practitioner’s NPI in
order to determine whether the practitioner is eligible for PCIP payments. We note that for all practitioners (both practitioners paid under the PFS and practitioners for whose professional services CAHs are paid under the optional method), the period of claims data used for the annual determination of the primary care service percentage of allowed charges with a practitioner specialty of primary care would lag the PCIP payment year by 2 years (for example,
CY 2010 claims data would be used for the CY 2012 PCIP). This 2-year lag is
consistent with other areas of the Medicare program where we rely on
information from claims data to inform payment in a future year, such as the
use of CY 2009 PFS utilization data in the establishment of certain aspects of CY 2011 PFS payment rates.

Under the proposed PCIP eligibility determination method, it would be necessary to revise the list of eligible practitioners based on updated claims data regarding primary specialty designation and the percentage of a practitioner’s allowed charges for primary care services each year. The


### 40138 Federal Register / Vol. 75, No. 133 / Tuesday, July 13, 2010 / Proposed Rules

revised list of practitioners developed prior to the beginning of the next CY would establish a practitioner’s eligibility for PCIP payments for the full next CY. That is, once eligible for the PCIP for a given CY, the practitioner would receive PCIP payments for primary care services furnished throughout that full CY until we reassess the practitioner’s PCIP eligibility for the next year’s payments. As a result, a practitioner newly enrolling in Medicare during a CY would not be eligible for the PCIP until Medicare claims data reflecting the practitioner’s primary care specialty and a percentage of allowed charges for primary care services that equals or exceeds the 60 percent threshold were available to establish the practitioner’s eligibility for the next PCIP year. Similarly, an enrolled practitioner’s change in primary specialty designation (either to or from a primary care specialty) would not affect that practitioner’s eligibility for the PCIP until the practitioner’s claims reflecting the change were available for analysis in preparation for the next applicable CY PCIP. Given the statutory requirement that a practitioner’s primary care services account for at least 60 percent of the allowed charges under Part B for the practitioner in a prior period as determined by the Secretary, we see no clear alternative methodologies that would allow PCIP payments to be made to those practitioners newly enrolling in Medicare without the 2-year lag in eligibility determination that was described previously. However, given our general interest in supporting primary care practitioners and entry into primary care practice by new physicians and NPPs in order to ensure
that Medicare beneficiaries have access to these important services, we are seeking public comments on alternative approaches for establishing PCIP eligibility for newly enrolled practitioners that would be consistent with the statutory requirement.

We plan to monitor changes in the primary specialties of enrolled practitioners over time and would expect not to see significant changes in the specialties of currently enrolled practitioners as a result of the PCIP payments. We would expect that physicians changing their primary specialty to one of the primary care specialties of family medicine, internal medicine, geriatric medicine, or pediatric medicine and who would be newly eligible for the PCIP would be furnishing primary care services to the patients in their practices. Consistent with our past policies, we would expect that physicians changing their primary specialty designation under Medicare would make such changes only so that their primary specialty designation is fully consistent with the specific or unique type of medicine they practice. If we find that physicians are changing their specialty designations (for example, cardiologists who designate their primary specialty as internal medicine, although they practice cardiology) in order to take advantage of the PCIP payments, we would considering making future revisions to
eliminate such an outcome.

Consistent with the established Medicare HPSA physician bonus program (Medicare Claims Processing Manual, Pub. 100–04, Chapter 12, Section 90.4.4) and the proposed Health Professional Shortage Area Surgical Incentive Payment Program (HSIP)
described in section III.S.2. of this proposed rule, we are proposing that PCIP payments would be calculated by
the Medicare contractors and made quarterly on behalf of the eligible primary care practitioner for the primary care services furnished by the practitioner in that quarter. The primary care practitioners’ professional services may be paid under the PFS based on a claim for professional services or, where the practitioner has reassigned his or her benefits to a CAH paid under the optional method, to the CAH based on
an institutional claim.

As discussed above, eligible primary care practitioners would be identified
on a claim based on the NPI of the rendering practitioner. If the claim is submitted by a practitioner’s group practice or a CAH, the rendering practitioner’s NPI must be included on the line-item for the primary care service (identified in Table 39 above) in
order for a determination to be made regarding whether or not the service is eligible for payment of the PCIP. We note that, in order to be eligible for the PCIP, physician assistants, clinical nurse specialists, and nurse practitioners must be billing for their
services under their own NPI and not furnishing services incident to physicians’ services. Regardless of the specialty area in which they may be practicing, these specific NPPs would be eligible for the PCIP based on their specialty if their historical percentage of allowed charges for primary care services equals or exceeds the 60 percent threshold.

We note that section 1833(x)(4) of the Act (as added by section 5501(a) of the ACA) specifies ‘‘ there shall be no administrative or judicial review under section 1869, 1878, or otherwise, respecting the identification of primary care practitioners. ’’ We believe that the inclusion of this language is intended to provide a means for the practical implementation of this provision. That is, because we must develop a process and identify primary care practitioners before we can make payment under the PCIP to the eligible primary care practitioners, the statute gives CMS the authority to make final determinations of eligible primary care practitioners that are not subject to appeal through the various channels normally available to practitioners, in order for the timely payments under the PCIP to occur. In contrast, if the determinations that CMS must make under this provision were subject to appeal, the timely implementation of this provision could be jeopardized and payments under the PCIP could be significantly delayed. However, we do not believe that the ‘‘ no administrative or judicial review ’’ clause precludes CMS from correcting errors resulting from clerical or mathematical mistakes. Therefore, we note that practitioners would have the opportunity to notify CMS of clerical or mathematical errors that may have occurred during the process of identifying eligible primary care practitioners for PCIP payment, and
which could result in a mistaken eligibility determination for the PCIP.

In summary, under the PCIP beginning in CY 2011, we are proposing to identify primary care practitioners based on their primary specialty and percentage of allowed charges for primary care services that equals or exceeds the 60 percent threshold based upon the most current full year of Medicare claims data, which would be the claims data for 2 years prior to the incentive payment year (for example, CY 2009 claims data processed through June 2010 would be used to identify primary care practitioners for the CY 2011 PCIP). Practitioners identified as eligible for the PCIP immediately prior to the PCIP payment year would then receive quarterly incentive payments during the PCIP year equal to 10 percent of the payment amount for their primary care services under Part B, in addition to the amount the primary care practitioner would otherwise be paid for their professional services under Part B for furnishing the primary care services. For example, primary care practitioners
identified in late CY 2010 for the CY 2011 PCIP would receive quarterly PCIP payments in CY 2011 that equal 10 percent of the Part B payment for the primary care services those practitioners furnish during CY 2011.

We further note that section 1833(x)(3) of the Act (as added by section 5501(a) of the ACA) authorizes


### 40139 Federal Register / Vol. 75, No. 133 / Tuesday, July 13, 2010 / Proposed Rules

payment under the PCIP as an additional payment amount for specified primary care services without regard to any additional payment for the service under section 1833(m) of the Act. Therefore, an eligible primary care physician furnishing a primary care service in a HPSA may receive both a HPSA physician bonus payment under the established program and a PCIP payment under the new program beginning in CY 2011, but the PCIP payment is made without regarding to the HPSA physician bonus payment amount. In addition, payments for outpatient CAH services under section 1834(g)(2)(B) of the Act (as amended by section 5501(a) of the ACA) are not affected by the PCIP payment amounts
made to the CAH on behalf of the primary care practitioner.

Accordingly, for CY 2011, we are proposing to add a new § 414.80 to our regulations to specify the requirements of the PCIP. Proposed § 414.80(a) would define primary care practitioners and primary care services. Proposed § 414.80(b) would provide eligible primary care practitioners a 10 percent incentive payment with respect to primary care services, in addition to the amount that would otherwise be paid for their professional services under Part B. Quarterly PCIP payments would be made to eligible practitioners or to CAHs paid under the optional method that are billing on behalf of practitioners for their professional services for identified primary care services.

2. Section 5501(b): Incentive Payment Program for Major Surgical Procedures
Furnished in Health Professional Shortage Areas

a. Background

Section 1833(m) of the Act provides for an additional 10 percent incentive payment for physicians’ services
furnished to a covered individual in an area that is designated as a geographic Health Professional Shortage Area (HPSA) as identified by the Secretary prior to the beginning of such year. Section 5501(b) of the ACA revises section 1833 of the Act by adding the new subparagraph (y), ‘‘ Incentive Payments for Major Surgical Procedures
Furnished in Health Professional Shortage Areas. ’’

In the case of major surgical procedures furnished by a general surgeon on or after January 1, 2011 and before January 1, 2016, in an area designated under section 332(a)(1)(A) of
the Public Health Service Act as a geographic HPSA, there shall be paid on a monthly or quarterly basis, an amount equal to 10 percent of the payment amount for eligible services under Part B. Section 1833(y)(2)(A) of the Act (as added by section 5501(b) of the ACA) defines a general surgeon as a physician who is described in section 1861(r)(1) of the Act and who has designated a CMS specialty code of 02—General Surgery as his or her primary specialty code in the physician enrollment under section 1866(j) of the Act.

Section 1833(y)(2)(B) of the Act (as added by section 5501(b) of the ACA) defines major surgical procedures as surgical procedures for which a 10-day or 90-day global period is used for payment under the PFS in section 1848(b) of the Act. In Addendum B to
the CY 2010 PFS final rule with comment period (74 FR 62017 through 62143), as corrected in the correction notice (74 FR 65455 through 65457), we identified 489 10-day global procedure codes and 3,796 90-day global procedure codes for a total of 4,285 surgical procedure codes that would have met the surgical procedure criteria for the incentive payment if it were applicable in CY 2010.

b. Proposed HPSA Surgical Incentive Payment Program (HSIP)

For services furnished on or after January 1, 2011 and before January 1, 2016, we are proposing to provide a 10 percent incentive payment to general surgeons, identified by their enrollment in Medicare with a primary specialty code of 02—general surgery, in addition to the amount they would otherwise be paid for their professional services under Part B, when they furnish a major surgical procedure in a location that was defined by the Secretary as of December 31 of the prior year as a geographic
HPSA. As with the PCIP described above, we do not believe that surgeons will change their Medicare specialty designation in order to take advantage of the HSIP payments. However, we will monitor the specialty designations of enrolled physicians, and if we find that surgeons are changing their primary specialty designation to general surgery in order to take advantage of the HSIP payments, we would consider making
future revisions to eliminate such an

outcome.

Consistent with the established Medicare HPSA physician bonus program, we are proposing that these HSIP payments would be calculated by
the Medicare contractors based on the criteria for payment that we have
established as discussed earlier in this section, and payments would be made quarterly on behalf of the qualifying general surgeon for the qualifying major surgical procedures. The surgeons’ professional services may be paid under the PFS based on a claim for professional services or, where the physician has reassigned his or her benefits to a critical access hospital (CAH) paid under the optional method,
to the CAH based on an institutional
claim.

Qualifying general surgeons would be identified on a claim for a major surgical procedure based on the primary specialty of the rendering physician, identified by his or her NPI, of 02— general surgery. If the claim is submitted by a physician’s group practice or a CAH, the rendering physician’s NPI must be included on the line-item for the major surgical procedure in order for a determination to be made regarding whether or not the procedure is eligible for payment under
the HSIP.

For HSIP payment to be applicable, the major surgical procedure must be furnished in an area designated by the Secretary as of December 31 of the prior year as a geographic HPSA. We would provide HSIP payments for major surgical procedures furnished by general surgeons in the same HPSAs as we currently recognize for purposes of payment of all physicians under the established Medicare HPSA physician bonus program under section 1833(m) of
the Act.

Each year, we publish a list of zip codes eligible for automatic payment of the HPSA physician bonus payment at: http://www.cms.gov/ hpsapsaphysicianbonuses/

01

_ overview.asp. We are proposing to use the same list of zip codes for automatic payment of the bonus for eligible services furnished by general surgeons. We are also proposing to
create a new HCPCS code modifier to identify circumstances when general surgeons furnish services in areas that are designated as HPSAs as of December 31 of the prior year, but that are not on the list of zip codes eligible for automatic payment. The new modifier would be appended to the major surgical procedure on claims submitted for payment, similar to the current process for payment of the Medicare HPSA physician bonus when the geographic HPSA is not a HPSA identified for automatic payment.

Consistent with the statutory requirement, we are proposing to define major surgical procedures as those for which a 10-day or 90-day global period is used for payment under the PFS. For CY 2011, approximately 4,300 10-day and 90-day global surgical procedures
codes are identified in Addendum B to this proposed rule under the far right
column labeled ‘‘ Global ’’ and designated
with ‘‘ 010 ’’ or ‘‘ 090, ’’ respectively.


### 40140 Federal Register / Vol. 75, No. 133 / Tuesday, July 13, 2010 / Proposed Rules

We further note that section 1833(y)(3) of the Act (as added by section 5501(b)(1) of the ACA) authorizes payment under the HSIP as an additional payment amount for specified surgical services without regard to any additional payment for the service under section 1833(m) of the Act. Therefore, a general surgeon may receive both a HPSA physician bonus payment under the established Medicare HPSA physician bonus program and an HSIP payment under the new program beginning in CY 2011, but the HSIP payment is made without regarding to the HPSA physician bonus payment amount. In addition, payments for outpatient CAH services under section 1834(g)(2)(B) of the Act (as amended by section 5501(b) of the ACA) are not affected by the HSIP payment
amounts made to the CAH on behalf of the general surgeon.

Accordingly, for CY 2011, we are proposing to amend § 414.2 by adding
the definitions of ‘‘ HPSA ’’ and ‘‘ major surgical procedure. ’’ We are also proposing to revise § 414.67 to move the existing provisions to paragraph (a) to be grouped as the ‘‘ Health Professional Shortage Area (HPSA) physician bonus

program ’’ and adding a new paragraph (b) for the ‘‘ HPSA surgical incentive
payment program ’’ provisions. Proposed § 414.67(b) would state that general surgeons who furnish identified 10-day and 90-day global period surgical procedures in an area designated by the Secretary as of December 31 of the prior year as a geographic HPSA that is recognized by Medicare for the HPSA physician bonus program as specified under renumbered § 414.67(a)(1) would receive a 10 percent incentive payment
in addition to the amount that would otherwise be paid for their professional services under Part B. Physicians furnishing services in areas that are designated as geographic HPSAs prior to the beginning of the year but not included on the published list of zip
codes for which automated HPSA surgical bonus payments are made should report a specified HCPCS code modifier to receive the HSIP payment. Quarterly incentive payments would be made to physicians or to CAHs paid under the optional method that are billing on behalf of physicians for their professional services.

3. Sections 5501(a) and (b) of the ACA and Payment for Critical Access Hospital Professional Services Under the Optional Method

Section 1834(g) of the Act establishes the payment rules for outpatient services furnished by a CAH. In 1999, section 403(d) of the Balanced Budget Refinement Act of 1999 (Pub. L. 106– 113) (BBRA) amended section 1834(g) of the Act to provide for two methods of payment for outpatient services furnished by a CAH. Specifically, section 1834(g)(1) of the Act, as amended by the BBRA, specifies that the amount of payment for outpatient services furnished by a CAH is equal to
the reasonable costs of the CAH in furnishing such services. (The physician or other practitioner furnishing the professional service receives payment under the PFS.) In the alternative, the CAH may make an election, under section 1834(g)(2) of the Act, to receive amounts that are equal to ‘‘ the
reasonable costs ’’ of the CAH for facility services plus, with respect to the professional services, the amount otherwise paid for professional services under Medicare, less the applicable
Medicare deductible and coinsurance
amount. The election made under section 1834(g)(2) of the Act is
sometimes referred to as ‘‘ method II ’’ or

‘‘ the optional method. ’’ Throughout this section of this preamble, we refer to this
election as ‘‘ the optional method. ’’

In 2000, section 202 of the Medicare,
Medicaid and SCHIP Benefits Improvement and Protection Act of 2000) (Pub. L. 106–554) (BIPA) amended section 1834(g)(2)(B) of the Act to increase the payment for professional services under the optional method to 115 percent of the amount otherwise paid for professional services under Medicare. In addition, in 2003 section 405(a)(1) of the MMA amended section 1834(g)(l) of the Act by inserting the phrase ‘‘ equal to 101 percent of ’’ before the phrase ‘‘ the reasonable costs. ’’ However, section 405 of the MMA did not make a corresponding change to section 1834(g)(2)(A) of the Act regarding the amount of payment for facility services under the optional method. In 2010, Section 3128 of the ACA amended section 1834(g)(2)(A) of the Act by inserting the phrase ‘‘ 101 percent of ’’ before ‘‘ the reasonable costs. ’’ Section 5501(a) of the ACA amends section 1833 of the Act by adding a new paragraph (x), ‘‘ Incentive Payments for Primary Care Services, ’’ that authorizes additional Part B payments to primary care practitioners for primary care services. Section 5501(b) of the ACA
further amends section 1833 of the Act by adding new paragraph (y), ‘‘ Incentive Payments for Major Surgical Procedures
Furnished in Health Professional Shortage Areas, ’’ that authorizes additional Part B payments for major surgical procedures furnished by general surgeons in HPSAs. Sections 5501(a)(3) and 5501(b)(3) of the ACA make conforming amendments to section 1834(g)(2)(B) of the Act, which refers to payment to the CAH for professional services under the optional method, by adding at the end of section 1834(g)(2)(B) the following phrase,

‘‘ Subsections (x) and (y) of 1833 shall
not be taken into account in determining the amounts that would otherwise be paid pursuant to the preceding sentence. ’’ As such, section 1834(g)(2)(B) of the Act (as amended by sections 5501(a)(2) and 5501(b)(2) of the ACA) requires that under the optional method, the 115 percent adjustment payment to the CAH for professional
services is calculated without considering the incentive payments for primary care services furnished by primary care practitioners and major surgical procedures furnished by general surgeons in HPSAs as these
terms are defined under sections 1833(x) and (y) of the Act.

The regulations implementing section 1834(g)(2)(B) of the Act, payment to the CAH for professional services under the optional method, are in § 413.70(b)(3)(ii)(B). In order to implement the amendments to section 1834(g)(2)(B) of the Act as specified by sections 5501(a)(2) and 5501(b)(2) of the ACA, we are proposing to amend the regulations in § 413.70(b)(3)(ii)(B) to state that, effective for primary care services furnished by primary care practitioners and major surgical procedures furnished by general surgeons in HPSAs on or after January 1, 2011 and before January 1, 2016, the additional incentive payment amounts as specified in § 414.67 and § 414.80 are
not included in the determination of the payment for professional services made to the CAH under the optional method. Accordingly, we are proposing that payment for professional services to the CAH at 115 percent of the PFS amount under the optional method would not
take into account the additional Part B incentive payments for primary services furnished by primary care practitioners and major surgical procedures furnished by general surgeons in HPSAs as provided in § 414.67 and § 414.80.

T. Section 6003: Disclosure Requirements for In-Office Ancillary Services Exception to the Prohibition on Physician Self-Referral for Certain Imaging Services

1. Background

Section 1877 of the Act also known as the physician self-referral law: (1) Prohibits a physician from making
referrals for certain ‘‘ designated health

services ’’ (DHS) payable by Medicare to an entity with which he or she (or an immediate family member) has a


### 40141 Federal Register / Vol. 75, No. 133 / Tuesday, July 13, 2010 / Proposed Rules

financial relationship (ownership or compensation), unless an exception applies; and (2) prohibits the entity from filing claims with Medicare (or billing another individual, entity, or third party payer) for those DHS rendered as a result of a prohibited referral. The statute establishes a number of specific exceptions and grants the Secretary the authority to create regulatory exceptions that pose no risk of program or patient
abuse.

Section 1877(b)(2) of the Act, entitled

‘‘ In-office Ancillary Services ’’ sets forth the exception that permits a physician in a solo or group practice to order and provide designated health services (DHS), other than most durable medical equipment and pretrial and enteral nutrients, in the office of the physician or group practice, provided that certain specific criteria are met. Under this exception, the statute limits who can furnish the service, designates where the service must be performed, and
limits who can bill for the service. As explained at the end of the statutory exception, the service may also be subject to ‘‘ such other requirements as the Secretary may impose by regulation as needed to protect against program or patient abuse. ’’ The in-office ancillary services exception is interpreted at § 411.355(b).

Section 6003 of the ACA amends section 1877(b)(2) of the Act by creatinga new disclosure requirement for the inoffice ancillary services exception to the prohibition on physician self-referral. Specifically, section 6003 provides that, with respect to referrals for magnetic resonance imaging (MRI), computed topography (CT), positron emission topography (PET), and any other DHS specified under section 1877(h)(6)(D) that the Secretary determines appropriate, we must promulgate a requirement that the referring physician inform a patient in writing at the time of the referral that the patient may obtain the service from a person other than the referring physician or someone in the physician’s group practice and provide the patient with a list of suppliers who furnish the service in the area in which the patient resides.

2. Proposed Disclosure Requirement

We are proposing to implement section 6003 of the ACA by amending § 411.355(b) to add new paragraph (b)(7). We describe below our proposal for the new disclosure requirement.

a. Services That Trigger the Disclosure Requirement

Section 6003(a) of the ACA requires that the new disclosure requirement apply to MRI, CT, and PET services as well as such other radiology or imaging services included in the DHS category specified in section 1877(h)(6)(D) of the Act that the Secretary determines appropriate. We are considering whether to expand this disclosure requirement to other radiology and imaging services. We are not inclined to expand the disclosure requirement but we solicit comments regarding whether other radiology or imaging services that fall under section 1877(h)(6)(D) of the
Act should be included in this requirement, and if so, which services, and the purpose served by extending the disclosure requirement to additional radiology or imaging services.

b. General Disclosure Requirements

In § 411.355(b)(7), we are proposing
that the disclosure notice should be
written in a manner sufficient to be reasonably understood by all patients and must, as the ACA requires, be given to the patient at the time of the referral. This notice must indicate to the patient that the services may be obtained from a person other than the referring physician or his or her group practice and include a list of other suppliers who provide the service being referred (MRI, CT, or PET).

We believe one purpose of the disclosure requirement is to inform a patient’s decision-making regarding his or her own care. The list of suppliers provided to the patient by the physician
is meant to serve as a resource for the patient. Nothing on the disclosure notice or list of suppliers may indicate to the patient that he or she must receive imaging from a supplier on the list if not receiving the service from the referring physician. The patient may receive the imaging service from the referring physician, from a supplier identified on the notice, or from another supplier of the patient’s choice. The patient is free to choose the supplier of
the service.

c. List of Alternate Suppliers

Section 6003(a) of the ACA specifies that the referring physician must provide a written list of ‘‘ suppliers (as defined in section 1861(d)). ’’ Section 1861(d) of the Act defines supplier as ‘‘ a physician or other practitioner, a facility, or other entity (other than a provider of services) that furnishes
items or services under this title. ’’ We are proposing that only suppliers be
included on the written list. We are not proposing to permit or require the list to
include ‘‘ providers of services ’’ , which is defined in section 1861(u) of the Act to include hospitals and critical access hospitals, among other facilities. We are soliciting comments regarding whether inclusion of providers of services on the written notice would benefit patients in choosing an alternate entity for an imaging service by providing more, and varied, options.

Section 6003(a) of the ACA also requires that the alternate suppliers specified in the notice provided to the patient must furnish the relevant

services ‘‘ in the area in which [the patient] resides. ’’ We are aware that a patient may travel outside the area in
which he or she resides in order to
receive medical care. We believe that requiring an original written notice for each patient based upon a certain distance from the patient’s residence could place a significant administrative burden on physicians practicing in a solo or group practice. It would be impractical for a physician to prepare a separate list for every area in which his or her patients reside. Additionally, we believe that if a patient has traveled to see the referring physician, the physician is located in an area convenient to the patient and therefore,
a referral within a certain distance of
this location would also be convenient for the patient.

In order to ease the administrative burden of creating multiple lists while still implementing the requirements of the statute, we are proposing that the suppliers included in this notice should
be located within a 25-mile radius of the physician’s office location at the time of
the referral. We believe that a 25-mile radius is large enough in most areas to generate a list of suppliers that will be useful to patients. We note that we have used a 25-mile radius in other physician self-referral exceptions, including the intra-family rural referrals exception (§ 411.355(j)) and the physician recruitment exception (§ 411.357(e)). Even if a patient resides more than 25 miles away, we are proposing that it will be sufficient to provide a list of suppliers located within a 25-mile radius of the physician’s office location
at the time the referral is made. As discussed above, we believe that measuring the distance from the physician’s office location will better serve patients who have perhaps traveled from long distances to receive specialized treatment.

We are soliciting comments regarding the proposed 25-mile radius requirement. In attempting to minimize
confusion and burden related to implementing this provision, we have proposed the same standard for both
urban and rural areas. We realize that in some areas 25 miles may be too small to generate a sufficient list of other suppliers. We are interested in hearing whether an alternative distance may be


### 40142 Federal Register / Vol. 75, No. 133 / Tuesday, July 13, 2010 / Proposed Rules

more effective for urban or rural areas as
well as what other criteria should be considered in finalizing regulations for physicians in both urban and rural

areas.

In order to help a patient make an informed decision regarding other options for the recommended imaging services, we propose that the written
notice include no fewer than 10 other suppliers. We considered proposing that the list include the 10 closest suppliers, but we want to allow physicians some flexibility in drafting the list of suppliers. On the other hand, we are concerned that physicians located in large metropolitan areas will draft a list that includes suppliers located mostly at the edges of the 25-mile radius, thereby increasing the chances that the patient will choose to receive imaging services from the referring physician’s practice. We are soliciting comments regarding whether providing a list of 10 suppliers
is sufficient or too burdensome or susceptible to abuse and whether there
are alternate criteria we should use that would result in an adequate list of convenient suppliers that does not impose an undue burden on physician practices or a risk of abuse.

We recognize that there may be fewer than 10 other suppliers within a 25-mile radius of the referring physician’s office location. We propose that, under these circumstances, the physician shall list all of the other suppliers of the particular imaging service that are present within a 25-mile radius of the referring physician’s office location, including up to 10 suppliers as required by these regulations. If no other suppliers of the imaging services
ordered exist within the 25-mile radius of the physician’s office location, the physician need not provide a list of alternative suppliers, but must still disclose to his or her patients that the patients may receive the imaging services from another supplier. In this last situation, simply providing this disclosure statement will satisfy the disclosure requirement of this provision even though alternative suppliers are not listed. The physician must maintain
documentation of the disclosure.

We are proposing that the written notice be required to include certain information about the listed suppliers in order to satisfy this disclosure requirement. The list must include the name, address, phone number, and distance from the physician’s office
location at the time of the referral. We propose to require inclusion of the distance from the physician’s location to the other suppliers in order to emphasize to the patient the relative convenience of the listed suppliers. We are not proposing an exception to the disclosure requirement for MRI, CT,
or PET services furnished on an emergency or time-sensitive basis. We are soliciting comments related to whether there are other procedures or circumstances in which it may be difficult or impractical to provide the written disclosure prior to provision of the imaging services.

This proposal sets forth criteria that apply to the disclosure requirement and list of alternative suppliers. These criteria are intended to provide clear guidance as to how physicians may comply with the new requirement of the in-office ancillary services exception. We understand that there may be alternative ways to implement these statutory requirements. One possible alternative is to only require a

‘‘ reasonable ’’ list of other suppliers with general requirements for the disclosure to patients, while providing that if the physician meets the more specific requirements set forth in this proposal,
he or she will be deemed to have a

‘‘ reasonable ’’ disclosure. We seek comments on this specific alternative and any other alternative methods of compliance that still satisfy the statutory requirements.

d. Documentation of Disclosure

In order to document that this disclosure requirement has been satisfied, we propose that a record of the patient’s signature on the disclosure
notification must be maintained as an element of the patient’s medical record. We are soliciting comments regarding the burden of this recordkeeping requirement. We are also interested in comments that suggest alternative means of recording that the disclosure was made to the patient at the time of
referral.

e. Effective Date

As discussed above, section 6003(a) of the ACA amends section 1877(b)(2) of the Act by instructing that the new disclosure requirement be added as oneof the additional requirements of the inoffice ancillary services exception. The last sentence of the statutory exception preceding this amendment authorizes the Secretary to impose ‘‘ such other requirements * * * by regulation as needed to protect against program or patient abuse ’’ ( emphasis added ). The amendment specifies that ‘‘ [s]uch requirements shall * * * include a [disclosure] requirement * * * ’’ In reading the last sentence of section 1877(b)(2) together with the amendment, we do not believe that the amendment is self-effectuating. Instead, the new disclosure requirement of section 6003 must be promulgated by regulation. Therefore, we believe that a correct reading of section 6003(a) is that
this amendment shall not be effective until the Secretary promulgates a final regulation implementing this new requirement and the regulation becomes
effective.

We considered whether, pursuant to section 6003 of the ACA, the final rule setting forth the disclosure requirement should apply retroactively to all services furnished on or after January 1, 2010.
Given the structure of the amended inoffice ancillary services exception and the statute as a whole, however, we believe that retroactive rulemaking is not required. Therefore, we are proposing that the new disclosure requirement shall apply only to services
furnished on or after the effective date of the final regulation implementing
section 6003 of the ACA. We are proposing an effective date of January 1, 2011 for the regulation implementing this provision.

U. Section 6404: Maximum Period for Submission of Medicare Claims
Reduced to Not More Than 12 Months

1. Background

Sections 1814(a)(1), 1835(a), and 1842(b)(3)(B) of the Act establish time limits for filing Medicare Part A and B
claims. Prior to the enactment of the ACA, under sections 1814(a)(1) and 1835(a) of the Act, providers could file for Part A and Part B claims, respectively, ‘‘ * * * no later than the close of the period of 3 calendar years following the year in which such services are furnished (deeming any
services furnished in the last 3 calendar months of any calendar year to have been furnished in the succeeding calendar year) except that, where the Secretary deems that efficient administration so requires, such period may be reduced to not less than 1 calendar year * * * ’’ . Prior to the enactment of the ACA, CMS was
authorized to establish a minimum time limit for provider-submitted Part A and Part B claims of at least 1 calendar year from the date of service, and a
maximum time limit not to exceed 4 years and 3 months after the date of

service.

Additionally, prior to the enactment of the ACA, under section 1842(b)(3)(B) of the Act, Part B claims for physician and other supplier services could be
filed with Medicare ‘‘ * * * no later than the close of the calendar year following the year in which such service is furnished (deeming any service furnished in the last 3 months of any calendar year to have been furnished in


### 40143 Federal Register / Vol. 75, No. 133 / Tuesday, July 13, 2010 / Proposed Rules

the succeeding calendar year) * * * ’’

. Therefore, prior to the enactment of the ACA, CMS was authorized to establish a minimum time limit for filing Part B claims of 15 months and a potential
maximum of 27 months after the service was furnished, depending on what month of the year the service was
furnished.

Section 424.44 implements sections 1814(a)(1), 1835(a), and 1842(b)(3)(B) of the Act. In order to effectively administer the Medicare Program, CMS, through regulations, modified the potential minimum and maximum time periods for filing Part A claims so that
Part A claims would have the same time limits as Part B claims. At § 424.44(a), CMS adopted the minimum time limit of 15 months and potential maximum of
27 months after the service was furnished that was permitted under section 1842(b)(3)(B) of the Act for Part B claims and uniformly applied that 15
to 27 month time limit to both Part A and B claims. Also, under § 424.44(b), CMS allowed providers and suppliers the opportunity to file claims after the 15 to 27 month deadline for filing claims expired when the failure to file

‘‘ * * * was caused by error or misrepresentation of an employee, intermediary, carrier, or agent of the Department that was performing Medicare functions and acting within the scope of its authority. ’’

2. Provisions of the ACA

Section 6404 of the ACA amended sections 1814(a)(1), 1835(a), and 1842(b)(3)(B) of the Act regarding Medicare fee-for-service (FFS) claims for services furnished on or after January 1, 2010. Under section 6404(b)(1) of the ACA, all claims for services furnished on or after January 1, 2010 must be filed within 1 calendar year after the date of service. The provisions of the ACA did
not amend these sections of the Act for services furnished before January 1, 2010. However, section 6404(b)(2) of the ACA created a new requirement that
claims for services furnished before January 1, 2010 must be filed on or before December 31, 2010. Thus, the statutory provisions prior to the
enactment of the ACA remain in effect for pre-2010 services, subject to this new requirement. The practical effect of this change is that any claims for services furnished before October 1, 2009 will follow the current existing regulations. But for any services furnished during the last three months of 2009, those claims must be filed no later than December 31, 2010. For services furnished between October 1, 2009 and December 31, 2009, providers and suppliers will only have 12–15 months to file a claim, whereas before the ACA amendments, they would have had an additional year to file their claims, or 24 to 27 months. Therefore, in order to effectuate the changes made by the ACA, we are proposing to amend § 424.44 so that it is consistent with the amended statutory provisions.

We are proposing to amend § 424.44(a) by replacing the current text with the requirement that claims for services provided on or after January 1,
2010 must be submitted no later than the close of the period ending 1 calendar year after the date of service. As noted above, any services furnished before January 1, 2010 will still be subject to the pre-existing statutory provisions. Therefore, we are proposingthat for pre-2010 services, the preexisting regulatory structure will continue to apply. For those services furnished before January 1, 2010, claims
must be filed on or before December 31 of the following year for services that were furnished during the first 9 months of a calendar year, and on or before December 31st of the second following year for services that were furnished during the last 3 months of the calendar year. However, for those services provided in the last three months of 2009, we propose that all claims for
those services must be filed no later than December 31, 2010.

Section 6404 of the ACA also gives the Secretary authority to create exceptions to the 1 year timely filing period. In addition to the existing exception to the timely filing requirement due to error or misrepresentation by CMS, our
contractors or agents, we propose to create two new exceptions. First, we are proposing to create an exception for those situations where a beneficiary becomes retroactively entitled to Medicare benefits, but was not entitled
at the time the services were furnished. Second, we are proposing to permit providers and suppliers to file claims after the time limit for filing claims has expired in limited dual eligible Medicare/Medicaid beneficiary

situations.

The first new proposed exception at § 424.44(b)(2) will permit providers and suppliers to file claims after the time limit for filing claims expires when
CMS or our contractors determines that the following conditions have been met:

• At the time the service was furnished the beneficiary was not entitled to Medicare; and

• The beneficiary subsequently
received notification of Medicare entitlement effective retroactively to or
before the date of the furnished service. In these situations, if CMS or one of
our contractors determines that both of the conditions in § 424.44(b)(2) are met,
then the time to file a claim will be extended through the last day of the 6th calendar month following the month in which the beneficiary received
notification of Medicare entitlement effective retroactively to or before the date of the furnished service. Therefore, instead of the beneficiary having to pay out of his or her own pocket for the service or instead of the beneficiary’s other insurance or some other payer that is secondary to Medicare having to pay primary for the service, Medicare may pay primary (or secondary or tertiary) for the service since the beneficiary was entitled to Medicare (although retroactively) at the time the service was furnished. All of Medicare’s payment rules including Medicare’s Secondary Payer rules still apply in these
retroactive entitlement situations.

The second proposed new exception at § 424.44(b)(3) will permit providersand suppliers to file claims for duallyeligible beneficiaries after the time limit for filing claims expires when CMS or
our contractors determine that all of the following conditions have been met:

• At the time the service was furnished the beneficiary was not entitled to Medicare;

• The beneficiary subsequently
received notification of Medicare entitlement effective retroactively to or before the date of the furnished service;
and

• A State Medicaid agency recovered the Medicaid payment for the furnished service from the provider or supplier 11
months or more after the date of service.

This proposed exception applies to situations where a provider or supplier bills (and receives payment from)
Medicaid for the services that a dual eligible Medicare/Medicaid beneficiary receives from the provider or supplier. However, at the time the services were furnished, the patient was not a dual eligible Medicare/Medicaid beneficiary yet because Medicare entitlement was granted to the individual retroactively after the service was actually furnished to the individual. In addition, after the State Medicaid Program discovers that the individual was granted Medicare entitlement retroactively, the State Medicaid Program recovers its payments from the provider or supplier for that individual’s services instructing the provider or supplier that Medicare should be billed for the services (not Medicaid). If all three of the conditions
outlined above occur within 11 months of the date the service was furnished, then the provider or supplier will have enough time to bill Medicare for the


### 40144 Federal Register / Vol. 75, No. 133 / Tuesday, July 13, 2010 / Proposed Rules

service. However, if Medicaid recovers their incorrect payment 11 months or
more after the date the service was furnished, then the provider or supplier will not have enough time to file a claim
with Medicare for the covered services because the time limit for filing claims expires 1 calendar year after the date of service. In these situations, if CMS or
one of our contractors determines that all of the conditions at § 424.44(b)(3) are met, then the time to file a claim will be extended through the last day of the 6th calendar month following the month in which the State Medicaid agency recovered the Medicaid payment for the furnished service from the provider or supplier. Therefore, we are proposing that this exception along with the
aforementioned retroactive entitlement exception be added to § 424.44.

We are proposing that for the one existing exception due to error or misrepresentation by CMS, our contractors or agents ( see § 424.44(b)(1)) that no extension of time will be granted beyond 4 years from the date of service. Limiting the exception for this timely filing extension is consistent with current CMS policy. Moreover, we believe that limiting this exception to 4 years after the date of service strikes an appropriate balance between fairness and equity for providers, suppliers, and beneficiaries and administrative finality for the Medicare program. We recognize that limiting the exceptions process could have potential impacts on those
that wish to avail themselves of this exception. Therefore, we are soliciting comments on how this proposed four year limitation on the exception at § 424.44(b)(1) will impact providers, suppliers and beneficiaries and the frequency of such occurrences. In addition, we are soliciting comments on whether the proposed four year limitation for this particular exception is appropriate, or what changes, if any,
should be made to the limitation on the exceptions process, including a rationale or justification for an
alternative time limitation.

CMS is not proposing a definition of
the term ‘‘ date of service ’’ in this regulation. Yet we recognize that the definition of this term is very important to providers, suppliers, and
beneficiaries because the ‘‘ date of

service ’’ will ultimately determine when
the claim has to be filed in order to meet the new 1 calendar year requirement. In
most cases the ‘‘ date of service ’’ will be
the date that the item or service is actually furnished to the beneficiary; however, we recognize that for many
Part A and B services it is difficult to craft a uniform rule that will apply a
consistent date of service standard. It is our intention to provide sub-regulatory guidance on what constitutes the date of
service for different Part A and B services. We are soliciting comments regarding whether CMS should provide a regulatory definition of ‘‘ date of

service ’’ and, if so, how should it define
this term.

We are also clarifying the exception that appears at § 424.44(e). We are making clear that this regulation does not supersede the restriction on retrospective billing that appears in §§ 424.520 and 424.521. Under these provisions certain newly-enrolledsuppliers, such as physicians, nonphysician practitioners, physician or non-physician practitioner organizations and IDTFs, have only a limited ability to submit claims for items or services furnished prior to the effective date of their Medicare billing privileges even if these claims would otherwise be considered timely. In addition, we want to make clear that the one calendar year timely filing limit in section 424.44(a) does apply to any retrospective claims permitted by
sections 424.520 and 424.521 and to
claims for items or services furnished after the effective date of the supplier’s billing privileges.

V. Section 6410 and MIPPA: Adjustments to the Metropolitan Statistical Areas (MSA) for Medicare Durable Medical Equipment, Prosthetics, Orthotics, and Supplies Competitive Acquisition Program

We are proposing a number of
revisions to the DMEPOS CBP as a result of changes to the statute made by both the Medicare Improvements for
Patients and Provider Act of 2008 (MIPPA) and the ACA. Since both MIPPA and the ACA specify requirements for MSA selection for round 2 and beyond we are outlining our proposals for implementing the statutory requirements related to MSA
selection in both MIPPA and the ACA in this section. First, we propose to use the authority provided by the statute at section 1847(a)(1)(D)(ii) of the Act, as amended by MIPPA to subdivide Metropolitan Statistical Areas (MSAs) with populations of greater than 8,000,000 under Round 2 of the DMEPOS CBP. Second, we propose to exclude certain areas from competitive bidding after round 2 as mandated by section 1847(a)(1)(D)(iii) of the Act, as amended by MIPPA. Third, we propose to implement the requirement of section 6410 of the ACA to expand Round 2 of the program by adding 21 of the largest MSAs based on total population to the original 70 already selected for round 2. 1. Background

Section VI.H of this proposed rule provides background on the DMEPOS CBP, including a description of many of the changes made to the program by section 154 of MIPPA. In this section, we provide additional information regarding changes made by both MIPPA
and Section 6410 of the ACA. In addition to the changes discussed previously in this proposed rule, MIPPA also added subparagraph (D) to section 1847(a)(1) of the Act. Section 1847(a)(1)(D)(ii), as added by MIPPA, addresses Round 2 of the DMEPOS CBP, and section 1847(a)(1)(D)(iii) addresses subsequent rounds of the Program.

Section 1847(a)(1)(D)(ii)(II) of the Act specifies that the Secretary shall implement DMEPOS competitive bidding in the areas previously selected for round 2 of the program and also allows the Secretary, in implementing round 2 of the program, to subdivide metropolitan statistical areas (MSAs) with populations of greater than 8,000,000 into separate CBAs. Previously, we believe the statute could have been interpreted to allow CMS to subdivide large MSAs but MIPPA gave CMS the explicit authority to subdivide large MSAs. Section 1847(a)(1)(D)(iii) imposes new requirements on the Secretary for competitions occurring before 2015 in subsequent rounds of the program. For such competitions (other than national mail order), the following
areas are to be excluded from the program: (I) Rural areas; (II) MSAs not
selected under Round 1 or 2 with a population of less than 250,000; and (III) certain areas with low population density within a selected MSA. These requirements do not apply to a national mail order program.

Finally, MIPPA required that we implement Round 2 of the DMEPOS
CBP in the same MSAs that were designated as of June 1, 2008. In 2010, section 6410(a) of the ACA amended sections 1847(a)(1)(B)(i)(II) and (D)(ii) of the Act to expand Round 2 of the program from 70 MSAs to 91 MSAs by adding the next 21 largest MSAs by total population not already selected for
Rounds 1 or 2.

2. Subdividing Large MSAs Under
Round 2

We have selected MSAs for Round 1
and for Round 2 consistent with MIPPA’s requirement. For round 1 CBAs generally were comparable to MSAs, however, for round 2 we are proposing to subdivide MSAs of 8,000,000 or more in population. The authority to subdivide MSAs into separate areas for competitive bidding


### 40145 Federal Register / Vol. 75, No. 133 / Tuesday, July 13, 2010 / Proposed Rules

purposes is set forth in section 1847(a)(1)(D)(ii)(II) of the Act which

states, ‘‘ [t]he Secretary may subdivide metropolitan statistical areas with populations (based upon the most recent data from the Census Bureau) of at least 8,000,000 into separate areas for competitive acquisition purposes. ’’ We have identified three MSAs which,
based on the 2009 estimate from the Census Bureau data, could be
subdivided under section1847(a)(1)(D)(ii)(II): (1) ChicagoNaperville-Joliet, Illinois-IndianaWisconsin (IL-IN-WI) MSA with a population of 9,569,624; (2) Los Angeles-Long Beach-Santa Ana, California (CA) MSA with a populationof 12,872,808; and (2) New YorkNorthern New Jersey-Long Island, NewYork-New Jersey-Pennsylvania (NY-NJPA) MSA with a population of 19,006,798. We are proposing to divide these MSAs into separate CBAs because we believe this approach would create more manageable CBAs for contract suppliers to serve and allow more small suppliers to be considered for participation in the program.

We considered certain factors when considering whether to propose subdividing the MSAs with populations of at least 8,000,000. We considered the geographic, social, and economic integration of each of the MSAs. We apply all of these factors when grouping
counties into CBAs considered at a county level in each MSA and we believe it is also appropriate to use these factors to determine: (1) Whether or not to subdivide an MSA into separate CBAs, and (2) once the decision is made to subdivide the MSA, how to subdivide the MSA. We considered the following factors, generally in the order in which they are listed:

• Geographic size of the MSA and the
location of the counties within each MSA compared to neighboring counties;

• The driving distances from north to
south and east to west within each MSA and county;

• The total population and the population of FFS Medicare beneficiaries using DMEPOS items subject to competitive bidding;

• The DMPOS allowed charges for items subject to competitive bidding;

• Comparably sized Round 1 and Round 2 MSAs based on beneficiary counts and allowed charges for competitive bid items;

• The interstate highway infrastructures of the MSAs; and

• The current service patterns of suppliers in each county of the MSA.

We used each of the factors to the extent practical to develop initial proposals for reasonable and workable subdivisions of these highly and densely populated MSAs. We believe consideration of these factors will help us meet our goal of subdividing large and densely populated MSAs and creating CBAs that are attractive to suppliers and incentivize them to bid competitively for a contract. With this goal in mind, we are trying to establish CBAs that provide for a good volume of DMEPOS business for winning bidders, avoid obvious geographic obstacles, mimic existing supplier service patterns, and, to the extent possible, do
not cross State lines. We believe the
factors we have selected will achieve those objectives.

We found that counties clearly delineate areas within a MSA, and as we have done for Round 1 by identifying CBAs by counties and zip codes, we are proposing to subdivide the MSAs at a county level. Since the Office of Management and Budget (OMB) defines the MSAs by counties and county-based subdivisions are stable, we use counties to subdivide CBAs. When subdividing an MSA into counties, we consider counties that share social, economic andgeographic integration. The ChicagoNaperville-Joliet IL-IN-WI MSA comprises 14 counties within 3 States: Illinois, Indiana, and Wisconsin. This MSA has 207,106 beneficiaries and $218,161,562 of DMEPOS allowed charges subject to the DMEPOS CBP. Using the factors that we indentified, wewould subdivide the ChicagoNaperville-Joliet, IL-IN-WI MSA into four separate CBAs: Indiana-Chicago Metro CBA; South-West-Chicago-Metro CBA; Central-Chicago Metro CBA; and Northern-Chicago Metro CBA. The counties, DMEPOS allowed charges, and the number of beneficiaries subject to competitive bidding, and the general population that comprise each of these proposed CBAs are shown in Table 40.



### T ABLE 

### 40—C HICAGO 

### -N APERVILLE 

### -J OLIET 

### , IL-IN-WI

CBA name/County DMEPOS allowed Charles* DMEPOS beneficiary count subject to competitive

bidding* General population **

Indiana-Chicago Metro CBA: Lake, IN ........................................................................................................ $18,600,917 16, 637 493,800 Jasper, IN ..................................................................................................... 1,238,119 1,191 32,544 Newton, IN .................................................................................................... 580,842 393 13,93 3 Porter, IN ...................................................................................................... 4,856,838 4,526 162,181

CBA TOTAL .......................................................................................... 25,276,716 22,747 702,458

South-West-Chicago-Metro CBA: Will, IL ........................................................................................................... 13,523,185 1 2,522 681,097 Grundy, IL ..................................................................................................... 1,417,511 1,405 47,958 Kendall, IL ..................................................................................................... 978,215 1,052 1 03,460 DeKalb, IL ..................................................................................................... 2,358,319 2,323 106,321 Kane, IL ........................................................................................................ 9,273,504 9,082 507,579

CBA TOTAL .......................................................................................... 27,550,734 26,384 1,446,415

Central-Chicago Metro CBA: Cook, IL ........................................................................................................ 124,854,279 116 ,360 5,294,664 DuPage, IL .................................................................................................... 16,945,135 18,492 930,528

CBA TOTAL .......................................................................................... 141,799,414 134,852 6,225,19 2

Northern-Chicago Metro CBA:


### 40146 Federal Register / Vol. 75, No. 133 / Tuesday, July 13, 2010 / Proposed Rules

T ABLE 

### 40—C HICAGO 

### -N APERVILLE 

### -J OLIET 

### , IL-IN-WI—Continued

CBA name/County DMEPOS allowed Charles* DMEPOS beneficiary count subject to competitive

bidding* General population **

Lake, IL ......................................................................................................... 12,352,802 12, 482 712,453 McHenry, IL .................................................................................................. 7,020,768 6,852 31 8,641 Kenosha, WI ................................................................................................. 4,161,128 3,789 164 ,465

CBA TOTAL .......................................................................................... 23,534,698 23,123 1,195,559

MSA TOTAL .......................................................................................... 218,161,562 207,106 9,569,62 4

* Source: Medicare claims from 10/1/08 to 9/30/09 for items subject to competitive bidding. ** Source: U.S. Census Bureau 2009 population estimates.

Figure 1 shows the boundaries of each proposed CBA.

**BILLING CODE 4120–01–P**


### 40147 Federal Register / Vol. 75, No. 133 / Tuesday, July 13, 2010 / Proposed Rules

**BILLING CODE 4120–01–C**


### 40148 Federal Register / Vol. 75, No. 133 / Tuesday, July 13, 2010 / Proposed Rules

The Indiana-Chicago Metro CBA

would include all four of the Indiana counties that are part of the MSA. The

other CBAs in the MSA would be as

follows:

• The South-West-Chicago Metro

CBA would include counties in Illinois

located to the south and west of the Central-Chicago Metro CBA.

• The Central-Chicago Metro CBA would include the city of Chicago covering both Cook and DuPage

counties.

• The Northern-Chicago Metro CBA which is north of the Central-Chicago
Metro CBA subdivision that encompasses the city of Chicago.

The Los Angeles-Long Beach-Santa Ana, CA MSA comprises two counties: Los Angeles County and Orange County. The MSA has 173,631 fee-for-service beneficiaries receiving DMEPOS subject to competitive bidding and $244,523,957 in DMEPOS allowed charges subject to the DMEPOS CBP. Wepropose to subdivide the Los AngelesLong Beach-Santa Ana, CA MSA into two CBAs: Los Angeles County CBA and Orange County CBA. The DMEPOS allowed amount and beneficiary count subject to competitive bidding, and the general population that comprises these two proposed CBAs are shown in Table

41.



### T ABLE 

### 41—L OS 

### A NGELES 

### -L ONG 

### B EACH 

### -S ANTA 

### A NA 

### , CA

CBA name DMEPOS
allowed amount * DMEPOS beneficiary

count * General population **

Los Angeles County CBA ................................................................................................ $201,244, 121 137,408 9,862,049

CBA Total ................................................................................................................. 201,2 44,121 137,408 * 9,862,049

Orange County CBA ........................................................................................................ 43,279 ,836 36,223 3,010,759

CBA Total ................................................................................................................. 43,27 9,836 36,223 3,010,759

MSA Total .......................................................................................................... 244,523,957 173,631 12,872,808

*Source: Medicare claims from 10/1/08 to 9/30/09 for items subject to competitive bidding. **Source: U.S. Census Bureau 2009 population estimates.

Figure 2 shows the boundaries of each proposed CBA.


### 40149 Federal Register / Vol. 75, No. 133 / Tuesday, July 13, 2010 / Proposed Rules

As mentioned earlier, we propose to subdivide MSAs using counties, and since the Los Angeles-Long Beach-Santa Ana, CA MSA only has two counties, it offers only one subdivision along the county lines. Hence, we have proposed to divide the MSA by the two counties creating two CBAs.

We also propose to use the authority in section 1847(a)(3)(A) of the Act to
exclude certain areas within the Los Angeles-Long Beach-Santa Ana, CA
MSA. We believe these areas meet the requirement of section 1847(a)(3)(A); they are rural areas with a low population density within an urban area that are not competitive. In the final rule CMS–1270 F § 414.410(c) published in April 2007, we defined the factors we consider when determining an area is considered a low population density area or an area that would not be competitive. Based on our review of the County Subdivision Population from the
2000 Census from the U.S. Census Bureau, and using the factors set forth in the April 2007 proposed rule, we propose to exclude the area of Los Angeles County north of the San Gabriel mountains. This large geographic area has a population of about 357,000, which is only 4 percent of the total population of Los Angeles County, and is separated from the rest of the county by the San Gabriel Mountains. The area
north of the San Gabriel Mountains has one major road and many terrains which make this area remote. The majority of the population in LA County lives south
of the San Gabriel Mountains.

We believe that excluding this area will create a more manageable CBA that still provides sufficient volume of DMEPOS items while avoiding the geographic obstacle of the mountains. We believe including this area in the
DMEPOS CBP would result in fewer small suppliers being considered for participation under the program, because we would not expect small suppliers to have the resources to serve these more remote areas. As a result, we expect that if this proposal is finalized
it will increase the number of bids
submitted for the CBAs within the Los Angeles-Long Beach-Santa Ana, CA

MSA.

The Los Angeles County includes the
two islands of Santa Catalina and San
Clemente off the west coast. We are proposing that the two islands be included as a part of the Los Angeles County CBA in order to ensure that


### 40150 Federal Register / Vol. 75, No. 133 / Tuesday, July 13, 2010 / Proposed Rules

beneficiaries presently residing on these

islands or who move to these islands in

the future are ensured access to competitively bid items by contract suppliers. San Clemente Island is a military base with a current population of zero, and therefore, the inclusion of

this area in the CBA would not result in an increase in the supplier service area
at this time.

We also propose to subdivide the New York-Northern New Jersey-Long Island, NY–NJ–PA MSA into five CBAs. This MSA comprises 23 counties in three States: New York, New Jersey and Pennsylvania. The MSA has 344,879 FFS beneficiaries receiving DMEPOS subject to the DMEPOS CBP and $350,449,795 in allowed charges for DMEPOS items subject to competitive bidding. The counties, DMEPOS allowed amount and beneficiary count subject to competitive bidding and the general populations that comprise each of these proposed CBAs are shown in
Table 42.



### T ABLE 

### 42—N EW 

### Y ORK 

### -N ORTHERN 

### N EW 

### J ERSEY 

### -L ONG 

### I SLAND 

### , NY-NJ-PA

CBA name/County DMEPOS
allowed amount * DMEPOS beneficiary count * General population **

Nassau-Brooklyn-Queens County Metro CBA: Nassau, NY .................................................................................................. $30,888,889 29,857 1,351,625 Kings, NY ...................................................................................................... 47,044,915 44,89 3 2,556,598 Queens, NY .................................................................................................. 33,406,236 32,798 2 ,293,007

CBA TOTAL .......................................................................................... 111,340,040 107,548 6,201,23 0

Suffolk County CBA: Suffolk, NY .................................................................................................... 31,950,806 31,47 6 1,512,224

CBA TOTAL .......................................................................................... 31,950,806 31,476 1,512,224

Bronx-Manhattan NY CBA: Bronx, NY ..................................................................................................... 19,791,646 17,002 1,391,903 New York, NY ............................................................................................... 26,483,792 26,414 1, 634,795

CBA TOTAL .......................................................................................... 46,275,438 43,416 3,026,698

North-West NY Metro CBA: Hudson, NJ ................................................................................................... 13,622,910 12,644 595,419 Bergen, NJ .................................................................................................... 19,948,837 20,278 894,840 Passaic, NJ ................................................................................................... 10,266,137 10,233 490,948 Putnam, NY .................................................................................................. 1,997,668 1,876 99, 244 Rockland, NY ................................................................................................ 6,421,317 6,265 298 ,545 Essex, NJ ..................................................................................................... 1,392,770 1,379 7 70,675 Morris, NJ ..................................................................................................... 9,094,758 9,830 487,548 Sussex, NJ ................................................................................................... 2,905,240 2,819 15 0,909 Pike, PA ........................................................................................................ 1,393,003 1,475 59,664 Westchester, NY ........................................................................................... 16,971,210 17,220 953 ,943

CBA TOTAL .......................................................................................... 84,013,850 84,019 4,801,735

Southern NY Metro CBA: Hunterdon, NJ .............................................................................................. 2,709,880 2,356 129, 031 Richmond, NY .............................................................................................. 7,054,863 6,626 487,4 07 Union, NJ ...................................................................................................... 10,466,838 10,65 4 523,249 Middlesex, NJ ............................................................................................... 15,803,473 16,649 7 89,102 Monmouth. NJ .............................................................................................. 14,979,747 15,110 642 ,448 Ocean, NJ ..................................................................................................... 20,913,022 21,600 569,111 Somerset, NJ ................................................................................................ 4,941,838 5,425 324 ,563

CBA TOTAL .......................................................................................... 76,869,661 78,420 3,464,911

MSA TOTAL .......................................................................................... 350,449,795 344,879 19,006,7 98

* Source: Medicare claims from 10/1/08 to 9/30/09 for items subject to competitive bidding. ** Source: U.S. Census Bureau 2009 population estimates.

Figure 3 shows the boundaries of each proposed CBA.


### 40151 Federal Register / Vol. 75, No. 133 / Tuesday, July 13, 2010 / Proposed Rules

The Nassau-Brooklyn-Queens CBA would be contiguous to Suffolk County and would consist of the western part of Long Island and extend to the eastern part of New York City. The Suffolk County CBA would consist of the eastern part of Long Island and would encompass most of Long Island. The
Bronx-Manhattan NY CBA would
include the entire area of Manhattan
and the Bronx. The North-West NY
Metro CBA would be situated north and west of New York City and would extend into New Jersey and Pennsylvania. The Southern NY Metro
CBA would include Staten Island and would extend south to Ocean County, New Jersey.

At the March 17, 2010 meeting of the Program Advisory and Oversight Committee (PAOC), we presented these proposals for subdividing these three large MSAs. Various members of the PAOC had the following suggestions for subdividing these MSAs:

• Draw the boundaries of CBAs using the interstate highways rather than the divisions by County;

• Determine the current servicing areas of suppliers by MSA and product category by using a scatter plot; • Use the Hudson River to divide the CBAs for the New York MSA;

• Carve out Pike and Putnam
Counties from the New York MSA due
to their location and their low population density;

• Include Manhattan as a separate CBA, due to its unique nature as a self contained area;

• Consider State licensure requirements when we divide the MSAs
into CBAs;

• In the LA County CBA, exclude the
area north of the San Gabriel Mountains from the CBA; and

• Consider traffic patterns when dividing the Los Angeles MSAs into

CBAs.

We are considering the PAOC’s advice
and recommendations and invite further comments on the proposed subdivisions
and PAOC’s advice of these three MSAs.

3. Exclusions of Certain Areas After
Round 2 and Prior to 2015

The MIPPA amended the statute by requiring that competition under Round 2 takes place in 2011 and by adding section 1847(a)(1)(D)(iii) that requires CMS to exclude the following areas from the competitive bid program for competitions after Round 2 of the program and before 2015:

• Rural Areas;

• Metropolitan Statistical Areas not
selected under Round 1 or Round 2 with a population of less than 250,000; and

• Areas with a low population density within a MSA that is otherwise
selected consistent with section 1847(a)(3)(A).

We propose to incorporate these requirements and timeframes in proposed § 414.410(c).

4. Expansion of Round 2

Section 6410(a) of the ACA expanded
the areas to be included in Round 2 of the program. As amended by section 6410(a) of the ACA, section 1847(a)(1)(B)(i)(II) requires that the competition for Round 2 of the program occur in 91 of the largest MSAs in 2011. Prior to this change, Round 2 was to
include 70 MSAs. Section 1847(a)(1)(D)(ii)(II), as added by section 6410(a), specifies that the additional 21
MSAs to be included in Round 2

‘‘ include the next 21 largest metropolitan statistical areas by total population ’’ (after those already selected Round 2). The 2009 annual population
estimates from the U.S. Census Bureau


### 40152 Federal Register / Vol. 75, No. 133 / Tuesday, July 13, 2010 / Proposed Rules

are the most recent estimates of population that will be available prior to the Round 2 competition mandated to take place in 2011. We therefore propose to use these estimates to
determine the additional 21 MSAs to be included in Round 2 of the program.
Table 43 is a list of the additional 21
MSAs added to Round 2.



### T ABLE 

### 43—A DDITIONAL 

### 21 MSA S 

### A DDED TO 

### R OUND 

### 2

21 Additional MSAs 2009 Total population

Philadelphia-Camden-Wilmington, PA-NJ-DE-MD .................................................................................... .......................................... 5,968,252 Washington-Arlington-Alexandria, DC-VA-MD-WV ................................................................................... .......................................... 5,476,241 Boston-Cambridge-Quincy, MA-NH ................................................................................................. .................................................... 4,588,680 Phoenix-Mesa-Scottsdale, AZ .................................................................................................... ......................................................... 4,364,094 Seattle-Tacoma-Bellevue, WA .................................................................................................... ......................................................... 3,407,848 St. Louis, MO-IL ............................................................................................................... .................................................................... 2,828,990 Baltimore-Towson, MD ........................................................................................................... ............................................................. 2,690,886 Portland-Vancouver-Beaverton, OR-WA ............................................................................................ ................................................. 2,241,841 Providence-New Bedford-Fall River, RI-MA ....................................................................................... ................................................. 1,600,642 Buffalo-Niagara Falls, NY ...................................................................................................... .............................................................. 1,123,804 Rochester, NY .................................................................................................................. ................................................................... 1,035,566 Tucson, AZ ..................................................................................................................... ..................................................................... 1,020,200 Honolulu, HI ................................................................................................................... ...................................................................... 907,574 Albany-Schenectady-Troy, NY .................................................................................................... ........................................................ 857,592 Worcester, MA .................................................................................................................. ................................................................... 803,701 Oxnard-Thousand Oaks-Ventura, CA ............................................................................................... .................................................. 802,983 Springfield, MA ................................................................................................................ .................................................................... 698,903 Bradenton-Sarasota-Venice, FL .................................................................................................. ........................................................ 688,126 Poughkeepsie-Newburgh-Middletown, NY ........................................................................................... ............................................... 677,094 Stockton, CA ................................................................................................................... ..................................................................... 674,860 Boise City-Nampa, ID ........................................................................................................... ............................................................... 606,376

W. Section 10501(i)(3)—Proposed Collection of HCPCS Data for Development and Implementation of a Prospective Payment System for the Medicare Federally Qualified Health Center Program

The Omnibus Budget Reconciliation Act (OBRA) of 1989 amended the Social Security Act by creating new FQHC benefit programs under both Medicare and Medicaid. The Medicare FQHC benefit provides coverage for a full range of primary care services, including physician and certain nonphysician services (PAs, NPs), clinical social worker, psychologist services, and preventive services. FQHCs are ‘‘ safety net ’’ providers (for example, community health centers and programs serving migrants, the homeless, public housing centers, and tribal groups). The main purpose of the FQHC program is to enhance the provision of primary care services in
underserved urban and rural communities. FQHCs typically enhance the availability of care to vulnerable populations, including Medicare, Medicaid, SCHIP, and the uninsured.
Most of these health centers receive HRSA grants for services to the
uninsured.

Medicare pays FQHCs on the basis of reasonable cost, subject to an upper payment limit on the reasonableness of
incurred cost. Actual Medicare
reasonable cost is determined based upon a Medicare cost report filed by the FQHC after the end of its fiscal year. Prior to the start of the year, an interim all-inclusive per-visit payment amount, based upon an estimate of Medicare reasonable costs, is calculated for each Medicare FQHC. During the year, this interim all-inclusive per-visit payment amount is paid for each covered visit between a Medicare beneficiary and an FQHC health professional. After the end of the Medicare FQHC’s cost reporting year, interim per-visit payments are
reconciled to actual Medicare reasonable costs based upon the Medicare cost report filed by the FQHC. Section 10501(i)(3) of the ACA now amends this current Medicare FQHC payment policy with an entirely different payment system, effective with cost reporting periods beginning on or after October 1, 2014.

Section 10501(i)(3)(A) of the ACA amended section 1834 of the Act by adding a new subsection (o), Development and Implementation of Prospective Payment System. This subsection provides the statutory framework for development and implementation of a prospective payment system for Medicare FQHCs. Section 1834(o)(1)(B) of the Act, as established by the ACA, addresses collection of data necessary to develop and implement the new Medicare FQHC prospective payment system. Specifically, section 1834(o)(1)(B) of the Act, Collection of Data and Evaluation, grants the Secretary of HHS the authority to require FQHCs to submit such information as may be required in order to develop and implement the Medicare FQHC prospective payment system, including the reporting of services using HCPCS codes. Section 1834(o)(1)(B) of the Act requires that the Secretary impose this data collection submission requirement no later than January 1, 2011. Accordingly, we are proposing to add a new paragraph (d) to § 405.2470 to require Medicare FQHCs to begin reporting all services furnished and using HCPCS codes for these services starting January 1, 2011. Beginning January 1, 2011, the Medicare FQHC would be required to report on Medicare FQHC claims all pertinent service(s) provided for each Medicare FQHC visit (defined in § 405.2463). This additional reporting would include the information needed to develop and implement a PPS for FQHCs. For example, corresponding HCPCS code(s) would be required to be reported along with the presently required Medicare revenue code(s) for the Medicare FQHC visit(s). CMS’ Medicare FQHC claims processing system would be revised to accept the addition of the new reporting requirements effective January 1, 2011. The proposed new data collection effort
would be for informational and data gathering purposes only, and would not
be utilized to determine Medicare payment to the FQHC. Until the FQHC prospective payment system is implemented in 2014 and the Medicare claims processing system is revised to reflect such a system, Medicare FQHC


### 40153 Federal Register / Vol. 75, No. 133 / Tuesday, July 13, 2010 / Proposed Rules

payment would continue in the current manner (utilizing revenue codes and the interim per-visit payment rate methodology).

We further note that Medicare FQHCs would be required to adhere to the information collection requirements in
accordance with the content and terms of their Medicare agreement as stipulated at § 405.2434. Failure to do so
could result in the termination of the FQHC’s Medicare agreement in accordance with § 405.2436 of the Medicare FQHC regulations.

At this time, we do not foresee
additional claims or other information collection needs beyond collection of HCPCS codes. Accordingly, we are not proposing additional information collection requirements at this time. However, we invite public comment on any additional information FQHCs believe may be necessary in order to develop and implement a prospective payment system for Medicare FQHCs.

VI. Other Provisions of the Proposed Regulation

A. Part B Drug Payment: Average Sales Price (ASP) Issues

1. ‘‘ Carry Over ’’ ASP

The ASP payment methodology is authorized under section 303(c) of the
MMA which amends Title XVIII of the Act by adding section 1847A of the Act.
This section establishes the use of the ASP methodology for payment for drugs and biologicals described in section 1842(o)(1)(C) of the Act furnished on or after January 1, 2005. For purposes of this part, the term ‘‘ drugs ’’ will hereafter refer to both drugs and biologicals. The ASP methodology applies to most drugs furnished incident to a physician’s service, drugs furnished under the durable medical equipment (DME) benefit, certain oral anti-cancer drugs, and oral immunosuppressive drugs.

Sections 1847A and 1927(b) of the Act specify quarterly ASP data reporting requirements for manufacturers. Specific ASP reporting requirements are set forth in section 1927(b) of the Act. Although delays in reporting have been uncommon, they create a risk that: (1) Could result in the publication of payment limits which do not reflect prices for drug products, and (2) could result in inaccurate payments, the need
for correction of files and unintentional ASP payment limit variability.

As a result of these concerns, we are seeking to establish a process for addressing situations where manufacturers fail to report manufacturer ASP data in a timely fashion. This proposal is intended to allow us to calculate and report ASP payment limits for a given quarter within the existing timelines and does not affect the CMS or OIG’s authority to assess civil monetary penalties associated with untimely or false ASP reporting. Manufacturers who misrepresent or fail to report
manufacturer ASP data will remain subject to civil monetary penalties, as applicable and described in sections 1847A and 1927(b) of the Act.

For the purposes of reporting under section 1847A of the Act, the term
manufacturer is defined in section 1927(k)(5) of the Act and means any entity engaged in the following: production, preparation, propagation, compounding, conversion or processing of prescription drug product, either directly or indirectly by extraction from substances of natural origin, or independently by means of chemical synthesis, or by a combination of extraction and chemical synthesis; or packaging, repackaging, labeling, relabeling, or distribution of prescription drug products. The term
manufacturer does not include a wholesale distributor of drugs or a retail pharmacy licensed under State law. However, manufacturers that also engage in certain wholesaler activities are required to report ASP data for those drugs that they manufacture. Note that
the definition of manufacturers for the purposes of ASP data reporting includes repackagers.

In accordance with section 1847A of the Act, manufacturers are required to report data on the NDC level, which include the following elements: the manufacturer ASP for drugs; the Wholesale Acquisition Cost (WAC) in effect on the last day of the reporting period; the number of ASP units sold; and the NDC. Currently, when manufacturer ASP data or specific data elements are not available, we calculate an ASP price for a billing code based on other applicable and available pricing data from manufacturers for that drug. This includes WAC prices from compendia if manufacturer data are not available for a billing code. WAC prices tend to be higher than manufacturer ASP prices.

Although problems with reporting have been uncommon, we have recently encountered situations where delays in manufacturer ASP reporting could have led to significant ASP payment limit fluctuations for highly utilized HCPCS codes. The greatest potential impact occurs when data for high volume drug products within a HCPCS code that is represented by a limited number of NDCs have not been reported and
cannot be included in the ASP volume weighted calculations described in section 1847A(b) of the Act. For multisource drugs, such a situation is likely to artificially increase or decrease Medicare ASP payment limits, which in turn would affect beneficiary cost sharing amounts. Such artificial fluctuations of the ASP payment limit could provide the appearance of instability unrelated to market forces
and could also create access issues for providers and beneficiaries and confusion that could ultimately affect product demand in the marketplace.

In order to minimize the possibility of ASP payment limit fluctuations due to missing data, we are proposing a process, consistent with our authority in section 1847A(c)(5)(B), to update ASPs,
based on the manufacturer’s ASP calculated for the most recent quarter for which data is available. Specifically, we are proposing to carry over the previously reported manufacturer ASP for an NDC(s) when missing
manufacturer ASP and/or WAC data could cause significant changes or fluctuations in ASP payment limits, and efforts by us to obtain manufacturer reported ASP before Medicare ASP payment limits publication deadlines have not been successful. For example, the most recently reported manufacturer ASP prices for products on the market
would be carried over to the next quarter if an entire manufacturer’s submission was not received, manufacturer ASP price data for specific NDCs has not been reported, or only WAC data has been reported; however,
NDCs that have zero sales or are no longer being manufactured will not be subjected to this process. Also, we are proposing to apply the carryover process only in cases where missing data results in a 10 percent or greater change in the ASP payment limit compared to the previous quarter. Based on experience with ASP methodology since 2006, we believe that this percentage threshold meets the definition of significant. We are specifically seeking comments on our use of 10 percent as the threshold amount. In order to better represent actual market trends, that is actual
increases or decreases in manufacturer reported ASP for the group of NDCs that represent the HCPCS code, we are proposing that the manufacturer ASP payment amounts for the individual
NDCs that are carried over will be adjusted by the weighted average of the change in the manufacturer ASP for the NDCs that were reported during both the most recently available quarter and the current quarter. We would appreciate comments about whether
other methods to account for


### 40154 Federal Register / Vol. 75, No. 133 / Tuesday, July 13, 2010 / Proposed Rules

marketplace price trends to the carried
over NDCs could be a better substitute for applying the weighted average change. The previous quarter’s sales
volumes will be carried over. An example of the proposed process appears in Table 44.

We propose to apply this process to both single source drugs and multiple source drugs. However, we are concerned that including single source drugs in the carry over process could create an incentive for non-reporting in situations where ASP prices for a single source drug are falling and the manufacturer stops reporting ASP in an effort to preserve a higher payment amount despite the risk of significant statutory penalties for such an action. Therefore, we are specifically requesting comments on this option and the effect of limiting this proposal to multiple source drugs only. We will consider these comments carefully before including both single source and multisource drugs in this process.



### T ABLE 

### 44—P ROPOSED 

### ASP C ARRYOVER 

### E XAMPLE FOR 

### NDC S IN A 

### S PECIFIC 

### HCPCS C ODE

Previous quarter reported NDCs PreviousQtr reported vol-

ume Previous Qtr ASP

price Current Qtr reported NDCs Current Qtr reported
volume Current Qtr ASP price Current QtrNDCs for calculation Current Qtr
volume for
calculation Current Qtr price for
calculation

12345–6789–10 ........................................................ 2000 $1.000 12345–6789–

10 2500 $0.980 12345–6789–

10 2500 $0.980

12345–6789–11 ........................................................ 3000 1.000 12345–6789–

11 1700 0.980 12345–6789–

11 1700 0.980

12345–6789–12 ........................................................ 5000 1.000 12345–6789–

12 5500 0.980 12345–6789–

12 5500 0.980

45678–1234–90 ........................................................ 9000 1.100 (**) (**) (**) 45678–1234–

90 9000 * 1.078

45678–1234–99 ........................................................ 27000 1.100 (**) (**) (**) 45678–1234–

99 27000 * 1.078

* This result is obtained by calculating the weighted average price change in NDCs available (that is, 12345–6789–10 thru 12345–6789–12) in both the previous and current quarters, which is

¥ 2% [(0.98–1.00)*100], and applying that change to the previous quarter’s manufacturer ASP for the missing NDCs (that is, 45678– 1234–90 and 45678–1234–99). The last two columns on the right would be used to calculate the weighted ASP and payment limits for the 5 NDCs as a HCPCS code and accounts for missing prices for two high volume NDCs that represent most of the units sold within the HCPCS code and theref ore heavily influence the price calculation for the HCPCS code.

** Missing.

Our proposed approach is intended to establish a straightforward and transparent solution that minimizes the effect of missing manufacturer ASP data on Medicare ASP payment limits. We believe that the availability of a

mechanism to minimize non-market related price fluctuations is desirable

when efforts to obtain manufacturer’s ASP data by deadlines have not been successful. Our proposed mechanism is not intended to alter or adjust reported prices and will not be used to do so, but instead is intended to more accurately represent prices in the marketplace if manufacturer ASP data for particular drug product(s) is missing. Based on our experience with ASP reporting since 2004, we do not believe that this process will be used frequently. However, as we stated previously, recent concerns with delays in reporting of manufacturer ASP data have led to this proposal.

We also remind manufacturers that significant civil monetary penalties for not reporting or misrepresenting
manufacturer ASP data are authorized under sections 1847A(d)(4) and 1927(b)(3)(C) of the Act and codified in regulations at § 414.806. This proposal should not be interpreted to mean that

CMS and the OIG will refrain from collecting such penalties for ASP reporting violations. Late or missing reports will not be tolerated. This proposed policy would be implemented regardless of any efforts by the OIG to enforce Civil Monetary Penalties for non-reporting.

We would also like to remind manufacturers that additional specific information about reporting ASP data to us is available. (See for example.: 69 FR
17936, 69 FR 66299, 70 FR 70215, 71 FR 69665, 72 FR 66256, 73 FR 69751, and 74 FR 61904.) Also, Frequently Asked Questions are posted in the Related
Links Inside CMS Section of the ASP Overview Web page at http:// www.cms.hhs.gov/ McrPartBDrugAvgSalesPrice/

01

_ overview.asp#TopOfPage , and the Downloads section of the same webpage
contains a link to the ASP Data Form (addendum A), which includes examples of how ASP data must be reported and formatted for submission. In particular, we would like to remind manufacturers to report sales volume in quantities of NDC units sold (not vials or other units of sale), and to use a zero (that is the character ‘‘ 0 ’’ ) instead of a blank when reporting items that did not have any sales in a particular quarter. In addition, manufacturers should report
both the ASP and the WAC for each NDC, the expiration date for the last lot sold, if applicable, and the date of first
sale for an NDC.

In summary, in situations where any current quarter’s manufacturer ASP data is unavailable, we are proposing, consistent with our authority in section 1847A(c)(5)(B), to use the most recent data available in the ASP payment limit calculation for single source and multiple source drugs. We look forward to comments on this proposal and the proposed changes to § 414.904(i).

2. Partial Quarter ASP Data

Section 1847A(c)(4) of the Act states
that ‘‘ In the case of a drug or biological during an initial period (not to exceed a full calendar quarter) in which data on the prices for sales for the drug or biological is not sufficiently available from the manufacturer to compute an average sales price for the drug or biological, the Secretary may determine the amount payable under this section for the drug or biological based on—(A) the wholesale acquisition cost; or (B) the methodologies in effect under this part on November 1, 2003, to determine payment amounts for drugs or biological. ’’

When a new drug product enters the market, the first date of sale rarely coincides with the beginning of a calendar quarter. Therefore, the ASP data for many new drug products falls into partial quarter status during the first quarter of sales. We are taking this opportunity to describe our policy regarding how reported data is used in the calculation of ASP payment limits during the first quarter of sales for single source and multiple source drugs.

In accordance with section 1847A(c)(4)(A) of the Act, it has been our policy to price new single source drugs at WAC for the first quarter (unless the date of first sale is on the first day of the quarter), and to add new


### 40155 Federal Register / Vol. 75, No. 133 / Tuesday, July 13, 2010 / Proposed Rules

NDCs for multi source drugs and product line expansions of single source drugs to the ASP calculation for a quarter as soon as these products are reported.

We believe that the approaches for both single source and multi source drugs are consistent with the statute, particularly section 1847A(c)(4) of the Act, and we intend to continue this policy.

3. Determining the Payment Amount for Drugs and Biological Which Include
Intentional Overfill

The methodology for developing Medicare drug payment allowances
based on the manufacturers’ submitted ASP data is specified in 42 CFR part 414, subpart K. We initially established this regulatory text in the CY 2005 PFS final rule with comment period (69 FR 66424). We further described the formula we use to calculate the payment amount for each HCPCS billing code in the CY 2006 PFS proposed rule (70 FR 45844) and final rule with comment period (70 FR 70217). With the enactment of the Medicare, Medicaid and SCHIP Extension Act (MMSEA) (Pub. L. 110–173), the formula we use changed beginning April 1, 2008. Section 112(a) of the MMSEA requires us to calculate payment amounts using a specified volume-weighting methodology. In addition, section 112(b) of the MMSEA sets forth a special rule for determining the payment amount for certain drugs and biological. We addressed these changes in the CY 2009 PFS proposed and final rules (73 FR 38520 and 69571, respectively). For each billing code, we calculate a volume-weighted, ASP-based payment amount using the ASP data submitted by manufacturers. Manufacturers submit ASP data to us at the 11-digit National Drug Code (NDC) level, including the number of units of the 11-digit NDC
sold and the ASP for those units. We determine the number of billing units in an NDC based on the amount of drug in the package.

For example: A manufacturer sells a box of 4 vials of a drug. Each vial contains 20 milligrams (mg); the billing code is per 10 MG. The number of billing units in this NDC for this billing code is (4 vials × 20mg)/10mg = 8
billable units.

Beginning April 1, 2008, we use a two-step formula to calculate the payment amount for each billing code. We sum the product of the
manufacturer’s ASP and the number of units of the 11-digit NDC sold for each NDC assigned to the billing and payment code, and then divide this total by the sum of the product of the number of units of the 11-digit NDC sold and the number of billing units in that NDC for each NDC assigned to the billing and payment code.

The provisions in section 112 of the MMSEA were self-implementing for services on and after April 1, 2008.
Because of the limited time between enactment and the implementation date, it was not practical to undertake and complete rulemaking on this issue prior to implementing the required changes. As a result of the legislation, we revised § 414.904 to codify the changes to the determination of payment amounts
consistent with section 112 of the

MMSEA.

Since that time, we have become
aware of situations where manufacturers, by design, include a
small amount of ‘‘ intentional overfill ’’ in containers of drugs. We understand that
this ‘‘ intentional overfill ’’ is intended to compensate for loss of product when a dose is prepared and administered properly. For instance, a hypothetical drug is intended to be delivered at a 0.5 mg dose which must be drawn into a syringe from a vial labeled for single use only. The vial is labeled to contain 0.5 mg of product but actually contains 1.5 mg of product. The additional 1.0 mg of product is included, by design, and is intended to be available to the provider so as to ensure a full 0.5 mg dose is administered to the patient.

Our ASP payment calculations are based on data reported to us by
manufacturers. This data includes the

‘‘ volume per item. ’’ In our ‘‘ Appendix A—Average Sales Price Reporting Data
Elements ’’ available on our Web site at http://www.cms.gov/ McrPartBDrugAvgSalesPrice/, we define

‘‘ volume per item ’’ as ‘‘ The amount in one item. (ex., 10 ml in one vial, or 500 tablets in one bottle) Enter ‘‘ 1 ’’ for certain forms of drugs (for example, powders and sheets) when ‘‘ Strength of
the Product ’’ indicates the amount of the product per item. ’’ In order to accurately calculate Medicare ASP payment limits under section 1847A, we interpret ‘‘ the

amount in one item ’’ to be the amount of product in the vial or other container as indicated on the FDA-approved label.

It has been longstanding Medicare policy that in order to meet the general requirements for coverage under the

‘‘ incident to ’’ provision, services or supplies should represent an expense incurred by the physician or entity billing for the services or supplies (See Medicare Benefit Policy Manual (Publication #100–02), Chapter 15, Sections 50.3, 60.1.A). Such physicians’ services and supplies include drugs and biological under section 1861(s)(2)(A). In accordance with this policy, providers may only bill for the amount of drug product actually purchased and that the cost of the product must represent an expense to the physician.

We further understand that when a provider purchases a vial or container of product, the provider is purchasing an amount of drug defined by the product packaging or label. Any excess, free product (that is, overfill) is provided without charge to the provider. In accordance with our policy, providers may not bill Medicare for overfill harvested from containers, including overfill amounts pooled from more than one container, because that overfill does not represent a cost to the provider. Claims for drugs and biological that do not represent a cost to the provider are not reimbursable, and providers who submit such claims may be subject to scrutiny and follow up action by CMS, its contractors, and OIG.

Because such overfill is not included in the calculation of payment limits under the methodology in section 1847A of the Act and does not represent an incurred cost to a provider, we are proposing to update our regulations at 42 CFR part 414 subpart J to clearly state that Medicare ASP payment limits are based on the amount of product in the
vial or container as reflected on the FDA-approved label. We are also proposing to update our regulations to clearly state that payment for amounts of free product, or product in excess of
the amount reflected on the FDAapproved label, will not be made under
Medicare.

4. WAMP/AMP

Section 1847A(d)(1) of the Act states
that ‘‘ the Inspector General of HHS shall conduct studies, which may include surveys to determine the widely available market prices (WAMP) of drugs and biologicals to which this section applies, as the Inspector General, in consultation with the Secretary, determines to be appropriate. ’’ Section 1847A (d)(2) of the Act states that, ‘‘ Based upon such studies and other data for drugs and biologicals, the Inspector General shall compare the ASP under this section for drugs and biologicals with—

• The widely available market price (WAMP) for these drugs and biologicals (if any); and

• The average manufacturer price (AMP) (as determined under section 1927(k)(1) of the Act) for such drugs and biologicals. ’’

Section 1847A(d)(3)(A) of the Act states that, ‘‘ The Secretary may disregard the ASP for a drug or biological that
exceeds the WAMP or the AMP for such drug or biological by the applicable


### 40156 Federal Register / Vol. 75, No. 133 / Tuesday, July 13, 2010 / Proposed Rules

threshold percentage (as defined in subparagraph (B)). ’’ Section 1847A(d)(3)(C) of the Act states that if the OIG finds that the ASP for a drug or biological is found to have exceeded the WAMP or AMP by this threshold percentage, the OIG ‘‘ shall inform the Secretary (at such times as the Secretary may specify to carry out this subparagraph) and the Secretary shall, effective as of the next quarter, substitute for the amount of payment
otherwise determined under this section for such drug or biological, the lesser of—(i) the widely available market price for the drug or biological (if any); or (ii) 103 percent of the average manufacturer price * * *. ’’

The applicable threshold percentage is specified in section 1847A(d)(3)(B)(i) of the Act as 5 percent for CY 2005. For CY 2006 and subsequent years, section 1847A(d)(3)(B)(ii) of the Act establishes that the applicable threshold percentage

is ‘‘ the percentage applied under this subparagraph subject to such adjustment as the Secretary may specify for the WAMP or the AMP, or both. ’’ In the CY 2006 (70 FR 70222), CY 2007 (71 FR 69680), CY 2008 (72 FR 66258), CY 2009 (73 FR 69752), and CY 2010 (74 FR 61904) PFS final rules with comment period, we specified an applicable threshold percentage of 5 percent for
both the WAMP and AMP. We based
this decision on the fact that data was too limited to support an adjustment to the current applicable threshold
percentage.

For CY 2011, we are proposing to specify two separate adjustments to the applicable threshold percentages. When making comparisons to the WAMP, we propose the applicable threshold percentage to remain at 5 percent. The applicable threshold percentage for the
AMP is addressed below in this section of the preamble. Although the latest WAMP comparison was published in 2008, the OIG is continuing to perform studies comparing ASP to WAMP. Based on available OIG reports that have been published comparing WAMP to ASP, we do not have sufficient
information to determine that the 5 percent threshold percentage is inappropriate. As a result, we believe that continuing the 5 percent applicable threshold percentage for the WAMP is appropriate for CY 2011. Therefore we are proposing to revise § 414.904(d)(3)
to include the CY 2011 date.

As we noted in the CY 2010 PFS final rule with comment period (74 FR 61904), we understand that there are complicated operational issues associated with this policy. We continue to proceed cautiously in this area. We remain committed to providing stakeholders, including providers and manufacturers of drugs impacted by potential price substitutions with adequate notice of our intentions regarding such, including the opportunity to provide input with regard to the processes for substituting
the WAMP for the ASP.

We welcome comments on our proposal to continue the applicable threshold percentage at 5 percent for the
WAMP for 2011.

5. AMP Threshold and Price
Substitutions

a. AMP Threshold

As mentioned elsewhere in this proposal, when making comparisons of ASP to AMP, the applicable threshold percentage for CY 2005 was specified in statute as 5 percent. Section 1847A(d)(3) of the Act allows the Secretary to specify adjustments to this threshold percentage for years subsequent to 2005, and to specify the timing for any price substitution. For CY 2006 (70 FR 70222), CY 2007 (71 FR 69680), CY 2008 (72 FR 66258), CY 2009 (73 FR 69752), and CY 2010 (74 FR 61904), the Secretary made no adjustments to the threshold percentage; it remained at 5
percent.

For CY 2011, we are proposing with respect to AMP substitution to apply the applicable percentage subject to certain adjustment such that comparisons of ASP to AMP will only be made when the ASP exceeds the AMP by 5 percent in two consecutive quarters immediately prior to the current pricing quarter, or three of the previous four quarters immediately prior to the
current quarter.

In general, the ASP methodology reflects average market prices for Part B drugs for a quarter. The ASP is based, in part, on the average sales price to all purchasers for a calendar quarter; the AMP, in turn, represents the average price paid by certain wholesalers. Accordingly, while the ASP payment amount for a billing code may exceed its AMP for that billing code for any given quarter, this may only reflect a temporary fluctuation in market prices
that would be otherwise corrected in a subsequent quarter. We believe this fluctuation is demonstrated by how few billing codes exceed the applicable threshold percentage over multiple quarters. For example, in the Inspector General’s report ‘‘ Comparison of Average Sales Prices and Average
manufacturer Prices: An Overview of

2008 ’’ , only 33 of 482 examined billing codes exceeded the applicable threshold percentage over multiple quarters. This figure also included billing codes that exceeded the threshold based on partial price comparisons (OEI–03–09–00350). We are concerned that comparisons of a single quarter’s ASP to AMP will not adequately account for these temporary fluctuations and underlying market trends. We believe that applying this threshold percentage adjusted to reflect data from multiple quarters will account for continuing differences between ASP and AMP, and allow us to better identify those drugs that consistently trigger the substitution threshold.

We further propose to apply the applicable AMP threshold percentage only for those situations where AMP and ASP comparisons are based on the same set of NDCs for a billing code (that
is, ‘‘ complete ’’ AMP data). Prior to 2008, the OIG calculated a volume-weighted
AMP and made ASP and AMP comparisons for only billing codes with
such ‘‘ complete ’’ AMP data. In such comparisons, a volume-weighted AMP for a billing code was calculated when
NDC-level AMP data was available for the same NDCs used by us to calculate the volume-weighted ASP. Beginning in the first quarter of 2008, the OIG also began to make ASP and AMP comparisons based on ‘‘ partial ’’ AMP data (that is, AMP data for some, but not all NDCs in a billing code). For these comparisons, the volume-weighted AMP for a billing code is calculated even when only such limited AMP datais available. That is, the volumeweighted AMP calculated by the Inspector General is based on fewer NDCs than the volume-weighted ASPcalculated by CMS. Moreover, volumeweighted ASPs are not adjusted by the Inspector General to reflect the fewer
number of NDCs in the volumeweighted AMP.

Because the OIG’s partial AMP data comparison does not reflect all the NDCs used in our volume-weighted ASP calculations, we have some concerns using the volume-weighted AMP. We believe that such AMP data may not adequately account for market-related drug price changes and may lead to the substitution of incomplete and inaccurate volume-weighted prices. Such substitutions may impact physician and beneficiary access to drugs. Therefore, in accordance with our authority as set forth in section 1847A(d)(1) and (3) of the Act, we are proposing the substitution of 103 percent of AMP for 106 percent of ASP should be limited to only those drugs with ASP and AMP comparisons based
on the same set of NDCs. We are proposing to revise § 414.904(d)(3) to reflect corresponding regulatory text changes, and we welcome comments on all aspects of this proposal.


### 40157 Federal Register / Vol. 75, No. 133 / Tuesday, July 13, 2010 / Proposed Rules

b. AMP Price Substitution

(1) Inspector General Studies

Section 1847A(d) of the Act requires the Inspector General to conduct studies of the widely available market price for drugs and biological to which section 1847A of the Act applies. However, it does not specify the frequency of when
such studies should be conducted. The Inspector General has conducted studies comparing AMP to ASP for essentially each quarter since the ASP system has been implemented. Since 2005, the OIG has published 18 reports pertaining to the price substitution issue (see Table 45), of which 16 have identified billing codes with volume-weighted ASPs that have exceeded their volume-weighted AMPs by the applicable threshold
percentage.



### T ABLE 

### 45—P UBLISHED 

### OIG R EPORTS ON 

### P RICE 

### S UBSTITUTIONS

Date Report title

7/2008 ............... A Comparison of Average Sales Price to Widely Available Market Prices for Inhalation Drugs (OEI–03–07–0019 0). 6/2006 ............... A Comparison of Average Sales Price to Widely Available Market Prices: Fourth Quarter 2005 (OEI–03–05–0043 0). 4/2010 ............... Comparison of Third-Quarter 2009 Average Sales Price and Average Manufacturer Prices: Impact on Medicare R eimbursement for First Quarter 2010 (OEI–03–10–00150). 2/2010 ............... Comparison of Average Sales Prices and Average Manufacturer Prices: An Overview of 2008 (OEI–03–09–00350). 1/2010 ............... Comparison of Second-Quarter 2009 Average Sales Price and Average Manufacturer Prices: Impact on Medicare Reimbursement for Fourth Quarter 2009 (OEI–03–09–00640). 8/2009 ............... Comparison of First-Quarter 2009 Average Sales Price and Average Manufacturer Prices: Impact on Medicare R eimbursement for Third Quarter 2009 (OEI–03–09–00490). 8/2009 ............... Comparison of Fourth-Quarter 2008 Average Sales Price and Average Manufacturer Prices: Impact on Medicare Reimbursement for Second Quarter 2009 (OEI–03–09–00340). 4/2009 ............... Comparison of Third-Quarter 2008 Average Sales Prices and Average Manufacturer Prices: Impact on Medicare Reimbursement for First Quarter 2009 (OEI–03–09–00150).2/2009 ............... Comparison of Second-Quarter 2008 Average Sales Prices and Average Manufacturer Prices: Impact on Medicare Reimbursement for Fourth Quarter 2008 (OEI–03–09–00050). 12/2008 ............. Comparison of First-Quarter 2008 Average Sales Price and Average Manufacturer Prices: Impact on Medicare Re imbursement for Third Quarter 2008 (OEI–03–08–00530). 12/2008 ............. Comparison of Average Sales Prices and Average Manufacturer Prices: An Overview of 2007 (OEI–03–08–00450). 8/2008 ............... Comparison of Fourth-Quarter 2007 Average Sales Price and Average Manufacturer Prices: Impact on Medicare Reimbursement for Second Quarter 2008 (OEI–03–08–00340). 5/2008 ............... Comparison of Third-Quarter 2007 Average Sales Price and Average Manufacturer Prices: Impact on Medicare R eimbursement for First Quarter 2008 (OEI–03–08–00130). 12/2007 ............. Comparison of Second-Quarter 2007 Average Sales Price and Average Manufacturer Prices: Impact on Medicare R eimbursement for Fourth Quarter 2007 (OEI–03–08–00010). 9/2007 ............... Comparison of First-Quarter 2007 Average Sales Price and Average Manufacturer Prices: Impact on Medicare R eimbursement for Third Quarter 2007 (OEI–03–07–00530). 7/2007 ............... Comparison of Third-Quarter 2006 Average Sales Price and Average Manufacturer Prices: Impact on Medicare R eimbursement for First Quarter 2007 (OEI–03–07–00140). 7/2006 ............... Comparison of Fourth-Quarter 2005 Average Sales Price and Average Manufacturer Prices: Impact on Medicare Reimbursement for Second Quarter 2006 (OEI–03–06–00370). 4/2006 ............... Monitoring Medicare Part B Drug Prices: A Comparison of Average Sales Price to Average Manufacturer Prices (OEI–03–04– 00430).

For example, in their latest report comparing AMP to ASP entitled

‘‘ Comparison of Third-Quarter 2009 Average Sales Price and Average Manufacturer Prices: Impact on

Medicare Reimbursement for First Quarter 2010 ’’ (OEI–03–10–00150), the Inspector General found that of 356 billing codes with complete AMP data in the third quarter of 2009, 16 met the 5 percent threshold, that is, ASP exceeded AMP by at least 5 percent. Eight of these 16 billing codes were also eligible for price adjustments in one or more of the previous four quarters, with three drugs meeting the 5-percent threshold in all five quarters under review. This Inspector General report further indicates that, ‘‘ If reimbursement amounts for all 16 drugs had been based on 103 percent of the AMPs, we estimate that Medicare expenditures would have been reduced by over half a million dollars in the first quarter of

2010. ’’ These drugs and the savings found by the Inspector General constitute potential savings for the Medicare program and beneficiaries.

(2) Regulatory, Judicial, and Legislative Changes

Since 2005, regulatory and legislative changes, as well as litigation, have had a direct impact on this price substitution issue. In 2007, we published a final rule that, in accordance with section 6001(c) of the Deficit Reduction Act, was designed to clarify the definition of AMP (72 FR 39142). On December 19, 2007, the
United States District Court for the
District of Columbia issued a preliminary injunction in National Association of Chain Drug Stores et al.

v. Health and Human Services, Civil Action No. 1:07-cv-02017(RCL) that enjoins CMS, in part, from posting any AMP data on a public Web site or otherwise disclosing any AMP data to certain individuals or entities, including, but not limited to, States or their representatives. (For additional information on this injunction, please
see our Web site at http:// www.cms.hhs.gov/DeficitReductionAct/ Downloads/AMPPIOrder.pdf)

.

In 2010, section 2503 of ACA amended the definition of AMP, in part, to reflect the average price paid for covered outpatient drugs: (1) By wholesalers for drugs distributed to retail community pharmacies; and (2) by retail community pharmacies that purchase drugs directly from the
manufacturer. The statute defines retail community pharmacies, in part, as independent, chain, and supermarket pharmacies.

(3) Proposal

Overall, we are cognizant that any policy must reflect market-related pricing changes. Additionally, we continue to recognize the need, in light of the statute, to implement a price substitution policy.


### 40158 Federal Register / Vol. 75, No. 133 / Tuesday, July 13, 2010 / Proposed Rules

As discussed previously, section 1847A(d)(3) of the Act provides authority for us to determine the applicable percentage subject to ‘‘ such adjustment as the Secretary may specify for the widely available market price or the average manufacturer price, or
both. ’’ We also have authority to specify the timing of any ASP substitution. Consistent with this authority, we are proposing a policy to substitute 103 percent of AMP for 106 percent of ASP where the applicable percentage has
been satisfied for a number of calendar quarters, as discussed elsewhere in this rule. This policy would apply to both single source and multiple source drugs and biologicals as defined respectively at section 1847A(c)(6)(C) and (D) of the

Act.

We acknowledge the limitation of the preliminary injunction on our ability to publicly disclose AMP data and until that injunction is modified, we will not implement this price substitution policy.

Because of the lack of data regarding WAMP to ASP comparisons, we are explicitly excluding WAMP from this price substitution proposal though we are proposing to maintain the WAMP threshold at 5 percent for CY 2011 in a separate section of this rule. Overall, we are interested in implementing a pricesubstitution policy that reflects marketrelated pricing changes and which focuses on those drugs that consistently exceed the price substitution threshold over multiple quarters. Unlike the OIG’s AMP studies, the published WAMP studies have recommended price substitutions based on specific
timeframes that do not illustrate whether such pricing discrepancies are singular or consistent across multiple quarters. We will reconsider proposing a policy for the substitution of WAMP
at a later date.

(4) Timeframe for and Duration of Price
Substitutions

As stated in § 414.804(a)(5), a manufacturer’s average sales price must be submitted to CMS within 30 days of the close of the quarter. We then calculate an ASP for each billing code as per the process outlined at § 414.904. Then, as per our CY 2005 PFS final rule (69 FR 66300), we implement these new prices through program instructions or otherwise at the first opportunity after we receive the data, which is the calendar quarter after receipt.

Section 1847A(d)(3)(C) of the Act indicates that a price substitution would be implemented ‘‘ effective as of the next
quarter ’’ after the OIG has informed us that the ASP for a drug or biological exceeds its AMP by the applicable percentage threshold. The OIG does not receive new ASP prices for a given quarter until after we have finalized them. Also, the results of their pricing comparisons are not available until after the ASP prices for a given quarter have gone into effect. Therefore, we anticipate that there will be a three quarter lag for substituted prices from the quarter in which manufacturer sales occurred, though this will depend in great part upon the timeframe in which we obtain comparison data from the OIG. Table 46 provides an example of
this timeframe.



### T ABLE 

### 46—E XAMPLE 

### P RICE 

### S UBSTITUTION 

### T IMEFRAME

Q2–10 Q3–10 Q4–10 Q1–11

ASP Process ....... Manufacturer sells drug. Manufacturer submits Q2–10 pricing data. CMS calculates ASP payment limits for Q4–10. CMS publishes Q4–10 payment

limits.

............................. ........................... ...................................................... CMS calculates ASP payment limits for Q1–11. Compares calculated payment limits toOIG substitute prices. Publishes Q1–11 prices that may include OIG substitute prices. OIG Process ....... ........................... ...................................................... OIG receives Q4–10 pricing f rom CMS and compares it to Q2– 10 volume-weighted AMP data. Notifies CMS of eligible

HCPCS for substitution.

Given this lag in time, the ASP price for a billing code may have decreased since the OIG’s comparison. Therefore,

consistent with our authorities in section 1847A(d)(3) of the Act and our desire to provide accurate payments consistent with these provisions, we believe that the timing of any substitution policy should permit a finalcomparison between the OIG’s volumeweighted 103 percent AMP for a billing code (calculated from the prior quarter’sdata) and the billing code’s volumeweighted 106 percent ASP, as calculated by CMS, for the current quarter. This final comparison would assure the Secretary that the 106 percent ASP payment limit continues to exceed 103 percent of the OIG’s calculated AMP in

order to avoid a situation in which the Secretary would inadvertently raise the Medicare payment limit through this price substitution policy. We specifically request comments on this proposal.

ASP payment limits are calculated on a quarterly basis as per section 1847A(c)(5)(A) of the Act, and we are particularly mindful that the ASP-based payment allowance for a billing code may change from quarter to quarter. As such, we propose that any price substitution would last for one quarter.

Overall, we believe that our proposal
as outlined above to substitute 103 percent of AMP for 106 percent of ASP provides us with a viable mechanism for generating savings for the Medicare program and its beneficiaries since it will allow Medicare to pay based off lower market prices for those drugs and biologicals that consistently exceed the applicable threshold percentage. Moreover, it will enable us to address a programmatic vulnerability identified by the OIG. We welcome comments on all aspects of our proposal.

We are also seeking comment on other issues related to the comparison between ASP and AMP, such as—

• Any effect of definitional differences between AMP and ASP, particularly in light of the revised definition of AMP per ACA;

• The impact of any differences in AMP and ASP reporting by manufacturers on price substitution comparisons; and

• Whether and/or how general
differences and similarities between
AMP and manufacturer’s ASP would affect comparisons between these two.


### 40159 Federal Register / Vol. 75, No. 133 / Tuesday, July 13, 2010 / Proposed Rules

B. Ambulance Fee Schedule Issue: Policy for Reporting Units When Billing for Ambulance Fractional Mileage

Under the ambulance fee schedule, the Medicare program pays for transportation services for Medicare
beneficiaries when other means of transportation are contraindicated and all other applicable medical necessity requirements are met. Ambulance
services are classified into different levels of ground (including water) and
air ambulance services based on the medically necessary treatment provided during transport. These services include the following levels of service:

• For Ground— ++ Basic Life Support (BLS) (emergency and nonemergency).

++ Advanced Life Support, Level 1 (ALS1) (emergency and nonemergency).

++ Advanced Life Support, Level 2 (ALS2).

++ Specialty Care Transport (SCT). ++ Paramedic ALS Intercept (PI).

• For Air— ++ Fixed Wing Air Ambulance (FW). ++ Rotary Wing Air Ambulance (RW).

1. History of Medicare Ambulance

Services

a. Statutory Coverage of Ambulance

Services

Under sections 1834(l) and 1861(s)(7) of the Act, Medicare Part B (Supplementary Medical Insurance) covers and pays for ambulance services, to the extent prescribed in regulations,
when the use of other methods of transportation would be contraindicated by the beneficiary’s medical condition. The House Ways and Means Committee and Senate Finance Committee Reports that accompanied the 1965 Social Security Amendments suggest that the Congress intended that—

• The ambulance benefit cover transportation services only if other means of transportation are contraindicated by the beneficiary’s medical condition; and

• Only ambulance service to local facilities be covered unless necessary services are not available locally, in which case, transportation to the nearest facility furnishing those services is covered (H.R. Rep. No. 213, 89th Cong., 1st Sess. 37 and Rep. No. 404, 89th Cong., 1st Sess. Pt 1, 43 (1965)).

The reports indicate that transportation may also be provided from one hospital to another, to the beneficiary’s home, or to an extended care facility. b. Medicare Regulations for Ambulance

Services

Our regulations relating to ambulance services are set forth at 42 CFR part 410, subpart B, and 42 CFR part 414, subpart H. Section 410.10(i) lists ambulance
services as one of the covered medical
and other health services under Medicare Part B. Therefore, ambulance services are subject to basic conditions and limitations set forth at § 410.12 and to specific conditions and limitations as specified in § 410.40 and § 410.41. Part 414, subpart H, describes how payment
is made for ambulance services covered by Medicare.

2. Mileage Reporting

a. Background and Current Process for Reporting Ambulance Mileage

Historically, the Medicare fee-forservice (FFS) claims processing system lacked the capability to accept and process fractional unit amounts reported in any claim format. Therefore, the standard for reporting units for ambulance mileage was to bill in whole number increments. Thus, if the total units of service for ambulance mileage included a fractional amount, providers and suppliers of ambulance services (hereafter referred to collectively as

‘‘ providers and suppliers ’’ ) were instructed to round the fraction up to
the next whole number. Claims billed with fractional units of service were, at that time, returned as unprocessable as CMS’ claims processing systems could not accept nor adjudicate fractional unit amounts properly.

Consequently, in Change Request (CR) 1281 (Transmittal AB–00–88, issued on September 18, 2000), we instituted anoperational procedure requiring wholeunit reporting of mileage on ambulance claims. Specifically, we instructed providers and suppliers that ‘‘ If mileage is billed, the miles must be whole numbers. If a trip has a fraction of a mile, round up to the nearest whole
number. ’’ Our instructions also stated
that ‘‘ 1 ’’ should be reported for trips totaling less than a single mile. This was an operational instruction based on Medicare’s FFS system limitations and capabilities at the time, as our claims processing systems were not capable of accepting and processing claims
submitted with fractional units of service. Since then, our claims processing system functionality has evolved to the point where this rounding process is no longer necessary for most ambulance transports, as it is now possible for our FFS systems to capture and accurately process fractional units on both paper and
electronic forms. Under our current instructions, providers and suppliers continue to report loaded mileage as whole-number units on both paper and electronic claims. Providers and suppliers utilize the appropriate Healthcare Common Procedure Coding System (HCPCS) code for ambulance mileage to report the number of miles traveled during a Medicare-covered trip rounded up to
the nearest whole mile at a minimum of 1 unit for the purpose of determining payment for mileage. Transmittal AB–
00–88 established a list of HCPCS codes accepted by Medicare for the purpose of billing mileage. Providers and suppliers were instructed to use these specific
HCPCS codes and enter the total
number of covered miles in the ‘‘ units ’’ field of the claim form. For example, if a covered trip from the point of pickup (POP) to the Medicare-approved destination (see § 414.40 for a list of approved destinations) totaled 9.1 miles, the provider would enter the appropriate HCPCS code for covered mileage and a ‘‘ 10 ’’ in the units field. Providers and suppliers billing for trips totaling, for example, 0.5 covered miles,
would enter ‘‘ 1 ’’ in the units field along with the appropriate HCPCS code for mileage.

b. Concerns Regarding the Potential for Inaccuracies in Reporting Units and
Associated Considerations

Often an ambulance provider will transport a distance that is either not an
exact whole number of miles or less than one whole mile during a covered trip. Currently, providers and suppliers billing for ambulance services must round up the total billable mileage to the nearest whole mile for trips that
include a fraction of a mile or less than
one whole mile. Under our current instructions, a provider or supplier is required to bill as much as .9 of a mile more than what was actually traveled.

We have been contacted by suppliers
on several occasions with concerns regarding our current instructions for reporting ambulance mileage. Certain suppliers believe that our instructions require them to bill inaccurately. One company in particular stated that they routinely need to bill for trips totaling
less than 1 mile. The beneficiaries that are being transported by this company live in the immediate vicinity of the facility to which they are being transported, and therefore, the number of loaded miles for each trip totals approximately one half of a mile. The company was concerned that since Medicare requires that they enter a ‘‘ 1 ’’
in the units field of their claims for mileage, they are being overpaid by


### 40160 Federal Register / Vol. 75, No. 133 / Tuesday, July 13, 2010 / Proposed Rules

Medicare for mileage based on the service they actually provided.

However, the company’s main
concern revolved around the risk of creating an appearance of impropriety. Although our instructions clearly state that providers and suppliers should, as a matter of procedure, round up fractional mileage amounts to the nearest whole mile, some providers and suppliers indicated that they wanted to bill as accurately as possible and that they only wanted to be paid for the service they actually provided. We thoroughly considered these concerns while reevaluating the procedure for reporting units for fractional mileage

amounts.

Our first priority in considering the issues raised by ambulance providers and suppliers was to ascertain the basis for the current mileage reporting instructions. As previously discussed, the original instructions for reporting fractional mileage were published in Transmittal AB–00–88, issued on September 18, 2000. We instructed providers and suppliers to round fractional mileage amounts ‘‘ up to the
nearest whole mile ’’ and to enter ‘‘ 1 ’’ for fractional mileage totaling less than one mile. This particular process had also been in place prior to issuance of the
transmittal. The reason for the procedure was that our claims processing systems were not capable of accepting and processing claims
submitted with fractional units of
service—even if the service was commonly measured in fractional amounts, as with ambulance mileage.

We then explored whether a change in our procedure would be: (a) Appropriate, (b) possible considering our current system capabilities and industry standards of measurement, and (c) applicable to any service other than ambulance mileage. As to the appropriateness of changing the procedure for reporting units of service on provider claims for fractional ambulance mileage, we believe that we should make every effort to create and implement policies and processes that create the best opportunity for accuracy in billing. It is not our intention to put providers and suppliers in a position where they are required to bill inaccurately for the service they provide. We continue to strive toward ensuring that providers and suppliers bill and are paid only for services actually provided. We believe that changing our current procedure for reporting units of service to require reporting of fractional mileage will help to ensure that providers and suppliers can submit claims that more precisely reflect actual mileage, and are reimbursed more accurately for the services they actually provided. We originally instituted a policy of accepting and processing only whole units because at that time, system limitations prevented us from accepting and processing fractional ambulance mileage.

Second, we considered whether it is currently possible for our claims processing systems to accept and process fractional unit amounts on both paper and electronic claims. Upon reevaluating our system capabilities, we found that technological advancements in Optical Character Recognition (OCR)
and electronic claim submission have made it possible for our FFS systems to capture and accurately process fractional units on both paper and
electronic claims. We note that our systems currently have the capability to accept fractional units with accuracy up
to as much as one thousandth of a unit (that is, to 3 decimal places).

We also considered whether ambulance providers and suppliers have the capability to measure fractional mileage. This was an important point because if providers and suppliers are not able to measure mileage with any more specificity than the nearest whole number mile, then there would be no need to modify the current procedure for billing fractional mileage. In that case, providers and suppliers would continue to report mileage as whole numbers since they could measure no more accurately than that. However, both analog and digital motor vehicle odometers are designed to measure mileage accurately to within a minimum
of a tenth of a mile. While we found that
some vehicle odometers measure mileage more accurately than a tenth of a mile, most odometers are accurate to the nearest tenth of a mile. Additionally, aircraft geographic positioning system (GPS) technology provides the means to accurately determine billable mileage to
the tenth of a mile.

Third, we considered whether a policy of billing fractional units would be applicable to any other service besides ambulance mileage. The units of
service field on both the electronic and paper claim is used to report the quantity of services or supplies provided to Medicare beneficiaries and is used to report a wide range of services and supplies including, but not limited to: Number of office visits; anesthesia minutes; quantity of drugs administered; covered miles. Although Medicare currently makes payment
based on fractional units for some services (for example, calculation of payment after conversion of anesthesia time reported in minutes to time units), there is currently no requirement that providers bill fractional units on the claim. If we were to implement a policy of requiring reporting of fractional units for other types of services or supplies

we would first need to evaluate whether it is possible to do so considering industry standards of measurement. As previously discussed, providers and suppliers of ambulance services have the capability to determine fractional mileage using standard onboard equipment, that is, an odometer, GPS, and/or other similar equipment used to

measure distance traveled. This would enable us to readily implement a fractional unit billing policy for ambulance mileage; whereas applicability to other areas (such as anesthesia, drugs, etc. ) would require more analysis to determine whether a fractional unit billing policy is feasible, efficacious, and cost effective. Additionally, this issue was first raised by ambulance suppliers who were concerned about overbilling and being overpaid by Medicare. Therefore, we

believe it is most reasonable to first

address the area where concerns have been raised (that is, ambulance mileage) and consider applicability of this procedure to other types of services and

items in the future.

Finally, and perhaps most importantly, we considered that our claims processing system should be configured to process claims as accurately as possible so as to provide for more accurate payments and to safeguard Medicare dollars. As previously discussed, ambulance providers and suppliers currently have the capability to measure mileage accurately to within a minimum of a tenth of a mile using devices (for example, odometers, GPS technology, etc.) already equipped onboard their vehicles. We believe that requiring ambulance providers and suppliers to round (and report) fractional ambulance mileage up to the next tenth of a mile strikes a proper balance between ensuring that the claims processing system adjudicates a claim as accurately as the system will permit without unduly burdening the ambulance community.

Based on all of the above considerations, we have decided that our claims processing instructions for

submission of claims for ambulance mileage should be revised to reflect the current functionality of our claims processing systems so as to maximize the accuracy of claims payment, as

further discussed below in this section.


### 40161 Federal Register / Vol. 75, No. 133 / Tuesday, July 13, 2010 / Proposed Rules

c. Billing of Fractional Units for Mileage

It is both reasonable and prudent that, in order to ensure accuracy of payment,
we facilitate and allow submission of
the most accurate information on all
Medicare ambulance claims. Furthermore, since our claims processing systems are currently capable of accepting and processing fractional units of service, we believe that ambulance mileage should be billed to and paid by Medicare in fractional amounts to enhance payment accuracy.
Based on all the considerations discussed above, we are proposing to require that claims for mileage submitted by ambulance providers and suppliers for an ambulance transport (ground and air) be billed in fractional units, by rounding up to the nearest tenth of a mile (with the exception discussed below). As discussed above, we believe that requiring ambulance providers and suppliers to round (and report) fractional mileage up to the next
tenth of a mile would allow us to provide for more accurate claims payment without unduly burdening the ambulance community.

Therefore, we are proposing that,
effective for claims with dates of service on and after January 1, 2011, ambulance providers and suppliers would be required to report mileage rounded up
to the nearest tenth of a mile for all claims for mileage totaling up to 100 covered miles. Providers and suppliers would submit fractional mileage using a decimal in the appropriate place (for example, 99.9). Since standard vehicle mileage (analog, digital, and GPS) is or can be calculated accurately to the nearest tenth of a mile, we are proposing that the mileage billed to Medicare by ambulance providers and suppliers be reported by rounding up to the next
tenth of a mile.

Although the electronic claim formats can accommodate fractional mileage when mileage is equal to or greater than 100 covered miles (for example, 100.0), the paper claim cannot. Because the Form CMS–1500 paper claim currently only supports four characters (including the decimal point) in the units field (Item 24G), we also propose that mileage equal to or greater than 100 covered miles continue to be reported in whole number miles on both paper and electronic claims. We propose that providers and suppliers would round up fractional mileage to the next whole number for mileage that exceeds 100 covered miles and report the resulting
whole number in the units’ field. We
would revise the instructions set forth in our Claims Processing Manual to reflect the revised procedures for submitting and paying claims for
fractional ambulance.

C. Clinical Laboratory Fee Schedule: Signature on Requisition

In the March 10, 2000 Federal Register , we published the ‘‘ Medicare Program; Negotiated Rulemaking: Coverage and Administrative Policies for Clinical Diagnostic Laboratory

Services ’’ proposed rule (65 FR 13082) announcing and soliciting comments on the results of our negotiated rulemaking
committee tasked to establish national coverage and administrative policies for clinical diagnostic laboratory tests
under Part B of Medicare. In our final rule published in the November 23,

2001 Federal Register (66 FR 58788), we explained our policy on ordering clinical diagnostic laboratory services and amended § 410.32 to make our policy more explicit. Our regulation at § 410.32(a) states the requirement that

‘‘ [a]ll diagnostic x-ray tests, diagnostic laboratory tests, and other diagnostic tests must be ordered by the physician who is treating the beneficiary. ’’ In the November 23, 2001 final rule, we added paragraph (d)(2) to § 410.32 to require that the physician or qualified nonphysician practitioner (NPP) (that is, clinical nurse specialists, clinical psychologists, clinical social workers, nurse-midwives, nurse practitioners (NPs), and physician assistants (PAs))
who orders the service must maintain documentation of medical necessity in the beneficiary’s medical record (66 FR 58809). In the preamble discussions to the March 10, 2000 proposed rule and November 23, 2001 final rule (65 FR 13089 and 66 FR 58802, respectively),
we noted that ‘‘ [w]hile the signature of a physician on a requisition is one way of documenting that the treating physician ordered the test, it is not the only permissible way of documenting
that the test has been ordered. ’’ In those preambles, we described the policy of not requiring physician signatures on requisitions for clinical diagnostic laboratory tests, but implicitly left in place the existing requirements for a written order to be signed by the ordering physician or NPP for clinical diagnostic laboratory tests, as well as other types of diagnostic tests. We further stated in the preambles of the proposed and final rules that we would publish an instruction to Medicare contractors clarifying that the signature of the ordering physician is not required for Medicare purposes on a requisition for a clinical diagnostic laboratory test (65 FR 13089 and 66 FR 58802).

On March 5, 2002, we published a program transmittal implementing the administrative policies set forth in the final rule, including the following

instruction: ‘‘ Medicare does not require the signature of the ordering physician on a laboratory service requisition. While the signature of a physician on a requisition is one way of documenting that the treating physician ordered the service, it is not the only permissible way of documenting that the service has been ordered. For example, the physician may document the ordering of specific services in the patient’s medical
record. ’’ (Transmittal AB–02–030, Change Request 1998, dated March 5, 2002).

On January 24, 2003, we published a program transmittal in order to manualize the March 5, 2002 Transmittal. (Transmittal 1787, Change Request 2410, dated January 24, 2003). The cover note to the transmittal states,

‘‘ Section 15021, Ordering Diagnostic Tests, manualizes Transmittal AB–02– 030, dated March 5, 2002. In accordance with negotiated rulemaking for outpatient clinical diagnostic laboratory services, no signature is required for the ordering of such services or for physician pathology services. ’’ In the
manual instructions in that transmittal in a note, we stated: ‘‘ No signature is required on orders for clinical diagnostic services paid on the basis of the physician fee schedule or for physician pathology services. ’’ The manual instructions did not explicitly reference clinical diagnostic laboratory tests as the cover note did. Rather, the transmittal seemed to extend the policy
set forth in the Federal Register (that no signature is required on requisitions for clinical diagnostic laboratory tests paid under the Clinical Laboratory Fee Schedule (CLFS)) to also apply to clinical diagnostic tests paid on the basis of the Physician Fee Schedule (PFS) and physician pathology services. In addition, the manual instructions
used the term ‘‘ order ’’ instead of

‘‘ requisition, ’’ which some members of the industry have asserted caused
confusion.

When we transitioned from paper
manuals to the current electronic Internet Only Manual system, these manual instructions were inadvertently omitted from the new Benefit Policy Manual (BPM).

In August 2008, we issued a program transmittal (Transmittal 94, Change Request 6100, dated August 29, 2008) to update the BPM to incorporate language that was previously contained in section
15021 of the Medicare Carriers Manual. The reissued language states, ‘‘ No signature is required on orders for clinical diagnostic tests paid on the basis of the clinical laboratory fee schedule, the physician fee schedule, or


### 40162 Federal Register / Vol. 75, No. 133 / Tuesday, July 13, 2010 / Proposed Rules

for physician pathology services. ’’ Based on further review, we have determined that there are no clinical diagnostic laboratory tests paid under the PFS. After Transmittal 94 was published, we received numerous inquiries from laboratory, diagnostic testing, and hospital representatives who had questions about whether the provision applied to all diagnostic services, including x-rays, MRIs, and other nonclinical laboratory fee schedule diagnostic services.

To resolve any existing confusion surrounding the implementation of the policy in 2001 and subsequent transmittals, we restated and solicited public comments on our policy in the CY 2010 PFS proposed rule (74 FR 33641). Our current policy is that a physician’s signature is not required on a requisition for clinical diagnostic laboratory tests paid on the basis of the CLFS; however, it must be evident, in accordance with our regulations at § 410.32(d)(2) and (3), that the physician
ordered the services.

We note that we solicited and received comments on this signature requirement during the notice and comment period for the March 10, 2000 proposed rule in the context of our proposal to add paragraph (d)(2)(i) to § 410.32 to require that the practitioner who orders a diagnostic laboratory test
must maintain documentation of medical necessity in the beneficiary’s medical record. The majority of comments supported the adoption of a policy that the signature of the practitioner on a requisition for a clinical diagnostic laboratory test paid under the CLFS is not the only way of documenting that the test has been ordered and, thus, should not be required provided such documentation
exists in an alternate form.

This policy regarding requisitions for clinical diagnostic laboratory tests does not supersede other applicable Medicare requirements (such as those related to hospital Conditions of Participation (CoPs)) which require the medical record to include an order signed by the physician who is treating the beneficiary. Nor do we believe that anything in our policy regarding signatures on requisitions for clinical diagnostic laboratory tests supersedes other requirements mandated by professional standards of practice or obligations regarding orders and medical records promulgated by Medicare, the Joint Commission, or State law; nor do we believe the policy would require providers to change their business practices.

We also restated and solicited public comment on our long-standing policy consistent with the principle in § 410.32(a) that a written order for diagnostic tests including those paid
under the CLFS and those that are not paid under the CLFS (for example, that are paid under the PFS or under the OPPS), such as X-rays, MRIs, and the TC of physician pathology services, must be signed by the ordering physician or NPP. That is, the policy that signatures are not required on requisitions for clinical diagnostic laboratory tests paid based on the CLFS applies only to requisitions (as opposed to written orders) (74 FR 33642).

Additionally, we solicited public
comments about the distinction between an order and a requisition (74 FR 33642). We note that an ‘‘ order ’’ as defined in our IOM, 100–02, Chapter 15, Section 80.6.1, is a communication from the treating physician/practitioner requesting that a diagnostic test be performed for a beneficiary. The order may conditionally request an additional diagnostic test for a particular beneficiary if the result of the initial diagnostic test ordered yields to a certain value determined by the treating physician/practitioner (for example, if test X is negative, then perform test Y).
As set forth in the CY 2010 MPFS final rule (FR 74 61930), an order may be delivered via any of the following forms
of communication:

• A written document signed by the treating physician/practitioner, which is hand-delivered, mailed, or faxed to the testing facility.

• A telephone call by the treating physician/practitioner or his or her office to the testing facility.

• An electronic mail, or other electronic means, by the treating physician/practitioner or his or her office to the testing facility.

If the order is communicated via telephone, both the treating physician/ practitioner, or his or her office, and the testing facility must document the telephone call in their respective copies of the beneficiary’s medical records.

In the proposed rule (74 FR 33642),
we defined a ‘‘ requisition ’’ as the actual paperwork, such as a form, which is provided to a clinical diagnostic laboratory that identifies the test or tests to be performed for a patient. It may contain patient information, ordering physician information, referring institution information, information about where to send reports, billing information, specimen information, shipping addresses for specimens or tissue samples, and checkboxes for test
selection. We believe it is ministerial in nature, assisting laboratories with billing and handling of results, and
serves as an administrative convenience to providers and patients. We believe that a written order, which may be part of the medical record, and the requisition are two different documents, although a requisition that is signed may serve as an order. We welcomed comments from the public about the distinction between requisitions and
orders.

During the proposed and final rulemaking process for CY 2010, we
received numerous comments on these issues, including, among others: Expressions of continued confusion
over the difference between an ‘‘ order ’’
and a ‘‘ requisition ’’ ; requests that CMS develop a single policy for all outpatient laboratory services, without the distinction for those paid under the CLFS or the PFS; and concerns about reference laboratory technicians who felt compelled to perform a test in order to protect the viability of the specimen although they did not have the proper
documentation. See 74 FR 61930–32 for a complete discussion of the comments received and responses to these issues.
In the CY 2010 PFS final rule with comment period (74 FR 61931), we stated that, in light of the issues and concerns raised during the comment period, and our desire to create policy
that will address the concerns in a meaningful, clear and thoughtful way, we would continue to carefully consider the issues of physician signatures on requisitions and orders and that we plan
to revisit these issues in the future paying particular attention to the definitions of order and requisition.

Since the publication of the CY 2010 PFS final rule with comment period, we have considered an approach that
would address the concerns raised. We are proposing to require a physician’s or NPP’s signature on requisitions for clinical diagnostic laboratory tests paid
on the basis of the CLFS.

We believe that this policy would result in a less confusing process. We believe that it would be less confusing because a physician’s signature would then be required for all requisitions and orders, eliminating uncertainty over
whether the documentation is a requisition or an order, whether the type of test being ordered requires a signature, or which payment system does or does not require a physician or NPP signature. We also believe that it
would not increase the burden on physicians because it is our understanding that, in most instances, physicians are annotating the patient’s medical record with either a signature or an initial (the ‘‘ order ’’ ), as well as providing a signature on the paperwork that is provided to the clinical diagnostic laboratory that identifies the


### 40163 Federal Register / Vol. 75, No. 133 / Tuesday, July 13, 2010 / Proposed Rules

test or tests to be performed for a patient (the ‘‘ requisition ’’ ) as a matter of course. Further, this policy would make it easier for the reference laboratory
technicians to know whether a test is appropriately requested, and potential compliance problems would be minimized for laboratories during the course of a subsequent Medicare audit because a signature would be consistently required. As already discussed, this minimizes confusion and provides a straightforward directive
for laboratories to meet.

We welcome comments on this proposal.

D. Discussion of Chiropractic Services

Demonstration

Section 651 of MMA requires the Secretary to conduct a 2-year demonstration to evaluate the feasibility and advisability of expanding coverage for chiropractic services under Medicare. Medicare coverage for chiropractic services is limited to manual manipulation of the spine to
correct a subluxation described in section 1861(r)(5) of the Act. The demonstration expanded current Medicare coverage to include ‘‘ care for
neuromusculoskeletal conditions typical among eligible beneficiaries and diagnostic and other services that a chiropractor is legally authorized to perform by the State or jurisdiction in which such treatment is provided ’’ and was conducted in four geographically diverse sites, two rural and two urban regions, with each type including a Health Professional Shortage Area (HPSA). The two urban sites were 26 counties in Illinois and Scott County, Iowa, and 17 counties in Virginia. The
two rural sites were the States of Maine and New Mexico. The demonstration, which ended on March 31, 2007, was required to be budget neutral as section 651(f)(1)(B) of MMA mandates the Secretary to ensure that ‘‘ the aggregate payments made by the Secretary under the Medicare program do not exceed the amount which the Secretary would have paid under the Medicare program if the demonstration projects under this section were not implemented. ’’

In the CY 2006, 2007, and 2008 PFS final rules with comment period (70 FR
70266, 71 FR 69707, 72 FR 66325, respectively), we included a discussion of the strategy that would be used to assess budget neutrality (BN) and the method for adjusting chiropractor fees
in the event the demonstration resulted in costs higher than those that would
occur in the absence of the
demonstration. We stated BN would be assessed by determining the change in costs based on a pre-post comparison of Medicare costs for beneficiaries in the demonstration and their counterparts in the control groups and the rate of change for specific diagnoses that are treated by chiropractors and physicians
in the demonstration sites and control sites. We also stated that our analysis would not be limited to only review of chiropractor claims because the costs of the expanded chiropractor services may have an impact on other Medicare costs.

In the CY 2010 PFS final rule with comment period (74 FR 61926), we
discussed the evaluation of this demonstration conducted by Brandeis University and the two sets of analyses used to evaluate budget neutrality. In
the ‘‘ All Neuromusculoskeletal Analysis, ’’ which compared the
Medicare costs of all beneficiaries who
received services for a
neuromusculoskeletal condition in the
demonstration areas with those of
beneficiaries with similar characteristics from similar geographic areas that did not participate in the demonstration, the
total effect of the demonstration to Medicare was $114 million. In the

‘‘ Chiropractic User Analysis, ’’ which compared the Medicare costs of beneficiaries who used expanded chiropractic services to treat a
neuromusculoskeletal condition in the demonstration areas, with those of
beneficiaries with similar characteristics who used chiropractic services as currently covered by Medicare to treat a
neuromusculoskeletal condition from similar geographic areas that did not participate in the demonstration, the
total effect of the demonstration to Medicare was $50 million.

As explained in the CY 2010 PFS final rule, we based the BN estimate on the

‘‘ Chiropractic User Analysis ’’ because of its focus on users of chiropractic
services rather than all Medicare
beneficiaries with neuromusculoskeletal conditions, including those who did not use chiropractic services and who
would not have become users of chiropractic services even with expanded coverage for them (74 FR 61926 through 61927). Users of chiropractic services are most likely to have been affected by the expanded coverage provided by this
demonstration. Cost increases and offsets, such as reductions in hospitalizations or other types of ambulatory care, are more likely to be observed in this group.

As explained in the CY 2010 PFS final rule (74 FR 61927), because the costs of this demonstration were higher than expected and we did not anticipate a reduction to the PFS of greater than 2 percent per year, we finalized a policy to recoup $50 million in expenditures from this demonstration over a 5-year period, that is, CYs 2010 through 2014 (74 FR 61927). Specifically, we are recouping $10 million for each such year through adjustments to the chiropractic CPT codes. Payment under
the PFS for these codes will be reduced by approximately 2 percent. We believe that spreading this adjustment over a longer period of time will minimize its potential negative impact on chiropractic practices.

We are continuing the implementation of the required budget neutrality adjustment by recouping $10
million in CY 2011. Our Office of the Actuary estimates chiropractic expenditures in CY 2011 to be approximately $524 million based on actual Medicare spending for chiropractic services for the most recent available year. To recoup $10 million in CY 2011, the payment amount under the PFS for the chiropractic CPT codes (that is, CPT codes 98940, 98941, and 98942) will be reduced by approximately 2 percent. We are reflecting this reduction only in the payment files used by the Medicare contractors to process Medicare claims rather than through adjusting the RVUs. Avoiding an adjustment to the RVUs would preserve the integrity of the PFS, particularly since many private payers also base payment on the RVUs.

E. Provisions Related to Payment for Renal Dialysis Services Furnished by End-Stage Renal Disease (ESRD)
Facilities

Since August 1, 1983, payment for dialysis services furnished by ESRD facilities has been based on a composite rate payment system that provides a fixed, prospectively determined amount per dialysis treatment, adjusted for geographic differences in area wage levels. The composite rate is designed to cover a package of goods and services needed to furnish dialysis treatments that include, but not be limited to, certain routinely provided drugs, laboratory tests, supplies, and equipment. Unless specifically included in the composite rate, other injectable drugs and laboratory tests medically necessary for the care of patients on dialysis are separately billable.

Other than periodic updates, there were no significant changes to the composite rate payment system until the implementation of the basic case-mix adjusted composite rate payment system beginning January 1, 2005. The Congress has enacted a number of adjustments to the composite rate since that time. As a result of the July 15, 2008 enactment of MIPPA, we are required to implement an end-stage renal disease (ESRD)


### 40164 Federal Register / Vol. 75, No. 133 / Tuesday, July 13, 2010 / Proposed Rules

bundled prospective payment system effective January 1, 2011 (referred to as

the ‘‘ ESRD PPS ’’ ). Below we brieflydiscuss the ESRD PPS, the basic casemix composite payment system, as well as our proposed updates to the composite rate portion of the blended payment for CY 2011.

a. MIPPA—The ESRD PPS

On September 29, 2009, we published

in the Federal Register a proposed rule

entitled ‘‘ End-Stage Renal Disease Prospective Payment System ’’ (74 FR 49922). In that rule, we proposed to implement a case-mix adjusted bundled PPS for renal dialysis services beginning January 1, 2011, in accordance with the statutory provisions set forth in section 153(b) of MIPPA. The ESRD PPS would replace the current basic case-mix adjusted composite payment system and the methodologies for the reimbursement of separately billable outpatient ESRD services.

As explained in the ESRD PPS proposed rule (74 FR 50019), section 1881(b)(14)(E)(i) of the Act requires a 4- year transition (phase-in) from the current composite payment system to the ESRD PPS, and section 1881(b)(14)(E)(ii) of the Act allows

ESRD facilities to make a one-time

election to be excluded from the transition. Electing to be excluded from the 4-year transition means that the ESRD facility receives payment for renal dialysis services based on 100 percent of the payment rate established under the ESRD PPS, rather than a blended rate under each year of the transition based in part on the payment rate under the current payment system and in part on the payment rate under the ESRD PPS. As of January 1, 2011, ESRD facilities that elect to go through the transition would be paid in the first year a blended amount that will consist of 75 percent of the basic case-mix adjusted composite payment system and the remaining 25 percent would be based on the ESRD PPS payment. Thus, we must continue to update the basic case-mix composite payment system for purposes of determining the composite rate portion of the blended payment amount during the ESRD PPS 4-year transition (CYs 2011 through 2013.) Accordingly, in this proposed rule, we are proposing the composite rate portion of the blend, which includes an update to the drug add-on and the application of the wage index, as well as the payment amount for the first-year (CY 2011) of the ESRD PPS transition. We anticipate that the
final rule for the ESRD PPS will be published this summer. b. Medicare Modernization Act (MMA)—The Basic Case-Mix Adjusted Composite Payment System

Section 623 of the MMA amended section 1881 of the Act to require changes to the composite rate payment methodology, as well as to the pricing methodology for separately billable drugs and biologicals furnished by ESRD facilities. Section 1881(b)(12) of the Act, as added by section 623(d) of the MMA, requires the establishment of a basic case-mix adjusted composite payment system that includes services comprising the composite rate and an add-on to the composite rate component
to account for the difference between current payments for separately billed drugs and the revised drug pricing specified in the statute. In addition, section 1881(b)(12)(A) of the Act requires that the composite rate be adjusted for a number of patient characteristics (case-mix) and section 1881(b)(12)(D) of the Act gives the Secretary discretion to revise the wage
indices and the urban and rural definitions used to develop them. Finally, section 1881(b)(12)(E) of the Act imposed a budget neutrality (BN) requirement, so that aggregate payments under the basic case-mix adjusted composite payment system equal the aggregate payments for the same period if section 1881(b)(12) of the Act did not apply.

1. CY 2005 Revisions

In the CY 2005 PFS final rule with comment period (69 FR 66319 through 66334), we implemented section 1881(b)(12) of the Act, as added by section 623 of the MMA, and revised payments to ESRD facilities. These revisions that were effective January 1, 2005, included an update of 1.6 percent to the composite rate component of the payment system; a drug add-on adjustment of 8.7 percent to the composite rate to account for the difference between pre-MMA payments for separately billable drugs and payments based on revised drug pricing for 2005 which used acquisition costs.

Also, to implement section 1881(b)(13) of the Act, we revised payments for drugs billed separately by independent ESRD facilities, paying for the top 10 ESRD drugs based on acquisition costs (as determined by the OIG) and for other separately billed drugs at the average sales price +6 percent (ASP+6).

In addition, effective April 1, 2005, we implemented the case-mix adjustments to the composite rate for certain patient characteristics (that is, age, low body mass index, and body surface area). For further explanation of the development of the basic case-mix adjusted composite payment system, see
the CY 2005 PFS final rule with comment period (69 FR 66319 through 66334).

2. CY 2006 Revisions

In the CY 2006 PFS final rule with comment, we implemented additional revisions to payments to ESRD facilities required under section 623 of the MMA. We revised the drug payment methodology applicable to drugs furnished by ESRD facilities. Effective January 1, 2006, all separately billed drugs and biologicals furnished by both hospital-based and independent ESRD facilities were paid based on ASP+6 percent. The drug add-on adjustment was updated to 14.5 percent to reflect the expected growth in expenditures for separately billable drugs in CY 2006.

We also implemented a revised geographic adjustment authorized by section 1881(b)(12)(D) of the Act. This adjustment revised the labor market areas to incorporate the Core-Based Statistical Area (CBSA) designations established by the Office of Management and Budget (OMB) by providing a 4-yeartransition from the previous wageadjusted composite rates. Effective January 1, 2006, 25 percent of the payment was based on the revised geographic adjustments, and the remaining 75 percent of payment was based on the metropolitan statistical area-based (MSA-based) adjustments. Other adjustments included the elimination of the wage index ceiling, and reducing the wage index floor to 0.8500, as well as a revised labor portion of the composite rate to which the geographic adjustment is applied.

In addition, section 5106 of the DRA (Pub. L. 109–171) provided for a 1.6 percent update to the composite rate component of the basic case-mix adjusted composite payment system, effective January 1, 2006. For further explanation of the revisions to the basic case-mix adjusted composite payment system, see the CY 2006 PFS final rule with comment period (70 FR 70161 through 70771).

3. CY 2007 Revisions

In the CY 2007 PFS final rule with comment period, we implemented a method to annually calculate the growth update to the drug add-on adjustment required by section 1881(b)(12) of the Act, as well as a growth update of 0.5 percent to the drug add-on adjustment. Also, section 103 of the MIEA–TRHCA (Pub. L. 109–432) established a 1.6 percent update to the composite rate portion of the payment system, effective


### 40165 Federal Register / Vol. 75, No. 133 / Tuesday, July 13, 2010 / Proposed Rules

April 1, 2007. The effect of this increase in the composite rate was a reduction in the drug add-on adjustment to 14.9 percent, effective April 1, 2007. As a result, the drug add-on adjustment to the composite rate increased from 14.5 to 15.1 percent. Since we compute the drug add-on adjustment as a percentage of the weighted average base composite rate, increases in the composite rate portion of the payment reduce the drug add-on percentage.

We provided an update to the wage index adjustments to reflect the latest hospital wage data, including a BN adjustment factor. We also implemented the second year of the transition to the CBSA-based wage index, where 50 percent of the payment was based on the CBSA-based geographic adjustments, and the remaining 50 percent of payment was based on the MSA-based adjustments. In addition, we reduced the wage index floor 0.85 to

0.80.

For further explanation of the development of the basic case-mix adjusted composite payment system, see
the CY 2007 PFS final rule with comment period (71 FR 69681 through 69688).

4. CY 2008 Revisions

In the CY 2008 PFS final rule with comment period (72 FR 66280), we implemented a growth update to the drug add-on adjustment of 0.5 percent. As a result, the drug add-on adjustment to the composite payment rate increased from 14.9 percent to 15.5 percent. In addition, we updated the wage index adjustments to reflect the latest hospital wage data, including a wage index BN adjustment of 1.055473 to the wage index for CY 2008, and finally, for CY 2008, we implemented the third year of the transition to the CBSA-based wage index, where 75 percent of the payment
was based on the the CBSA-based adjustments and the remaining 25 percent of payment was based on the MSA-based adjustments. In addition, we reduced the wage index floor from 0.80

to 0.75.

5. CY 2009 Revisions

For CY 2009, section 153(a) of the MIPPA updated sections 1881(b)(12)(G) and 1881(b)(12)(A) of the Act to revise payments to ESRD facilities effective for services furnished on or after January 1, 2009 and January 1, 2010. The revisions included an update of 1 percent to the composite rate, and the establishment of a site neutral composite rate to both hospital-based and independent dialysis
facilities that reflects the labor share applicable to independent dialysis facilities (53.711). The 1 percent increase to the independent dialysis facility’s CY 2008 composite rate of $132.49 resulted in a CY 2009 base composite rate for hospital-based and independent dialysis facilities of $133.81. The one percent increase in the composite rate portion of the payment system effective January 1, 2009, reduced the drug add-on adjustment from 15.5 to 15.2 percent.

Also, we updated the wage index adjustments to reflect the latest available wage data, including a wage index BN adjustment of 1.056672 to the wage index for CY 2009. Finally, we completed the 4-year transition to the CBSA-based geographic adjustments and reduced the wage index floor from 0.7500 to 0.700. For further detail, regarding the ESRD provisions, see the
2008 PFS final rule with comment period (73 FR 61921 through 61926).

6. CY 2010 Revisions

For CY 2010, we updated the casemix adjusted composite rate payment system by updating the drug add-on component of the composite rate system, as well as the wage index values used to adjust the labor component of the composite rate. Specifically, to update the drug add-on adjustment, we conducted a trend analysis of CY 2006 through 2008, we implemented a zero growth update to the drug add-on adjustment to the composite rates for 2010 required by section 1881(b)(12)(F)
of the Act.

Also, section 1881(b)(12)(G)(iv) of the Act, as added by section 153(a)(1) of the MIPPA, increased the composite rate by 1.0 percent for ESRD services furnished on or after January 1, 2010. The 1.0 percent increase resulted in a base composite rate of $135.15 per treatment and reduced the drug add-on adjustment from 15.2 to 15.0 percent.

Lastly, we updated the wage index to reflect the latest available wage data, including a revised BN adjustment factor of 1.057888. We applied a reduction to the wage index floor from

0.700 to 0.6500.

For further detail, regarding the ESRD provisions, see the 2009 final rule with comment period (74 FR 33634 through 33639).

7. CY 2011 Proposals

For purposes of establishing the composite rate portion of the blended payments under the ESRD PPS for those facilities electing to go through the transition in CY 2011, CMS is proposing the following:

• An update to the drug add-on adjustment to the composite rate, using a refined methodology for projecting growth in drug expenditures; and • An update to the wage index adjustment to reflect the latest available wage data, including a revised BN adjustment.

• A reduction in the ESRD wage
index floor from 0.6500 to 0.600.

8. The Affordable Care Act

Section 1881(b)(14)(F) of the Act, as added by section 153(b) of MIPPA and amended by section 3401(h) of ACA, governs the ESRD market basket increase factor (that is, the ESRD market basket). As explained in the ESRD PPS proposed rule (74 FR 4997), we
described how the ESRD Bundled market basket would be used to update the composite rate portion of the ESRD payments during the PPS transition.

Ordinarily in updating the composite payment system, we discuss any updates to the composite rate. However, beginning in 2011, the composite payment would be used as part of the blended payments during the ESRD PPS transition. Since the publication of the ESRD PPS proposed rule, and as explained in the ESRD PPS final rule, which we anticipate will be published this summer, we interpret this provision as requiring that the composite rate portion of the blended payment amount be increased in CY 2011 by the ESRD market basket percentage increase factor (the ‘‘ ESRD market basket ’’ ).

For purposes of this proposed rule, for CY 2011, we anticipate an estimate of a 2.5 percent increase to the ESRD composite rate portion of the blended payment amount, resulting in a CY 2011 composite rate of $138.53 ($135.15*1.025). This 2.5 percentincrease does not apply to the drug addon adjustment to the composite rate. Also, we note that the drug add-on percentage would be reduced from 15.0 to 14.7 as a result of the proposed increase to the composite rate in CY 2011. (A detailed explanation of the reduction to the drug add-on adjustment is discussed below).

9. Proposed Update to the Drug Add-on Adjustment to the Composite Rate

a. Estimating Growth in Expenditures for Drugs and Biologicals in CY 2011

Section 1881(b)(12)(F) of the Act specifies that the drug add-on increase
must reflect ‘‘ the estimated growth in expenditures for drugs and biologicals (including erythropoietin) that are separately billable * * *. ’’ By referring

to ‘‘ expenditures, ’’ we believe the statute contemplates that the update would account for both increases in drug prices, as well as increases in utilization of those drugs.

Since we now have 4 years of drug expenditure data based on ASP pricing,


### 40166 Federal Register / Vol. 75, No. 133 / Tuesday, July 13, 2010 / Proposed Rules

we propose to continue estimating growth in drug expenditures based on the trends in available data. Therefore, for CY 2011, we are proposing to use trend analysis from drug expenditure data to update the per treatment drug add-on adjustment. We then removed growth in enrollment for the same time period from the expenditure growth so that the residual reflects per patient expenditure growth (which includes price and utilization combined).

We further propose to use the perpatient growth update to the drug addon adjustment for CY 2011. To estimate drug expenditure growth using trend analysis, we looked at the average annual growth in total drug expenditures between 2006 and 2009. First, we estimated the total drug expenditures for all ESRD facilities in CY 2009. For this proposed rule, we used the final CY 2006, through CY
2008 ESRD claims data and the latest available CY 2009 ESRD facility claims, updated through December 31, 2009 (that is, claims with dates of service from January 1 through December 31, 2009, that were received, processed, paid, and passed to the National Claims History File as of December 31, 2009). For the CY 2011 PFS final rule, we plan to use additional updated CY 2009
claims with dates of service for the same timeframe. This updated CY 2009 data file will include claims received, processed, paid, and passed to the National Claims History File as of June

30, 2010.

While the CY 2009 claims file used in this proposed rule is the most current available, we recognize that it does not reflect a complete year, as claims with
dates of service towards the end of the year have not all been processed. To more accurately estimate the update to the drug add-on, aggregate drug expenditures are required. Based on an analysis of the 2008 claims data, we are proposing to inflate the CY 2009 drug expenditures to estimate the June 30, 2010 update of the 2009 claims file. We used the relationship between the December 2008 and the June 2009
versions of 2008 claims to estimate the more complete 2009 claims that will be available in June 2010 and applied that
ratio to the 2009 claims data from the
December 2009 claims file. The net adjustment to the CY 2009 claims data is an increase of 12.22 percent to the 2009 expenditure data. This adjustment allows us to more accurately compare the 2008 and 2009 drug expenditure data to estimate per patient growth. As stated earlier in this section, we plan to use additional updated CY 2009 claims
in the CY 2011 PFS final rule. Using the full-year 2009 drug expenditure figure, we calculated the average annual change in drug expenditures from 2006 through 2009. This average annual change showed an increase of 2.1 percent for this timeframe. We propose to use this 2.1 percent increase to project drug expenditures for both 2010 and 2011.

b. Estimating Per Patient Growth

Once we had the projected growth in drug expenditures from 2010 to 2011,
which is what we believe that section 1881(b)(12)(F) of the Act requires us to use to update the drug add-on adjustment. To calculate the per patient growth between CYs 2010 and 2011, we removed the enrollment component by using the estimated growth in
enrollment data between CY 2010 and CY 2011. This was approximately 3.6 percent. To do this, we divided the total drug expenditure change between 2010 and 2011 (1.021) by enrollment growth of 3.6 percent (1.036) for the same timeframe. The result is a per patient growth factor equal to 0.986 (1.021/ 1.036 = 0.986). Thus, we are projecting a 1.4 percent decrease in per patient growth in drug expenditures between
2010 and 2011.

c. Applying the Proposed Growth Update to the Drug Add-On Adjustment

In CY 2006, we applied the projected growth update percentage to the total amount of drug add-on dollars
established for CY 2005 to establish a dollar amount for the CY 2006 growth update. In addition, we projected the growth in dialysis treatments for CY 2006 based on the projected growth in
ESRD enrollment. We divided the projected total dollar amount of the CY 2006 growth by the projected growth in total dialysis treatments to develop the per treatment growth update amount. This growth update amount, combined with the CY 2005 per treatment drug add-on amount, resulted in an average drug add-on amount per treatment of $18.88 (or a 14.5 percent adjustment to the composite rate) for CY 2006.

In the CY 2007 PFS final rule with comment period (71 FR 69684), we revised our update methodology by applying the growth update to the per treatment drug add-on amount. That is, for CY 2007, we applied the growth update factor of 4.03 percent to the $18.88 per treatment drug add-on amount for an updated amount of $19.64 per treatment (71 FR 69684). For CY 2008, the per treatment drug add-on amount was updated to $20.33. In the
CY 2009 and 2010 PFS final rule with comment period (73 FR 69755 through 69757 and 74 FR 61923), we applied a zero update to per treatment drug addon amount which left it at $20.33. As discussed in detail below, for CY 2011, we are again proposing no update to the per treatment drug add-on amount of $20.33 established in CY 2008.

d. Proposed Update to the Drug Add-On Adjustment

As discussed previously in this section, we estimate a 2.1 percent increase in drug expenditures between CY 2010 and CY 2011. Combining this reduction with a 3.6 percent increase in enrollment, as described above, we are projecting a 1.4 percent decrease in per patient growth of drug expenditures
between CY 2010 and CY 2011. Therefore, we are projecting that the combined growth in per patient utilization and pricing for CY 2011 would result in a negative update equal to 0.2 percent. However, similar to last year and as indicated above, we areproposing a zero update to the drug addon adjustment. We believe this approach is consistent with the language under section 1881(b)(12)(F) of the Act which states in part that ‘‘ the Secretary shall annually increase ’’ the drug add-on amount based on the growth in expenditures for separately billed ESRD drugs. Our understanding of the statute contemplates ‘‘ annually

increase ’’ to mean a positive or zero update to the drug add-on. Therefore, we propose to apply a zero update, and to maintain the $20.33 per treatment drug add-on amount for CY 2011.

e. Proposed Update to the Geographic Adjustments to the Composite Rate

The purpose of the wage index is to adjust the composite rates for differing wage levels covering the areas in which ESRD facilities are located. The wage
indexes are calculated for each urban
and rural area.

In addition, we generally have followed wage index policies related to
these definitions as used under the inpatient hospital prospective payment system (IPPS), but without regard to any approved geographic reclassification authorized under sections 1886(d)(8) and (d)(10) of the Act or other provisions that only apply to hospitals paid under the IPPS (70 FR 70167). For purposes of the ESRD wage index methodology, the hospital wage data we use is pre-classified, pre-floor hospital data and unadjusted for occupational

mix.

f. Proposed Updates to Core-Based Statistical Area (CBSA) Definitions

In the CY 2006 PFS final rule with comment period (70 FR 70167), we announced our adoption of the OMB’s


### 40167 Federal Register / Vol. 75, No. 133 / Tuesday, July 13, 2010 / Proposed Rules

CBSA-based geographic area designations to develop revised urban/ rural definitions and corresponding wage index values for purposes of calculating ESRD composite rates. The CBSA-based geographic area designations are described in OMB Bulletin 03–04, originally issued June 6, 2003, and is available online at http:// www.whitehouse.gov/omb/bulletins/

b03-04.html. In addition, OMB has published subsequent bulletins regarding CBSA changes, including changes in CBSA numbers and titles. We wish to point out that this and all subsequent ESRD rules and notices are considered to incorporate the CBSA changes published in the most recent OMB bulletin that applies to the hospital wage index used to determine the current ESRD wage index. The OMB bulletins may be accessed online at http://www.whitehouse.gov/omb/
bulletins/index.html.

g. Updated Wage Index Values

In the CY 2007 PFS final rule with comment period (71 FR 69685), we stated that we intended to update the ESRD wage index values annually. The ESRD wage index values for CY 2011 were developed from FY 2007 wage and employment data obtained from the Medicare hospital cost reports. As we indicated, the ESRD wage index values are calculated without regard to geographic classifications authorized under sections 1886(d)(8) and (d)(10) of the Act and utilize pre-floor hospital data that is unadjusted for occupational mix. We propose to use the same methodology for CY 2011, with the exception that FY 2007 hospital data would be used to develop the CY 2011 wage index values. For a detailed description of the development of the proposed CY 2011 wage index values based on FY 2007 hospital data, see the FY 2011 IPPS proposed rule (75 FR 23944). Section III.G, of the preamble to the FY 2011 IPPS proposed rule,

‘‘ Method for Computing the Proposed FY 2011 Unadjusted Wage Index, ’’ describes the cost report schedules, line items, data elements, adjustments, and wage index computations. The wage index data affecting the ESRD composite rate for each urban and rural locale may

also be accessed on the CMS Web site

at http://www.cms.hhs.gov/ AcuteInpatientPPS/WIFN/list.asp. The wage data are located in the section entitled, ‘‘ FY 2011 Proposed Rule Occupational Mix Adjusted and Unadjusted Average Hourly Wage and Pre-reclassified Wage Index by CBSA. ’’ i. Reduction to the ESRD Wage Index
Floor

In the CY 2010 PFS final rule with comment period, we stated our
intention to continue to reassess the need for a wage index floor (74 FR 61924). We also stated that a gradual
reduction in the floor is needed to support continuing patient access to dialysis in areas that have low wage index values, especially in Puerto Rico where the wage index values are below the current wage index floor.

In the ESRD PPS proposed rule (74 FR 49968), we stated our intent to continue to reduce the wage index floor to the composite rate during the transition. For CY 2011, we propose that the ESRD wage index floor would be reduced from

0.65 to 0.60.

j. Proposed Wage Index Values for Areas With No Hospital Data

As discussed in the CY 2010 PFS final rule (74 FR 61925), and the ESRD PPS proposed rule (74 FR 49969) we have a methodology for identifying the small
number of ESRD facilities in both urban and rural geographic areas where there are no hospital wage data from which to calculate ESRD wage index values. At that time those rules were published,
the affected areas were rural Puerto Rico, and the urban area Hinesville-Fort Stewart, GA (CBSA 25980), and rural
Massachusetts.

In the case of Massachusetts, the
entire rural area consists of Dukes and
Nantucket Counties. We determined
that the borders of Dukes and Nantucket counties are contiguous with CBSA 12700, Barnstable Town, MA, and CBSA 39300, Providence-New Bedford-Fall River, RI–MA. We intend to use the same methodology for CY 2011. Under this methodology, this results in a proposed CY 2011 wage index value of 1.3577 for the composite rate portion of the blend, and a wage index value of 1.2844 for the ESRD PPS portion of the blend for Barnstable Town, MA (CBSA 12700) and also results in a proposed CY 2011 wage index value of 1.1343 for the composite rate portion of the blend, and a wage index value of 1.0731 for the ESRD PPS portion of the blend for (Providence-New Bedford-Fall River, RI–MA (CBSA 39300). These averages result in an imputed proposed wage
index value of 1.2460 for rural Massachusetts in CY 2011, for the composite rate portion of the blend, and a wage index value of 1.1788 for the ESRD PPS portion of the blend.

For Hinesville-Fort Stewart, GA (CBSA 25980), which is an urban area without specific hospital wage data, we propose to apply the same methodology used to impute a wage index value that we used in CYs 2006 through 2010. Specifically, we compute the average wage index value of all urban areas within the State of Georgia. This results in a CY 2011 wage index value of 0.9465 for the composite rate portion of the blend, and a wage index value of 0.8954 for the ESRD PPS portion of the blend for Hinesville-Fort Stewart, GA (CBSA 25980).

For CY 2011, there is an additional urban area—Anderson, SC—with no hospital data. For this urban area, Anderson, SC (CBSA 11340), we propose to use the same methodology
we have used for the other urban area with no hospital data, that is, Hinesville-Fort Stewart, GA (CBSA 25980). Under the methodology used for that area, we compute the average of all
urban areas within the State of South Carolina. This approach would result in a CY 2011 wage index value of 0.9480 for the composite rate portion of the blend, and a wage index value of 0.8839 for the ESRD PPS portion of the blend for the Anderson, SC CBSA (CBSA 11340).

For Puerto Rico, because all geographic areas in Puerto Rico were subject to the wage index floor in CYs 2006 through 2010, we applied the ESRD wage index floor to rural Puerto Rico as well. Therefore, for CY 2011, all
urban areas in Puerto Rico that have a wage index are eligible for the ESRD wage index floor of 0.60. Currently there
are no ESRD facilities located in rural Puerto Rico, however, should any facilities open in rural Puerto Rico, we intend to apply the CY 2011 proposed wage index floor of 0.60 to facilities that
are located in rural Puerto Rico. The proposed reduction to the wage index floor of 0.60 remains higher than the actual wage index values for ESRD facilities located in Puerto Rico, which currently range from 0.3674 to 0.4828. Also, in the CY 2010 PFS final rule with comment period (74 FR 61925), we
stated that we would continue to evaluate existing hospital wage data and possibly wage data from other sources such as the Bureau of Labor Statistics, to determine if other methodologies might be appropriate for imputing wage index values for areas without hospital wage data for CY 2011 and subsequent years. To date, no data from other sources, superior to that currently used in connection with the IPPS wage index has emerged. For ESRD purposes, we
continue to believe this is an appropriate policy.

Finally, for CY 2011, we are proposing to use the FY 2011 wage index data (collected from cost reports submitted by hospitals for cost reporting


### 40168 Federal Register / Vol. 75, No. 133 / Tuesday, July 13, 2010 / Proposed Rules

periods beginning FY 2007) to compute the ESRD composite payment rates effective beginning January 1, 2011.

k. Budget Neutrality Adjustment

We have previously interpreted the statute as requiring that the geographic adjustment be made in a budget neutral manner. Given our application of the ESRD wage index, this means that aggregate payments to ESRD facilities in CY 2011 would be the same as aggregate payments that would have been made if we had not made any changes to the geographic adjusters. We note that this BN adjustment only addresses the impact of changes in the geographic adjustments. A separate BN adjustment was developed for the case-mix adjustments required by the MMA.

As we are not proposing any changes to the case-mix measures for CY 2011, the current case-mix BN adjustment of
0.9116 would remain in effect for CY 2011. Consistent with prior rulemaking, For CY 2011, we propose to apply the wage-index BN adjustment factor of 1.057057 directly to the ESRD wage index values to the composite rate portion of the blend. Because the ESRDwage index is only applied to the laborrelated portion of the composite rate, we computed the BN adjustment factor based on that proportion (53.711 percent).

To compute the proposed CY 2011 wage index BN adjustment factor(1.057057), we used the FY 2007 prefloor, pre-reclassified, non-occupational mix-adjusted hospital data to compute the wage index values, 2009 outpatient claims (paid and processed as of December 31, 2009), and geographic location information for each facility which may be found through Dialysis Facility Compare Web page on the CMS
Web site at http://www.cms.hhs.gov/ DialysisFacilityCompare/. The FY 2011 hospital wage index data for each urban and rural locale by CBSA may also be
accessed on the CMS Web site at http:// www.cms.hhs.gov/AcuteInpatientPPS/ WIFN/list.asp. The wage index data are located in the section entitled, ‘‘ FY 2011 Proposed Rule Occupational Mix Adjusted and Unadjusted Average Hourly Wage and Pre-Reclassified Wage Index by CBSA. ’’

Using treatment counts from the 2009 claims and facility-specific CY 2010 composite rates, we computed the
estimated total dollar amount each ESRD provider would have received in CY 2010. The total of these payments became the target amount of expenditures for all ESRD facilities for CY 2011. Next, we computed the
estimated dollar amount that would have been paid for the same ESRD facilities using the proposed ESRD wage
index for CY 2011. The total of these payments becomes the new CY 2011 amount of wage-adjusted composite rate expenditures for all ESRD facilities.

After comparing these two dollar amounts (target amount divided by the new CY 2011 amount), we calculated an adjustment factor that, when multiplied by the applicable CY 2011 ESRD wage index value, would result in aggregate payments to ESRD facilities that would remain within the target amount of composite rate expenditures. When making this calculation, the ESRD wage index floor value of 0.6000 is applied whenever appropriate. The proposed wage BN adjustment factor for CY 2011

is 1.057057.

To ensure BN, we also must apply the BN adjustment factor to the wage index
floor of 1.057057 which results in an adjusted wage index floor of 0.6343 (0.6000 x 1.057057) for CY 2011. This budget neutrality factor is not applied to the wage index values for the ESRD PPS portion of the blend.

l. ESRD Wage Index Tables

The CY 2011 ESRD proposed wage
index tables are located in Addenda K and L of this proposed rule. The wage index tables lists two separate columns of wage index values. The first column lists the wage index values will be applied under the composite rate portion and includes the budget neutrality adjustment of 1057057. The second column lists the wage index values that will be applied under the

ESRD PPS.

F. Issues Related to the Medicare Improvements for Patients and Providers Act of 2008 (MIPPA)

1. Section 131: Physician Payment, Efficiency, and Quality Improvements— Physician Quality Reporting Initiative (PQRI)

a. Program Background and Statutory Authority

The Physician Quality Reporting Initiative (PQRI) is a voluntary reporting program, first implemented in 2007, that provides an incentive payment to identified EPs (EPs) who satisfactorily report data on quality measures for covered professional services furnished during a specified reporting period. We propose to add § 414.90 to title 42 of the Code of Federal Regulations to implement the provisions of the PQRI
discussed in this section of the proposed rule.

Under section 1848(k)(3)(B) of the Act, the term ‘‘ EP ’’ means any of the following: (1) A physician; (2) a practitioner described in section 1842(b)(18)(C); (3) a physical or occupational therapist or a qualified speech-language pathologist; or (4) a qualified audiologist. The PQRI was first implemented in 2007 as a result of
section 101 of Division B of the Tax
Relief and Health Care Act of 2006—the Medicare Improvements and Extension Act of 2006 (Pub.L. 109–432) (MIEA– TRHCA), which was enacted on December 20, 2006. The PQRI was
extended and further enhanced as a result of the Medicare, Medicaid, and SCHIP Extension Act of 2007 (Pub. L. 110–173) (MMSEA), which was enacted on December 29, 2007, and the MIPPA, which was enacted on July 15, 2008. Changes to the PQRI as a result of these laws, as well as information about the PQRI in 2007, 2008, 2009, and 2010 are
discussed in detail in the CY 2008 PFS proposed and final rules (72 FR 38196 through 38204 and 72 FR 66336 through 66353, respectively), CY 2009 PFS proposed and final rules (73 FR 38558 through 38575 and 73 FR 69817 through 69847, respectively), and CY 2010 PFS proposed and final rules (74 FR 33559 through 33600 and 74 FR 61788 through 61861, respectively). Further detailed information, about the PQRI program, related laws, and help desk resources, is
available on the CMS Web site at http://www.cms.gov/PQRI

. The ACA makes a number of changes to the PQRI, including authorizing incentive payments through 2014, and requiring a penalty beginning in 2015 for EPs who do not satisfactorily report data on quality measures in the applicable reporting period for the year. The various provisions of the ACA, with respect to PQRI, are further discussed in sections VI.F.1.b., VI.F.1.k., and VI.F.1.l. of this proposed rule.

Prior to the enactment of the ACA, PQRI incentive payments were only authorized through 2010. As discussed
further in sections VI.F.1.b. and VI.F.1.l. below, under section 1848(m)(1)(A) of the Act, as amended by section 3002(a) of the ACA, PQRI incentive payments are extended through 2014 for EPs that satisfactorily report data on PQRI quality measures for the applicable reporting period. Section 1848(m)(1)(B) of the Act, as amended by section 3002(a) of the ACA, authorizes a 1.0 percent incentive payment for program year 2011 and a 0.5 percent incentive payment for program years 2012 through 2014 for qualified EPs who satisfactorily submit PQRI quality measures data. Beginning in 2015, an incentive payment adjustment will be implemented for EPs who do not satisfactorily report quality measures as required by section 1848(a)(8) of the Act


### 40169 Federal Register / Vol. 75, No. 133 / Tuesday, July 13, 2010 / Proposed Rules

and added by section 3002(b) of the

ACA.

Section 3002(e) of the ACA amends section 1848(m)(5) of the Act to require the Secretary to provide timely feedback to EPs on the performance of the EP with respect to satisfactorily submitting data on quality measures. This is discussed further in section VI.F.1.l.(4)
below.

Section 3002(f)(2) amends section 1848(m)(5) of the Act by adding a requirement with respect to an informal appeals process. Specifically, section 1848(m)(5)(I) of the Act, as discussed further in section VI.F.1.l.(5) below, requries that the Secretary establish and have in place an informal process by January 1, 2011, whereby EPs may seek
a review of the determination that an EP did not satisfactorily submit data on quality measures for purposes of qualifying for a PQRI incentive
payment.

Section 1848(m)(7) of the Act ( ‘‘ Additional Incentive Payment ’’ ), as added by section 10327(a) of the ACA, provides that for years 2011 through 2014, the applicable quality percent under PQRI for EPs satisfactorily reporting PQRI quality measures data will be increased by 0.5 percentage points, if the EP also meets certain requirements, including satisfactorily reporting data on quality measures for a year and having such data submitted on their behalf through a Maintenance of Certification Program (MOCP) (as defined under section 1848(m)(7) of the Act) and participating in an MOCP practice assessment more frequently than is required to qualify for or
maintain board certification status. Section 1848(m)(7) of the Act ( ‘‘ Additional Incentive Payment ’’ ) is
discussed in more detail in section VI.F.1.l.(2). Furthermore, section 3002(c) of the ACA, as amended by section 10327(b) of the ACA authorizes the Secretary to incorporate participation and successful completion in an MOCP and successful completion of a qualified MOCP practice assessment into the composite of measures of quality of care furnished under the PFS payment modifier.

Also discussed further in section VI.F.1.k. below, section 10331 of the ACA requires the Secretary to develop a Physician Compare Internet web site by January 1, 2011, on which information on physicians enrolled in the Medicare program and other EPs who participate in the PQRI program would be posted. With respect to measures collected under the PQRI program, to the extent practicable, the Secretary will implement a plan by January 1, 2013, to report 2012 PQRI information on the Physician Compare
Web site.

Finally, section 1848(m)(7) of the Act ( ‘‘ Integration of Physician Quality Reporting and EHR Reporting ’’ ), as added by section 3002 of the ACA requires that not later than January 1, 2012, the Secretary shall develop a plan to integrate reporting on quality measures under subsection (o) relating to the meaningful use of electronic health records (EHRs), as discussed further in section VI.F.1.l.(3) below.

b. Incentive Payments for the 2011 PQRI

As stated above, for years 2011 through 2014, section 3002(a) of the ACA extends the opportunity for EPs to earn a PQRI incentive payment for satisfactorily reporting PQRI quality measures. For 2011 PQRI, section 1848(m)(2)(B) of the Act, as amended by section 3002(a) of the ACA, authorizes a 1.0 percent incentive, and for 2012 through 2014, a 0.5 percent incentive, for qualified EPs who satisfactorily submit PQRI quality measures data. Regardless of the reporting mechanism, and/or the associated reporting period (both discussed in detail below) an EP chooses to report quality data for purposes of PQRI, if the EP meets the respective criteria for satisfactory reporting, the EP may receive a 1.0 percent incentive.

The PQRI incentive payment amount is calculated using estimated Medicare Part B PFS allowed charges for all covered professional services, not just those charges associated with the reported quality measures. ‘‘ Allowed charges ’’ refers to total charges, including the beneficiary deductible and coinsurance, and is not limited to the 80 percent paid by Medicare or the portion covered by Medicare where Medicare is secondary payer. Amounts
billed above the PFS amounts for assigned and non-assigned claims will
not be included in the calculation of the incentive payment amount. In addition, since, by definition under section 1848(k)(3)(A) of the Act, ‘‘ covered professional services ’’ are limited to services for which payment is made under, or is based on, the PFS and which are furnished by an EP, other Part B services and items that may be billed by EPs, but are not paid under or based upon the Medicare Part B PFS, are not
included in the calculation of the incentive payment amount.

As mentioned above, we are proposing a number of reporting mechanisms that EPs may choose in order to participate in PQRI. Our proposals for claims-based reporting, registry-based reporting, and EHR-based reporting are discussed below with respect to the opportunity for individual EPs to participate in PQRI. For satisfactory reporting at the individual level in 2011, 1.0 percent of qualified charges would be paid at the TIN/NPI level. These proposed reporting
mechanisms are addressed in section G.1.d. below. Our proposed criteria for satisfactorily reporting using the various reporting mechanisms are discussed in
further detail in sections VI.F.1.e. and VI.F.1.f. below. Our proposals with respect to the reporting mechanisms and criteria for satisfactorily reporting for group practices are also addressed below, in section VI.F.1.g. Those group practices that satisfactorily report will also be paid a 1.0 percent incentive payment based upon the qualified charges for the group practice TIN.

c. Proposed 2011 Reporting Periods for
Individual EPs

Under section 1848(m)(6)(C) of the Act, the ‘‘ reporting period ’’ for the 2008 PQRI and subsequent years is defined to be the entire year, but the Secretary is authorized to revise the reporting period for years after 2009 if the Secretary determines such revision is appropriate, produces valid results on measures reported, and is consistent with the goals of maximizing scientific validity and reducing administrative burden. For the 2011 PQRI, we propose the following reporting periods: (1) 12- month reporting period for claims-based reporting and registry-based reporting (that is, January 1, 2011 through December 31, 2011); (2) 12-month reporting period for EHR-based reporting (that is, January 1, 2011 through December 31, 2011; and (3) 6- month reporting period for claims-based reporting and registry-based reporting (that is, July 1, 2011 through December 31, 2011). Additionally, as discussed further below in their respective sections, we propose the 12-month reporting period for the group practice reporting option (GPRO) for both PQRI and the eRx Prescribing Incentive Program (January 1, 2011 through December 31, 2011).

The proposed 2011 PQRI reporting periods are consistent with the 2010 reporting periods. In addition, in prior program years, we received input from stakeholders in support of partial year reporting for all reporting mechanisms, to give more EPs the opportunity to begin reporting later in the year. We agree that having the same reporting periods for all mechanisms may be less complex, and may facilitate participation in 2011 PQRI for certain
EPs. In an effort to be consistent with prior program years, and move in the direction of maintaining program


### 40170 Federal Register / Vol. 75, No. 133 / Tuesday, July 13, 2010 / Proposed Rules

stability and continuing program flexibility, while increasing successful reporting of 2011 PQRI measures, we propose to retain 2010 PQRI reporting periods as described above. We invite comments on the proposed reporting periods for 2011 PQRI.

d. Proposed 2011 PQRI Reporting
Mechanisms for Individual EPs

When the PQRI was first implemented in 2007, there was only 1 reporting
mechanism available to submit data on PQRI quality measures. For the 2007 PQRI, EPs had to submit quality data codes (QDCs) on Medicare Part B claims (claims-based reporting). QDCs are Current Procedural Terminology (CPT) Category II codes or G-codes (where CPT Category II codes are not yet available). CPT Category II codes and G-codes are Healthcare Common Procedure Coding System (HCPCS) codes for reporting quality data. For the 2008 PQRI, we added registry-based reporting as an alternative reporting mechanism as required by section 1848(k)(4) of the Act. Under this option, EPs may submit data on PQRI quality measures to a qualified PQRI registry and request the registry to submit PQRI quality
measures results and numerator and denominator data on the 2008 PQRI quality measures or measures groups. For the 2009 PQRI, we retained the 2 reporting mechanisms used in the 2008 PQRI (that is, claims-based reporting and registry-based reporting) for reporting individual PQRI quality measures and for reporting measures

groups.

Finally, to promote the adoption of EHRs, and to facilitate quality measure data reporting, we sought to establish an EHR reporting option by conducting limited testing of EHR reporting for the 2008 and 2009 PQRI. This involved the submission of clinical quality dataextracted from an EHR, or the EHRbased reporting mechanism. No incentive payment was available to those EPs who participated in testing the EHR-based reporting mechanism.

For the 2010 PQRI, we retained the claims-based reporting mechanism, the registry-based reporting mechanism, and established EHR reporting for a limited subset of the 2010 PQRI quality measures, as identified in Table 14 of
the CY 2010 PFS final rule with comment period (74 FR 61831), contingent upon the successful completion of our 2009 EHR data submission testing process and a determination based on that testing process that accepting data from EHRs on quality measures for the 2010 PQRI was practical and feasible. In the 2010 PQRI, following the successful completion of the 2009 EHR data submission testing process, it was determined that it is practical and feasible to accept data from EHRs on quality measures for the 2010 PQRI.

For the 2011 PQRI, we are proposing to retain the claims-based reporting mechanism and the registry-based reporting mechanism. We also propose to retain the 2010 EHR-based reporting mechanism, by which we will continue to accept quality measures data extracted from a qualified EHR product for a limited subset of the proposed 2011 PQRI quality measures, as
identified in Tables 55 and 56. Under the 2011 PQRI, we propose that the EHR submission is optional.

For the 2011 PQRI, we are not proposing to offer additional reporting options for individual EPs beyond those discussed above. In contrast to prior program years (2008 PQRI, 2009 PQRI, and 2010 PQRI), we believe that other options would not facilitate reporting of quality data for PQRI by EPs. However, we seek public comment on these proposals and invite suggestions as to other options that could be included in the PQRI.

We recognize that there continues to
be a number of limitations associated with claims-based reporting since the claims processing system was developed for billing purposes and not for the submission of quality data. Claims submission, however, is
available to all EPs. We have observed that only about half of those EPs whoparticipated in PQRI via the claimsbased reporting mechanism satisfied the criteria for satisfactory reporting (that is, reported at least 3 PQRI measures or
1–2 measures if there were fewer than 3 applicable measures, for at least 80 percent of the EP’s Medicare Part B FFS patients for whom services were furnished during the reporting period to which the measure applies) and qualified for the incentive. We have also found that measures with complex specifications, such as those that require multiple diagnosis codes are not as conducive to claims-based reporting and may be associated with a greater number of invalidly reported QDCs. Similarly, when multiple measures share the same codes it may be difficult to determine which measure(s) the EP intended to report through claims. Finally, for pragmatic efficiency it is not practical to
allow resubmission of claims for the sole purpose of adding QDCs. This means that claims-based reporting must be concurrent with billing.

By contrast, our experience with the registry-based reporting mechanism continues to be a favorable option, as
the drawbacks discussed above do not apply. Data has shown that not onlyhave the participation rates for registrybased reporting increased, but also satisfactory reporting, resulting in an incentive payment for EPs, has also increased. Furthermore, the available number of qualified registries has also increased since 2008, and we expect additional registries to become qualified in future years. For these reasons, we maintain that the registry-based reporting option remains viable, and furthermore, we anticipate continuing to expand this option in future years.

We also believe that EHR-based reporting continues to be a viable option for overcoming the limitations associated with claims-based reporting of quality measures, as clinical quality
data is extracted from the EHR for
submission. We believe further that retaining the EHR-based reporting mechanism for 2011 PQRI will continue to promote the adoption and use of EHRs and further align with the provision in the ACA related to the integration of PQRI EHR measures and the EHR incentive program measures in years after 2011, which is discussed in further detail in section VI.F.1.l.(3)
below.

In summary, we propose that for 2011, an EP may choose to report data on PQRI quality measures through claims, a qualified registry (for the proposed qualification requirements for registries, see section VI.F.1.d.(4) of this proposed rule), or through a qualified EHR product (for the proposed qualification requirements for the EHR vendors and their products, see section VI.F.1.d.(5) of this proposed rule). As in previous years, depending on which PQRI individual quality measures or measures groups an EP selects, one or more of the proposed reporting mechanisms may not be available for reporting a particular 2011 PQRI individual quality measure or measures group. For example, the EHR reporting mechanism currently is not available for reporting measures groups and specifications for the electronic
transmission of a measure via an EHR
are not available for all of the individual PQRI measures. In addition, as discussed previously the specifications for some measures are too complex for claims-based reporting. The proposed 2011 reporting mechanisms through which each proposed 2011 PQRI individual quality measure and measures group could be reported are
identified in Tables 47 and 48. We invite comments on our proposal for the 2011 reporting mechanisms.

While we propose to retain the claims-based reporting mechanism for 2011, we note that we continue to


### 40171 Federal Register / Vol. 75, No. 133 / Tuesday, July 13, 2010 / Proposed Rules

consider significantly limiting the claims-based mechanism of reporting clinical quality measures in future program years. This limitation continues to be contingent upon there being an adequate number and variety of registries available and/or the continuation and/or expansion of the EHR reporting option. Potentially, we
would continue to retain claims-based reporting in years after 2011 principally for the reporting of structural measures,
such as Measure #124 Health Information Technology (HIT): Adoption/Use of Electronic Health Records (EHR), and in circumstances where claims-based reporting is the only
available mechanism for certain categories of EPs to report on PQRI quality measures.

Continuing to reduce our reliance on the claims-based reporting mechanism
after 2011 would allow us and EPs to
continue to devote available resources towards maximizing the potential of registries and EHRs for quality measurement reporting. Both mechanisms hold the promise of more sophisticated and timely reporting of clinical quality measures. Clinical data registries allow the collection of more detailed data, including outcomes, without the necessity of a single submission contemporaneously with claims billing, which overcomes some
of the limitations of the claims-based reporting mechanism. Registries can also provide feedback and quality improvement information based on reported data. Finally, clinical data registries can also receive data from EHRs, and therefore, serve as an alternative means to reporting clinical quality data extracted from an EHR. As we continue to qualify additional registries (qualified registries are listed on the CMS PQRI Web site http:// www.cms.gov/PQRI/20

_ Alternative ReportingMechanisms.asp#TopOfPage ), we believe there may be a sufficient number of registries by 2012 to make it possible to reduce the claims-based reporting mechanism for many measures after 2011. We again invite
comments on our intent to lessen our reliance on the claims-based reporting mechanism for the PQRI program beyond 2011.

As in previous years, regardless of the reporting mechanism chosen by an EP, there is no requirement for the EP to sign up or register to participate in the PQRI. However, there may be some requirements for participation through a specific reporting mechanism that are unique to that particular reporting mechanism. In addition to the proposed criteria for satisfactory reporting of
individual measures and measures groups described in section VI.F.1.e. and section VI.F.1.f., respectively, of this proposed rule, EPs must ensure that they meet all requirements for their chosen reporting mechanism for 2011.

(1) Proposed Requirements for
Individual EPs Who Choose the ClaimsBased Reporting Mechanism

For EPs who choose to participate in the 2011 PQRI by submitting data on individual quality measures or measures groups through the claims-based reporting mechanism, we propose the EP would be required to submit the appropriate PQRI QDCs on the professionals’ Medicare Part B claims. QDCs for the EP’s selected individual PQRI quality measures or measures group may be submitted to CMS at any time during 2011. Please note, however, that as required by section 1848(m)(1)(A) of the Act, all claims for services furnished between January 1, 2011 and December 31, 2011, would need to be processed by no later than February 28, 2012, to be included in the 2011 PQRI analysis.

(2) Proposed Requirements for
Individual EPs Who Choose the Registry-Based Reporting Mechanism

We propose that in order to report quality data on the 2011 PQRI individual quality measures, or measures groups, through a qualified clinical registry, an EP must enter into and maintain an appropriate legal arrangement with a qualified 2011 PQRI registry. Such arrangements would provide for the registry’s receipt of patient-specific data from the EP and the registry’s disclosure of quality
measures results and numerator and denominator data on PQRI quality measures or measures groups on behalf of the EP to CMS. Thus, the registry
would act as a Health Insurance Portability and Accountability Act of 1996 (Pub. L. 104–191) (HIPAA) Business Associate and agent of the EP. Such agents are referred to as ‘‘ data
submission vendors. ’’ The ‘‘ data
submission vendors ’’ would have the requisite legal authority to provide clinical quality measures results and
numerator and denominator data on individual quality measures or measures groups on behalf of the EP for the PQRI. We propose that the registry, acting as a data submission vendor, would submit CMS-defined registry-derived measures information to our designated database for the PQRI, using a CMS-specified record layout, which would be provided to the registry by CMS.

To maintain compliance with applicable statutes and regulations, our program and our data system must maintain compliance with the HIPAA requirements for requesting, processing, storing, and transmitting data. EPs that
conduct HIPAA covered transactions
also would need to maintain compliance with the HIPAA requirements.

We propose that EPs choosing toparticipate in PQRI through the registrybased reporting mechanism for 2011 would need to select a qualified PQRI registry and submit information on PQRI individual quality measures or measures groups to the selected registry in the form and manner and by the deadline specified by the registry.

We propose to post on the PQRI
section of the CMS Web site at http://

www.cms.gov a list of qualified registries for the 2011 PQRI, including the registry name, contact information, and the 2011 measure(s) and/or measures group(s) and eRx reporting (if qualified) for which the registry is qualified and intends to report. As in the 2010 PQRI, we propose for the 2011 PQRI to post the names of the 2011 PQRI qualified registries in 3 phases, which are discussed below. In any event, even though a registry is listed as

‘‘ qualified, ’’ we cannot guarantee or assume responsibility for the registry’s successful submission of the required PQRI quality measures results or measures group results or required data elements submitted on behalf of a given

EP.

In the first phase, we propose to post, by December 31, 2010, a list of those registries qualified for the 2011 PQRI based on the following: (1) Being a qualified registry for a prior PQRI program year that successfully submitted 2008 and/or 2009 PQRI quality measures results and numerator and denominator data on the quality measures; (2) having received a letter indicating their continued interest in being a PQRI registry for 2011 by October 31, 2010; and (3) the registry’s compliance with the 2011 PQRI registry requirements. This list may be modified if any given registry fails to meet any new requirement(s) proposed for 2011. The testing of any additional requirements will be completed as soon as possible but by the end of the first quarter of 2011 at the latest. By posting this first list of qualified registries for the 2011 PQRI, we seek to make available the names of registries that can be used at the start of the 2011 reporting period.

We propose in the second phase, to add the names of the registries that were initially qualified in 2010 and submitted actual quality data on behalf of their EPs to CMS for the first time in early 2011.
Successful submission of data to CMS


### 40172 Federal Register / Vol. 75, No. 133 / Tuesday, July 13, 2010 / Proposed Rules

for the year in which a registry is qualified is the final step in the qualification process and a necessary requirement if the registry desires to continue to participate in PQRI in subsequent years. We propose that these registries also must meet any new 2011 requirements and will also undergo testing, which will be completed by the end of the first quarter of 2011 at the
latest.

In the third phase, we propose to complete posting of the list of qualified 2011 registries as soon as we have completed vetting the additional registries interested in and capable of participating in the 2011 PQRI. We anticipate this will be completed no
later than the summer of 2011. An EP’s ability to report PQRI quality measures
data and numerator and denominator data on PQRI quality measures ormeasures groups using the registrybased reporting mechanism should not be impacted by the complete list of qualified registries for the 2011 PQRI being made available after the start of the reporting period. First, registries would not begin submitting EPs’ PQRI quality measures results and numerator and denominator data on the quality measures or measures groups to CMS until 2012. Second, if an EP decides that he or she is no longer interested in submitting quality measures data and
numerator and denominator data on PQRI individual quality measures ormeasures group through the registrybased reporting mechanism after the complete list of qualified registries becomes available, this would not preclude the EP from attempting to meet the criteria for satisfactory reporting through another 2011 PQRI reportingmechanism, such as claims or EHRbased data submission.

In addition to meeting the above proposed requirements specific to registry-based reporting, we propose that EPs who choose to participate in PQRI through the registry-based reporting mechanism would need to meet the relevant criteria proposed for satisfactory reporting of individual measures or measures groups that all EPs must meet in order to satisfactorily report for PQRI 2011. However, in 2011, we propose not to count measures that are reported through a registry or EHR that have a zero percent performance rate. That is, if the recommended clinical quality action is not performed on at least 1 patient for a particular measure or measures group reported by the EP via a registry or EHR, we will not count the measure (or measures groups) as a measure (or measures group) reported by an EP. We propose to disregard measures (or measures groups) that are reported through a registry or EHR that have a zero percent performance rate in the 2011 PQRI because we are assuming that the measure was not applicable to the EPand was likely reported from EHRderived data (or from data mining) and was unintentionally submitted from the registry or EHR to CMS. We also seek to avoid the possibility of intentional submission of spurious data solely for the purpose of receiving an incentive payment for reporting.

(3) Proposed Requirements for
Individual EPs Who Choose the EHRBased Reporting Mechanism

For 2011, in addition to meeting the criteria for satisfactory reporting of at least 3 individual measures, we propose the following requirements associated with EHR-based reporting: (1) Selection of a PQRI qualified EHR product; and (2) submission of clinical quality data
extracted from the EHR to a CMS
clinical data warehouse in the CMSspecified manner and format. These proposed requirements are identical to the 2010 requirements for individual
EPs who choose the EHR-based requirements. We are proposing to retain the 2010 requirements because
results from 2010 EHR data submission
will not be available until 2011. A test of quality data submission from EPs who wish to report 2010 quality measure data directly from their qualified EHR product will be required and occur in early 2011 immediately followed by the submission of the EP’s actual 2010 PQRI data. This entire final test/production 2010 data submission timeframe is expected to be January 2011 through March 2011. As discussed
in the CY 2010 PFS final rule with comment period (74 FR 61800), throughout most of 2010, we will continue to vet newly self-nominated EHR vendor products for possible qualification for the 2011 PQRI program year. We expect to list any additional PQRI qualified EHR products by January 2011. It is expected that these newly qualified products would be able to submit 2011 PQRI data in early 2012.

Measures group reporting is not an option for EHR based quality measure reporting for 2010. We propose to continue this policy for 2011 and therefore, propose not to include measures group reporting via EHRs for the 2011 PQRI. We will receive 2010 production data in early 2011 and since
this will be the first time we have an opportunity to receive direct EHR data submission for quality reporting and to calculate the results, we believe it is best not to add another reporting option using EHRs at this time. We propose that EPs who choose the EHR-based reporting mechanism for the 2011 PQRI would be required to (in addition to meeting the criteria for satisfactory reporting of individual measures)—

• Have a qualified EHR product;

• Have an active Individuals Authorized Access to CMS Computer Services (IACS) user account with a data
submission role or be able to use the surrogate data submission method (if one exists) that will be used to submit clinical quality data extracted from the
EHR to a CMS clinical data warehouse or another CMS approved means of securely transmitting the quality
measures data to CMS such as a CMS/ OCSQ approved HIE (health information exchange) if we are able to collect data from HIEs in 2012 using the NHIN (national health information network) or NHIN direct network;

• Submit a test file containing real or test clinical quality data extracted from
the EHR to a CMS clinical data warehouse via an approved data submission method such as IACS, an HIE, or the NHIN between July 1, 2011 and September 30, 2011 (if technically feasible); and

• Submit a file containing the EP’s 2011 PQRI clinical quality data
extracted from the EHR for the entire reporting period (that is January 1, 2011 through December 31, 2011) via IACS or an acceptable surrogate (if technically feasible) between January 1, 2012, through February 28, 2012.

However, as stated above, the 2010 EHR Testing Program is still ongoing. Since we are proposing that only EHR
vendors that self-nominated to participate in the 2011 EHR Testing Program and successfully complete the 2011 EHR Testing Program would be considered qualified EHR vendors for the 2011 PQRI, there is no guarantee that there will be any additionally qualified EHR vendors available for the 2011 PQRI. In addition, as we complete the 2010 EHR Testing Program and are
better able to determine what is technically feasible, the actual dates on which EPs are required to submit their test files and/or to begin submitting their actual 2011 PQRI data are subject to change.

We cannot assume responsibility for
the successful submission of data from an EP’s EHR. Any EP who chooses to submit PQRI data extracted from an EHR should contact the EHR product’s vendor to determine if the product is qualified and has been updated to facilitate PQRI quality measures data submission. Such professionals also should begin attempting submission soon after the opening of the clinical
data warehouse in order to assure the


### 40173 Federal Register / Vol. 75, No. 133 / Tuesday, July 13, 2010 / Proposed Rules

professional has a reasonable period of
time to work with his or her EHR and/ or its vendor to correct any problems that may preclude successful quality measures data submission through that EHR. As we indicated above, we are proposing that data submission for the 2011 PQRI would need to be completed by February 28, 2012.

The specifications for the electronic transmission of the 2011 PQRI measures, identified in Tables 55 and 56 of this proposed rule as being available for EHR-based reporting in 2011, will be posted on the Alternative Reporting Mechanisms page of the PQRI section of the CMS Web site during the summer of

2010.

(4) Proposed Qualification Requirements for Registries

In order to be ‘‘ qualified ’’ to submit quality measures results and numerator and denominator data on PQRI quality measures and measures groups on behalf of EPs pursuing a PQRI incentive for the 2008, 2009, and 2010 PQRI, werequired registries to complete a selfnomination process and to meet certain technical and other requirements. For the 2010 PQRI, registries that were qualified for 2009 did not need to be ‘‘ requalified ’’ for 2010 unless they were unsuccessful at submitting 2009 PQRI data (that is, failed to submit 2009 PQRI data per the 2009 PQRI registry requirements). Registries that were

‘‘ qualified ’’ for 2009 and wished to continue to participate in 2010 were only required to communicate their desire to continue participation for 2010 by submitting a letter to CMS indicating their continued interest in being a PQRI registry for 2010 and their compliance with the 2010 PQRI registry requirements by March 31, 2010.

For the 2011 PQRI, we are proposing to require a self-nomination process for registries wishing to submit 2011 PQRI quality measures or measures groups on
behalf of EPs for services furnished during the applicable reporting periods in 2011. We propose that the registry self-nomination process for the 2011 PQRI would be based on a registry meeting specific technical and other requirements, as discussed below.

To be considered a qualified registry for purposes of submitting individual quality measures and measures groups on behalf of EPs who choose to report using this reporting mechanism under the 2011 PQRI, we propose that all registries (new to PQRI and those previously qualified) must:

• Be in existence as of January 1,

2011;

• Have at least 25 participants by January 1, 2011; • Provide at least 1 feedback report per year to participating EPs;

• Not be owned and managed by anindividual locally-owned singlespecialty group (in other words, singlespecialty practices with only 1 practice location or solo practitioner practiceswould be prohibited from selfnominating to become a qualified PQRI registry);

• Participate in ongoing 2011 PQRI mandatory support conference calls hosted by CMS (approximately 1 call per month), including an in-person registry kick-off meeting to be held at CMS headquarters in Baltimore, MD. Registries that miss more than one meeting will be precluded from submitting PQRI data for the reporting year (2011);

• Be able to collect all needed data
elements and transmit to CMS the data
at the TIN/NPI level for at least 3 measures in the 2011 PQRI program (according to the posted 2011 PQRI Measure Specifications);

• Be able to calculate and submit measure-level reporting rates or the data
elements needed to calculate the reporting rates by TIN/NPI;

• Be able to calculate and submit, by TIN/NPI, a performance rate (that is, the percentage of a defined population who receive a particular process of care or achieve a particular outcome) for each measure on which the TIN/NPI reports
or the data elements needed to calculate the reporting rates;

• Be able to separate out and report on Medicare Part B FFS patients;

• Provide the name of the registry;

• Provide the reporting period start date the registry will cover;

• Provide the reporting period end date the registry will cover;

• Provide the measure numbers for the PQRI quality measures on which the registry is reporting;

• Provide the measure title for the PQRI quality measures on which the registry is reporting;

• Report the number of eligible instances (reporting denominator);

• Report the number of instances of quality service performed (numerator);

• Report the number of performance exclusions;

• Report the number of reported instances, performance not met (EP receives credit for reporting, not for performance);

• Be able to transmit this data in a CMS-approved XML format. We expect that this CMS-specified record layout will be substantially the same as for the 2008, 2009, and 2010 PQRI if aggregate level data is continued but will likely change if individual data elements are required, as discussed below. This layout will be provided to registries in

2011;

• Comply with a CMS-specified secure method for data submission, such as submitting the registry’s data in an XML file through an IACS user account or another approved method such as over the NHIN (national health information network) if technically feasible;

• Submit an acceptable ‘‘ validation
strategy ’’ to CMS by March 31, 2011. A validation strategy ascertains whether EPs have submitted accurately and on at least the minimum number (80 percent) of their eligible patients, visits, procedures, or episodes for a given measure. Acceptable validation strategies often include such provisions as the registry being able to conduct random sampling of their participant’s data, but may also be based on other credible means of verifying the accuracy of data content and completeness of reporting or adherence to a required sampling method;

• Perform the validation outlined in the strategy and send the results to CMS by June 30, 2012 for the 2011 reporting year’s data;

• Enter into and maintain with its participating professionals an appropriate Business Associate agreement that provides for the registry’s receipt of patient-specific data from the EPs, as well as the registry’s disclosure of quality measure results
and numerator and denominator data on behalf of EPs who wish to participate in the PQRI program;

• Obtain and keep on file signed
documentation that each holder of an
NPI whose data are submitted to the registry has authorized the registry to submit quality measures and numerator
and denominator data to CMS for the purpose of PQRI participation. This
documentation must be obtained at the time the EP signs up with the registry to submit PQRI quality measures data to the registry and must meet any applicable laws, regulations, and
contractual business associate
agreements;

• Provide CMS access (if requested for validation purposes) to review the Medicare beneficiary data on which 2011 PQRI registry-based submissions are founded or provide to CMS a copy of the actual data (if requested);

• Provide the reporting option (reporting period and reporting criteria) that the EP has satisfied or chosen;

• Provide CMS a signed, written
attestation statement via mail or e-mail which states that the quality measure results and any and all data including
numerator and denominator data


### 40174 Federal Register / Vol. 75, No. 133 / Tuesday, July 13, 2010 / Proposed Rules

provided to CMS are accurate and complete;

• Indicate the reporting period
chosen for each EP who chooses to submit data on measures groups;

• Base reported information on measures groups only on patients to whom services were furnished during the 12-month reporting period of January through December 2011 or the 6-month reporting period of July 1, 2011 through December 31, 2011;

• Agree that the registry’s data may be inspected or a copy requested by CMS and provided to CMS under our oversight authority;

• Be able to report data on all applicable measures in a given measures group on either 30 or more Medicare Part B FFS patients from January 1, 2011 through December 31, 2011, or on 80 percent of applicable Medicare Part B FFS patients for each EP (with a minimum of 15 patients during the January 1, 2011, through December 31, 2011, reporting period or a minimum of 8 patients during the July 1, 2011, through December 31, 2011, reporting period).

These proposed qualification requirements for 2011 registries are similar to the PQRI qualification requirements for registries for previous years. However, we note, that registries would no longer be permitted to include non-Medicare patients for measures group reporting ( see section VI.F.1.f. of this proposed rule for further discussion of the criteria for satisfactory reporting of measures groups by individual EPs).

In addition, in prior years registries were permitted to develop their own algorithms to calculate measure results (that is, reporting and performance rates) from the data provided to them
from their EP members. For the 2011 PQRI, we propose that all current and future registries would have to meet the following new requirements proposed
for 2011:

• Use PQRI measure specifications and the CMS provided measure calculation algorithm to calculate reporting rates or performance rates unless otherwise stated if aggregated
measures data is continued for 2011 PQRI registry reporting. CMS will provide registries a calculation algorithm for each measure and/or measures group they intend to report in

2011.

• Provide a calculated result using the CMS supplied algorithm and XML file for each measure that the registry intends to calculate (as described below). This applies to all registries; those that are new to the program, and those that were previously qualified. The registries will be required to show that they can calculate the proper measure results (that is, reporting andperformance rates) using the CMSsupplied algorithm and send the
calculated data back to CMS in the specified format.

• Provide us the individual data
elements used to calculate the measures if so requested by CMS for validation purposes, if aggregated data submission
is still the selected method of data collection. Registries that are subject to
validation will be asked to send discrete data elements for a measure (determined by CMS) in the required data format for us to recalculate the registries’ reported
results. Validation will be conducted for several measures at a randomly selected sample of registries in order to validate
their data submissions.

While registries allow EPs to collect data over a broader timeframe enabling us to implement more sophisticated measures in PQRI and despite their apparent success as a vehicle for quality reporting (over 90.0 percent of EPs who participated in the 2008 PQRI through registry-based reporting were incentive eligible), registry data results have been
inconsistent when we have validated the registry data against claims. Even though qualified registries go through a thorough vetting and testing process, we
have found differences in measure results (that is, performance rates) reported by the registries when compared to measure results calculated
from claims data for the same EP. This makes it difficult for EPs to analyze their performance results for practice improvement in that the information may not be reliable and reproducible from registry to registry. This also makes possible physician comparison difficult
and inconsistent. We believe there are likely several reasons for these inconsistencies, including the fact that some registries are getting their datafrom an EP’s EHR, the use of nonMedicare patients by registries for measures groups, and the use of different algorithms by registries to
calculate measures. We believe the proposed new requirements for registries discussed above will help us in validating the registry data we receive by addressing some of the reasons leading to the inconsistencies. The proposal for 2011 to retain many of the 2010 requirements while introducing some new requirements is intended to improve the registry-based reporting mechanism by capitalizing on some of the registry’s existing quality improvement functions, maximizing the registry’s ability to successfully submit EP’s quality measure results and
numerator and denominator data on PQRI individual quality measures or measures groups to CMS, and discouraging small physicians’ offices or an individual EP from self-nominating to become a qualified registry. We
continue to be concerned that an individual EP or a small practice does not have either the resources, or the capabilities, to successfully submit quality measures results and numerator and denominator data on PQRI individual measures or measures groups through the registry data submission process. We invite comments on the process and requirements that we propose to use to determine whether a registry is qualified to submit quality measures results (performance rates and reporting rates) and numerator and denominator data on PQRI quality measures or measures groups on an EP’s
behalf.

As stated previously, registries currently calculate the measure results (that is reporting and performance rates) from the data submitted to them by their
EP members and send us the measure results for each participating EP, which are aggregated, nonpatient identifiable data. An advantage of this approach is
that less data will need to be transmitted to CMS (since we only receive aggregated data), which means there is less data for CMS to analyze.

Another option that we considered was changing the requirements with respect to the type of data that registries send us. For 2011, we considered requiring registries, instead, to send discrete data elements for a measure (as determined by CMS) in the required
data format for us to calculate the EP’s measure results. Thus, the registry would be required to send CMS beneficiary-level data provided to the registry by the EP and CMS would use
the data to calculate the EP’s measure results (that is, reporting and performance rates). This approach is similar to the approach that was contemplated when registry data submission began in 2008 and was
referred to as ‘‘ Option 2 ’’ in the CY 2008 PFS proposed rule (72 FR 38203). An advantage of this approach is that it
allows us to calculate the measure
results and reduces the variation that occurs when registries try to aggregate
their data and calculate the measure results themselves. Reducing the variation would facilitate comparison of
EPs’ results should we move towards public reporting of performance results in the future. Also, if the measure specifications change from year to year, this approach would require the registry to make fewer systems changes. The registry would not need to update the algorithms used to calculate the


### 40175 Federal Register / Vol. 75, No. 133 / Tuesday, July 13, 2010 / Proposed Rules

measure’s results. We invite comments
on this alternative that was considered.

We propose to post the final 2011 PQRI registry requirements, including the exact date by which registries that wish to qualify for 2011 must submit a
self-nomination letter and instructions for submitting the self-nomination letter, on the PQRI section of the CMS
Web site at http://www.cms.gov/PQRI by November 15, 2010. We anticipate that new registries that wish to self-nominate for 2011 would be required to do so by January 31, 2011.

Similar to 2010 PQRI, we propose that registries that were ‘‘ qualified ’’ for 2010 and wish to continue to participate in
2011 will not need to be ‘‘ re-qualified ’’ for 2011 except to the extent that the requirements change for 2011 (as proposed above). If this occurs, we propose that all previously qualified registries would need to demonstrate that they can meet the new 2011 data submission requirements. Additionally, we propose that registries that are unsuccessful submitting 2010 PQRI data (that is, fail to submit 2010 PQRI data per the 2010 PQRI registry requirements) will need to go through a full self-nomination vetting process for 2011. Successful 2010 PQRI registries that choose to report on new or different 2011 PQRI measures would also need to qualify for these additional measures and/or methods. We also propose that registries that are ‘‘ qualified ’’ for 2010, who were successful in submitting 2010 PQRI data, and wish to continue to participate in 2011 would need to
indicate their desire to continue participation for 2011 by submitting a letter to CMS indicating their continued interest in being a PQRI registry for 2011 and their compliance with the 2011 PQRI registry requirements by no later than October 31, 2010. Instructions regarding the procedures for submitting this letter will be provided to qualified 2010 PQRI registries on the 2010 PQRI registry support conference calls.

Similar to 2010 PQRI, we propose that if a qualified 2010 PQRI registry fails to submit 2010 PQRI data per the 2010 PQRI registry requirements, the registry
would be considered unsuccessful at submitting 2010 PQRI data and wouldneed to go through the full selfnomination process again to participate in the 2011 PQRI. By March 31, 2011, registries that are unsuccessful at submitting quality measures results and
numerator and denominator data for
2010 would need to be able to meet the 2011 PQRI registry requirements and go through the full vetting process again. This would include CMS receiving the registry’s self-nomination by March 31,
2011. As discussed further under section VI.F.2. of this proposed rule, we propose that the above registry requirements would apply not only for the purpose of a registry qualifying to report 2011 PQRI quality measure
results and numerator and denominator data on PQRI individual quality measures or measures groups, but also for the purpose of a registry qualifying to submit the proposed electronic prescribing measure for the 2011 Electronic Prescribing Incentive Program. We invite comments on the proposed qualification requirements for registries for the 2011 PQRI.

(5) Proposed Qualification Requirements for EHR Vendors and
Their Products

In 2010 PQRI, EHR products were listed on the PQRI section of the CMS
Web site at http://www.cms.hhs.gov/ PQRI as a ‘‘ qualified ’’ EHR product (that is, the name of the vendor software product and the version that was qualified), and were available for the product’s users to submit quality data
on Medicare beneficiaries to CMS directly from their system for the 2010 PQRI. This list of qualified EHR vendors and products was posted upon completion of the 2009 EHR Testing Program in January 2010.

Vendors’ EHR products that were
listed as ‘‘ qualified ’’ products for the 2010 PQRI were selected because the vendor self-nominated to participate in the 2009 EHR Testing Program and demonstrated that their products met
the ‘‘ Requirements for Electronic Health Record (EHR) Vendors to Participate in the 2009 PQRI EHR Testing Program ’’ that were posted on the Alternative Reporting Mechanisms page of the PQRI
section of the CMS Web site at http:// www.cms.gov/PQRI/20

_ Alternative ReportingMechanisms.asp#TopOfPage on December 31, 2008. Additionally, a vendor’s EHR system was required to be updated according to the Final 2010 EHR specifications, which were posted in January 2010 on the Alternative Reporting Mechanisms page of the PQRI
section of the CMS Web site in order for an EHR vendor and its product to be qualified to submit information on 2010 PQRI measures.

The EHR vendor qualification process for the 2011 PQRI was finalized in the
2010 PFS final rule with comment period (74 FR 61800 through 61802) and is currently underway. We anticipate the EHR vendor vetting process for the 2011 PQRI will be complete in early
2011. At the conclusion of the 2011 PQRI EHR vendor vetting process, those EHR products that meet all of the 2011 EHR vendor requirements will be listed on the PQRI section of the CMS Web site as a ‘‘ qualified ’’ PQRI EHR product, which indicates that the product’s users may submit quality data to CMS for the 2011 PQRI. We continue to caution there is no guarantee that there will be any qualified EHR vendors available for the 2011 PQRI. However, since seven EHR vendors and their programs were

‘‘ qualified ’’ to submit quality data to CMS directly from their EPs for 2010 PQRI reporting, we are optimistic that for 2011 PQRI and subsequent years there will continue to be multiple

‘‘ qualified ’’ EHR vendors available for

EPs.

During 2011, we propose to use the same self-nomination process described
in the ‘‘ Requirements for Electronic Health Record (EHR) Vendors to Participate in the 2011 PQRI EHR Testing Program ’’ posted on the PQRI
section of the CMS Web site at http:// www.cms.gov/PQRI/20

_ AlternativeReporting Mechanisms.asp#TopOfPage, to qualify
additional EHR vendors and their EHR products to submit quality data extracted from their EHR products to the CMS clinical quality data warehouse for 2012 PQRI. We propose that any EHR vendor interested in having one or more of their EHR products ‘‘ qualified ’’ to submit quality data extracted from their EHR products to the CMS clinical quality data warehouse for 2012 and subsequent years will be required to submit their self-nomination letter by January 31, 2011. Instructions for submitting the self-nomination letter will be provided in the 2012 EHR vendor requirements, which we expect to post in the 4th quarter of CY 2010. Specifically, for the 2012 PQRI, wepropose that only EHR vendors that selfnominate to participate in the 2012 EHR Test Program will be considered qualified EHR vendors for the 2012 PQRI. We propose that the 2011 PQRI EHR test vendors, who, if their testing is successful, may report 2012 PQRI data to CMS, must meet the following requirements:

• Be able to collect and transmit all required data elements according to the 2012 EHR Specifications.

• Be able to separate out and report on Medicare Part B FFS patients only.

• Be able to include TIN/NPI

information submitted with an EP’s quality data.

• Be able to transmit this data in the CMS-approved format.

• Comply with a secure method for
data submission.

• Not be in a beta test form.

• Have at least 25 active users. Additionally, we propose that previously qualified PQRI EHR vendors
and 2012 EHR test vendors must also


### 40176 Federal Register / Vol. 75, No. 133 / Tuesday, July 13, 2010 / Proposed Rules

participate in ongoing PQRI mandatory support conference calls hosted by CMS (approximately one call per month). These requirements would apply not only for the purpose of a vendor’s EHR product being qualified so that the product’s users may submit data
extracted from the EHR for the 2012 PQRI in 2013, but also for the purpose of a vendor’s EHR product being qualified so that the product’s users may electronically submit data extracted
from the EHR for the electronic prescribing measure for the 2012 eRx Incentive Program in 2013. We propose
that if a vendor misses more than one mandatory support call or meeting, the vendor and their product would be disqualified for the PQRI reporting year, which is covered by the call.

We propose that previously qualified
vendors and new vendors will need to incorporate any new EHR measures (measures electronically-specified) added to PQRI for the reporting year they wish to maintain their PQRI qualification, as well as update their electronic measure specifications and
data transmission schema should either or both change. This proposed requirement ensures that all PQRI qualified EHR products can be used by EPs to report any PQRI EHR measure. We invite comments on the proposed qualification requirements for EHR Vendors and their products for the 2012 PQRI.

e. Proposed Criteria for Satisfactory Reporting of Individual Quality
Measures for Individual EPs

Section 1848(m)(3)(A) of the Act established the criteria for satisfactorily submitting data on individual quality
measures as at least 3 measures in at least 80 percent of the cases in which the measure is applicable. If fewer than 3 measures are applicable to the services of the professional, the professional may meet the criteria by submitting data on 1 or 2 measures for at least 80 percent of applicable cases where the measures are reportable. This section establishes the presumption that if an EP submits quality data codes for a particular measure the measure applies to the EP.

For years after 2009, section 1848(m)(3)(D) of the Act provides additional authority to the Secretary, in
consultation with stakeholders and experts, to revise the criteria for satisfactorily reporting data on quality measures. Based on this authority and the input we have previously received from stakeholders, we propose, for 2011, the following 2 criteria for claims-based reporting of individual measures by
individual EPs: • Report on at least 3 measures that apply to the services furnished by the professional; and

• Report each measure for at least 50 percent of the EP’s Medicare Part B FFS patients for whom services were furnished during the reporting period to which the measure applies.

To the extent that an EP has fewer than 3 PQRI measures that apply to the EP’s services, then we propose the EP
would be able to meet the criteria for satisfactorily reporting data on individual quality measures by meeting the following 2 criteria:

• Report on all measures that apply to the services furnished by the professional (that is 1 to 2 measures);
and

• Report each measure for at least 50 percent of the EP’s Medicare Part B FFS patients for whom services were furnished during the reporting period to which the measure applies.

We also propose for 2011 the requirement that an EP who reports on fewer than 3 measures through the claims-based reporting mechanism may be subject to the Measure Applicability Validation (MAV) process, which would
allow us to determine whether an EP should have reported quality data codes for additional measures. This process was applied in prior years. Under the proposed MAV process, when an EP reports on fewer than 3 measures, we propose to review whether there are other closely related measures (such as those that share a common diagnosis or those that are representative of services typically provided by a particular type of EP). We further propose that if an EP who reports on fewer than 3 measures in 2011 reports on a measure that is part of an identified cluster of closely related measures and did not report on any other measure that is part of that identified cluster of closely related measures, then the EP would not qualify as a satisfactory reporter in 2011 PQRI or earn an incentive payment. In 2011, we propose that these criteria for satisfactorily reporting data on fewer than 3 individual quality measures would apply for the claims-based reporting mechanism only.

We note that the proposed 2011 criteria for satisfactory reporting of individual quality measures through
claims submission are different from the 2010 criteria, which required reporting on at least 80 percent of the EP’s Medicare Part B FFS patients for whom services were furnished during the reporting period to which the measure applies.

The rationale for an 80 percent reporting rate is that this sample size would prevent selective reporting to achieve higher performance rates. However, we now have experience with claims based reporting, which has proved challenging for EPs, as discussed above. In 2007, approximately half of PQRI participants (defined as submitting at least one QDC), qualified for the PQRI incentive payment. Following the 2007 program completion, we performed an extensive review and made a number of analytic changes that we detailed in our 2007 PQRI Experience Report. For 2008, the analytic changes that we made following the completion of the 2007 program resulted in substantial increases in valid QDC reporting and the number of professionals qualifying for an incentive payment. However, the number who qualified for the incentive for the 2008 program year remained at about half of those who participated. A major reason for this was reporting at less than the required 80 percent reporting requirement. As a result of our review of the 2007 and 2008 program results, we believe that we can reduce the reporting sample requirement to 50 percent for claims-based submission without increasing the likelihood that professionals will selectively report based on whether the performance expectation of a measure is met for that particular patient. Inasmuch as we do not allow resubmission of a claim solely for the purpose of resubmission of a QDC, EPs will still need to submit QDCs contemporaneously with the claim. Therefore, we believe that even at a 50 percent reporting it would be difficult to selectively report for the purpose of better performance. Based on our review, we further believe that by reducing the reporting sample, there
will be substantial increases in the portion of participating professionals who qualify for the PQRI incentive. Thus, we believe we can encourage significantly broader participation which otherwise might be deterred if physicians and other EPs do not believe that they are likely to qualify for the

incentive.

As previously stated, we propose that the 50 percent reporting sample wouldapply only to the 2011 PQRI claimsbased reporting mechanism available for reporting individual PQRI quality measures and not registry-based reporting or EHR-based reporting.

For the 2011 PQRI, we propose the following 2 criteria for satisfactory reporting of data on individual PQRI quality measures for registry-based and EHR-based reporting:

• Report on at least 3 measures that apply to the services furnished by the professional; and


### 40177 Federal Register / Vol. 75, No. 133 / Tuesday, July 13, 2010 / Proposed Rules

• Report each measure for at least 80 percent of the EP’s Medicare Part B FFS patients for whom services were furnished during the reporting period to which the measure applies.

We do not believe that reducing the reporting sample to 50 percent for registry-based reporting or EHR-based reporting would substantially impact the portion of participating professionals who qualify for the PQRI incentive. As stated previously, over 90.0 percent of EPs submitting data through registries were incentive eligible.

The proposed 2011 criteria for satisfactory reporting of data on individual PQRI quality measures are
summarized in Table 47 and are arranged by reporting mechanism and reporting period. We seek public comment on these proposed reporting criteria. We are particularly interested in receiving comments on our proposal to lower the reporting criteria for claims-based reporting of individual measures from 80 percent to 50 percent. We seek input on whether 50 percent is an appropriate threshold or if another threshold would be more appropriate. We had considered lowering the reporting criteria to a higher threshold (such as 60 percent or 75 percent) but
we found that differences in the performance rates at 50 percent and 80 percent reporting were not substantial while differences in the proportion of EPs satisfactorily reporting at the two
different thresholds were substantial.



### T ABLE 

### 47—P ROPOSED 

### 2011 C RITERIA FOR 

### S ATISFACTORY 

### R EPORTING OF 

### D ATA ON 

### I NDIVIDUAL 

### PQRI Q UALITY 

### M EASURES



### , BY 

### R EPORTING 

### M ECHANISM AND 

### R EPORTING 

### P ERIOD

Reporting mechanism Reporting criteria Reporting period

Claims-based reporting .............................. • Report at least 3 PQRI measures, or 1–2 measures if less than 3 measures apply to the EP; and January 1, 2011–December 31, 2011.

• Report each measure for at least 50% of the EP’s

Medicare Part B FFS patients seen during the reporting period to which the measure applies. Claims-based reporting .............................. • Report at least 3 PQRI measures, or 1–2 measures if less than 3 measures apply to the EP; and July 1, 2011–December 31, 2011.

• Report each measure for at least 50% of the EP’s

Medicare Part B FFS patients seen during the reporting period to which the measure applies. Registry-based reporting ............................ • Report at least 3 PQRI measures; and January 1, 2011–December 31, 2011.

• Report each measure for at least 80% of the EP’s

Medicare Part B FFS patients seen during the reporting period to which the measure applies. Registry-based reporting ............................ • Report at least 3 PQRI measures; and July 1, 2011–December 31, 2011.

• Report each measure for at least 80% of the EP’s

Medicare Part B FFS patients seen during the reporting period to which the measure applies. EHR-based reporting .................................. • Report at least 3 PQRI measures; and January 1, 2011–December 31, 2011.

• Report each measure for at least 80% of the EP’s

Medicare Part B FFS patients seen during the reporting period to which the measure applies.

Table 47 illustrates that there are a total of 5 proposed reporting options for 2011, or ways in which an EP may meet the criteria for satisfactorily reporting on individual quality measures for the 2011 PQRI. Each proposed reporting option consists of the criteria for satisfactorily reporting such data and results on individual quality measures relevant to a given reporting mechanism and reporting period. EPs may potentially qualify for an incentive as satisfactorily reporting individual quality measures under more than one of the proposed reporting criteria, proposed reporting mechanism, and or for more than one proposed reporting period; however, only one incentive payment will be made to an EP based on the longest reporting period for which the EP satisfactorily reports.

f. Proposed Criteria for Satisfactory Reporting Measures Groups for
Individual EPs

We also propose that individual EPs have the option to report measures groups instead of individual quality measures to qualify for the 2011 PQRI incentive, using claims or registries. As stated previously, we do not propose to make the EHR-based reporting mechanism available for reporting on measures groups in 2011. The criteria that we propose for 2011 for satisfactory reporting of measures groups through claims-based or registry-based reporting

for either the 12-month or 6-month reporting period are as follows: (1) For claims-based reporting, the reporting of at least 1 measures group for at least 50 percent of patients to whom the measures group applies, during thereporting period; or (2) for registrybased reporting, the reporting of at least 1 measures group for at least 80 percent of patients to whom the measures group applies during the reporting period. EPs, for both claims-based and registry-based reporting under these criteria, would be required to submit data on a minimum of 15 unique Medicare Part B FFS patients for the 12-month reporting period and a minimum of 8 Medicare Part B FFS patients for the 6-month reporting period. We note that the proposed criteria for 2011 are the same criteria as for 2010 PQRI reporting on measures groups, with the exception of our reducing the reporting sample from80 percent to 50 percent for claimsbased submission of measures groups. We propose to reduce the reporting sample requirement for claims-based submission of measures groups for the

same reasons discussed in section VI.F.1.e. of this proposed rule for

claims-based submission of individual measures. In other words, we believe that reducing the reporting sample from 80 percent to 50 percent will substantially increase the portion of participating EPs who qualify for a 2011 PQRI incentive without encouraging EPs to selectively report only those cases that will increase their performance rates. Additionally for 2011, we propose to retain the criteria, available only for the 12-month reporting period, based on reporting on at least 1 measures group for at least 30 patients for whom


### 40178 Federal Register / Vol. 75, No. 133 / Tuesday, July 13, 2010 / Proposed Rules

services were furnished between January 1, 2011, and December 31, 2011, to whom the measures group applies. We also propose that the 30 patients on which an EP would need to report a measures group for 2011 would not need to be consecutive patients. We propose that the EP may report on any 30 unique patients seen during the reporting period to which the measures group applies. As in previous years, we propose that for 2011, the patients, for claims-based reporting, would be limited to Medicare Part B FFS patients.

Finally, for registry-based reporting in 2011, in contrast to prior program years, we propose to require that the minimum patient numbers or percentages must be met by Medicare Part B FFS patients exclusively and not non-Medicare Part B FFS patients. The reason for this is the difficulty of analyzing data we receive from registries, where patients other than Medicare Part B FFS patients are included. For example, under our proposal we would be able to compare claims data with registry submitted data to compare patients in the denominator

of the measure for validation. The proposed 2011 criteria for satisfactory reporting of data on measures groups are

summarized in Table 48 and are arranged by reporting mechanism and reporting period.



### T ABLE 

### 48—P ROPOSED 

### 2011 C RITERIA FOR 

### S ATISFACTORY 

### R EPORTING ON 

### M EASURES 

### G ROUPS



### , BY 

### R EPORTING


### M ECHANISM AND 

### R EPORTING 

### P ERIOD

Reporting mechanism Reporting criteria Reporting period

Claims-based reporting .............................. • Report at least 1 PQRI measures group; January 1, 2011–December 31, 2011.

• Report each measures group for at least 30 Medicare Part B FFS patients. Claims-based reporting .............................. • Report at least 1 PQRI measures group; January 1, 2011–December 31, 2011.

• Report each measures group for at least 50% of the

EP’s Medicare Part B FFS patients seen during thereporting period to whom the measures group applies; and

• Report each measures group on at least 15 Medicare

Part B FFS patients seen during the reporting period to which the measures group applies. Claims-based reporting .............................. • Report at least 1 PQRI measures group; January 1, 2011–December 31, 2011.

• Report each measures group for at least 50% of the

EP’s Medicare Part B FFS patients seen during thereporting period to whom the measures group applies; and

• Report each measures group on at least 8 Medicare

Part B FFS patients seen during the reporting period to which the measures group applies. Registry-based reporting ............................ • Report at least 1 PQRI measures group; January 1, 2011–December 31, 2011.

• Report each measures group for at least 30 Medicare Part B FFS patients. Registry-based reporting ............................ • Report at least 1 PQRI measures group; January 1, 2011–December 31, 2011.

• Report each measures group for at least 80% of the

EP’s Medicare Part B FFS patients seen during thereporting period to whom the measures group applies; and

• Report each measures group on at least 15 Medicare

Part B FFS patients seen during the reporting period to which the measures group applies. Registry-based reporting ............................ • Report at least 1 PQRI measures group; January 1, 2011–December 31, 2011.

• Report each measures group for at least 80% of the

EP’s Medicare Part B FFS patients seen during thereporting period to whom the measures group applies; and

• Report each measures group on at least 8 Medicare

Part B FFS patients seen during the reporting period to which the measures group applies.

As illustrated in Table 48, there are a total of 6 proposed reporting options, or ways in which EPs may meet the criteria for satisfactory reporting of measures groups for the 2011 PQRI. Each proposed reporting option consists of the criteria for satisfactory reporting relevant to a given reporting mechanism and reporting period. As stated previously, EPs may potentially qualify as satisfactorily reporting for 2011 PQRI on measures groups under more than one of the reporting criteria, reporting mechanisms, and/or for more than one reporting period; however, only one incentive payment will be made to an EP based on the longest reporting period for which the EP satisfactorily reports. Similarly, an EP could also potentially qualify for the PQRI incentive payment by satisfactorily reporting both

individual measures and measures groups. However, only one incentive payment will be made to the EP based on the longest reporting period for which the EP satisfactorily reports. We invite comments on the proposed criteria for satisfactory reporting measures groups for individual EPs.

g. Proposed Reporting Option for Satisfactory Reporting on Quality Measures by Group Practices

(1) Background and Authority

Section 1848(m)(3)(C)(i) of the Act requires the Secretary to establish and have in place a process by January 1, 2010 under which EPs in a group practice (as defined by the Secretary) shall be treated as satisfactorily submitting data on quality measures


### 40179 Federal Register / Vol. 75, No. 133 / Tuesday, July 13, 2010 / Proposed Rules

under PQRI if, in lieu of reporting measures under PQRI, the group practice reports measures determined appropriate by the Secretary, such as measures that target high-cost chronic conditions and preventive care, in a form and manner, and at a time specified by the Secretary. Section 1848(m)(3)(C)(ii) of the Act requires that this process provide for the use of a statistical sampling model to submit data on measures, such as the model used under the Medicare Physician Group Practice (PGP) demonstration project under section 1866A of the Act. A group practice reporting option (GPRO) was established for the 2010 PQRI in the CY 2010 PFS final rule with comment period (74 FR 61807 through 61811).

In addition, payments to a group practice under section 1848(m) of the Act by reason of the process proposed herein shall be in lieu of the PQRI incentive payments that would otherwise be made to EPs in the group practice for satisfactorily submitting data on quality measures (that is, prohibits double payments). Therefore, for the 2011 PQRI, we propose to continue to allow a group practice, as a whole (that is, for the TIN(s)), to participate in 2011 PQRI and to submit PQRI quality measures for 2011 and qualify to earn an incentive. If, however,
an individual EP is affiliated with a group practice participating in the GPRO and the group practice satisfactorily reports under the GPRO,
the EP will be considered as satisfactorily reporting PQRI quality
measures data at the individual level under that same TIN(s) (that is, for the same TIN/NPI combination).

(2) Definition of ‘‘ Group Practice ’’

As stated above, section 1848(m)(3)(C)(i) of the Act authorizes the Secretary to define ‘‘ group practice. ’’ For purposes of determining whether a group practice satisfactorily submits PQRI quality measures data, we propose that for the 2011 PQRI a ‘‘ group practice ’’ would consist of a physician group practice, as defined by a TIN, with 2 or more individual EPs (or, as identified by NPIs) who have reassigned their billing rights to the TIN. This proposed definition for group practice is different from the 2010 PQRI definition of group practice in that we propose to change the minimum group size from 200 to 2 to enable more group practices to participate in the PQRI GPRO in 2011.

Generally, our intent continues to be to build on an existing quality reporting program that group practices may already be familiar with by modeling some aspects of the the PQRI GPRO after the PGP demonstration while concurrently expanding the availability of the GPRO to more group practices.
Since the PGP demonstration is a demonstration program for large group practices, one of the requirements for group practices participating in the PGP demonstration is for each practice to
have 200 or more members. To be consistent with the PGP demonstration, we propose one GPRO process, which
we refer to as ‘‘ GPRO I ’’ that would be available only to similar large group practices. For group practices that have fewer than 200 members, we propose, if technically feasible, an alternative GPRO process which we refer to as

‘‘ GPRO II ’’ . We invite comments on the proposed definition of ‘‘ group practice ’’ and our proposal to expand the definition of group practice to include groups with 2 or more members.

In order to participate in the 2011 PQRI through the GPRO, we propose to require group practices to complete a self-nomination process and to meet
certain technical and otherrequirements. The proposed selfnomination process and participation requirements for GPRO I and GPRO II are separately discussed below.

As discussed further in section VI.F.2. of this proposed rule, participation in the Electronic Prescribing (eRx) Incentive Program is voluntary for group practices selected to participate in the PQRI group practice reporting option. However, for 2011, we propose that group practices must participate in the PQRI group practice reporting option in order to be eligible to participate in the eRx group practice reporting option for 2011 PQRI. This is the current requirement under the 2010 PQRI and ERx Incentive programs. Therefore, we propose that a group practice that wishes to participate in both the PQRI group practice reporting option and the electronic prescribing group practice reporting option must notify CMS of its
desire to do so at the time that it selfnominates to participate in the PQRI group practice reporting option.

In addition, we propose that group practices that are participating in Medicare demonstration projects, as approved by the Secretary, would also be considered group practices for purposes of the 2011 PQRI GPRO. Specifically, for the 2011 PQRI we propose to deem group practices participating in the PGP, Medicare Care Management Performance (MCMP), and EHR demonstrations to be participating in the PQRI GPRO since many of the measures being reported under these demonstration programs are similar to PQRI measures. As a result, suchpractices do not need to separately selfnominate to participate in the PQRI GPRO, although it would be necessary for such groups to meet the requirements for incentive qualification under their respective approved demonstration project. For example, the
MCMP demonstration sites would be required to meet the requirements for earning a PQRI incentive specified
under the MCMP demonstration.

For purposes of the 2011 eRx Incentive Program, however, we propose that group practices participating in CMS-approved demonstration projects discussed above would be required to meet the proposed 2011 eRx Incentive Program GPRO requirements or the proposed 2011 eRx Incentive Program requirements for individual EPs in order to qualify for a 2011 eRx incentive. Such group practices would not be able to qualify
for a 2011 eRx incentive via participation in an approved demonstration project since there is no eRx requirement under these
demonstrations.

(3) Proposed Process for Physician Group Practices To Participate as Group Practices and Criteria for Satisfactory Reporting

(i) Group Practice Reporting Option for Physician Group Practices With 200 or

More NPIs–GPRO I

As stated above, we propose that group practices interested inparticipating in GPRO I must selfnominate to do so. Specifically, wepropose that the 2011 PQRI selfnomination letter for group practices interested in participating in the 2011 PQRI through the GPRO I must be accompanied by an electronic file submitted in a format specified by CMS (such as, a Microsoft Excel file) that includes the group practice’s TIN(s) and name of the group practice, the name and e-mail address of a single point of contact for handling administrative issues, as well as the name and e-mail address of a single point of contact for technical support purposes. This information was also required as part of the self-nomination process for the 2010 PQRI GPRO.

One change that we propose from the 2010 PQRI GPRO is that we propose for 2011 PQRI GPRO I to validate that the group practice consists of a minimum of 200 NPIs and we will supply group practices with this list. We invite comment on this proposed change for self nomination criteria. In addition, we propose that the self-nomination letter must also indicate the group practice’s compliance with the following requirements:

• Have an active IACS user account;


### 40180 Federal Register / Vol. 75, No. 133 / Tuesday, July 13, 2010 / Proposed Rules

• Agree to attend and participate in all mandatory GPRO training sessions;
and

• Have billed Medicare Part B on or after January 1, 2010 and prior to October 29, 2010.

We propose to post the final 2011 PQRI participation requirements for group practices, including instructions for submitting the self-nomination letter and other requested information, on the PQRI section of the CMS Web site at http://www.cms.gov/PQRI by November 15, 2010. Group practices that wish to
self-nominate for 2011 would be required to do so by January 31, 2011. Upon receipt of the self-nomination letters we propose to assess whether the participation requirements were met by each self-nominated group practice using 2010 Medicare claims data. We do not propose to preclude a group practice from participating in the GPRO I if we discover, from analysis of the 2010 Medicare claims data, that there are some EPs (identified by NPIs) that are not established Medicare providers (that is, have not billed Medicare Part B on or after January 1, 2010 and prior to October 29, 2010) as long as the group
has at least 200 established Medicare providers. NPIs who are not established Medicare providers, however, would
not be included in our incentive payment calculations. We propose that group practices that were selected to participate in the 2010 PQRI GPRO would automatically be qualified to participate in the 2011 PQRI GPRO I and would not need to complete the 2011 PQRI GPRO I self-nomination

process.

For physician groups selected to participate in the PQRI GPRO I for 2011, we propose to retain the existing 12- month reporting period beginning January 1, 2011. We propose that group practices participating in GPRO I submit information on these measures using a
data collection tool based on the GPRO Tool used in 2010 PQRI GPRO by 36 participating group practices to report quality measures under PQRI. The 2010 PQRI GPRO Tool will be updated as needed to include the 2011 PQRI GPRO
I measures. We believe that use of the GPRO data collection tool allows group practices the opportunity to calculate their own performance rates for reporting quality measures. We propose that physician groups selected to participate in the 2011 PQRI through the GPRO I report on a proposed common set of 26 NQF-endorsed quality
measures that are based on measures currently used for 2010 PQRI GPRO. We believe these measures target high-cost chronic conditions and preventive care. The proposed quality measures are
identified in Table 71.

The proposed 2011 PQRI GPRO I quality measures are based on a subset of the Doctor’s Office Quality (DOQ) quality measures set developed under
the direction of CMS and were used in
the PGP and/or MCMP demonstration programs, and have subsequently been used in 2010 PQRI GPRO. Contributors to the development of the DOQ
measures set included the American Medical Association’s Physician
Consortium for Performances Improvement (AMA–PCPI), the American College of Cardiology (ACC), the American Heart Association (AHA), the National Diabetes Quality Improvement Alliance, the National Committee for Quality Assurance (NCQA), and the Veterans Health Administration (VA). In most instances, these measures overlap with the proposed 2011 PQRI measures for reporting by individual EPs, however, there are some measures proposed for GPRO I that are not proposed for
individual EPs.

These quality measures are grouped into four disease modules: coronary artery disease; diabetes; heart failure; and preventive care services. On February 2, 2010, we hosted a 2011 PQRI listening session to solicit input on a number of aspects of the PQRI, including measures for the 2011 PQRI GPRO. Since we received no suggestions
for additional disease modules for the GPRO I from this listening session, we are not proposing any additional measures for the 2011 PQRI GPRO I. We invite comments on our proposal to use
the 26 measures identified in Table 71 for inclusion in 2011 PQRI GPRO I. We specifically request comments on
whether these measures can and/or should be expanded for the group practice reporting option for future program years. Disease modules and measures should address high cost conditions and/or a gap in care. Further
detail on criteria for measure selection
can be found in section VI.F.1.h. below.

The proposed process that group practices will be required to use to report data on quality measures for the 2011 PQRI GPRO I and the proposed associated criteria for satisfactory reporting of data on quality measures by group practices, are summarized in Table 49. Under our proposed 2011 program, group practices participating in PQRI GPRO I as a group practice would be required to report on all of the
measures listed in Table 71.

As part of the data submission process for 2011 GPRO I, we propose that during 2012, each group practice would be required to report quality measures with respect to services furnished during the 2011 reporting period (that is, January 1, 2011, through December 31, 2011) on an assigned sample of Medicare beneficiaries. We propose to analyze the January 1, 2011 through October 31, 2011 (that is, the last business day of October 2011) National Claims History (NCH) file to assign Medicare beneficiaries to each physician group practice using a patient assignment methodology modeled after the patient assignment methodology used in the
PGP demonstration. Based on our desire to model the PQRI GPRO I after the PGP demonstration, we will also consider applying any refinements made to the patient assignment methodology used in the PGP demonstration prior to January 1, 2011 to the 2011 PQRI GPRO I. Assigned beneficiaries would be limited
to those Medicare FFS beneficiaries
with Medicare Parts A and B for whom Medicare is the primary payer. Assigned
beneficiaries would not include Medicare Advantage enrollees. A beneficiary would be assigned to the physician group that provides the plurality of a beneficiary’s office or other outpatient evaluation and management allowed charges (based on
Medicare Part B claims submitted for the beneficiary for dates of services between January 1, 2011, and October 31, 2011). Beneficiaries with only 1 visit to the group practice between January 1, 2011 and October 31, 2011, would be eliminated from the group practice’s assigned patient sample for purposes of 2011 PQRI GPRO I. For inclusion in the sample, assigned beneficiaries would be required to have at least 2 visits to the group practice between January 1, 2011, and October 31, 2011.

Once the beneficiary assignment has been made for each physician group during the fourth quarter of 2011, we propose to provide each physician group selected to participate in the PQRI GPRO I with access to a database (that is, a data collection tool) that will include the group’s assigned beneficiary samples and the quality measures listed in Table 71. We propose to pre-populate
the data collection tool with the assigned beneficiaries’ demographic and
utilization information based on all of
their Medicare claims data. We intend to provide the selected physician groups with access to this pre-populated database by no later than the first quarter of 2012. The physician group would be required to populate the remaining data fields necessary for capturing quality measure information on each of the assigned beneficiaries. Numerators for each of the quality
measures would include all


### 40181 Federal Register / Vol. 75, No. 133 / Tuesday, July 13, 2010 / Proposed Rules

beneficiaries in the denominator population who also satisfy the quality performance criteria for that measure. Denominators for each quality measure would include a sample of the assigned beneficiaries who meet the eligibility
criteria for that disease module or each preventive care quality measure. All of the assigned patients’ inpatient, outpatient, and physician claims would be used in determining clinical eligibility for each module, regardless if they were submitted by the group practice or other providers. Identical to the sampling method used in the PGP demonstration, we propose that the random sample must consist of at least 411 assigned beneficiaries. If the pool of eligible assigned beneficiaries is less than 411, then the group practice must report on 100 percent, or all, of the assigned beneficiaries to satisfactorily participate in the group practice reporting option. For each disease module or preventive care measure, the physician group would be required to report information on the assigned patients in the order in which they appear in the group’s sample (that is, consecutively). These proposed reporting criteria are identical to the reporting criteria used in the PGP demonstration and in the 2010 PQRI GPRO. By building on an existing demonstration program that large group practices may already have experience with, we hope to minimize burden on both group practices and CMS.



### T ABLE 

### 49—2011 P ROPOSED 

### P ROCESS FOR 

### P HYSICIAN 

### G ROUP 

### P RACTICES 

### T O 

### P ARTICIPATE AS 

### G ROUP 

### P RACTICES AND 

### C RITERIA FOR 

### S ATISFACTORY 

### R EPORTING OF 

### D ATA ON 

### Q UALITY 

### M EASURES BY 

### G ROUP 

### P RACTICES FOR 

### GPRO I

Reporting mechanism Reporting criteria Reporting period

A pre-populated data collection tool provided by CMS. • Report on all measures included in the data collection tool (26 measures); and January 1, 2011–December 31, 2011.

• Complete the tool for the first 411 consecutively

ranked and assigned beneficiaries in the order in which they appear in the group’s sample for each disease module or preventive care measure. If the pool of eligible assigned beneficiaries is less than 411, then report on 100% of assigned beneficiaries.

For 2011, we propose an exclusive reporting mechanism for EPs identified as part of the group practice with respect to the group as identified by the TIN. However, EPs who are part of the group practice, and who separately practice with respect to another TIN to which the EP has reassigned benefits, could separately qualify as individual EPs with respect to the other practice (TIN). As discussed above, we propose that each physician group selected to participate in the PQRI GPRO I would have access to a data base (that is a data collection tool) that would include the assigned beneficiary sample and the quality measures. This data collection tool was originally developed for use in the PGP demonstration, updated for use in the MCMP demonstration, and will continue to be updated as needed for use in the PQRI. The assigned beneficiaries’ demographic and utilization information is pre-populated based on claims data. We anticipate being able to provide the selected physician groups with access to this pre-populated database by the first quarter of 2012. The physician group would be required to populate the remaining data fields necessary for capturing quality measure information on each of the assigned beneficiaries. Numerators for each of the quality
measures would include all
beneficiaries in the denominator population who also satisfy the quality performance criteria for that measure. Denominators for each quality measure would include a sample of the assigned beneficiaries who meet the eligibility criteria for that quality measure module or preventive care measure.

We expect that use of the PQRI GPRO I data collection tool allows group practices the opportunity to calculate their own performance rates for reporting quality measures. This provides group practices with the chance to preview their information prior to the public posting of performance data should we choose to do so in future program years.

We invite comment on our proposal
for 2011 to retain 200 as the number of NPIs for a TIN required for each group practice under the GPRO I. We also invite comment on our proposal to
allow those ‘‘ qualified ’’ for 2010 GPRO
to be rolled over for automatic qualification for 2011 GPRO I.

(ii) Group Practice Reporting Option for Group Practices of 2—199 NPIs—

GPRO–II

As discussed previously, section 1848(m)(3)(C) of the Act authorizes us to
define the term ‘‘ group practice ’’ and requires us to establish a process under which EPs in group practices shall be treated as satisfactorily submitting data on PQRI quality measures, but is not prescriptive with regard to the characteristics of this process. Although for 2010 we did not provide a process for groups of less than 200 NPIs to report under the GPRO, we believe that there are significant potential benefits to allowing reporting at the group level generally. At present, for example, where more than one individual professional sees the same patient, each may have to report separately with respect to the patient even for processes of care that do not need to be repeated at each visit. Thus, there is significant duplication of reporting. Additionally, while we are not proposing to report performance information with respect to the 2011 PQRI GPRO, the public reporting of performance information at the group level raises substantially fewer issues, such as privacy, and the potential adverse impact of public reporting on the individual physician,
and the lack of sufficient numbers of patients for any one physician to meaningfully differentiate performance results. Finally, we believe that many process-of-care measures depend on general functioning of the practice, such as in coordinating and tracking care, as opposed to a quality of a particular professional in the group, particularly for measures related to prevention and
care of chronic illnesses.

As a result, based on our authority under section 1848(m)(3)(C) of the Act to establish a process for group practices
and our discretion to define ‘‘ group practice ’’ under this section we are proposing multiple processes for reporting at the group level for groups of EPs of all sizes for purposes of qualifying for a PQRI incentive payment. The proposed process for groups of 200 or more EPs, known as GPRO I, was discussed above. If technically feasible, we propose a new group practice reporting option (GPRO


### 40182 Federal Register / Vol. 75, No. 133 / Tuesday, July 13, 2010 / Proposed Rules

II) for groups of 2–199 NPIs in a TIN for 2011. For GPRO II in 2011, we propose to require groups of EPs who decide to report as a group to self-nominate. The self-nomination process would consist of sending a letter with the name of the group, the TIN, an e-mail address of the contact person, and the names and NPIs of all of the EPs practicing under that group’s TIN. We do not propose to preclude a group practice from participating in the GPRO II if we discover, from analysis of the 2010 Medicare claims data, that there are some EPs (identified by NPIs) that are not established Medicare providers (that is, have not billed Medicare Part B on or after January 1, 2010 and prior to October 29, 2010) as long as the group
has at least 2 established Medicare providers. NPIs who are not established Medicare providers, however, would
not be included in our incentive payment calculations.

We also propose that self-nominating groups would need to indicate in this letter if the group intends to report as a group for the eRx Incentive Program and the reporting mechanism the group intends to use to report as a group for the eRx Incentive Program. We would require that this information be sent to: GPRO II, c/o CMS, 7500 Security Blvd., Mail Stop S3–02–01, Baltimore, MD 21244, and must be postmarked by January 31, 2011, for consideration in the program.

Since GPRO II would be a new process available to groups in 2011, we propose to initially pilot the GPRO II process with a limited number of groups. We propose to select the first 500 groups that meet the proposed eligibility requirements to participate in the 2011 GPRO II. We propose to use the postmark to determine the order in which groups self-nominated for GPROII. We propose to consider only selfnomination letters postmarked between January 3, 2011 and January 31, 2011. We do not propose to consider letters postmarked prior to January 3, 2011 to prevent groups from self-nominating before the GPRO II requirements are finalized and to discourage groups from self-nominating for GPRO II prior to reviewing the final GPRO II requirements.

For purposes of quality data submission, we propose, for the GPRO II, to allow EPs to submit their data through claims or through a qualified GPRO registry to the extent registries are technically capable of collecting, calculating and transmitting the required data to CMS and that we are able to accept such data from registries.

For GPRO II, as discussed in greater detail below, we propose that in addition to reporting a specific number of individual measures, the group would have to report one or more proposed 2011 PQRI measures groups identified in Tables 57 through 70 of this proposed rule depending on the size of the group practice. In this way we seek to address a concern expressed regarding PQRI for individual reporting that EPs are able to select any three of a large array of measures making comparison data difficult whether for the same individual or among professionals. We believe that by having
a smaller set of measures to choose from, we hope to focus on topics of major significance, and make the information obtained with respect to quality more meaningful.

For purposes of satisfying the requirements under section 1848(m)(3)(C)(i) of the Act for groups of 2–199 NPIs, we propose that in order to be treated as satisfactorily reporting under GPRO II, the group practice would be required to report on 50 percent or more (if submitting through claims) of all Medicare Part B patients who fit into the measures group denominator or 80 percent or more of Medicare patients if using a registry to
report.

Additionally, to earn a PQRI incentive payment for all allowed Medicare Part B services that are provided by the TIN, we propose that a group practice must report on three to six individual 2011 PQRI measures, depending on the size of the group. We propose that the group practice may select from among any of the 2011 PQRI measures on which to submit data, provided the measures selected are not duplicated in the measures group(s) reported.

We propose that, to satisfactorily report individual PQRI measures, a group must report each measure at the same rate (percentage) as determined by
the method of submission as individual EPs. For example, if reporting via claims, to satisfactorily report individual measures, each measure would need to be reported on at least 50 percent of eligible Medicare Part B FFS patients.

An alternative which we considered was to require that the individual
measures be selected from a more limited set of measures, such as measures closely linked to improved population health, or other measures perceived to address the greatest potential benefit from improved performance. While there are potential benefits to this approach of encouraging broad reporting of a more limited set of measures, we are concerned that any limited measures set may not be applicable to all groups, such as single specialty groups. Further we are
concerned that this would diminish an important strength of the overall PQRI measures set, which is its broad applicability. We invite comments on the potential benefits of a core measures set, as opposed to allowing groups to select from among the array of PQRI measures, what measures should be included in that set, whether there are any PQRI measures that all professionals in group practices should report, where the measure applies to patients of the group.

A second alternative that we considered was to require group practices, as part of the self-nomination process, to designate whether they were a multispecialty group with primary care, a multispecialty group without primary care, or a single specialty group, and if so, the specialty. Depending on what type of specialty the group is, we would identify a set of PQRI measures pertaining to the group’s specialty and require the group practice to report on the identified set of specialty-specific PQRI measures. We invite comments on the potential benefits of this approach as opposed to allowing groups to select from among the array of PQRI measures or requiring all groups, regardless of specialty, to report on the same core set of measures.

Table 50 sets forth the proposed criteria for satisfactory reporting under the 2011 PQRI GPRO II and requirements for each group based on their respective group size (number of EPs).

If a group does not satisfactorily report as a GPRO II group, we propose to analyze the individual professional’s data to see if they satisfactorily reported
at the individual TIN/NPI level. If the EP satisfactorily reported at the individual level, he or she would receive a PQRI incentive, which is calculated using the EP’s TIN/NPI Medicare Part B allowed charges.

If a group practice participating in the 2011 PQRI GPRO II wants to also participate in the 2011 eRx Incentive Program as a small group, we propose that the group would need to indicate that preference in their self-nomination letter and would need to report on the number of unique encounters based on their group size as listed in Table 50 below. For the 2011 eRx reporting for GPRO II, we propose the following reporting mechanisms: claims, a GPRO eRx qualified registry or a GPRO qualified EHR. As with the 2011 eRx Incentive Program for individual EPs and the 2011 eRx GPRO I, at least 10 percent of a GPRO II group’s charges would need to be comprised of codes in
the denominator of the electronic


### 40183 Federal Register / Vol. 75, No. 133 / Tuesday, July 13, 2010 / Proposed Rules

prescribing measure and the group
would need to use an electronic prescribing system that meets the requirements of the 2011 eRx measure. Similar to proposed GPRO I, if a GPRO II group self-nominates to report the eRx measure as a group, we propose that all members of the group practicing under the group’s TIN would be ineligible to report as an individual electronic prescriber.



### T ABLE 

### 50—2011 P ROPOSED 

### P ROCESS FOR 

### P HYSICIAN 

### G ROUP 

### P RACTICES 

### T O 

### P ARTICIPATE AS 

### G ROUP 

### P RACTICES AND 

### C RITERIA FOR 

### S ATISFACTORY 

### R EPORTING OF 

### D ATA ON 

### Q UALITY 

### M EASURES BY 

### G ROUP 

### P RACTICES FOR 

### GPRO II

Group size (number of EPs) Number of MGsrequired to be reported Percent of Medicare Pt B patients in denominator for successful reporting
via claims Percent of Medicare Pt B patients in denominator for successful reporting

via registries Minimum number of patients in
each measures

group Number of required individual

measures to report Required number of unique visitswhere an e-prescription was generated to be

a successfulelectronic prescriber

2–10 ................................. 1 50% 80% 35 3 75

11–25 ............................... 1 50% 80% 50 3 225

26–50 ............................... 2 50% 80% 50 4 475

51–100 ............................. 3 50% 80% 60 5 925

101–199 ........................... 4 50% 80% 100 6 1875

The required number of unique visits where an electronic prescription was generated to be a successful electronic prescriber was determined by taking the midpoint of the group size range and multiplying the number by 12.5 and then rounding this number to the nearest multiple of 5. This is consistent

with how the 2010 eRx GPRO requirements, which requires that the group practice report that at least 1 prescription during an encounter was generated and transmitted using a qualified electronic prescribing system in at least 2,500 instances during the reporting period, were derived. For the 2010 eRx Incentive Program, we
assumed that half the members of an average sized-group (which we assumed to be 200 EPs) do not furnish the services represented by the electronic prescribing measure’s denominator codes, and thus, would not have an opportunity to report the electronic prescribing measure. For the remaining EPs within the group who do have an opportunity to report the electronic prescribing measure, we sought to hold

those EPs to the same standard as individual EPs. Thus, for an average 200 EP group, each of the 100 EPs with an opportunity to report the electronic prescribing measure would be expected to have 25 unique electronic prescribing events for a total of 2,500 unique electronic prescribing events for the

group.

We propose posting the information required by section 1848(m)(5)(G) of the Act for those group practices that are selected to participate in the 2011 PQRI under the GPRO II. That is, we propose to post the names of group practices that satisfactorily report under GPRO II as we propose to do for group practices that satisfactorily report under the 2011 PQRI GPRO I.

We invite comment on our proposal to add this second option (GPRO II) for group practices to report PQRI quality data measures and the GPRO II process. We also invite comments regarding our proposal to publicly report GPRO II information with respect to satisfactory PQRI participation.

(iii) Alternatives Considered for Expanding the GPRO in 2011

In addition to the GPRO II, another option that we considered for expanding the GPRO for 2011 was to expand GPRO I to include smaller group practices. Specifically, we considered allowing groups of 100 or more EPs to participate in the PQRI under GPRO using the same reporting mechanism and reporting criteria required under the 2010 PQRI GPRO and proposed for the 2011 PQRI GPRO I. We also considered modifying
the definition of ‘‘ group practice ’’ to include groups that have and use multiple TINs. We invite comments on
these alternatives.

h. Statutory Requirements and Other Considerations for 2011 PQRI Measures

(1) Statutory Requirements for 2011 PQRI Measures

Under section 1848(k)(2)(C)(i) of the Act, the PQRI quality measures shall be such measures selected by the Secretary
from measures that have been endorsed by the entity with a contract with the Secretary under subsection 1890(a) of the Act (that is, the National Quality Forum, or NQF). However, in the case of a specified area or medical topic determined appropriate by the Secretary for which a feasible and practical measure has not been endorsed by the NQF, section 1848(k)(2)(C)(ii) of the Act authorizes the Secretary to specify a measure that is not so endorsed as long as due consideration is given to
measures that have been endorsed or adopted by a consensus organization identified by the Secretary, such as the AQA alliance. In light of these statutory requirements, we believe that, except in the circumstances specified in the statute, each proposed 2011 PQRI quality measure would need to be endorsed by the NQF. The NQF
endorsement status of each of the proposed measures is identified for each measure. The basis for including certain measures that are not endorsed by NQF
is discussed further below.

Additionally, section 1848(k)(2)(D) of the Act requires that for each 2011 PQRI quality measure, ‘‘ the Secretary shall ensure that EPs have the opportunity to provide input during the development, endorsement, or selection of measures applicable to services they furnish. ’’ We believe that this requirement is met for all proposed measures in several ways. Measure developers generally include a public comment phase in their measure development process. As part of the measures development process, measures developers typically solicit public comments on measures that they are testing in order to determine
whether additional refinement of the measure(s) is needed prior to
submission for consensus endorsement. For example, information on the measure development process, employed by us when CMS or our contractor is the measure developer, is
available in the ‘‘ Measures Management System Blueprint ’’ found on the CMS
Web site at http://www.cms.gov/apps/ QMIS/mmsBlueprint.asp . EPs also have the opportunity to provide input on a measure as the measure is being vetted


### 40184 Federal Register / Vol. 75, No. 133 / Tuesday, July 13, 2010 / Proposed Rules

through the NQF consensus endorsement process. The NQF employs a public comment period for measures vetted through its consensus endorsement process (and previously, for the AQA consensus adoption process). Additionally, we have invited suggestions for measures during the last 3 years, including most recently via the Listening Session held at CMS on February 2, 2010. The goal of the Listening Session was to discuss and solicit feedback on suggestions received on individual quality measures and measures groups for possible inclusion in the proposed set of quality measures for use in the 2011 PQRI program. Finally, as in previous program years, EPs also have an opportunity to provide input on the measures proposed for inclusion in the 2011 PQRI through this proposed rule, which provides a 60-day comment period. Accordingly, with regard to the 2011 PQRI, we believe we have satisfied this requirement in multiple ways.

The statutory requirements under section 1848(k)(2)(C) of the Act, subject to the exception noted above, require only that the measures be selected from measures that have been endorsed by the entity with a contract with the Secretary under section 1890(a) (that is, the NQF) and are silent with respect to
how the measures that are submitted to the NQF for endorsement were developed. The basic steps for developing measures applicable to physicians and other EPs prior to
submission of the measures for endorsement may be carried out by a variety of different organizations. We do not believe there needs to be any special restrictions on the type or make up of the organizations carrying out this basic development of physician measures, such as restricting the initial development to physician-controlled organizations. Any such restriction would unduly limit the basic development of quality measures and the scope and utility of measures that may be considered for endorsement as voluntary consensus standards.

(2) Other Considerations for Measures Proposed for Inclusion in the 2011 PQRI

As stated previously, in addition to reviewing the 2010 PQRI measures for purposes of developing the proposed 2011 PQRI measures, we reviewed and considered measure suggestions including comments received in response to the CY 2010 PFS proposed
rule and final rule with comment period. Additionally, suggestions and input received through other venues,
such as an invitation for measures suggestions via the Listening Session held February 2, 2010, were also reviewed and considered for purposes of our development of the list of proposed 2011 PQRI quality measures. A summary of the measures suggestions received via the Listening Session is included in the background paper that was provided to Listening Session participants. The Listening Session background paper is posted on CMS Sponsored Calls page of the PQRI
section of the CMS Web site at: http:// www.cms.gov/PQRI/04

_ CMSSponsoredCalls.asp#TopOfPage

.

With respect to the selection of new measures (that is, measures that have never been selected as part of a PQRI quality measure set for 2010 or any prior year), we propose to apply the following considerations, which include many of the same considerations applied to the selection of 2009 and 2010 PQRI quality measures for inclusion in the 2011 PQRI quality measure set described above:

• High Impact on Healthcare. ++ Measures that are high impact and

support CMS and HHS priorities for improved quality and efficiency of
care for Medicare beneficiaries. These current and long-term priority topics include the following: Prevention; chronic conditions; high cost and high volume conditions; eliminationof health disparities; healthcareassociated infections and other conditions; improved care coordination; improved outcomes; improved efficiency; improved patient and family experience of care; improved end-of-life/palliative care; effective management of acute and chronic episodes of care; reduced unwarranted geographic variation in quality and efficiency; and adoption and use of interoperable HIT.

• Measures that are included in, or facilitate alignment with, other Medicare, Medicaid, and CHIP programs in furtherance of overarching healthcare goals.

• NQF Endorsement. ++ Measures must be NQF-endorsed by

June 1, 2010, in order to be
considered for inclusion in the 2011 PQRI quality measure set except as provided under section 1848(k)(2)(C)(ii) of the Act. ++ Section 1848(k)(2)(C)(ii) of the Act

provides an exception to the requirement that the Secretary select measures that have been endorsed by the entity with a contract under section 1890(a) of the Act (that is, the NQF). As long as an area or medical topic for which a feasible and practical NQF-endorsed measure is
not available has been identified and due consideration has been given to measures that have been adopted by the AQA or other consensus organization identified by Secretary. As discussed above, we anticipate not including measures which only have AQA adoption for future program

years. ++ The statutory requirements under

section 1848(k)(2)(C) of the Act, subject to the exception noted above, require only that the measures be
selected from measures that have been endorsed by the entity with a contract with the Secretary under section 1890(a) (that is, the NQF) and are silent with respect to how the
measures that are submitted to the NQF for endorsement are developed. The basic steps for developing measures applicable to physicians and other EPs prior to submission of the measures for endorsement may be carried out by a variety of different organizations. We do not believe there needs to be any special restrictions on the type or makeup of the organizations carrying out this basic development of physician measures, such as restricting the initial development to physician-controlled organizations. Any such restriction would unduly limit the basic development of quality measures and the scope and utility of measures that may be considered for endorsement as voluntary consensus standards. The requirements under section 1848(k)(2)(C) of the Act pertain only
to the selection of measures and not to the development of measures.

• Address Gaps in PQRI Measure Set.
++ Measures that increase the scope of

applicability of the PQRI measures to
services furnished to Medicare beneficiaries and expand opportunities for EPs to participate in PQRI. We continue to seek the broad ability to assess the quality of care furnished to Medicare beneficiaries, and ultimately to compare performance among professionals. We
seek to increase the circumstances
where EPs have at least three measures applicable to their practice and measures that help expand the number of measures groups with at least four measures in a group.

• Measures of various aspects of clinical quality including outcome measures, where appropriate and feasible, process measures, structural measures, efficiency measures, and measures of patient experience of care.

Other considerations that we propose to apply to the selection of measures for 2011, regardless of whether the measure was a 2010 PQRI measure or not, were:


### 40185 Federal Register / Vol. 75, No. 133 / Tuesday, July 13, 2010 / Proposed Rules

• Measures that are functional, which is to say measures that can be technically implemented within the capacity of the CMS infrastructure for data collection, analysis, and calculation of reporting and performance rates. This leads to preference for measures that reflect readiness for implementation, such as those that are currently in the 2010 PQRI program or have been through testing. The purpose of measure testing is to reveal the measure’s strengths and
weaknesses so that the limitations can
be addressed and the measure refined and strengthened prior to implementation. For any new measures considered for 2011 PQRI, preference is given to those that can be most efficiently implemented for data collection and submission. Therefore, any measures that have previously been found to be technically impractical to report because they are analytically challenging due to any number offactors, including those that are claimsbased, will again not been included for 2011 PQRI. For example, in some cases, we are proposing to replace existing 2010 PQRI measures with updated and improved measures that are less technically challenging to report. For example, we are proposing to replace existing 2010 PQRI measures #114 and #115 with updated and improved measure #TBD (Preventive Care and Screening: Tobacco Use: Screening and Cessation Intervention), which is less technically challenging to report.

• In 2011 PQRI, as in 2010 PQRI, for some measures that are useful, but
where data submission is not feasible through all otherwise available PQRI reporting mechanisms, a measure may be included for reporting solely through specific reporting mechanism(s) in
which its submission is feasible. For the 2011 PQRI, we propose to retain those measures that had previously been available for claims-based reporting and registry-based reporting, which were changed for 2010 PQRI to registry-based reporting only because they were technically challenging to report and/or analyze through the claims-based reporting mechanism.

We welcome comments on the implication of including or excluding any given measure or measures for our proposed 2011 PQRI quality measure set, as well as feedback relative to our proposed approach in selecting measures. We recognize that some commenters may also wish to
recommend additional measures for inclusion in the 2011 PQRI measures that we are not proposing. While we
welcome all constructive comments and suggestions, and may consider such recommended measures for inclusion in future measure sets for PQRI and/or other programs to which such measures may be relevant, we will not be able to
consider such additional measures for
inclusion in the final 2011 measure set.

As discussed above, section 1848(k)(2)(D) of the Act requires that the public have the opportunity to provide input during the selection of measures. We also are required by other applicable statutes to provide opportunity for public comment on provisions of policy or regulation that are established via notice and comment rulemaking.
Measures that were not included in this proposed rule for inclusion in the 2011 PQRI that are recommended to CMS via comments on this proposed rule cannot
be included in the 2011 measure set.

As discussed above, section 1848(k)(2)(D) of the Act requires that the public have the opportunity to provide input during the selection of measures. We also are required by other applicable statutes to provide opportunity for public comment on provisions of policy or regulation that are established via notice and comment rulemaking.
Measures that were not included in this proposed rule for inclusion in the 2011 PQRI that are recommended to CMS via comments on this proposed rule have not been placed before the public to
comment on the selection of those measures within the rulemaking process. Even when measures have been published in the Federal Register , but in other contexts and not specifically proposed as PQRI measures, such publication does not provide true opportunity for public comment on those measures’ potential inclusion in PQRI. Thus, such additional measures
recommended for selection for the 2011 PQRI via comments on this proposed
rule cannot be included in the 2011 measure set. However, as discussed above, we will consider comments and recommendations for measures, which may not be applicable to the final set of 2011 PQRI measures, for purposes of identifying measures for possible use in future years’ PQRI or other initiatives to which those measures may be pertinent.

In addition, as in prior years, we again
note that we do not use notice and comment rulemaking as a means to update or modify measure specifications. Quality measures that have completed the consensus process have a designated party (usually, the measure developer/owner) who has accepted responsibility for maintaining the measure. In general, it is the role of the measure owner, developer, or maintainer to make changes to a measure. Therefore, comments requesting changes to a specific proposed PQRI measure’s title, definition, and detailed specifications or coding should be directed to the measure developer identified in Tables 52 through 70. Contact information for the 2010 PQRI measure developers is
listed in the ‘‘ 2010 PQRI Quality
Measures List, ’’ which is available on the PQRI section of the CMS Web site

at http://www.cms.gov/PQRI

. However, we stress that inclusion of measures that are not NQF endorsed or AQA adopted is an exception to the requirement under section 1848(k)(2)(C)(i) of the Act that measures be endorsed by the NQF. We may exercise this exception authority in a specified area or medical topic for which a feasible and practical measure has not been endorsed by NQF, so long as due consideration is given to measures that have been endorsed by the NQF.

i. Proposed 2011 PQRI Quality Measures
for Individual EPs

As in 2010 PQRI, individual EPs have the choice of reporting PQRI quality
measures data on either individual quality measures or on measures groups for 2011 PQRI.

Consistent with statutory requirements for identifying and including measures for 2011 PQRI, the individual quality measures identified for use in the 2011 PQRI will be selected from those we propose in this rule and will ultimately be finalized as of the
date the CY 2011 PFS final rule with comment period is available for public inspection at the Office of the Federal Register. No changes (that is, additions or deletions of measures) will be made after publication of the CY 2011 PFS final rule with comment period. However, as was the case in previous program years, we may make modifications or refinements, such as
revisions to measures titles and code additions, corrections, or revisions to the detailed specifications for the 2011 measures until the beginning of the reporting period. The 2011 measures specifications for individual quality measures will be available on the PQRI
section of the CMS Web site at http:// www.cms.gov/PQRI when they are sufficiently developed or finalized. We are targeting finalization and publication of the detailed specifications for all 2011 PQRI measures on the PQRI section of the CMS Web site by November 15, 2010 and will, in no event, publish these specifications later than December 31, 2010. The detailed specifications will include instructions for reporting and will identify the circumstances in which each measure is applicable. For 2011,


### 40186 Federal Register / Vol. 75, No. 133 / Tuesday, July 13, 2010 / Proposed Rules

we are proposing that for the most part, final PQRI quality measures will be selected from the 2010 PQRI measures.

In response to the February 2, 2010 Listening Session, CMS received 146 individual measure suggestions and 9 measures groups suggestions, one of
which included modifications to an existing measures group, for possible inclusion in the 2011 PQRI.

We propose to include a total of 198 measures (this includes both individual measures and measures that are part of a proposed 2011 measures group) on which individual EPs can report for the 2011 PQRI. The individual PQRI quality measures proposed for the 2011 PQRI are listed in Tables 52 through 56 and fall into four broad categories as set forth below. The four categories are the following:

• Proposed 2011 Individual Quality Measures Selected From the 2010 PQRI Quality Measures Set Available forClaims-Based Reporting and RegistryBased Reporting;

• Proposed 2011 Individual Quality Measures Selected From the 2010 PQRI Quality Measures Set Available for Registry-Based Reporting Only;

• New Individual Quality Measures Proposed for 2011; and

• Proposed 2011 Measures Available for EHR-Based Reporting.

In addition, we are also proposing the inclusion of 1 new measures group for 2011 PQRI. The measures proposed for 2011 measures groups are listed in Tables 57 through 70. Please note Table 51 includes 2010 PQRI measures that are not proposed for inclusion in 2011 PQRI.



### T ABLE 

### 51—2010 PQRI Q UALITY 

### M EASURES 

### N OT 

### P ROPOSED FOR 

### I NCLUSION IN THE 

### 2011 PQRI

Measure No. Measure title

114 ............................. Preventive Care and Screening: Inquiry Regarding Tobacco Use. 115 ............................. Preventive Care and Screening: Advising Smokers and Tobacco Users to Quit. 135 ............................. Chronic Kidney Disease (CKD): Influenza Immunization. 136 ............................. Melanoma: Follow-Up Aspects of Care. 139 ............................. Cataracts: Comprehensive Preoperative Assessment for Cataract Surgery with Intraocular Lens (IOL) Placement.

After careful consideration of 2010 PQRI measures, we propose to retire these 5 measures because they did not

meet one or more of the considerations for selection of proposed 2011 measures

discussed in section VI.F.1.h. above. Specifically, we are proposing to retire PQRI measures #135, #136, and #139, for 2011 because they have been considered by NQF for possible endorsement but ultimately were not NQF-endorsed. In addition we propose to replace existing 2010 PQRI measures #114 and #115 with an updated and improved measure (#TBD ‘‘ Preventive Care and Screening: Tobacco Use: Screening and Cessation Intervention ’’ ), which is less technically challenging to report. We invite comments on our proposal to retire the 2010 measures listed in Table 51 for the 2011 PQRI. (1) Proposed 2011 Individual Quality Measures Selected From the 2010 PQRI Quality Measures Set Available forClaims-Based Reporting and RegistryBased Reporting

For 2011, we propose to retain 170 measures currently used in the 2010 PQRI. These 170 proposed measures include 45 registry-only measures currently used in the 2010 PQRI, but do not include any measures that are proposed to be included as part of the 2011 Back Pain measures group ( see section VI.F.1.i.(5) of this proposed rule). Similar to the 2010 PQRI, for 2011, we propose that any 2011 PQRI
measures that are included in the Back Pain measures group would not be reportable as individual measures through claims-based reporting or registry-based reporting.

The 125 individual 2010 PQRI measures proposed for inclusion in the 2011 PQRI quality measure set as individual quality measures for either claims-based reporting or registry-based reporting are listed by their Measure Number and Title in Table 52, along

with the name of the measure’s developer/owner, and the NQF measure number, if applicable. The PQRI Measure Number is a unique identifier assigned by CMS to all measures in the PQRI measure set. Once a PQRI Measure Number is assigned to a measure, it will not be used again to identify a different measure, even if the original measure to which the number was assigned is subsequently retired from the PQRI measure set. A description of the

measures listed in Table 52 can be

found in the ‘‘ 2010 PQRI Quality
Measures List, ’’ which is available on the Measures and Codes page of the PQRI section of the CMS Web site at http://cms.gov/PQRI.

The 2010 measures that are proposed to be available for registry-based reporting only for the 2011 PQRI are

discussed and identified in section VI.F.1.i.(2) of this proposed rule.



### T ABLE 

### 52—P ROPOSED 

### 2011 M EASURES 

### S ELECTED 

### F ROM THE 

### 2010 PQRI Q UALITY 

### M EASURE 

### S ET 

### A VAILABLE FOR


### E ITHER 

### C LAIMS 

### -B ASED 

### R EPORTING OR 

### R EGISTRY 

### -B ASED 

### R EPORTING

Measure No. Measure title Measure developer NQF Measure No.

1 ......................... Diabetes Mellitus: Hemoglobin A1c Poor Control in Diabetes

Mellitus. NCQA ..................................... 0059.

2 ......................... Diabetes Mellitus: Low Density Lipoprotein (LDL–C) Control

in Diabetes Mellitus. NCQA ..................................... 0064.

3 ......................... Diabetes Mellitus: High Blood Pressure Control in Diabetes

Mellitus. NCQA ..................................... 0061.

6 ......................... Coronary Artery Disease (CAD): Oral Antiplatelet Therapy

Prescribed for Patients with CAD. AMA–PCPI ............................. 0067.

9 ......................... Major Depressive Disorder (MDD): Antidepressant Medication During Acute Phase for Patients with MDD. NCQA ..................................... 0105.

10 ....................... Stroke and Stroke Rehabilitation: Computed Tomography (CT) or Magnetic Resonance Imaging (MRI) Reports. AMA–PCPI/NCQA ................. 0246.


### 40187 Federal Register / Vol. 75, No. 133 / Tuesday, July 13, 2010 / Proposed Rules

T ABLE 

### 52—P ROPOSED 

### 2011 M EASURES 

### S ELECTED 

### F ROM THE 

### 2010 PQRI Q UALITY 

### M EASURE 

### S ET 

### A VAILABLE FOR


### E ITHER 

### C LAIMS 

### -B ASED 

### R EPORTING OR 

### R EGISTRY 

### -B ASED 

### R EPORTING 

### —Continued

Measure No. Measure title Measure developer NQF Measure No.

12 ....................... Primary Open Angle Glaucoma (POAG): Optic Nerve Evaluation. AMA–PCPI/NCQA ................. 0086.

14 ....................... Age-Related Macular Degeneration (AMD): Dilated Macular

Examination. AMA–PCPI/NCQA ................. 0087.

18 ....................... Diabetic Retinopathy: Documentation of Presence or Absence of Macular Edema and Level of Severity of Retinopathy. AMA–PCPI/NCQA ................. 0088.

19 ....................... Diabetic Retinopathy: Communication with the Physician Managing On-Going Diabetes Care. AMA–PCPI/NCQA ................. 0089.

20 ....................... Perioperative Care: Timing of Antibiotic Prophylaxis—Ordering Physician. AMA–PCPI/NCQA ................. 0270.

21 ....................... Perioperative Care: Selection of Prophylactic Antibiotic— First OR Second Generation Cephalosporin. AMA–PCPI/NCQA ................. 0268.

22 ....................... Perioperative Care: Discontinuation of Prophylactic Antibiotics (Non-Cardiac Procedures). AMA–PCPI/NCQA ................. 0271.

23 ....................... Perioperative Care: Venous Thromboembolism (VTE) Prophylaxis (When Indicated in ALL Patients). AMA–PCPI/NCQA ................. 0239.

24 ....................... Osteoporosis: Communication with the Physician ManagingOn-Going Care Post-Fracture of Hip, Spine or Distal Radius for Men and Women Aged 50 Years and Older. AMA–PCPI/NCQA ................. 0045.

28 ....................... Aspirin at Arrival for Acute Myocardial Infarction (AMI) ......... AMA–PCPI/NCQA ................. 0092. 30 ....................... Perioperative Care: Timely Administration of Prophylactic

Parenteral Antibiotics. AMA–PCPI/NCQA ................. 0270.

31 ....................... Stroke and Stroke Rehabilitation: Deep Vein Thrombosis Prophylaxis (DVT) for Ischemic Stroke or Intracranial Hemorrhage. AMA–PCPI/NCQA ................. 0240

32 ....................... Stroke and Stroke Rehabilitation: Discharged on Antiplatelet Therapy. AMA–PCPI/NCQA ................. 0325.

35 ....................... Stroke and Stroke Rehabilitation: Screening for Dysphagia AMA–PCPI/NCQA ................. 0243.

36 ....................... Stroke and Stroke Rehabilitation: Consideration of Rehabilitation Services. AMA–PCPI/NCQA ................. 0244.

39 ....................... Screening or Therapy for Osteoporosis for Women Aged 65

Years and Older. AMA–PCPI/NCQA ................. 0046.

40 ....................... Osteoporosis: Management Following Fracture of Hip, Spine or Distal Radius for Men and Women Aged 50

Years and Older. AMA–PCPI/NCQA ................. 0045.

41 ....................... Osteoporosis: Pharmacologic Therapy for Men and Women Aged 50 Years and Older. AMA–PCPI/NCQA ................. 0049.

43 ....................... Coronary Artery Bypass Graft (CABG): Use of Internal Mammary Artery (IMA) in Patients with Isolated CABG Surgery. Society of Thoracic Surgeons (STS). 0516 or 0134.

44 ....................... Coronary Artery Bypass Graft (CABG): Preoperative BetaBlocker in Patients with Isolated CABG Surgery. STS ........................................ 0127 or 0236.

45 ....................... Perioperative Care: Discontinuation of Prophylactic Antibiotics (Cardiac Procedures). AMA–PCPI/NCQA ................. 0637.

46 ....................... Medication Reconciliation: Reconciliation After Discharge From an Inpatient Facility. AMA–PCPI/NCQA ................. 0097.

47 ....................... Advance Care Plan ................................................................ AMA–PCPI/NCQA ........ ......... 0326. 48 ....................... Urinary Incontinence: Assessment of Presence or Absence of Urinary Incontinence in Women Aged 65 Years and

Older. AMA–PCPI/NCQA ................. 0098.

49 ....................... Urinary Incontinence: Characterization of Urinary Incontinence in Women Aged 65 Years and Older. AMA–PCPI/NCQA ................. 0099.

50 ....................... Urinary Incontinence: Plan of Care for Urinary Incontinence in Women Aged 65 Years and Older. AMA–PCPI/NCQA ................. 0100.

51 ....................... Chronic Obstructive Pulmonary Disease (COPD): Spirometry Evaluation. AMA–PCPI ............................. 0091.

52 ....................... Chronic Obstructive Pulmonary Disease (COPD): Bronchodilator Therapy. AMA–PCPI ............................. 0102.

53 ....................... Asthma: Pharmacologic Therapy ........................................... AMA–PCPI ...................... ....... 0047.54 ....................... 12–Lead Electrocardiogram (ECG) Performed for Non-Traumatic Chest Pain. AMA–PCPI/NCQA ................. 0090.

55 ....................... 12–Lead Electrocardiogram (ECG) Performed for Syncope AMA–PCPI/NCQA ................. 0093. 56 ....................... Community-Acquired Pneumonia (CAP): Vital Signs ............ AMA–PCPI/NCQA ................. 023257 ....................... Community-Acquired Pneumonia (CAP): Assessment of Oxygen Saturation. AMA–PCPI/NCQA ................. 0094.

58 ....................... Community-Acquired Pneumonia (CAP): Assessment of

Mental Status. AMA–PCPI/NCQA ................. 0234.

59 ....................... Community-Acquired Pneumonia (CAP): Empiric Antibiotic .. AMA–PCPI/NCQA ................. 0096.

64 ....................... Asthma: Asthma Assessment ................................................ AMA–PCPI ..................... ........ 0001.


### 40188 Federal Register / Vol. 75, No. 133 / Tuesday, July 13, 2010 / Proposed Rules

T ABLE 

### 52—P ROPOSED 

### 2011 M EASURES 

### S ELECTED 

### F ROM THE 

### 2010 PQRI Q UALITY 

### M EASURE 

### S ET 

### A VAILABLE FOR


### E ITHER 

### C LAIMS 

### -B ASED 

### R EPORTING OR 

### R EGISTRY 

### -B ASED 

### R EPORTING 

### —Continued

Measure No. Measure title Measure developer NQF Measure No.

65 ....................... Treatment for Children With Upper Respiratory Infection (URI): Avoidance of Inappropriate Use. NCQA ..................................... 0069.

66 ....................... Appropriate Testing for Children With Pharyngitis ................. NCQA ................................ ..... 0002. 67 ....................... Myelodysplastic Syndrome (MDS) and Acute Leukemias: Baseline Cytogenetic Testing Performed on Bone Marrow. AMA–PCPI/American Society of Hematology (ASH). 0377.

68 ....................... Myelodysplastic Syndrome (MDS): Documentation of Iron Stores in Patients Receiving Erythropoietin Therapy. AMA–PCPI/ASH .................... 0378.

69 ....................... Multiple Myeloma: Treatment With Bisphosphonates ............ AMA–PCPI/ASH .................... 0380. 70 ....................... Chronic Lymphocytic Leukemia (CLL): Baseline Flow Cytometry. AMA–PCPI/ASH .................... 0379.

71 ....................... Breast Cancer: Hormonal Therapy for Stage IC–IIIC Estrogen Receptor/Progesterone Receptor (ER/PR) Positive

Breast Cancer. AMA–PCPI/American Society of Clinical Oncology(ASCO)/National Comprehensive Cancer Network (NCCN). 0387.

72 ....................... Colon Cancer: Chemotherapy for Stage III Colon Cancer

Patients. AMA–PCPI/ASCO/NCCN ...... 0385.

76 ....................... Prevention of Catheter-Related Bloodstream Infections(CRBSI): Central Venous Catheter (CVC) Insertion Protocol. AMA–PCPI ............................. 0464.

79 ....................... End-Stage Renal Disease (ESRD): Influenza Immunization

in Patients with ESRD. AMA–PCPI ............................. 0227.

84 ....................... Hepatitis C: Ribonucleic Acid (RNA) Testing Before Initiating

Treatment. AMA–PCPI ............................. 0395.

85 ....................... Hepatitis C: HCV Genotype Testing Prior to Treatment ........ AMA–PCPI ............................. 0396. 86 ....................... Hepatitis C: Antiviral Treatment Prescribed ........................... AMA–PCPI ........................ ..... 0397. 87 ....................... Hepatitis C: HCV Ribonucleic Acid (RNA) Testing at Week

12 of Treatment. AMA–PCPI ............................. 0398.

89 ....................... Hepatitis C: Counseling Regarding Risk of Alcohol Consumption. AMA–PCPI ............................. 0401.

90 ....................... Hepatitis C: Counseling Regarding Use of Contraception Prior to Antiviral Therapy. AMA–PCPI ............................. 0394.

91 ....................... Acute Otitis Externa (ACE): Topical Therapy ........................ AMA–PCPI ............................. AQA adopted Currently under
NQF review. 92 ....................... Acute Otitis Externa (ACE): Pain Assessment ...................... AMA–PCPI ............................. AQA adopted Currently under
NQF review.93 ....................... Acute Otitis Externa (ACE): Systemic Antimicrobial Therapy—Avoidance of Inappropriate Use. AMA–PCPI ............................. AQA adopted Currently under
NQF review. 94 ....................... Otitis Media with Effusion (OME): Diagnostic Evaluation— Assessment of Tympanic Membrane Mobility. AMA–PCPI ............................. AQA adopted Currently under
NQF review. 99 ....................... Breast Cancer Resection Pathology Reporting: pT Category (Primary Tumor) and pN Category (Regional Lymph Nodes) With Histologic Grade. AMA–PCPI/College of American Pathologists (CAP). 0391.

100 ..................... Colorectal Cancer Resection Pathology Reporting: pT Category (Primary Tumor) and pN Category (Regional Lymph Nodes) With Histologic Grace. AMA–PCPI/CAP .................... 0392.

102 ..................... Prostate Cancer: Avoidance of Overuse of Bone Scan for Staging Low-Risk Prostate Cancer Patients. AMA–PCPI ............................. 0389.

104 ..................... Prostate Cancer: Adjuvant Hormonal Therapy for High-Risk

Prostate Cancer Patients. AMA–PCPI ............................. 0390.

105 ..................... Prostate Cancer: Three-Dimensional (3D) Radiotherapy ...... AMA–PCPI ............................. 0388. 106 ..................... Major Depressive Disorder (MDD): Diagnostic Evaluation .... AMA–PCPI ............................. 0103.107 ..................... Major Depressive Disorder (MDD): Suicide Risk Assessment. AMA–PCPI ............................. 0104.

108 ..................... Rheumatoid Arthritis (RA): Disease Modifying Anti-Rheumatic Drug (DMARD) Therapy. NCQA ..................................... 0054.

109 ..................... Osteoarthritis: Function and Pain Assessment ...................... AMA–PCPI ............................. 0050. 110 ..................... Preventive Care and Screening: Influenza Immunization for

Patients ≥ 50 Years Old. AMA–PCPI ............................. 0041.

111 ..................... Preventive Care and Screening: Pneumonia Vaccination for

Patients 65 Years and Older. NCQA ..................................... 0043.

112 ..................... Preventive Care and Screening: Screening Mammography NCQA ..................................... 0031.113 ..................... Preventive Care and Screening: Colorectal Cancer Screening. NCQA ..................................... 0034.

116 ..................... Antibiotic Treatment for Adults with Acute Bronchitis: Avoidance of Inappropriate Use. NCQA ..................................... 0058.

117 ..................... Diabetes Mellitus: Dilated Eye Exam in Diabetic Patient ...... NCQA ..................................... 0 055. 119 ..................... Diabetes Mellitus: Urine Screening for Microalbumin or Medical Attention for Nephropathy in Diabetic Patients. NCQA ..................................... 0062.


### 40189 Federal Register / Vol. 75, No. 133 / Tuesday, July 13, 2010 / Proposed Rules

T ABLE 

### 52—P ROPOSED 

### 2011 M EASURES 

### S ELECTED 

### F ROM THE 

### 2010 PQRI Q UALITY 

### M EASURE 

### S ET 

### A VAILABLE FOR


### E ITHER 

### C LAIMS 

### -B ASED 

### R EPORTING OR 

### R EGISTRY 

### -B ASED 

### R EPORTING 

### —Continued

Measure No. Measure title Measure developer NQF Measure No.

121 ..................... Chronic Kidney Disease (CKD): Laboratory Testing (Calcium, Phosphorous, Intact Parathyroid Hormone (iPTH) and Lipid Profile). AMA–PCPI ............................. Combined: 0570, 0571, 0572,

0626.

122 ..................... Chronic Kidney Disease (CKD): Blood Pressure Management. AMA–PCPI ............................. AQA adopted.

123 ..................... Chronic Kidney Disease (CKD): Plan of Care—Elevated Hemoglobin for Patients Receiving Erythropoiesis-Stimulating Agents (ESA). AMA–PCPI ............................. AQA adopted.

124 ..................... Health Information Technology (HIT): Adoption/Use of Electronic Health Records (EHR). CMS/Quality Insights of Pennsylvania (QIP). 0488.

126 ..................... Diabetes Mellitus: Diabetic Foot and Ankle Care, Peripheral Neuropathy—Neurological Evaluation. American Podiatric Medical Association (APMA). 0417.

127 ..................... Diabetes Mellitus: Diabetic Foot and Ankle Care, Ulcer Prevention—Evaluation of Footwear. APMA ..................................... 0416.

128 ..................... Preventive Care and Screening: Body Mass Index (BMI) Screening and Follow-Up. CMS/QIP ................................ 0421.

130 ..................... Documentation and Verification of Current Medications in

the Medical Record. CMS/QIP ................................ 0419.

131 ..................... Pain Assessment Prior to Initiation of Patient Therapy and Follow-Up. CMS/QIP ................................ 0420.

134 ..................... Screening for Clinical Depression and Follow-Up Plan ......... CMS/QIP ................................ 041 8. 140 ..................... Age-Related Macular Degeneration (AMD): Counseling on Antioxidant Supplement. AMA–PCPI/NCQA ................. 0566.

141 ..................... Primary Open-Angle Glaucoma (POAG): Reduction of Intraocular Pressure (IOP) by 15% OR Documentation of Plan

of Care. AMA–PCPI/NCQA ................. 0563.

142 ..................... Osteoarthritis (OA): Assessment for Use of Anti-Inflammatory or Analgesic Over-the-Counter (OTC) Medications. AMA–PCPI ............................. 0051.

145 ..................... Radiology: Exposure Time Reported for Procedures Using Fluoroscopy. AMA–PCPI/NCQA ................. 0510.

146 ..................... Radiology: Inappropriate Use of ‘‘ Probably Benign ’’ Assessment Category in Mammography Screening. AMA–PCPI/NCQA ................. 0508.

147 ..................... Nuclear Medicine: Correlation With Existing Imaging Studies for All Patients Undergoing Bone Scintigraphy. AMA–PCPI ............................. 0511.

153 ..................... Chronic Kidney Disease (CKD): Referral for Arteriovenous (AV) Fistula. AMA–PCPI ............................. AQA adopted.

154 ..................... Falls: Risk Assessment .......................................................... AMA–PCPI/NCQA ................. AQA adopted. 155 ..................... Falls: Plan of Care ................................................................. AMA–PCPI/NCQA ................. AQA adopted. 156 ..................... Oncology: Radiation Dose Limits to Normal Tissues ............ AMA–PCPI ............................. 0382157 ..................... Thoracic Surgery: Recording of Clinical Stage for Lung Cancer and Esophageal Cancer Resection. STS ........................................ 0455.

158 ..................... Carotid Endarterectomy: Use of Patch During Conventional Carotid Endarterectomy. Society of Vascular Surgeons (SVS). 0466.

163 ..................... Diabetes Mellitus: Foot Exam ................................................ NCQA ....................... .............. 0056. 172 ..................... Hemodialysis Vascular Access Decision-Making by Surgeon To Maximize Placement of Autogenous Arterial Venous (AV) Fistula. SVS ........................................ 0259.

173 ..................... Preventive Care and Screening: Unhealthy Alcohol Use— Screening. AMA–PCPI ............................. AQA adopted.

175 ..................... Pediatric End-Stage Renal Disease (ESRD): Influenza Immunization. AMA–PCPI ............................. AQA adopted.

176 ..................... Rheumatoid Arthritis (RA): Tuberculosis Screening .............. AMA–PCPI/NCQA ................. AQA adopte d. 177 ..................... Rheumatoid Arthritis (RA): Periodic Assessment of Disease Activity. AMA–PCPI/NCQA ................. AQA adopted.

178 ..................... Rheumatoid Arthritis (RA): Functional Status Assessment ... AMA–PCPI/NCQA ................. AQA adopted. 179 ..................... Rheumatoid Arthritis (RA): Assessment and Classification of Disease Prognosis. AMA–PCPI/NCQA ................. AQA adopted.

180 ..................... Rheumatoid Arthritis (RA): Glucocorticoid Management ....... AMA–PCPI/NCQA ................. AQA adopted. 181 ..................... Elder Maltreatment Screen and Follow-Up Plan ................... CMS/QIP ................................ AQA adopted. 182 ..................... Functional Outcome Assessment in Chiropractic Care ......... CMS/QIP ................................ AQA a dopted. 183 ..................... Hepatitis C: Hepatitis A Vaccination in Patients with HCV .... AMA–PCPI ............................. 0399. 184 ..................... Hepatitis C: Hepatitis B Vaccination in Patients with HCV .... AMA–PCPI ............................. 0400. 185 ..................... Endoscopy & Polyp Surveillance: Colonoscopy Interval forPatients With a History of Adenomatous Polyps—Avoidance of Inappropriate Use. AMA–PCPI/NCQA ................. AQA adopted Currently under
NQF review.

186 ..................... Wound Care: Use of Compression System in Patients With

Venous Ulcers. AMA–PCPI/NCQA ................. AQA adopted.

188 ..................... Referral for Otologic Evaluation for Patient With Congenital or Traumatic Deformity of the Ear. Audiology Quality Consortium (AQC). Not applicable.


### 40190 Federal Register / Vol. 75, No. 133 / Tuesday, July 13, 2010 / Proposed Rules

T ABLE 

### 52—P ROPOSED 

### 2011 M EASURES 

### S ELECTED 

### F ROM THE 

### 2010 PQRI Q UALITY 

### M EASURE 

### S ET 

### A VAILABLE FOR


### E ITHER 

### C LAIMS 

### -B ASED 

### R EPORTING OR 

### R EGISTRY 

### -B ASED 

### R EPORTING 

### —Continued

Measure No. Measure title Measure developer NQF Measure No.

189 ..................... Referral for Otologic Evaluation for Patient With History of Active Drainage From the Ear Within the Previous 90 days. AQC ....................................... Not applicable.

190 ..................... Referral for Otologic Evaluation for Patient With a History of Sudden or Rapidly Progessive Hearing Loss. AQC ....................................... Not applicable.

193 ..................... Perioperative Temperature Management .............................. AMA–PCPI ............................. 0454. 194 ..................... Oncology: Cancer Stage Documented .................................. AMA–PCPI/ASCO .................. 0386. 195 ..................... Stenosis Measurement in Carotid Imaging Studies ............... AMA–PCPI/NCQA ................. 0507.201 ..................... Ischemic Vascular Disease (IVD): Blood Pressure Management Control. NCQA ..................................... 0084.

202 ..................... Ischemic Vascular Disease (IVD): Complete Lipid Profile ..... NCQA ..................................... 00 73. 203 ..................... Ischemic Vascular Disease (IVD): Low Density Lipoprotein (LDL–C) Control. NCQA ..................................... 0075.

204 ..................... Ischemic Vascular Disease (IVD): Use of Aspirin or Another

Anti-thrombotic. NCQA ..................................... 0068

It is our understanding that measures #188, #189, and #190 were considered by NQF for possible endorsement but were not ultimately NQF-endorsed. However, since we are not aware of any other NQF-endorsed measures that are available to audiologists, we propose to exercise our exception authority under section 1848(k)(2)(C)(ii) of the Act. Therefore, we propose to use measures #188, #189, and #190 for the 2011 PQRI despite the fact that they are neither NQF-endorsed nor AQA adopted.

Please note that detailed measure specifications, including the measure’s title, for 2010 individual PQRI quality measures may have been updated or modified during the NQF endorsement process or for other reasons prior to 2011. The 2011 PQRI quality measure specifications for any given individual quality measure may, therefore, be different from specifications for the same quality measure used for 2010. Specifications for all 2011 individual PQRI quality measures, whether or not included in the 2010 PQRI program, must be obtained from the specifications document for 2011 individual PQRI quality measures, which will be available on the PQRI section of the
CMS Web site on or before December

31, 2010.

(2) Proposed 2011 Individual Quality Measures Selected From the 2010 PQRI Quality Measures Set Available for Registry-Based Reporting Only

For the 2011 PQRI, we propose to include 45 registry-only individual measures from the 2010 PQRI. As in 2010 PQRI, we are proposing todesignate these measures as registryonly measures for 2011 to relieve ongoing analytical difficulties
encountered with claims-based reporting of these measures in prior program years. We encourage comments on our proposal to designate these 45 2010 measures as registry-only measures for the 2011 PQRI.

Although we are proposing todesignate certain measures as registryonly measures for 2011, we cannot guarantee that there will be a registry qualified to submit each registry-only measure for 2011. We rely on registries to self-nominate and identify the types of measures for which they would like to be qualified to submit quality

measures results and numerator and denominator data on quality measures. If no registry self-nominates to submit

measure results and numerator and denominator data on a particular type of measure for 2011, then an EP would not be able to report that particular measure type via a registry. The Measure Number and Measure Title for these proposed registry-only measures are listed in Table 53 along with the NQF measure number, if applicable, and the name of the measure’s developer/owner. As mentioned above, a description of the

measures listed in Table 53 can be

found in the ‘‘ 2010 PQRI Quality
Measures List, ’’ which is available on the Measures and Codes page of the PQRI section of the CMS Web site at http://www.cms.gov/PQRI.



### T ABLE 

### 53: 2011 P ROPOSED 

### M EASURES 

### S ELECTED 

### F ROM THE 

### 2010 PQRI Q UALITY 

### M EASURE 

### S ET 

### A VAILABLE FOR


### R EGISTRY 

### -B ASED 

### R EPORTING 

### O NLY

Measure No. Measure title Measure developer NQF Measure No.

5 ......................... Heart Failure: Angiotensin-Converting Enzyme (ACE) Inhibitor or Angiotensin Receptor Blocker (ARB) Therapy for Left Ventricular Systolic Dysfunction (LVSD). AMA–PCPI ............................. 0081.

7 ......................... Coronary Artery Disease (CAD): Beta-Blocker Therapy for CAD Patients With Prior Myocardial Infarction (MI). AMA–PCPI ............................. 0070.

8 ......................... Heart Failure: Beta-Blocker Therapy for Left Ventricular Systolic Dysfunction (LVSD). AMA–PCPI ............................. 0083.

33 ....................... Stroke and Stroke Rehabilitation: Anticoagulant Therapy Prescribed for Atrial Fibrillation at Discharge. AMA–PCPI/NCQA ................. 0241.

81 ....................... End-Stage Renal Disease (ESRD): Plan of Care for Inadequate Hemodialysis in ESRD Patients. AMA–PCPI ............................. 0323.

82 ....................... End-Stage Renal Disease (ESRD): Plan of Care for Inadequate Peritoneal Dialysis. AMA–PCPI ............................. 0321

83 ....................... Hepatitis C: Testing for Chronic Hepatitis C—Confirmation of Hepatitis C Viremia. AMA–PCPI ............................. 0393.


### 40191 Federal Register / Vol. 75, No. 133 / Tuesday, July 13, 2010 / Proposed Rules

T ABLE 

### 53: 2011 P ROPOSED 

### M EASURES 

### S ELECTED 

### F ROM THE 

### 2010 PQRI Q UALITY 

### M EASURE 

### S ET 

### A VAILABLE FOR


### R EGISTRY 

### -B ASED 

### R EPORTING 

### O NLY 

### —Continued

Measure No. Measure title Measure developer NQF Measure No.

118 ..................... Coronary Artery Disease (CAD): Angiotensin-Converting Enzyme (ACE) Inhibitor or Angiotensin Receptor Blocker (ARB) Therapy for Patients With CAD and Diabetes and/ or Left Ventricular Systolic Dysfunction (LSVD). AMA–PCPI ............................. 0066.

137 ..................... Melanoma: Continuity of Care—Recall System ..................... AMA–PCPI/NCQA ................. 0650.
138 ..................... Melanoma: Coordination of Care ........................................... AMA–PCPI/NCQA ................. 0561. 143 ..................... Oncology: Medical and Radiation—Pain Intensity Quantified AMA–PCPI ............................. 0384. 144 ..................... Oncology: Medical and Radiation—Plan of Care for Pain .... AMA–PCPI ............................. 0383. 159 ..................... HIV/AIDS: CD4+ Cell Count or CD4+ Percentage ................ AMA–PCPI/NCQA ................. 0404.160 ..................... HIV/AIDS: Pneumocystis Jiroveci Pneumonia (PCP) Prophylaxis. AMA–PCPI/NCQA ................. 0405.

161 ..................... HIV/AIDS: Adolescent and Adult Patients With HIV/AIDS Who Are Prescribed Potent Antiretroviral Therapy. AMA–PCPI/NCQA ................. 0406.

162 ..................... HIV/AIDS: HIV RNA Control After Six Months of Potent Antiretroviral Therapy. AMA–PCPI/NCQA ................. 0407.

164 ..................... Coronary Artery Bypass Graft (CABG): Prolonged Intubation (Ventilation). STS ........................................ 0129.

165 ..................... Coronary Artery Bypass Graft (CABG): Deep Sternal

Wound Infection Rate. STS ........................................ 0130.

166 ..................... Coronary Artery Bypass Graft (CABG): Stroke/Cerebrovascular Accident (CVA). STS ........................................ 0131.

167 ..................... Coronary Artery Bypass Graft (CABG): Postoperative Renal Insufficiency. STS ........................................ 0114.

168 ..................... Coronary Artery Bypass Graft (CABG): Surgical Re-Exploration. STS ........................................ 0115.

169 ..................... Coronary Artery Bypass Graft (CABG): Antiplatelet Medications at Discharge. STS ........................................ 0116.

170 ..................... Coronary Artery Bypass Graft (CABG): Beta-Blockers Administered at Discharge. STS ........................................ 0117.

171 ..................... Coronary Artery Bypass Graft (CABG): Lipid Management and Counseling. STS ........................................ 0118.

174 ..................... Pediatric End-Stage Renal Disease (ESRD): Plan of Care for Inadequate Hemodialysis. AMA–PCPI ............................. AQA adopted Currently under
NQF review. 187 ..................... Stroke and Stroke Rehabilitation: Thrombolytic Therapy ...... AHA/ASA/ ..............................

TJC ........................................ 0437.

191 ..................... Cataracts: 20/40 or Better Visual Acuity Within 90 Days Following Cataract Surgery. AMA–PCPI/NCQA ................. 0565.

192 ..................... Cataracts: Complications Within 30 Days Following Cataract Surgery Requiring Additional Surgical Procedures. AMA–PCPI/NCQA ................. 0564.

196 ..................... Coronary Artery Disease (CAD): Symptom and Activity Assessment. AMA–PCPI ............................. 0065.

197 ..................... Coronary Artery Disease (CAD): Drug Therapy for Lowering

LDL–Cholesterol. AMA–PCPI ............................. 0074.

198 ..................... Heart Failure: Left Ventricular Function (LVF) Assessment .. AMA–PCPI ............................. 0079.

199 ..................... Heart Failure: Patient Education ............................................ AMA–PCPI ................... .......... 0082.200 ..................... Heart Failure: Warfarin Therapy Patients With Atrial Fibrillation. AMA–PCPI ............................. 0084.

205 ..................... HIV/AIDS: Sexually Transmitted Disease Screening for Chlamydia and Gonorrhea. AMA–PCPI/NCQA ................. 0409.

206 ..................... HIV/AIDS: Screening for High Risk Sexual Behaviors .......... AMA–PCPI/NCQA ................. 0413. 207 ..................... HIV/AIDS: Screening for Injection Drug Use ......................... AMA–PCPI/NCQA ................. 0415. 208 ..................... HIV/AIDS: Sexually Transmitted Disease Screening for Syphilis. AMA–PCPI/NCQA ................. 0410.

209 ..................... Functional Communication Measure—Spoken Language Comprehension. American Speech Language Haring Association (ASHA). 0445.

210 ..................... Functional Communication Measure—Attention .................... ASHA ..................................... 0449. 211 ..................... Functional Communication Measure—Memory ..................... ........................................... 0448. 212 ..................... Functional Communication Measure—Motor Speech ........... ASHA ..................................... 0447. 213 ..................... Functional Communication Measure—Reading ..................... ASHA ..................................... 0 446. 214 ..................... Functional Communication Measure—Spoken Language Expression. ASHA ..................................... 0444.

215 ..................... Functional Communication Measure—Writing ....................... ASHA .................................... . 0442. 216 ..................... Functional Communication Measure—Swallowing ................ ASHA ..................................... 044 3.

Please note, as previously discussed above, detailed measure specifications, including a measure’s title, for 2010 PQRI quality measures may be updated or modified during the NQF endorsement process or for other reasons during 2010. Therefore, the 2011 PQRI quality measure specifications for any given quality measure may be different from specifications for the same quality measure used for 2010. Specifications


### 40192 Federal Register / Vol. 75, No. 133 / Tuesday, July 13, 2010 / Proposed Rules

for all 2011 individual PQRI quality measures, whether or not included in the 2010 PQRI program, must be obtained from the specifications document for 2011 individual PQRI quality measures, which will be available on the PQRI section of the
CMS Web site on or before December

31, 2010.

(3) New Individual Quality Measures Proposed for 2011

We propose to include in the 2011 PQRI quality measure set 20 measures that were not included in the 2010 PQRI quality measures set provided that each measure obtains NQF endorsement by June 1, 2010 and its detailed specifications are completed and ready for implementation in PQRI by August 15, 2010. Besides having NQF endorsement, we again propose that the development of a measure is considered complete for the purposes of the 2011 PQRI if by August 15, 2010: (1) The final, detailed specifications for use in data collection for PQRI have been completed and are ready for implementation, and (2) all of the Category II Current Procedural Terminology (CPT II) codes required for

the measure have been established and

will be effective for CMS claims data submission on or before January 1, 2011. The titles of these proposed additional, or new, measures are listed in Table 54 along with the name of the measure developer and the proposed reporting mechanism (that is, whether the measure is proposed to be reportable using claims, registries, or both). For these 20 proposed measures, a PQRI Measure Number will be assigned to a

measure if and when the measure is included in the final set of 2011 PQRI

measures.

Due to the complexity of their measure specifications, we propose that

8 of these 20 measures would be available as registry-only measures for the 2011 PQRI. The remaining 15 measures are proposed to be availablefor reporting through either claimsbased reporting or registry-based reporting.



### T ABLE 

### 54—N EW 

### I NDIVIDUAL 

### Q UALITY 

### M EASURES 

### P ROPOSED FOR 

### 2011

Measure title NQF Measure number Measure developer Reporting mechanism(s)

Change in Risk-Adjusted Functional Status for Patients

With Knee Impairments. 0422 ...................................... FOTO .................................... Registry.

Change in Risk-Adjusted Functional Status for Patients

With Hip Impairments. 0423 ...................................... FOTO .................................... Registry.

Change in Risk-Adjusted Functional Status for Patients

With Lower Leg, Foot or Ankle Impairments. 0424 ...................................... FOTO .................................... Registry.

Change in Risk-Adjusted Functional Status for Patients

With Lumbar Spine Impairments. 0425 ...................................... FOTO .................................... Registry.

Change in Risk-Adjusted Functional Status for Patients

With Shoulder Impairments. 0426 ...................................... FOTO .................................... Registry.

Change in Risk-Adjusted Functional Status for Patients

With Elbow, Wrist or Hand Impairments. 0427 ...................................... FOTO .................................... Registry.

Change in Risk-Adjusted Functional Status for Patients

With a Functional Deficit of the Neck, Cranium, Mandible, Thoracic Spine, Ribs or Other General Orthopedic Impairment. 0428 ...................................... FOTO .................................... Registry.

Care Transitions: Reconciled Medication List Received by

Discharged Patients (Inpatient Discharges to Home/Self Care or Any Other Site of Care). Currently under NQF review Society of Hospital Medicine (SMH) AMA–PCPI/NCQA. Claims, Registry.

Care Transitions: Transition Record with Specified Elements Received by Discharged Patients (Inpatient Discharges to Home/Self Care or Any Other Site of Care). Currently under NQF review Society of Hospital Medicine (SMH) AMA–PCPI/NCQA. Claims, Registry.

Care Transitions: Timely Transmission of Transition Record

(Inpatient Discharges to Home/Self Care or Any Other Site of Care). Currently under NQF review Society of Hospital Medicine (SMH) AMA–PCPI/NCQA. Claims, Registry.

Care Transitions: Transition Record with Specified Elements Received by Discharged Patients (Emergency Department Discharges to Ambulatory Care [Home/Self Care] or Home Health Care). Currently under NQF review Society of Hospital Medicine (SMH) AMA–PCPI/NCQA. Claims, Registry.

Hypertension (HTN): Plan of Care ....................................... 0017 ...................................... AMA–PCPI ............................ Claims, Registry. Heart Failure (HF): Left Ventricular Function (LVF) Testing 79 .......................................... CMS .................... .................. Registry. Melanoma: Overutilization of Imaging Studies in Stage 0–

IA Melanoma. 0562 ...................................... AMA–PCPI ............................ Claims, Registry.

Radiology: Reminder System for Mammograms .................. 0509 ...................................... AMA–PCPI ............................ Claims, Registry.Asthma: Assessment of Asthma Risk—Emergency Department/Inpatient Setting. Currently under NQF review AMA–PCPI ............................ Claims, Registry.

Asthma: Discharge Plan—Emergency Department/Inpatient

Setting. Currently under NQF review AMA–PCPI ............................ Claims, Registry.

Preventive Care and Screening: Tobacco Use: Screening

and Cessation Intervention. 0028 ...................................... AMA–PCPI ............................ Claims, Registry.

Recording of Performance Status Prior to Lung or Esophageal Cancer Resection. 0457 ...................................... Society of Thoracic Surgery (STS). Claims, Registry.

Pulmonary Function Tests Before Major Anatomic Lung

Resection. 0458 ...................................... Society of Thoracic Surgery (STS). Claims, Registry.

These measures are being proposed for the 2011 PQRI because they meet one or more of the considerations for measure selection discussed in section VI.F.1.h. of this proposed rule.


### 40193 Federal Register / Vol. 75, No. 133 / Tuesday, July 13, 2010 / Proposed Rules

(4) Proposed 2011 Measures Available for EHR-Based Reporting

For 2011, we propose to again accept PQRI data from EHRs for a limited subset of the proposed 2011 PQRI quality measures, contingent upon the successful completion of our 2010 EHR data submission process and a determination that accepting data from EHRs on quality measures for the 2011 PQRI continues to be practical and
feasible.

We propose to make a total of 22
measures available for EHR-based reporting in the 2010 PQRI. These
include the 10 measures available for EHR-based reporting in the 2010 PQRI,
which are identified in Table 55 and 12
additional measures identified in Table 56 that overlap with the clinical quality
measures used in the EHR incentive program established by the American Recovery and Reinvestment Act (ARRA). Again, this year, we propose to
make these measures available for
electronic submission via an EHR because these measures target preventive care or common chronic and high-cost conditions.



### T ABLE 

### 55—P ROPOSED 

### 2011 M EASURES 

### A VAILABLE FOR 

### EHR-B ASED 

### R EPORTING 

### F ROM 

### 2010 PQRI

Measure No. Measure title Measure developer NQF Measure No.

1 ........................ Diabetes Mellitus: Hemoglobin A1c Poor Control in Diabetes

Mellitus. NCQA ........................................... 0059.

2 ........................ Diabetes Mellitus: Low Density Lipoprotein (LDL–C) Control in Diabetes Mellitus. NCQA ........................................... 0064.

3 ........................ Diabetes Mellitus: High Blood Pressure Control in Diabetes Mellitus NCQA .............................. ............. 0061. 5 ........................ Heart Failure: Angiotensin-Converting Enzyme (ACE) Inhibitor or Angiotensin Receptor Blocker (ARB) Therapy for Left Ventricular Systolic Dysfunction (LVSD). AMA–PCPI ................................... 0081.

7 ........................ Coronary Artery Disease (CAD): Beta-Blocker Therapy for CAD Patients with Prior Myocardial Infarction (MI). AMA–PCPI ................................... 0070.

110 .................... Preventive Care and Screening: Influenza Immunization for Patients ≥ 50 Years Old. AMA–PCPI ................................... 0041.

111 .................... Preventive Care and Screening: Pneumonia Vaccination for Patients 65 Years and Older. NCQA ........................................... 0043.

112 .................... Preventive Care and Screening: Screening Mammography ............. NCQA ................................... ........ 0031. 113 .................... Preventive Care and Screening: Colorectal Cancer Screening ........ NCQA .................................. ......... 0034. 124 .................... Health Information Technology (HIT): Adoption/Use of Electronic Health Records (EHR). CMS/QIP ...................................... 0488.



### T ABLE 

### 56: P ROPOSED 

### 2011 M EDICARE 

### ARRA—HITECH M EASURES 

### A VAILABLE FOR 

### EHR-B ASED 

### R EPORTING

Measure No. Measure title Measure developer NQF Measure No.

TBD ................... Hypertension (HTN): Blood Pressure Measurement ......................... AMA–PCPI .......................... ......... 0013. 128 .................... Preventive Care and Screening: Body Mass Index (BMI) Screening and Follow-Up. CMS/Quality Insights of Pennsylvania. 0421.

TBD ................... Preventive Care and Screening: Tobacco Use: Screening and Cessation Intervention. AMA–PCPI ................................... 0028.

TBD ................... Childhood Immunization Status ......................................................... NCQA ............... ............................ 0038. TBD ................... Body Mass Index (BMI) 2 Through 18 Years of Age ........................ National Initiative for Children’s Healtcare Quality. 0024.

39 ...................... Screening or Therapy for Osteoporosis for Women Aged 65 Years

and Older. AMA–PCPI/NCQA ....................... 0046.

47 ...................... Advance Care Plan ............................................................................ AMA–PCPI/N CQA ....................... 0326.48 ...................... Urinary Incontinence: Assessment of Presence or Absence of Urinary Incontinence in Women Aged 65 Years and Older. AMA–PCPI/NCQA ....................... 0098.

173 .................... Preventive Care & Screening: Unhealthy Alcohol Use—Screening .. AMA–PCPI ................................... AQA Adopted. TBD ................... Drugs To Be Avoided in the Elderly .................................................. NCQA ................. .......................... 0022. 41 ...................... Osteoporosis: Pharmacologic Therapy for Men and Women Aged

50 Years and Older. ...................................................... 0049.

142 .................... Osteoarthritis: Assessment of Use of Anti-Inflammatory or Analgesic OTC Meds. AMA–PCPI ................................... 0051.

(5) Measures Proposed for Inclusion in 2011 Measures Groups

We propose to retain the following 13 2010 PQRI measures groups for the 2011 PQRI: (1) Diabetes Mellitus; (2) CKD; (3) Preventive Care; (4) CABG; (5) Rheumatoid Arthritis; (6) Perioperative Care; (7) Back Pain; (8) CAD; (9) Heart Failure; (10) IVD; (11) Hepatitis C; (12) HIV/AIDS; and (13) CAP. We are proposing to include these measures groups in 2011 PQRI because they each contain at least 4 PQRI quality measures
that share a common denominator
definition.

For 2011, we propose that the CABG, CAD, Heart Failure, HIV/AIDS measures groups continue to be reportable through the registry-based reporting mechanism only, while the remaining Diabetes Mellitus, CKD, Preventive Care, Rheumatoid Arthritis, Perioperative Care, Back Pain, IVD, Hepatitis C, and CAP measures groups will continue to be reportable througheither claims-based reporting or registrybased reporting for the 2011 PQRI. The 4 2011 proposed measures groups reportable via registry-based reporting only are identified with an asterisk (*)

below.


### 40194 Federal Register / Vol. 75, No. 133 / Tuesday, July 13, 2010 / Proposed Rules

For 2010, the 13 measures groups that we propose to retain in the 2011 PQRI,

combined with the one additional measures group we are proposing for 2011, makes a total of 14 measures groups for the 2011 PQRI. The 1 additional measures group we propose for the 2011 PQRI, identified in Table 70, is an Asthma Measures Group. The Asthma Measures Group is proposed tobe reportable through either claimsbased reporting or registry-based reporting.

We believe that the measure groups proposed for the 2011 PQRI address gaps in quality reporting and are those that have a high impact on HHS and CMS priority topics for improved quality and efficiency for Medicare beneficiaries (such as prevention, chronic conditions, improved care coordination, improved efficiency, improved patient and family experience of care, and effective management of acute and chronic episodes).

Finally, as in previous program years, for 2011, we continue to propose that except for the measures included in the Back Pain measures group, the measures included in any proposed 2011 measures group be reportable either as individual measures or as part of a measures group. For 2011, we propose that the measures proposed for
inclusion in the Back Pain measures group will continue to be reportable only as part of a measures group and not
as individual measures in 2011. We propose that measures selected for inclusion in all 2011 PQRI measures groups (except for the Back Pain measures group) are reportable either as individual measures or as part of a

measures group.

The measures proposed for inclusion in each of the 2011 measures groups are identified in Tables 57 through 70. As stated previously, the PQRI Measure Number is a unique identifier assigned by CMS to all measures in the PQRI measure set. Once a PQRI Measure Number is assigned to a measure, it will not be used again, even if the measure is subsequently retired from the PQRI

measure set. Measures that are not preceded by a number (in other words, those preceded by ‘‘ TBD ’’ ) in Tables 57 through 71 were never part of a PQRI measure set prior to 2011. A number will be assigned to such measures for 2011, if we finalize inclusion of the measures in the 2011 PQRI.

As with measures group reporting in the 2008, 2009, and 2010 PQRI, we propose that each EP electing to report a group of measures for 2011 must report all measures in the group that are applicable to each patient or encounter to which the measures group applies at least up to the minimum number of patients required by the applicable reporting criteria.



### T ABLE 

### 57—M EASURES 

### P ROPOSED FOR 

### 2011 D IABETES 

### M ELLITUS 

### M EASURES 

### G ROUP

Measure No. Measure Title NQF Measure No. Measure developer

1 ........................ Diabetes Mellitus: Hemoglobin A1c Poor Control in Diabetes

Mellitus. 0059 ............................................. NCQA.

2 ........................ Diabetes Mellitus: Low Density Lipoprotein (LDL–C) Control in Diabetes Mellitus. 0064 ............................................. NCQA.

3 ........................ Diabetes Mellitus: High Blood Pressure Control in Diabetes Mellitus 0061 .............................. ............... NCQA. 117 .................... Diabetes Mellitus: Dilated Eye Exam in Diabetic Patient .................. 0055 ........................... .................. NCQA.119 .................... Diabetes Mellitus: Urine Screening for Microalbumin or Medical Attention for Nephropathy in Diabetic Patients. 0062 ............................................. NCQA.

163 .................... Diabetes Mellitus: Foot Exam ............................................................ 0056 ............ ................................. NCQA.



### T ABLE 

### 58—M EASURES 

### P ROPOSED FOR 

### 2011 CKD M EASURES 

### G ROUP

Measure No. Measure Title NQF Measure No. Measure developer

121 .................... Chronic Kidney Disease (CKD): Laboratory Testing (Calcium,Phosphorus, Intact Parathyroid Hormone (iPTH) and Lipid Profile). 0570, 0571, 0572, 0626 .............. AMA–PCPI.

122 .................... Chronic Kidney Disease (CKD): Blood Pressure Management ........ AQA adopted .............................. . AMA–PCPI.123 .................... Chronic Kidney Disease (CKD): Plan of Care—Elevated Hemoglobin for Patients Receiving Erythropoiesis-Stimulating Agents (ESA). AQA adopted ............................... AMA–PCPI.

153 .................... Chronic Kidney Disease (CKD): Referral for Arteriovenous (AV)

Fistula. AQA adopted ............................... AMA–PCPI.



### T ABLE 

### 59—M EASURES 

### P ROPOSED FOR 

### 2011 P REVENTIVE 

### C ARE 

### M EASURES 

### G ROUP

Measure No. Measure title NQF Measure No. Measure developer

39 ...................... Screening or Therapy for Osteoporosis for Women Aged 65 Years

and Older. 0046 ............................................. AMA–PCPI/NCQA.

48 ...................... Urinary Incontinence: Assessment of Presence or Absence of Urinary Incontinence in Women Aged 65 Years and Older. 0098 ............................................. AMA–PCPI/NCQA.

110 .................... Preventive Care and Screening: Influenza Immunization for Patients ≥ 50 Years Old. 0041 ............................................. AMA–PCPI.

111 .................... Preventive Care and Screening: Pneumonia Vaccination for Patients 65 Years and Older. 0043 ............................................. NCQA.

112 .................... Preventive Care and Screening: Screening Mammography ............. 0031 ................................... .......... NCQA. 113 .................... Preventive Care and Screening: Colorectal Cancer Screening ........ 0034 .................................. ........... NCQA. 128 .................... Preventive Care and Screening: Body Mass Index (BMI) Screening and Follow-Up. 0421 ............................................. CMS/QIP.

173 .................... Preventive Care and Screening: Unhealthy Alcohol Use—Screening. AQA adopted ............................... AMA–PCPI.


### 40195 Federal Register / Vol. 75, No. 133 / Tuesday, July 13, 2010 / Proposed Rules

T ABLE 

### 59—M EASURES 

### P ROPOSED FOR 

### 2011 P REVENTIVE 

### C ARE 

### M EASURES 

### G ROUP 

### —Continued

Measure No. Measure title NQF Measure No. Measure developer

TBD ................... Preventive Care and Screening: Tobacco Use: Screening and Cessation Intervention. 0028 ............................................. AMA–PCPI.



### T ABLE 

### 60—M EASURES 

### P ROPOSED FOR 

### 2011 CABG M EASURES 

### G ROUP 

### *

Measure No. Measure title NQF Measure No. Measure developer

43 ...................... Coronary Artery Bypass Graft (CABG): Use of Internal Mammary Artery (IMA) in Patients with Isolated CABG Surgery. 0516, 0134 ................................... Society of Thoracic Surgeons (STS). 44 ...................... Coronary Artery Bypass Graft (CABG): Preoperative Beta-Blocker in Patients with Isolated CABG Surgery. 0127, 0236 ................................... STS.

164 .................... Coronary Artery Bypass Graft (CABG): Prolonged Intubation (Ventilation). 0129 ............................................. STS.

165 .................... Coronary Artery Bypass Graft (CABG): Deep Sternal Wound Infection Rate. 0130 ............................................. STS.

166 .................... Coronary Artery Bypass Graft (CABG): Stroke/Cerebrovascular Accident (CVA). 0131 ............................................. STS.

167 .................... Coronary Artery Bypass Graft (CABG): Postoperative Renal Insufficiency. 0114 ............................................. STS.

168 .................... Coronary Artery Bypass Graft (CABG): Surgical Re-exploration ...... 0115 .................................. ........... STS. 169 .................... Coronary Artery Bypass Graft (CABG): Antiplatelet Medications at Discharge. 0116 ............................................. STS.

170 .................... Coronary Artery Bypass Graft (CABG): Beta-Blockers Administered at Discharge. 0117 ............................................. STS.

171 .................... Coronary Artery Bypass Graft (CABG): Lipid Management and Counseling. 0118 ............................................. STS.

* This measures group is reportable through registry-based reporting only.



### T ABLE 

### 61—M EASURES 

### P ROPOSED FOR 

### 2011 R HEUMATOID 

### A RTHRITIS 

### M EASURES 

### G ROUP

Measure No. Measure title NQF Measure No. Measure developer

108 .................... Rheumatoid Arthritis (RA): Disease Modifying Anti-Rheumatic Drug (DMARD) Therapy. 0054 ............................................. NCQA.

176 .................... Rheumatoid Arthritis (RA): Tuberculosis Screening .......................... AQA adopted .................. ............. AMA–PCPI/NCQA. 177 .................... Rheumatoid Arthritis (RA): Periodic Assessment of Disease Activity AQA adopted .......................... ..... AMA–PCPI/NCQA. 178 .................... Rheumatoid Arthritis (RA): Functional Status Assessment ............... AQA adopted ....................... ........ AMA–PCPI/NCQA.179 .................... Rheumatoid Arthritis (RA): Assessment and Classification of Disease Prognosis. AQA adopted ............................... AMA–PCPI/NCQA.

180 .................... Rheumatoid Arthritis (RA): Glucocorticoid Management ................... AQA adopted ...................... ......... AMA–PCPI/NCQA.



### T ABLE 

### 62—M EASURES 

### P ROPOSED FOR 

### 2011 P ERIOPERATIVE 

### C ARE 

### M EASURES 

### G ROUP

Measure No. Measure title NQF Measure No. Measure developer

20 ...................... Perioperative Care: Timing of Antibiotic Prophylaxis—Ordering Physician. 0270 ............................................. AMA–PCPI/NCQA.

21 ...................... Perioperative Care: Selection of Prophylactic Antibiotic—First OR Second Generation Cephalosporin. 0268 ............................................. AMA–PCPI/NCQA.

22 ...................... Perioperative Care: Discontinuation of Prophylactic Antibiotics (Non-Cardiac Procedures). 0271 ............................................. AMA–PCPI/NCQA.

23 ...................... Perioperative Care: Venous Thromboembolism (VTE) Prophylaxis (When Indicated in ALL Patients). 0239 ............................................. AMA–PCPI/NCQA.



### T ABLE 

### 63—M EASURES 

### P ROPOSED FOR 

### 2011 B ACK 

### P AIN 

### M EASURES 

### G ROUP

Measure No. Measure title NQF Measure No. Measure developer

148 .................... Back Pain: Initial Visit ........................................................................ 0322 .... ......................................... NCQA. 149 .................... Back Pain: Physical Exam ................................................................. 0319 ........... .................................. NCQA.

150 .................... Back Pain: Advice for Normal Activities ............................................ 0315 ................. ............................ NCQA. 151 .................... Back Pain: Advice Against Bed Rest ................................................. 0313 ................. ............................ NCQA.


### 40196 Federal Register / Vol. 75, No. 133 / Tuesday, July 13, 2010 / Proposed Rules

T ABLE 

### 64—M EASURES 

### P ROPOSED FOR 

### 2011 CAD M EASURES 

### G ROUP 

### *

Measure No. Measure title NQF Measure No. Measure developer

6 ........................ Coronary Artery Disease (CAD): Oral Antiplatelet Therapy Prescribed for Patients with CAD. 0067 ............................................. AMA–PCPI.

196 .................... Coronary Artery Disease (CAD): Symptom and Activity Assessment 0065 ..................................... ........ AMA–PCPI. 197 .................... Coronary Artery Disease (CAD): Drug Therapy for Lowering LDL–

Cholesterol. 0074 ............................................. AMA–PCPI.

TBD ................... Preventive Care and Screening: Tobacco Use: Screening and Cessation Intervention. 0028 ............................................. AMA–PCPI.

* This measures group is reportable through registry-based reporting only.



### T ABLE 

### 65—M EASURES 

### P ROPOSED FOR 

### 2011 H EART 

### F AILURE 

### M EASURES 

### G ROUP 

### *

Measure No. Measure title NQF Measure No. Measure developer

5 ........................ Heart Failure: Angiotensin-Converting Enzyme (ACE) Inhibitor or Angiotensin Receptor Blocker (ARB) Therapy for Left Ventricular Systolic Dysfunction (LVSD). 0081 ............................................. AMA–PCPI.

8 ........................ Heart Failure: Beta-Blocker Therapy for Left Ventricular Systolic Dysfunction (LVSD). 0083 ............................................. AMA–PCPI.

198 .................... Heart Failure: Left Ventricular Function (LVF) Assessment .............. 0079 ............................. ................ AMA–PCPI.

199 .................... Heart Failure: Patient Education ........................................................ 0082 ............ ................................. AMA–PCPI.TBD ................... Preventive Care and Screening: Tobacco Use: Screening and Cessation Intervention. 0028 ............................................. AMA–PCPI.

* This measures group is reportable through registry-based reporting only.



### T ABLE 

### 66—M EASURES 

### P ROPOSED FOR 

### 2011 IVD M EASURES 

### G ROUP

Measure No. Measure title NQF Measure No. Measure developer

201 .................... Ischemic Vascular Disease (IVD): Blood Pressure Management

Control. 0073 ............................................. NCQA.

202 .................... Ischemic Vascular Disease (IVD): Complete Lipid Profile ................ 0075 ............................. ................ NCQA. 203 .................... Ischemic Vascular Disease (IVD): Low Density Lipoprotein (LDL–C)

Control. 0075 ............................................. NCQA.

204 .................... Ischemic Vascular Disease (IVD): Use of Aspirin or Another Antithrombotic. 0068 ............................................. NCQA.

TBD ................... Preventive Care and Screening: Tobacco Use: Screening and Cessation Intervention. 0028 ............................................. AMA–PCPI.



### T ABLE 

### 67—M EASURES 

### P ROPOSED FOR 

### 2011 H EPATITIS 

### C M EASURES 

### G ROUP

Measure No. Measure title NQF Measure No. Measure developer

84 ...................... Hepatitis C: Ribonucleic Acid (RNA) Testing Before Initiating Treatment. 0395 ............................................. AMA–PCPI.

85 ...................... Hepatitis C: HCV Genotype Testing Prior to Treatment ................... 0396 ............................ ................. AMA–PCPI. 86 ...................... Hepatitis C: Antiviral Treatment Prescribed ....................................... 0397 ................. ............................ AMA–PCPI. 87 ...................... Hepatitis C: HCV Ribonucleic Acid (RNA) Testing at Week 12 of

Treatment. 0398 ............................................. AMA–PCPI.

89 ...................... Hepatitis C: Counseling Regarding Risk of Alcohol Consumption .... 0401 .................................. ........... AMA–PCPI. 90 ...................... Hepatitis C: Counseling Regarding Use of Contraception Prior to Antiviral Therapy. 0394 ............................................. AMA–PCPI.

183 .................... Hepatitis C: Hepatitis A Vaccination in Patients with HCV ............... 0399 ............................ ................. AMA–PCPI. 184 .................... Hepatitis C: Hepatitis B Vaccination in Patients with HCV ............... 0400 ............................ ................. AMA–PCPI.



### T ABLE 

### 68—M EASURES 

### P ROPOSED FOR 

### 2011 HIV/AIDS M EASURES 

### G ROUP 

### *

Measure No. Measure title NQF Measure No. Measure developer

159 .................... HIV/AIDS: CD4+ Cell Count or CD4+ Percentage ............................ 0404 ............................ ................. AMA–PCPI/NCQA. 160 .................... HIV/AIDS: Pneumocystis Jiroveci Pneumonia (PCP) Prophylaxis .... 0405 ..................................... ........ AMA–PCPI/NCQA.

161 .................... HIV/AIDS: Adolescent and Adult Patients with HIV/AIDS Who Are Prescribed Potent Antiretroviral Therapy. 0406 ............................................. AMA–PCPI/NCQA.

162 .................... HIV/AIDS: HIV RNA Control After Six Months of Potent Antiretroviral Therapy. 0407 ............................................. AMA–PCPI/NCQA.

205 .................... HIV/AIDS: Sexually Transmitted Disease Screening for Chlamydia

and Gonorrhea. 0409 ............................................. AMA–PCPI/NCQA.

206 .................... HIV/AIDS: Screening for High Risk Sexual Behaviors ...................... 0413 ............................ ................. AMA–PCPI/NCQA. 207 .................... HIV/AIDS: Screening for Injection Drug Use ..................................... 0415 ..................... ........................ AMA–PCPI/NCQA.


### 40197 Federal Register / Vol. 75, No. 133 / Tuesday, July 13, 2010 / Proposed Rules

T ABLE 

### 68—M EASURES 

### P ROPOSED FOR 

### 2011 HIV/AIDS M EASURES 

### G ROUP 

### *—Continued

Measure No. Measure title NQF Measure No. Measure developer

208 .................... HIV/AIDS: Sexually Transmitted Disease Screening for Syphilis ..... 0410 .................................. ........... AMA–PCPI/NCQA.

* This measures group is selected to be reportable through registry-based reporting only.



### T ABLE 

### 69—M EASURES 

### P ROPOSED FOR 

### 2011 CAP M EASURES 

### G ROUP

Measure No. Measure title NQF Measure No. Measure developer

56 ...................... Community-Acquired Pneumonia (CAP): Vital Signs ........................ 0232 ............................ ................. AMA–PCPI/NCQA. 57 ...................... Community-Acquired Pneumonia (CAP): Assessment of Oxygen

Saturation. 0094 ............................................. AMA–PCPI/NCQA.

58 ...................... Community-Acquired Pneumonia (CAP): Assessment of Mental

Status. 0234 ............................................. AMA–PCPI/NCQA.

59 ...................... Community-Acquired Pneumonia (CAP): Empiric Antibiotic ............. 0096 ................................ ............. AMA–PCPI/NCQA.



### T ABLE 

### 70—M EASURES 

### P ROPOSED FOR 

### 2011 A STHMA 

### M EASURES 

### G ROUP

Measure No. Measure title NQF Measure No. Measure developer

53 ...................... Asthma: Pharmacologic Therapy ....................................................... 0047 ............... .............................. AMA–PCPI.

64 ...................... Asthma: Asthma Assessment ............................................................ 0001 .............. ............................... AMA–PCPI.TBD ................... Asthma: Assessment of Asthma Risk—Emergency Department/Inpatient Setting. Currently under NQF review ........ AMA–PCPI.

TBD ................... Asthma: Discharge Plan-Emergency/Inpatient Setting ...................... Currently under NQF review ....... . AMA–PCPI.

We note that the specifications for measures groups do not necessarily contain all the specification elements of each individual measure making up the measures group. This is based on the
need for a common set of denominator specifications for all the measures making up a measures group in order to define the applicability of the measures group. Therefore, the specifications and instructions for measures groups will again be provided separately from the specifications and instructions for the individual 2011 PQRI measures. We will post the detailed specifications and specific instructions for reporting measures groups on the PQRI section of
the CMS Web site at http:// www.cms.gov/PQRI by no later than December 31, 2010.

Additionally, the detailed measure specifications and instructions for submitting data on those 2011 measures groups that were also included as 2010 PQRI measures groups may be updated or modified prior to 2011. Therefore, the 2011 PQRI measure specifications for any given measures group could be different from specifications and
submission instructions for the same measures group used for 2010. These measure specification changes are not expected to materially impact the intended meaning of the measures or the strength of the measures.

j. Proposed 2011 PQRI Quality Measures for Physician Groups Selected To Participate in the Group Practice Reporting Option (GPRO I)

As discussed in section VI.F.1.g.(3).(i) of this proposed rule, we propose that physician groups selected to participate in the 2011 PQRI GPRO I would be required to report on 26 proposed measures. We are proposing thesemeasures because they are NQFendorsed measures currently collected as part of the PGP and/or MCMP demonstrations and in the 2010 PQRI GPRO. These proposed measures are

listed in Table 71. To the extent that a measure is an existing PQRI measure available for reporting by individual EPs, the Measure Title is preceded by the measure’s PQRI Measure Number. If there is no number in the PQRI Measure Number column of the table, then the measure is not an existing PQRI
measure and will be added to the 2011 PQRI for purposes of the GPRO I. Measures proposed for GPRO II are discussed in section VI.F.1.g.(3).(ii) of this proposed rule.

As in the 2010 PQRI, a separate measures specifications manual and other supporting documents will be available for group practices participating in the 2011 PQRI GPRO I. We anticipate that the group practice measures specifications manual will be available by November 15, 2010 on the PQRI section of the CMS Web site at http://www.cms.gov/PQRI.



### T ABLE 

### 71—M EASURES FOR 

### P HYSICIAN 

### G ROUPS 

### P ARTICIPATING IN THE 

### 2011 PQRI G ROUP 

### P RACTICE 

### R EPORTING 

### O PTION 

### (GPRO I)

PQRI measure
No. Measure title Measure developer NQF No.

1 ........................ Diabetes Mellitus: Hemoglobin A1c Poor Control in Diabetes

Mellitus. NCQA ........................................... 0059

2 ........................ Diabetes Mellitus: Low Density Lipoprotein (LDL–C)Control ............ NCQA ............................. .............. 0064 3 ........................ Diabetes Mellitus: High Blood Pressure Control in Diabetes Mellitus NCQA .............................. ............. 0061 5 ........................ Heart Failure: Angiotensin-Converting Enzyme (ACE) Inhibitor or Angiotensin Receptor Blocker (ARB) Therapy for Left Ventricular Systolic Dysfunction (LVSD). AMA–PCPI ................................... 0081

6 ........................ Coronary Artery Disease (CAD): Oral Antiplatelet Therapy Prescribed for Patients with CAD. AMA–PCPI ................................... 0067


### 40198 Federal Register / Vol. 75, No. 133 / Tuesday, July 13, 2010 / Proposed Rules

T ABLE 

### 71—M EASURES FOR 

### P HYSICIAN 

### G ROUPS 

### P ARTICIPATING IN THE 

### 2011 PQRI G ROUP 

### P RACTICE 

### R EPORTING 

### O PTION 

### (GPRO I)—Continued

PQRI measure
No. Measure title Measure developer NQF No.

7 ........................ Coronary Artery Disease (CAD): Beta-Blocker Therapy for CAD Patients with Prior Myocardial Infarction (MI). AMA–PCPI ................................... 0070

8 ........................ Heart Failure: Beta-Blocker Therapy for Left Ventricular Systolic Dysfunction (LVSD). AMA–PCPI ................................... 0083

110 .................... Preventive Care and Screening: Influenza Immunization for Patients ≥ 50 Years Old. AMA–PCPI ................................... 0041

111 .................... Preventive Care and Screening: Pneumonia Vaccination for Patients 65 Years and Older. NCQA ........................................... 0043

112 .................... Preventive Care and Screening: Screening Mammography ............. NCQA ................................... ........ 0031 113 .................... Preventive Care and Screening: Colorectal Cancer Screening ........ NCQA .................................. ......... 0034 117 .................... Diabetes Mellitus: Dilated Eye Exam in Diabetic Patient .................. NCQA ........................... ................ 0055 118 .................... Coronary Artery Disease (CAD): Angiotensin-Converting Enzyme(ACE) Inhibitor or Angiotensin Receptor Blocker (ARB) for Patients with CAD and Diabetes and/or Left Ventricular Systolic Dysfunction (LVSD). AMA–PCPI ................................... 0066

119 .................... Diabetes Mellitus: Urine Screening for Microalbumin or Medical Attention for Nephropathy in Diabetic Patients. NCQA ........................................... 0062

163 .................... Diabetes Mellitus: Foot Exam ............................................................ NCQA ............ ............................... 0056 GPRO DM–1 ..... Diabetes Mellitus: Hemoglobin A1c Testing ...................................... NCQA .............................. ............. 0057 GPRO DM–9 ..... Diabetes Mellitus: Lipid Profile ........................................................... NCQA .................. ......................... 0063 GPRO HF–2 ...... Heart Failure: Left Ventricular Function (LVF) Testing ...................... CMS. 198 .................... Heart Failure: Left Ventricular Function (LVF) Assessment .............. AMA–PCPI ......................... .......... 0079 GPRO HF–3 ...... Heart Failure: Weight Measurement .................................................. CMS AMA–PCPI not maintaining 0085
199 .................... Heart Failure: Patient Education ........................................................ AMA–PCPI ........ ........................... 0082 200 .................... Heart Failure: Warfarin Therapy for Patients with Atrial Fibrillation .. AMA–PCPI ......................... .......... 0084 197 .................... Coronary Artery Disease (CAD): Drug Therapy for Lowering LDL–

Cholesterol. AMA–PCPI ................................... 0074

GPRO HTN–1 ... Hypertension: Blood Pressure Measurement .................................... AMA–PCPI .............................. ..... 0013 GPRO HTN–2 ... Hypertension (HTN): Blood Pressure Control ................................... NCQA ................................. .......... 0018 GPRo HTN–3 .... Hypertension (HTN): Plan of Care ..................................................... AMA–PCPI .................... ............... 0017

k. Public Reporting of PQRI Data

Section 1848(m)(5)(G) of the Act requires the Secretary to post on the CMS Web site, in an easily understandable format, a list of the names of EPs (or group practices) who satisfactorily submitted data on quality measures for the PQRI and the names of the EPs (or group practices) who are successful electronic prescribers. In addition, section 10331(a)(1) of the ACA, requires the Secretary to develop a Physician Compare Internet Web site by January 1, 2011, on which information on physicians enrolled in the Medicare program and other EPs who participate in the PQRI program would be posted.

To meet the ACA deadline of January 1, 2011, with respect to establishing the Physician Compare Web site, we propose, for 2011 PQRI, to use the current Physician and Other Health Care Professional Directory as a foundation for the Physician Compare Web site. As in 2010 PQRI, we propose to continue to make public the names of EPs and group practices that satisfactorily submit quality data for the 2011 PQRI. Previously, this was posted on the Physician and Other Health Care Professionals Directory. Our intent for the 2011 PQRI is to post the information on the Physician Compare Web site that must be developed by January 1, 2011. Specifically, we propose to post the names of EPs who: (1) Submit data on the 2011 PQRI quality measures through one of the reporting mechanisms available for the 2011 PQRI; (2) meet one of the proposed satisfactory reporting criteria of individual measures or measures groups for the 2011 PQRI as described above; and (3) qualify to earn a PQRI incentive payment for covered professional services furnished during the applicable 2011 PQRI reporting period, for purposes of satisfying the requirements under section 1848(m)(5)(G)(i) of the Act, on the Physician Compare Web site.

Similarly, for purposes of publicly reporting the names of group practices, on the Physician Compare Web site, for 2011, we propose to post the names of group practices that: (1) Submit data on the 2011 PQRI quality measures through one of the proposed group practice reporting options; (2) meet the proposed criteria for satisfactory reporting under the respective group practice reporting option; and (3) qualify to earn a PQRI incentive payment for covered professional services furnished during the applicable 2011 PQRI reporting period for purposes of satisfying the requirements under section 1848(m)(5)(G)(i) of the Act.

We do not propose to require as a condition of participation in the 2011 PQRI that performance information be made publicly available at either the group practice or individual level for 2011 PQRI. However, we note that section 10331 of the ACA requires that not later than January 1, 2013, and with respect to reporting periods that begin no earlier than January 1, 2012, we implement a plan for making publicly available through Physician Compare, information on physician performance, including measures collected under PQRI. Consistent with section 10331 of the ACA, we expect, in the future, to publicly report performance information based on PQRI.

We will be working on a plan to expand the information that is publicly posted on the Physician Compare in future years. This will be further described in future rulemaking. We solicit comments on our plan for implementation of a Physician Compare

Web site for 2011.


### 40199 Federal Register / Vol. 75, No. 133 / Tuesday, July 13, 2010 / Proposed Rules

l. Other Relevant ACA Provisions

(1) Section 3002 (b)—Incentive Payment Adjustment for Quality Reporting

Beginning 2015, a payment adjustment will apply under the PQRI. Specifically, under section 1848(a)(8) of the Act, as added by section 3002(b) of the ACA, with respect to covered professional services furnished by an EP during 2015 or any subsequent year, if the EP does not satisfactorily submit data on quality measures for covered professional services for the quality reporting period for the year, the fee
schedule amount for services furnished by such professionals during the year shall be equal to the applicable percent
of the fee schedule amount that would otherwise apply to such services. The applicable percent for 2015 is 98.5 percent and for 2016 and each subsequent year it is 98.0 percent.

We will address this provision of the
ACA in future notice and comment rulemaking.

(2) Section 3002(c)—Maintenance of Certification Programs and Section 10327 Improvements to the Physician Quality Reporting System

Section 3002(c) of the ACA amends section 1848(k)(4) of the Act to require a mechanism whereby an EP may provide data on quality measures through an MOCP operated by a specialty body of the American Board of Medical Specialties (ABMS). In addition, section 1848(m)(7)of the Act ( ‘‘ Additional Incentive Payment ’’ ), as added by section 10327(a) of the ACA, provides for an additional 0.5 percent incentive payment for years 2011 through 2014 if certain requirements are
met. In accordance with section 1848(m)(7)(B) of the Act, in order to qualify for the additional incentive payment, an EP must—

• Satisfactorily submit data on quality measures under PQRI for a year and
have such data submitted— ++ On their behalf through an MOCP

that meets the criteria for a registry under PQRI (see section VI.F.1.d.(4) of this proposed rule); or
++ In an alternative form and manner

determined appropriate by the Secretary; and

• More frequently than is required to qualify for or maintain board
certification status— ++ Participate in such an MOCP for a

year; and ++ Successfully completes a qualified

MOCP for such year.
Section 1848(m)(7)(C)(i) of the Act
defines ‘‘ Maintenance of Certification Program ’’ as a continuous assessment program, such as a qualified ABMS MOCP, or an equivalent program (as determined by the Secretary), that advances quality and the lifelong learning and self-assessment of board certified specialty physicians by focusing on the competencies of patient care, medical knowledge, practice-based learning, interpersonal and
communications skills and professionalism. Such a program shall require a physician to do the following:

• Maintain a valid, unrestricted
medical license in the United States.

• Participate in educational and selfassessment programs that require an
assessment of what was learned.

• Demonstrate, through a formalized, secure examination, that the physician has the fundamental diagnostic skills, medical knowledge, and clinical judgment to provide quality care in their respective specialty.

• Successful completion of a qualified MOCP practice assessment.

As defined in section 1848(m)(7)(C)(ii) of the Act, a ‘‘ qualified Maintenance of Certification Program practice assessment ’’ means an assessment of a physician’s practice
that—

(1) Includes an initial assessment of an EP’s practice that is designed to demonstrate the physician’s use of evidence-based medicine;

(2) Includes a survey of patient experience with care; and

(3) Requires a physician to implement a quality improvement intervention to address a practice weakness identified
in the initial assessment and then to remeasure to assess performance after
such intervention.

To qualify for the additional incentive payment, section 1848(m)(7)(B)(iii) of the Act also requires the MOCP Program to submit to CMS, on behalf of the EP,
information:

(1) In a form and manner specified by the Secretary, that the EP has successfully completed a qualified MOCP practice assessment for such

year;

(2) If requested by the Secretary, information on the survey of patient experience with care; and

(3) As the Secretary may require, on the methods, measures, and data used under the MOCP and the qualified MOCP practice assessment.

Section 10327(b) of the ACA amends section 3002(c) of the ACA further to specify that the additional 0.5 percent incentive payment is available only for years 2011, 2012, 2013, and 2014. For years after 2014, if the Secretary determines it to be appropriate, the Secretary may incorporate participation in an MOCP and successful completion of a qualified MOCP practice assessment into the composite of measures of quality for care furnished pursuant to the physician fee schedule payment
modifier.

To implement the provisions under sections 3002(c) and 10327 of the ACA, CMS proposes for 2011 to require the following:

• An EP wishing to be eligible for the additional PQRI incentive payment of 0.5 percent must meet the proposed requirements for satisfactory PQRI reporting, for program year 2011, based on the 12-month reporting period. We propose to require that EPs seeking the additional PQRI incentive payment satisfactorily report for a 12-month reporting period rather than only a 6 month reporting period, based on the statutory language that the EP must satisfactorily report ‘‘ for a year. ’’ For purposes of satisfactory reporting under PQRI, we propose that the EP may participate as an individual EP using either individual PQRI measures or measures groups and submitting the PQRI data via claims, a registry, or an her or participate under one of the GPRO options (I or II),. Alternatively, EPs may satisfactorily report under PQRI based on submission of PQRI data by an MOCP, provided that the MOCP has qualified as a PQRI registry for 2011. As indicated previously, an EP would not necessarily have to qualify for PQRI through an MOCP serving as a registry. Rather, we propose that an EP may qualify for the additional incentive, without reqard to the method by which the EP has met the basic requirement of satisfactory reporting under PQRI.

• In addition to meeting the proposed requirements for satisfactory reporting under PQRI for program year 2011, the
EP must have data submitted on his or her behalf through an MOCP, for the MOCP in which the EP participates. Although the MOCP need not become a qualified registry for data submission for PQRI purposes, the MOCP must meet the criteria for a registry for submission of the MOCP data as specified below.

• An EP must, more frequently than is required to qualify for or maintain board certification, participate in an MOCP for a year and successfully complete a qualified MOCP practice assessment for such year. We believe
that the ‘‘ more frequently ’’ requirement applies both to the elements of the MOCP itself and the requirement to successfully complete a qualified MOCP practice assessment. With regard to the elements other than completing a qualified MOCP practice assessment, we propose to require that the MOCP certify
that the EP has ‘‘ more frequently ’’ than is required to qualify for or maintain


### 40200 Federal Register / Vol. 75, No. 133 / Tuesday, July 13, 2010 / Proposed Rules

board certification ‘‘ participated in a MOCP for a year ’’ as required by section 10327 of the ACA. We do not propose to specify with respect to participation
how an EP must meet the more frequently requirement, but rather that the MOCP so certify that EP has met this requirement. We note that we do not
believe that the ‘‘ more frequently ’’ requirement is applicable to the licensure requirement, given that one
cannot be licensed ‘‘ more frequently ’’ than is required. However, we do
believe that the ‘‘ more frequently ’’ requirement applies to the required
elements under sections 1848(m)(7)(C)(i)(II) and 1848(m)(7)(C)(i)(III) of the Act. In other words, we believe that the EP must

‘‘ more frequently ’’ than is required to qualify for or maintain board certification, participate in educational and self-assessment programs that require an assessment of what was learned; demonstrate, through a formalized, secure examination, that the physician has the fundamental diagnostic skills, medical knowledge, and clinical judgment to provide quality care in their respective specialty; and successfully complete a qualified MOCP practice assessment.

With respect to the MOCP practice assessment, which is specifically delineated in section 1848(m)(7)(B)(ii) of the Act as being required more often than is necessary to qualify for or maintain board certification, we believe we need to be more specific regarding our interpretation of the phrase ‘‘ more frequently. ’’ Additionally, we are aware that some specialty boards have varying MOCP requirements for physicians to maintain board certification, based on the date of original certification. Some, we believe, may not be required to participate in an MOCP program at all
in order to maintain board certifications. Accordingly, we recognize that ‘‘ more often ’’ may vary among physicians certified by the same specialty board. We interpret the statutory provisions as requiring participation in and successful completion of at least one MOCP practice assessment. Therefore, we propose, as a basic requirement, participation in and successful completion in at least one MOCP practice assessment. For physicians who are not required to participate in an MOCP to maintain board certification,

‘‘ more often ’’ would be more than 0, and therefore only once. For physicians, however, who are otherwise required by the specialty board to participate in an
MOCP to maintain board certification status, these physicians would need to complete the MOCP practice assessment a second time in order to qualify for the additional incentive payment. If an MOCP practice assessment were required more than once during a particular cycle, the EP would be required to complete the MOCP practice
assessment a third time in order to qualify for the additional incentive.

We are also aware that ABMS boards are at various stages in implementing the practice assessment modules, and some may not have such assessment modules in place. However, inasmuch as we interpret the statute to require an MOCP practice assessment at least once as part of the MOCP, EPs who do not have available, through their boards or otherwise, an MOCP practice assessment are not eligible for the 0.5 percent incentive.

• We believe that the experience of care survey provides particularly valuable information and propose that a qualified MOCP practice assessment must include a survey of patient experience with care. The Secretary may request information on the survey of patient experience with care, under section 1848(m)(7)(B)(iii) of the Act. In view of the importance of this information, and the lack of readily available alternative sources, we propose to require that MOCPs submit information as to the survey of patient experience with care for the EP regarding whom information is being submitted by the MOCP.

We propose that MOCPs, who wish to enable their members to be eligible for an additional PQRI incentive payment for the 2011 PQRI, will need to go through a self-nomination process by January 31, 2011. We propose the board will need to include all of the following
information in their self-nomination
letter to CMS:

• Provide detailed information regarding the MOCP with reference to the statutory requirements for such

program.

• Indicate the organization sponsoring the MOCP, and whether the MOCP is sponsored by an ABMS board. If not an ABMS board, indicate whether the program is substantially equivalent to the ABMS MOCP process.

• The frequency of a cycle of MOC for the specific MOCP of the sponsoring organization; including what constitutes

‘‘ more frequently ’’ for the MOCP practice assessment for the specific MOCP of the sponsoring organization.

• What was, is, or will be the first year of availability of the MOCP practice assessment for completion by an EP.

• What data is collected under the patient experience of care survey and
how this information would be provided to CMS. • How the MOCP monitors that an EP has implemented a quality improvement process for their practice.

• Describe the methods, and data used under the MOCP, and provide a
list of all measures used in the MOCP for 2010 and to be used for 2011, including the title and descriptions of each measure, the owner of the measure, whether the measure is NQF endorsed, and a link to a Web site containing the detailed specifications of the measures, or an electronic file containing the detailed specifications of the measures.

We propose that sponsoring organizations who desire to participate
as an MOCP will need to be able to provide CMS the following information in a CMS-specified file format by no later than the end of the first quarter of

2012:

• The name, NPI and applicable TIN(s) of the EP who would like to participate in this process;

• Attestation from the board that the information provided to CMS is accurate and complete;

• The board has signed
documentation from the EP that the EP
wishes to have their information released to CMS; Information from the experience of care survey;

• Information certifying that the EP has participated in an MOCP for a year, more frequently than is required to qualify for or maintain board certification status, including the year that the physician met the board certification requirements for the MOCP, and the year the EP participated

in an MOCP ‘‘ more frequently ’’ than is required to maintain or qualify for board certification; and

• Information certifying that the EP has completed the MOCP practice
assessment one additional time more than is required to qualify for or maintain board certification, including the year of the original MOCP practice assessment or that an MOCP practice assessment is not required for the EP, and the year of the additional MOCP practice assessment completion.

We propose that specialty boards that also desire to send PQRI information to

CMS on behalf of their EP should be able to meet the requirements for registry data submission proposed in section VI.F.1.d.(4) of this rule and
should follow the directions for selfnomination to become a qualified registry. Boards may also participate as registries for PQRI data provided that they meet the registry requirements.

As an alternative to requiring boards to either operate a qualified PQRI registry or to self-nominate to submit
MOCP data to CMS on behalf of their members, we also considered having the


### 40201 Federal Register / Vol. 75, No. 133 / Tuesday, July 13, 2010 / Proposed Rules

various boards submit the MOCP data to the ABMS and having ABMS channel
the information from the various boards
to CMS. We invite comments on the proposed mechanism for receiving MOCP data from the specialty boards as
well as on the alternative mechanism
that we considered.

(3) Section 3002(d)—Integration of PQRI and EHR Reporting

Section 1848(m)(7) of the Act ( ‘‘ Integration of Physician Quality Reporting and EHR Reporting), as added by section 3002(d) of the ACA requires us to move towards the integration of EHR measures with respect to the PQRI program. Section 1848(m)(7) of the Act specifies that by no later than January 1, 2012, the Secretary shall develop a plan to integrate reporting on quality measures under PQRI with reporting requirements under subsection (o) relating to the meaningful use of EHRs. Such integration shall consist of the following:

(A) The selection of measures, the reporting of which would both
demonstrate—

(i) Meaningful use of an EHR for purposes of the EHR incentive program;
and

(ii) Quality of care furnished to an individual; and

(B) Such other activities as specified by the Secretary.

In an effort to align PQRI with the EHR incentive program, we propose to include many ARRA core clinical quality measures in the PQRI program, to demonstrate meaningful use of EHR and quality of care furnished to individuals. We propose the selection of these measures to meet the requirements of planning the integration of PQRI and EHR reporting. We are working towards a plan to integrate reporting on quality measures to make available by January

1, 2012.

We solicit comments on this approach to integrate PQRI EHR measures with the clinical quality measures adopted for the EHR incentive program. Specifically, we encourage comments on how CMS plans to align the measures, and how the plan for integration will optimally improve quality of care for individuals and provide meaningful use of EHRs.

(4) Section 3002(e)—Feedback

Section 3002 (e) of the ACA amends section 1848(m)(5) of the Act by adding subparagraph (H), which requires the Secretary to provide timely feedback to EPs on the performance of the EP with respect to satisfactorily submitting data on quality measures. Since the inception of the program in 2007, the PQRI program has provided EPs who have reported PQRI data on quality measures feedback reports at the TIN/ NPI level detailing participation in PQRI, including reporting rate and performance rate information. For 2008, we improved the format and content of feedback reports based on stakeholder input. We also developed an alternate report distribution method whereby each EP can directly request and receive a feedback report. We will continue to provide feedback reports to individuals and group practices that satisfactorily submit PQRI quality measure and thus qualify to earn a PQRI incentive.

We believe that the requirements under section 1848(m)(5)(H) of the Act, as added by section 3002(e) of the ACA,
for ‘‘ timely ’’ feedback reports with respect to satisfactorily submitting data on quality measures is met by providing the feedback reports on or about the
time of issuance of the incentive payments. Thus, we propose to provide 2011 feedback reports on or about the
time of issuance of the 2011 incentive payments, consistent with our current practice.

In addition, we also propose to provide interim feedback reports for EPs reporting 2011 measures groups through the claims-based reporting mechanism. Specifically, we propose to develop interim feedback reports that are similar in content and format to the reports that we currently provide for such EPs using
claims for dates of service between January 1, 2011 and February 28, 2011. We expect that we would be able to make these interim feedback reports available to EPs in June 2011. We believe interim feedback reports would be particularly valuable to EPs reporting measures group because, unlike with individual measures reporting, EPs would not be required to report on a certain percentage of eligible cases to satisfactorily report the 2011 PQRI measures groups. EPs could just report on 30 eligible cases to satisfactorily report using measures groups. Interim feedback regarding the number of cases reported as of February 28, 2011 would
be valuable since an EP would know how many more cases he or she needs to report to satisfy the criteria for satisfactory reporting for claims-based reporting of measures groups.

We also intend to continue to explore methods to facilitate PQRI feedback report distribution. Additionally, based on feedback from the 2011 PQRI Listening Session that was held on February 2, 2010, we are considering a process by which we could respond to interim feedback report requests at the
individual level for claims-based submission, based upon first quarter claims data for the applicable program year. The goal of this would be to provide information to EPs as to errors in claims-based QDC submission while the reporting period is ongoing and prior to the start of the 6-month reporting period. We welcome comments with respect to our proposal to provide timely feedback reports for PQRI.

(5) Section 3002(f)—Appeals

Section 1848(m)(5)(I) of the Act, as amended and added by section 3002(f)(2) of the ACA, requires an informal review process. Specifically, the statute requires that the Secretary establish and have in place, no later than January 1, 2011, an informal process for EPs to seek a review of the
determination that an EP did not satisfactorily submit data on quality measures under the PQRI.

We note that except as provided under the informal process under section 1848(m)(5)(I) of the Act, section 1848(m)(5)(E) of the Act, as amended by section 3002(f) of the ACA, specifies that, with respect to the PQRI, there shall be no administrative or judicial review under section 1869, section 1878, or otherwise, of:

(1) The determination of measures applicable to services furnished by EPs under PQRI;

(2) The determination of satisfactory reporting under PQRI; and

(3) The determination of any PQRI incentive payment and PQRI payment adjustment.

We propose to base the informal process on our current inquiry process whereby an EP can contact the Quality Net Help Desk (via phone or e-mail) for general PQRI and eRx Incentive Program information, information on PQRI feedback report availability and access, and/or information on PQRI Portal password issues. We believe that the current inquiry process provides a good basis for an informal review process because EPs currently can utilize the inquiry process if they have questions on whether they qualified for an incentive. However, the current inquiry process does not have timelines nor is it restricted to questions solely on whether the EP qualified for an incentive. Thus, for purposes of the informal process required under section 1848(m)(5)(E) of the Act, we propose the following process:

• An EP electing to utilize the informal process must request an informal review within 90 days of the release of his or her feedback report.

• An EP can request the informal review by notifying the Quality Net Help Desk via e-mail at


### 40202 Federal Register / Vol. 75, No. 133 / Tuesday, July 13, 2010 / Proposed Rules

qnetsupport@sdps.org . The e-mail requesting the initiation of the informal review process should summarize the concern(s) of the EP and the reason(s) for requesting an informal review.

• We propose to provide the EP with a response to his or her request for an informal review within 60 days of receiving the original request.

• As this process is informal and the statute does not require a formal appeals process, we will not include a hearing or evidence submission process, although the EP may submit information
to assist in the review.

• Based on our informal review, we will provide a written response. Where we find that the EP did satisfactorily report, we propose to provide the applicable incentive payment.

• Given that this is an informal review process and given the limitations on review under section 1848(m)(5)(E) of the Act, decisions based on the informal review will be final, and there will be no further review or appeal.

• By December 31, 2011, we propose to post on the CMS PQRI Web site, further information regarding the operational aspects of the informal review process for 2011 PQRI. We invite public comment on this proposed

process.

2. Section 132: Incentives for Electronic Prescribing (eRx)— The Electronic Prescribing Incentive Program

a. Program Background and Statutory Authority

As defined in § 423.159(a), eRx is the transmission using electronic media, of prescription or prescription-related information between prescriber, dispenser, pharmacy benefit manager (PBM), or health plan, either directly or through an intermediary, including an eRx network. Included in eRx, but not limited to, are two-way transmissions between the point of care and the dispenser.

Section 1848(m)(2) of the Act promotes the use of electronic prescribing by authorizing incentive payments to EPs or group practices who

are ‘‘ successful electronic prescribers. ’’
The intention of the 2011 eRx Incentive Program, which is separate from, and in addition to, any incentive payment that EPs may earn through the PQRI program, is to continue to encourage significant expansion of the use of electronic prescribing by authorizing a
combination of financial incentives and payment adjustments. Individual EPs do not have to participate in PQRI in order to participate in the eRx Incentive Program (and vice versa). We propose to add § 414.92 to title 42 of the Code of Federal Regulations to implement the provisions of the eRx Incentive Program
discussed in this section of the proposed rule.

For 2011, which is the third year of the eRx Incentive Program, the Secretary is authorized to provide successful electronic prescribers, as defined in section 1848(m)(3)(B) of the Act and further discussed below in this section, an incentive payment equal to 1.0 percent of the total estimated Medicare Part B PFS allowed charges (based on
claims submitted not later than 2 months after the end of the reporting period) for all covered professional services furnished during the 2011 reporting period. Covered professional
services are defined under the statute to be services for which payment is made under, or is based on, the PFS and which are furnished by an EP. The applicable electronic prescribing percent (1.0 percent) authorized for the 2011 eRx Incentive Program is different
from that authorized for the 2009 and 2010 eRx Incentive Program.

Under section 1848(m)(2)(C) of the Act, the incentive payments for successful electronic prescribers for future years are authorized as follows:

• 1.0 percent for 2012.

• 0.5 percent for 2013. However, section 1848(m)(2)(D) of the Act, as added by section 4101(f)(2)(B) of
Title IV of Division B of the American Recovery and Reinvestment Act of 2009 (Pub.L. 111–5) (ARRA–HITECH), specifies that the eRx incentive does not apply to an EP (or group practice), if, for the EHR reporting period, the EP (or group practice) earns an incentive payment under the Medicare EHR incentive program. The Medicare EHR incentive program begins in 2011. Therefore, EPs who earn an incentive
under the Medicare EHR Incentive Program, with respect to certified EHR technology that has eRx capabilities, will not be eligible to earn a separate incentive payment for being a successful electronic prescriber under the eRx Incentive Program.

For eRx, when reporting any of the Gcodes for purposes of qualifying for the incentive payment for electronic prescribing in 2011, we propose that the professional must have and regularly

use a ‘‘ qualified ’’ electronic prescribing system, as defined in the electronic prescribing measure specifications. If the professional does not have general access to an eRx system in the practice setting, as cited in the hardship exception as stated by the secretary, there is nothing to report.

In addition, under section 1848(a)(5)(A) of the Act, a PFS payment adjustment applies beginning in 2012 to those who are not successful electronic prescribers. Specifically, for 2012, 2013, and 2014, if the EP is not a successful electronic prescriber for the reporting period for the year, the PFS amount for covered professional services furnished by such professionals during the year as
referenced above shall be less than the PFS amount that would otherwise apply over the next several years by:

• 1.0 percent for 2012.

• 1.5 percent for 2013.

• 2.0 percent for 2014. We believe that the criteria for
determination of successful electronic prescriber proposed herein for the eRx incentive payment are not required to be
identical to the criteria that will be used to determine the applicability of the payment adjustment that begins in 2012. Policy considerations underlying the application of the incentive payment are not necessarily the same as those in applying a payment adjustment. In general, we believe that an incentive should be broadly available to encourage the widest possible adoption of eRx, even for low volume prescribers. On the other hand, we believe that a payment adjustment should be applied primarily to assure that those who have a large volume of prescribing do so electronically, without penalizing those for whom the adoption and use of an electronic prescribing system may be impractical given the low volume of prescribing. The 2011 eRx incentive and the application of the payment adjustment for 2012 will be addressed separately below.

Under section 1848(m)(6)(A) of the Act, the definition of ‘‘ EP ’’ for purposes of eligibility for the eRx Incentive Program is identical to the definition of

‘‘ EP ’’ for the PQRI under section 1848(k)(3)(B) of the Act. In other words, EPs include physicians, other practitioners as described in section 1842(b)(18)(C) of the Act, physical and occupational therapists, qualified speech-language pathologists, and qualified audiologists. However, as we have noted in prior years, for purposes of the eRx Incentive Program, eligibility is further restricted by scope of practice to those professionals who have prescribing authority. Detailed information about the types of professionals that are eligible to participate in the eRx Incentive Program
is available on the Electronic Prescribing Incentive Program section of
the CMS Web site at http:// www.cms.gov/ERXIncentive.

As in the 2010 eRx Incentive Program, we propose in 2011 that the eRx Incentive Program continue to be an incentive program in which
determination of whether an EP is a


### 40203 Federal Register / Vol. 75, No. 133 / Tuesday, July 13, 2010 / Proposed Rules

successful electronic prescriber will be made at the individual professional level, based on the NPI. Inasmuch as some individuals (identified by NPIs) may be associated with more than one practice or TIN, the determination of
whether an EP is a successful electronic prescriber will be made to the holder of each unique TIN/NPI combination. Then, as in previous years, payment will be made to the applicable holder of the TIN. For 2011, the determination of
whether an EP is a successful electronic prescriber will continue to be made for each unique TIN/NPI combination. However, section 1848(m)(3)(C) of the Act required the Secretary by January 1, 2010 to establish and have in place a process under which EPs in a group practice (as defined by the Secretary) would be treated as meeting the requirements for submitting data on electronic prescribing quality measures for covered professional services for a reporting period (or, for purposes of the payment adjustment under section 1848(a)(5) of the Act, for a reporting period for a year) if, in lieu of reporting the electronic prescribing measure, the group practice reports measures determined appropriate by the Secretary, such as measures that target high-cost chronic conditions and preventive care, in a form and manner, and at a time specified by the Secretary. Therefore, in addition to making incentive payments for 2011 to individual EPs based on separately analyzing whether the individual EPs are successful electronic prescribers, we propose to also make incentive payments to group practices based on the determination that the group practice, as a whole, is a successful electronic prescriber in accordance with section 1848(m)(3)(C) of the Act.

b. The 2011 eRx Incentive

(1) The 2011 Reporting Period for the eRx Incentive Program

Section 1848(m)(6)(C)(i)(II) of the Act
defines ‘‘ reporting period ’’ for the 2011 eRx Incentive Program to be the entire year. Section 1848(m)(6)(C)(ii) of the Act, however, authorizes the Secretary to revise the reporting period if the Secretary determines such revision is appropriate, produces valid results on measures reported, and is consistent with the goals of maximizing scientific validity and reducing administrative burden. We propose the 2011 eRx Incentive Program reporting period to be the entire calendar year (January 1, 2011 through December 31, 2011) based on
the definition of ‘‘ reporting period ’’ specified under section 1848(m)(6)(C)(i)(II) of the Act. We believe that keeping the 2011 eRx Incentive Program reporting period
consistent with 2009 and 2010 eRx Incentive Program reporting periods will help to further maintain program stability and be less confusing for EPs.

Accordingly, we propose that successful electronic prescribers would be eligible to receive an incentive payment equal to 1.0 percent of the total
estimated allowed Medicare Part B charges (based on claims submitted by no later than February 28, 2012) for all covered professional services furnished January 1, 2011 through December 31,

2011.

(2) Proposed Criteria for Determination
of Successful Electronic Prescriber for

EPs

Under section 1848(m)(3)(B) of the Act, in order to qualify for the incentive payment, an EP must be a ‘‘ successful electronic prescriber, ’’ which the Secretary is authorized to identify using 1 of 2 possible criteria. One criterion, under section 1848(m)(3)(B)(ii) of the Act, is based on the EP’s reporting, in at least 50 percent of the reportable cases, on any electronic prescribing quality measures that have been established under the physician reporting system, under subsection 1848(k) of the Act (which, as noted previously, we have named ‘‘ PQRI ’’ for ease of reference) and are applicable to services furnished by the EP during a reporting period. We applied this criterion in 2009. However, for years after 2009, section 1848(m)(3)(D) of the Act permits the Secretary in
consultation with stakeholders and experts to revise the criteria for submitting data on electronic prescribing measures under section 1848(m)(3)(B)(ii) of the Act.

The second criterion, under section 1848(m)(3)(B)(iii) of the Act, is based on the electronic submission by the EP of a sufficient number (as determined by the Secretary) of prescriptions under Part D during the reporting period. If the Secretary decides to use the latter standard, then, in accordance with section 1848(m)(3)(B)(iv) of the Act, the Secretary is authorized to use Part D drug claims data to assess whether a

‘‘ sufficient ’’ number of prescriptions have been submitted by EPs. However, under section 1848(m)(3)(B)(i) of the Act, if the standard based on a sufficient number (as determined by the Secretary) of electronic Part D prescriptions is applied for a particular reporting period, then the standard based on the reporting on electronic prescribing measures would no longer apply.

For 2011, we propose to continue to require EPs to report on the electronic prescribing measure used in the 2009 and 2010 eRx Incentive Program to
determine whether an EP is a successful electronic prescriber, but we are proposing to again use modified measure specifications and to use modified reporting criteria based on the authority provided under section 1848(m)(3)(D) of Act, as discussed
below.

As we stated in prior years, we are still considering the use of a certain number of Part D prescribing events as the basis for the incentive payment. We propose to continue to require EPs to report on the electronic prescribing
measure used in the 2009 and 2010 eRx Incentive Program because we believe that the accuracy and completeness of the Part D data with respect to whether a prescription was submitted electronically is unknown. In 2010, information on whether a prescription was submitted electronically by an individual EP began to be collected on the Part D claims and/or Prescription Drug Event (PDE) data. Also, since April 1, 2009, prescription drug plan sponsors are required to send PDE data with an individual prescriber’s NPI. We currently have limited information on the accuracy and completeness of NPI
data that is submitted with the PDE
data. The NPI is needed in order for
CMS to be able to link an EP’s PDE data
to his or her Medicare Part B claims to calculate the incentive payment amount. During 2010, we continue to evaluate the adequacy of Part D data to determine the feasibility of its use for determining whether an EP qualifies as a successful electronic prescriber. The
use of Part D data for correlation has not yet shown to be possible due to NPI and other issues. Part D data is supplied by the pharmacy and not the EP. We are in the process of writing and will publish an evaluation of the PQRI reporting experience. The experience report will
include an evaluation of the eRx Incentive Program.

(i) Reporting the Electronic Prescribing

Measure

For 2011, we propose to retain the 3 reporting mechanisms available to individual EPs to report the electronic prescribing measure in 2010 to maintain program stability. First, we propose to again retain the claims-based reporting
mechanism that is used in the 2009 and 2010 eRx Incentive Program. In addition, similar to the PQRI, for the eRx Incentive Program, we propose to continue the registry-based reporting mechanism and, we also propose that the EHR-based reporting mechanism be available for the electronic prescribing
measure for 2011.


### 40204 Federal Register / Vol. 75, No. 133 / Tuesday, July 13, 2010 / Proposed Rules

We propose that only registries qualified to submit quality measure
results and numerator and denominator data on quality measures on behalf of EPs for the 2011 PQRI would be qualified to submit measure results and
numerator and denominator data on the electronic prescribing measure on behalf
of EPs for the 2011 eRx Incentive Program. As in 2010, not all registries qualified to submit quality measures on behalf of EPs for the 2011 PQRI would be qualified to submit quality measures
results and numerator and denominator
data on the eRx measure. The electronic prescribing measure is reportable by an EP any time he or she bills for one of the procedure codes for Part B services
included in the measure’s denominator. Some registries who self-nominate to become a qualified registry for PQRI may not choose to self-nominate to become a qualified registry for submitting measures that require reporting at each eligible visit. Registries need to indicate their desire to qualify
to submit measure results and
numerator and denominator data on the electronic prescribing measure for the 2011 eRx Incentive program at the time that they submit their self-nomination letter for the 2011 PQRI. In addition, we propose that registries that want to be qualified to submit measure results and
numerator and denominator data on the electronic prescribing measure for the 2011 eRx Incentive Program would be required to transmit 2011 eRx measure
results and numerator and denominator data on the electronic prescribing measure to CMS in two separate transmissions. In addition to submitting
2011 measure results and numerator data on the electronic prescribing
measure in 2012 as described in section VI.F.1. above, such registries would
need to submit 2011 measure results
and numerator and denominator data on the electronic prescribing measure between July 1, 2011 and August 19, 2011 for purposes of the eRx penalty
described in section VI.F.2.c. below. The self-nomination process and requirements for registries for the PQRI, which also would apply to the registries for the 2011 eRx Incentive Program, are discussed previously in section VI.F.1. of this proposed rule. We will post a final list of qualified registries for the 2011 eRx Incentive Program on the Electronic Prescribing Incentive Program section of the CMS Web site at http://www.cms.gov/ERXIncentive when we post the final list of qualified registries for the 2011 PQRI on the PQRI
section of the CMS Web site.

Similarly, we continue to propose that only EHR products ‘‘ qualified ’’ to potentially be able to submit clinical quality data extracted from the EHR to CMS for the 2011 PQRI would be
considered ‘‘ qualified ’’ for the purpose of an EP potentially being able to submit data on the electronic prescribing
measure for the 2011 eRx Incentive Program. The self-nomination process and requirements for EHR vendors for the PQRI, which would apply to the
EHR vendors for the 2011 eRx Incentive Program were discussed in the CY 2010 PFS final rule with comment period (74 FR 61801 through 61802). EHR vendors were required to indicate their desire to have one or more of their EHR products qualified for the purpose of an EP potentially being able to submit data on the electronic prescribing measure for the 2011 eRx Incentive Program at thetime that they submitted their selfnomination letter for the 2011 PQRI. A list of qualified EHR vendors and their products (including the version that is qualified) for the 2011 eRx Incentive Program will be posted on the eRx Incentive Program section of the CMS
Web site at http://www.cms.gov/

ERXIncentive when we post the list of qualified EHR products for the 2011 PQRI on the PQRI section of the CMS Web site. We propose that EPs who want to use a qualified EHR to submit the electronic prescribing measure for the 2011 eRx Incentive Program would be required to transmit 2011 eRx data to CMS in two separate transmissions. In addition to submitting 2011 data on the electronic prescribing measure in 2012, as described in section VI.F.1. above,
such EPs would need to submit 2011 data on the electronic prescribing measure between July 1, 2011 and August 19, 2011 for purposes of the eRx penalty described in section VI.F.2.c.
below.

(ii) The Reporting Denominator for the Electronic Prescribing Measure

The electronic prescribing measure, similar to the PQRI measures, has 2 basic elements, which include: (1) A reporting denominator that defines the
circumstances when the measure is reportable; and (2) a reporting

numerator.

The denominator for the electronic prescribing measure consists of specific billing codes for covered professional
services. The measure becomes reportable when any one of these procedure codes is billed by an EP for Part B covered professional services. As initially required under section 1848(k)(2)(A)(ii) of the Act, and further established through rulemaking and under section 1848(m)(2)(B) of the Act, we may modify the codes making up the
denominator of the electronic prescribing measure. As such, we expanded the scope of the denominator codes for 2010 to covered professional services outside the professional office and outpatient setting, such as professional services furnished in skilled nursing facilities or the home care setting.

We propose to retain the following
CPT codes in the denominator of the electronic prescribing measure for 2011:

90801, 90802, 90804, 90805, 90806,
90807, 90808, 90809, 90862, 92002,
92004, 92012, 92014, 96150, 96151,
96152, 99201, 99202, 99203, 99204,
99205, 99211, 99212, 99213, 99214,
99215, 99304, 99305, 99306, 99307,
99308, 99309, 99310, 99315, 99316,
99324, 99325, 99326, 99327, 99328,
99334, 99335, 99336, 99337, 99341,
99342, 99343, 99344, 99345, 99347, 99348, 99349, 99350, G0101, G0108, G0109. In 2010, the expansion of the electronic prescribing measure denominator was expected to provide more EPs the opportunity to report the measure, and thus, provide more opportunities for EPs to participate in the eRx Incentive Program. Thus far, our experience in the 2010 eRx Incentive Program has been positive and we do not see a need to change the
denominator codes for 2011. We invite comments on our proposal to retain the
denominator codes from the 2010 electronic prescribing measure
denominator.

There are no diagnosis codes in the
measure’s denominator and there are no age/gender requirements in order for a patient to be included in the measure’s denominator (that is, reporting of the electronic prescribing measure is not further limited to certain ages or a specific gender). EPs are not required to report this measure in all cases in which the measure is reportable. EPs who do not bill for one of the procedure codes for Part B covered professional services
included in the measure’s denominator will have no occasion to report the electronic prescribing measure.

We further propose that by December 31, 2010, we will post the final specifications of the measure on the

‘‘ eRx Measure ’’ page of the eRx Incentive Program section of the CMS Web site at http://www.cms.gov/ERXIncentive.

(iii) Qualified Electronic Prescribing System—Required Functionalities and
Part D eRx Standards

To report the electronic prescribing measure in 2011, we again propose that the EP must report one of the measure’s

numerator ‘‘ G ’’ codes, as will be discussed below. However, when reporting any of the G-codes for purposes of qualifying for the incentive


### 40205 Federal Register / Vol. 75, No. 133 / Tuesday, July 13, 2010 / Proposed Rules

payment for electronic prescribing in 2011, we propose that the professional must have and regularly use a

‘‘ qualified ’’ electronic prescribing system, as defined in the electronic prescribing measure specifications. If the professional does not have general access to an eRx system in the practice setting, the EP does not have any data to report for purposes of the incentive
payment.

Required Functionalities for a

‘‘ Qualified ’’ Electronic Prescriber System.

For 2011, we propose to retain what

constitutes a ‘‘ qualified ’’ electronic prescribing system as a system based upon certain required functionalities that the system can perform. We propose that for 2011, a ‘‘ qualified ’’ electronic prescribing system would be
one that can—

• Generate a complete active medication list incorporating electronic data received from applicable pharmacies and PBMs, if available.

• Allow EPs to select medications, print prescriptions, electronically transmit prescriptions, and conduct alerts (written or acoustic signals to warn the prescriber of possible
undesirable or unsafe situations including potentially inappropriate dose or route of administration of a drug, drug-drug interactions, allergy concerns, or warnings and cautions). This functionality must be enabled.

• Provide information related to lower cost, therapeutically appropriate alternatives (if any). The ability of an electronic prescribing system to receive tiered formulary information, if available, would again suffice for this requirement for 2011 and until this function is more widely available in the marketplace.

• Provide information on formulary or tiered formulary medications, patient eligibility, and authorization requirements received electronically from the patient’s drug plan (if available).

Part D Electronic Prescribing
Standards. Section 1848(m)(3)(B)(v) of the Act specifies that to the extent practicable, in determining whether an EP is a successful electronic prescriber,

‘‘ the Secretary shall ensure that EPs utilize electronic prescribing systems in compliance with standards established for such systems pursuant to the Part D Electronic Prescribing Program under section 1860D–4(e) ’’ of the Act. The Part D standards for electronic prescribing systems establish which electronic standards Part D sponsors, providers, and dispensers must use when they electronically transmit prescriptions and certain prescription related information for Part D covered drugs that are prescribed for Part D eligible individuals. To be a qualified electronic prescribing system under the current eRx Incentive Program, electronic systems must convey the information listed above under (a) through (d) using the standards currently in effect for the Part D electronic prescribing program. Additional Part D electronic prescribing standards were implemented April 1,
2009. These latest Part D electronic prescribing standards, and those that had previously been adopted, can be
found on the CMS Web site at http:// www.cms.gov/eprescribing.

To ensure that EPs utilize electronic prescribing systems that meet these requirements, the electronic prescribing measure requires that those functionalities required for a ‘‘ qualified ’’ electronic prescribing system utilize the adopted Part D electronic prescribing
standards. The Part D electronic prescribing standards relevant to the
four functionalities for a ‘‘ qualified ’’ system in the electronic prescribing
measure described above and listed as (a), (b), (c), and (d), currently are as
follows:

(a) Generate medication list—Use the National Council for Prescription Drug Programs (NCPDP) Prescriber/ Pharmacist Interface SCRIPT Standard, Implementation Guide, Version 8, Release 1, October 2005 (hereinafter

‘‘ NCPDP SCRIPT 8.1 ’’ ) Medication History Standard.

(b) Transmit prescriptions electronically—Use the NCPDP SCRIPT
8.1 for the transactions listed at § 423.160(b)(2).

(c) Provide information on lower cost alternatives—Use the NCPDP Formulary and Benefits Standard, Implementation Guide, Version 1, Release 0 (Version 1.0), October 2005 (hereinafter ‘‘ NCPDP Formulary and Benefits 1.0 ’’ ).

(d) Provide information on formulary or tiered formulary medications, patient eligibility, and authorization requirements received electronically from the patient’s drug plan—use—

(1) NCPDP Formulary and Benefits 1.0 for communicating formulary and
benefits information between prescribers and plans;

(2) Accredited Standards Committee (ASC) X12N 270/271–Health Care Eligibility Benefit Inquiry and Response, Version 4010, May 2000, Washington Publishing Company, 004010X092 and Addenda to Health Care Eligibility Benefit Inquiry and Response, Version 4010A1, October 2002, Washington Publishing Company, 004010X092A1 for communicating eligibility information between the plan and prescribers; and (3) NCPDP Telecommunication Standard Specification, Version 5, Release 1 (Version 5.1), September 1999, and equivalent NCPDP Batch Standard Batch Implementation Guide, Version 1, Release 1 (Version 1.1), January 2000 for communicating eligibility information between the plan and dispensers.

However, there are Part D electronic prescribing standards that are in effect
for functionalities that are not commonly utilized at this time. Such functionalities are not currently required for a ‘‘ qualified ’’ system under the eRx Incentive Program. One example is Rx Fill Notification, which is
discussed in the Part D electronic prescribing final rule (73 FR 18918, 18926). For purposes of the 2011 Electronic Prescribing Program, we again are not proposing to require that an electronic prescribing system contain
all functionalities for which there are available Part D electronic prescribing standards. For those required functionalities described above, we propose that a ‘‘ qualified ’’ system must use the adopted Part D electronic prescribing standards for electronic messaging.

There are other aspects of the
functionalities for a ‘‘ qualified ’’ system that are not dependent on electronic messaging and are part of the software of the electronic prescribing system, for
which Part D standards for electronic prescribing do not pertain and are not required for purposes of the eRx Incentive Program. For example, the requirements in qualification (b) listed above that require the system to allow professionals to select medications, print prescriptions, and conduct alerts are functions included in the particular software, for which Part D standards for electronic messaging do not apply.

We are aware that there are significant
numbers of EPs who are interested in participating in the eRx Incentive Program, but currently do not have an electronic prescribing system. The electronic prescribing measure does not require the use of any particular system or transmission network; only that the system be a ‘‘ qualified ’’ system having
the functionalities described above based on Part D electronic prescribing standards. As in 2010, if the professional does not have general access to an electronic prescribing system in the practice setting, the EP does not have any data to report for purposes of the incentive payment and would not be able to participate in the 2011 eRx Incentive Program. If an EP does not participate in the 2011 eRx Incentive Program he or she may be subject to the 2012 eRx penalty


### 40206 Federal Register / Vol. 75, No. 133 / Tuesday, July 13, 2010 / Proposed Rules

discussed in section VI.F.2.c. of this proposed rule.

(iv) The Reporting Numerator for the Electronic Prescribing Measure

The proposed criteria for reporting for purposes of being a 2011 successful electronic prescriber are designed to
reward those EPs who demonstrate that they have adopted a qualified electronic prescribing system and actually used the system in a substantial way to electronically prescribe. In this context, the reporting of information in circumstances where a professional did not electronically prescribe is not pertinent. Additionally, although it may be of interest to measure the proportion of prescribing events that are electronic,
we do not believe such detail at the individual or group practice level is of sufficient value to warrant the high burden of reporting such information.
We do note that in the future the use of Part D claims data may allow this
information to be collected without the necessity for professionals to specifically report such details.

Accordingly, for the 2011 electronic prescribing measure, we propose to retain the following numerator G-code from the 2010 electronic prescribing measure’s numerator: G8553 (At least 1 prescription created during the encounter was generated and transmitted electronically using a qualified electronic prescribing system.)

We propose to post the final 2011 electronic prescribing measure specifications on the ‘‘ eRx Measure ’’ page of the eRx Incentive Program
section of the CMS Web site at http:// www.cms.gov/ERXIncentive . We propose to post the final 2011 electronic prescribing measure specifications by no later than December 31, 2010.

Because the electronic prescribing quality measure will apply only when an EP furnishes services indicated by
one of the codes included in themeasure’s denominator, for claimsbased reporting, for example, it will not be necessary for an EP to report G-codes for the electronic prescribing measure on claims not containing one of the denominator codes. However, if reporting a G-code, the G-code data submission will only be considered valid if it appears on the same Medicare Part B claim containing one of the electronic prescribing quality measure’s
denominator codes.

In addition, if the EP submits a Medicare Part B claim containing one of the electronic prescribing measure’s denominator codes, he or she can report the numerator G-code only when the EPfurnishes services indicated by the Gcode included in the measure’s numerator. That is, only when at least 1 prescription created during the encounter is generated and transmitted electronically using a qualified electronic prescribing system.

(v) Criteria for Successful Reporting of the Electronic Prescribing Measure

As discussed above, section 1848(m)(3)(D) of the Act authorizes the Secretary to revise the criteria for submitting data on the electronic prescribing measure from the criteria specified under section 1848(m)(3)(B)(ii) of the Act, which requires the measure to be reported in at least 50 percent of
the cases in which the measure is reportable. In 2010, we revised the
criteria for successful electronic prescriber such that an EP shall be
treated as a successful electronic prescriber for a reporting period based on the EP’s reporting of the electronic prescribing measure by generating and reporting one or more prescriptions associated with a patient visit electronically, a minimum of 25 unique visits per year in 2010 of applicable
cases in the denominator of the eRx measure. For 2011, we again propose to
make the determination of whether an EP is a successful electronic prescriber
based on a count of the number of times (minimum threshold of 25) an EP reports that at least one prescription created during the encounter is generated using a qualified electronic prescribing system (that is, reports the G8553 code).

As in 2010, we believe these criteria will bring us closer to our intention to transition to using a certain number of electronic Part D prescribing events as the basis for the incentive payment in future years. In proposing these criteria again for 2011 eRx, we continue to
assume that once an EP has invested in an eRx system, integrated the use of the eRx system into the practice’s work flows, and has used the system to some extent, he or she is likely to continue to use the eRx system for most of the prescriptions he or she generates.

For structural measures such as the electronic prescribing measure, once an
EP has demonstrated that he or she has integrated use of an eRx system into his or her practice’s work flow, we believe that requiring the EP to continue to report the measure represents an
administrative burden with little added benefit to the reliability and validity of the data being reporting. In contrast, for clinical quality measures, we believe that the reliability and validity of the performance rates depends on the adequacy of the sample. Therefore, we propose that an EP would be required to report that at least 1 prescription for a Medicare Part B FFS patient created during an encounter that is represented by 1 of the codes in the denominator of the electronic prescribing measure was generated and transmitted electronically using a qualified eRx system for at least 25 times during the 2011 reporting period.

The reporting threshold of 25 also
takes into consideration that prescriptions are not generated with every Medicare Part B FFS patient encounter, some prescriptions, such as narcotics, cannot be prescribed electronically, and that not all Medicare Part B FFS encounters are represented by the electronic prescribing measure’s
denominator codes.

As stated previously, we propose that by December 31, 2010, we will post the final specifications of the measure on
the ‘‘ eRx Measure ’’ page of the eRx Incentive Program section of the CMS
Web site at http://www.cms.gov/

ERXIncentive

. (3) Determination of the 2011 Incentive Payment Amount for Individual EPs
Who Are Successful Electronic
Prescribers

Section 1848(m)(2)(B) of the Act imposes a limitation on the electronic prescribing incentive payment. The Secretary is authorized to choose 1 of 2 possible criteria for determining whether or not the limitation applies to a successful electronic prescriber. The first criterion, under section 1848(m)(2)(B)(i) of the Act, is based upon whether the Medicare Part B allowed charges for covered professional services to which the electronic prescribing quality measure applies are less than 10 percent of the
total Medicare Part B PFS allowed charges for all covered professional services furnished by the EP during the reporting period. The second criterion, under section 1848(m)(2)(B)(ii) of the Act, is based on whether the EP submits(both electronically and nonelectronically) a sufficient number (as determined by the Secretary) of prescriptions under Part D (which can, again, be assessed using Part D drug claims data). If the Secretary decides to use the latter criterion, then, in accordance with section 1848(m)(2)(B) of the Act, the criterion based on the reporting on electronic prescribing measures would no longer apply. The statutory limitation also applies with regard to the application of the payment adjustment.

Based on our proposal to make the
determination of whether an EP is a

‘‘ successful electronic prescriber ’’ based
on submission of the electronic prescribing measure, we propose to


### 40207 Federal Register / Vol. 75, No. 133 / Tuesday, July 13, 2010 / Proposed Rules

again apply the criterion under section 1848(m)(2)(B)(i) of the Act for the
limitation for the 2011 eRx Incentive Program.

Since, as discussed above, we are retaining for 2011 our proposal to make
the determination of whether an EP is

a ‘‘ successful electronic prescriber ’’
based on submission of the electronic prescribing measure, we also are proposing to retain the requirement to analyze the claims submitted by the EP
at the TIN/NPI level to determine whether the 10 percent threshold is met in determining the receipt of an electronic prescribing incentive payment for 2011 by an EP. This calculation is expected to take place in the first quarter of 2012 and will be performed by dividing the EP’s total
2011 Medicare Part B PFS allowed charges for all such covered professional
services submitted for the measure’s denominator codes by the EP’s total Medicare Part B PFS allowed charges for all covered professional services (as assessed at the TIN/NPI level). If the result is 10 percent or more, then the statutory limitation will not apply and a successful electronic prescriber will qualify to earn the electronic prescribing incentive payment. If the result is less than 10 percent, then the statutory limitation will apply and the EP will not earn an electronic prescribing incentive payment even if he or she electronically prescribes and reports a G-code indicating that he or she generated and transmitted a prescription electronically at least 25 times for those eligible cases that occur during the 2011 reporting period. Although an individual EP may
decide to conduct his or her own assessment of how likely this statutory limitation is expected to apply to him or her before deciding whether or not to report the electronic prescribing measure, an individual EP may report the electronic prescribing measure without regard to the statutory limitation for the incentive payment.

(4) Proposed Reporting Option for Satisfactory Reporting of the Electronic Prescribing Measure by Group Practices

In 2010 eRx Incentive Program, we were required by section 1848(m)(3)(C) of the Act to establish a process under which EPs in a group practice shall be
treated as a successful electronic prescriber. In addition, section 1848(m)(3)(C)(iii) of the Act requires that payments to a group practice by reason of the process established under section 1848(m)(3)(C)(i) of the Act shall be in lieu of the payments that would
otherwise be made under this subsection to EPs in the group practice for being a successful electronic prescriber. In 2011, we propose to retain the requirements from 2010 eRx Incentive Program with respect to making incentive payments to group practices based on the determination that the group practice, as a whole, is a successful electronic prescriber for
2011. An individual EP who is affiliated with a group practice participating in the group practice reporting option that successfully meets the proposed requirements for group practices would not be eligible to earn a separate eRx incentive payment for 2011 on the basis of his or her successfully reporting the electronic prescribing measure at the
individual level.

(i) Definition of ‘‘ Group Practice ’’

Section 1848(m)(3)(C)(i) of the Act authorizes the Secretary to define

‘‘ group practice. ’’ For purposes of determining whether a group practice is a successful electronic prescriber for 2011, we propose that consistent with the definition of group practice proposed for the PQRI group practice reporting option (GPRO) discussed in section VI.F.1. of this proposed rule, a

‘‘ group practice ’’ would be defined as a single Taxpayer Identification Number (TIN) with 2 or more EPs, as identified by their individual National Provider Identifier (NPI), who have reassigned their Medicare billing rights to the TIN.

‘‘ Group practice ’’ would also include group practices participating in Medicare demonstration projects approved by the Secretary, as described in section VI.F.1.g.(2) of this proposed
rule.

In addition, we propose to restrict participation in the 2011 eRx GPRO to group practices participating in the 2011 PQRI GPRO (either through GPRO I or GPRO II) or group practices that are deemed to be participating in the 2011 PQRI GPRO (that is, group practices participating in a CMS-approved Medicare demonstration) that have indicated their desire to participate in
the 2011 eRx GPRO.

Therefore, unlike individual EPs who are not required to participate in the PQRI, to be eligible to earn an electronic prescribing incentive in 2011, group practices that wish to participate in the electronic prescribing group practice reporting option will be required to participate in the PQRI group practice reporting option or be deemed to be participating in the PQRI group practice reporting option based on the practice’s participation in an approved Medicare demonstration project. Participation in the eRx Incentive Program, including participation in the electronic prescribing group practice reporting option is, however, optional for group practices that are participating in PQRI under the group practice reporting option. If a group practice wishes to participate in the 2011 eRx Incentive Program under the group practice reporting option, it must indicate its desire to do so at the time that the group practice self-nominates to participate in the 2011 PQRI group practice reporting option. There is no need for group practices to indicate their intent to participate in the 2011 eRx Incentive Program as individual EPs when the group practice self-nominates to participate in the 2011 PQRI group practice reporting option.

Group practices interested in participating in the 2011 PQRI through the group practice reporting option will be required to submit a self-nomination letter to CMS, requesting to participate in the 2011 PQRI group practice reporting option. Instructions for submitting the self-nomination letter will be posted on the PQRI section of the CMS Web site by November 15, 2010. A group practice that wishes to participate in the eRx Incentive Program group practice reporting option will be
notified of the selection decision to participate in the eRx Incentive Program
at the same time that it is notified of the selection decision for the PQRI group practice reporting option.

In addition to meeting the proposed eligibility requirements discussed in section VI.F.1.g. of this proposed rule, we propose that a group practice that wishes to participate in the 2011 eRx Incentive Program under the group practice reporting option will also have to indicate how it intends to report the electronic prescribing measure. That is, the group practice will need to indicate
in its self-nomination letter which reporting mechanism the group practice intends to use for purposes of participating in the 2011 eRx Incentive Program group practice reporting option.

(2) Process for Group Practices to Participate as Group Practices and Criteria for Successful Reporting of the Electronic Prescribing Measure by Group Practices

For group practices selected to participate in the electronic prescribing group practice reporting option for 2011, we propose the reporting period would be January 1, 2011, to December

31, 2011.

We propose that physician groups selected to participate in the 2011 eRx Incentive Program through the group practice reporting option would be able to choose to report the electronicprescribing measure through the claimsVerDate Mar<15>2010 20:23 Jul 12, 2010 Jkt 220001 PO 00000 Frm 00169 Fmt 4701 Sfmt 4702 E:\FR\FM\13JYP2.SGM 13JYP2jlentini on DSKJ8SOYB1PROD with PROPOSALS2

### 40208 Federal Register / Vol. 75, No. 133 / Tuesday, July 13, 2010 / Proposed Rules

based, the registry-based, or, the EHRbased reporting mechanism.

In order for a group practice participating in the PQRI GPRO I to be

considered a successful electronic prescriber, we propose that the group practice would have to report that at least 1 prescription during an encounter was generated and transmitted electronically using a qualified electronic prescribing system in at least 2,500 instances during the reporting period. In order for a group practice participating in the PQRI GPRO II to be

considered a successful electronic prescriber, we propose that the group practice would have to report that at least 1 prescription during an encounter was generated and transmitted electronically using a qualified electronic prescribing system for the number of instances specified in Table 50 (see section VI.F.1.g.(3).(ii). of this proposed rule). In other words, a group of 2–10 NPIs would need to report the 2011 electronic prescribing measure for at least 75 denominator eligible patient encounters during 2011, 225 instances for groups of 11–25 NPIs, 475 instances for groups of 26–50 NPIs, 925 instances for groups of 51–100, and 1,875 instances for groups of 101–199.

Section 1848(m)(2)(B) of the Act specifies that the limitation on the applicability of the electronic prescribing incentive applies to group practices as well as individual EPs. Therefore, in determining whether a group practice will receive an electronic prescribing incentive payment for 2011 by meeting the proposed reporting criteria described above, we would determine whether the 10 percent

threshold is met based on the claims submitted by the group practice.

This calculation is expected to take place in the first quarter of 2012 and will be determined by dividing the group practice’s total 2011 Medicare Part B PFS allowed charges for all covered professional services submitted for the measure’s denominator codes by the group practice’s total Medicare Part B PFS allowed charges for all covered professional services. If the result is 10 percent or more, then the statutory limitation would not apply and a group practice that is determined to be a successful electronic prescriber would qualify to earn the electronic prescribing incentive payment. If the result is less than 10 percent, then the statutory limitation would apply and the group practice would not qualify to earn the electronic prescribing incentive
payment. c. The 2012 eRx Penalty

As stated previously, section 1848(a)(5) of the Act requires that beginning with respect to covered professional services furnished by an EP in 2012, if the EP is not a successful electronic prescriber for the reporting period for the year, the fee schedule amount for such services furnished by such professional during 2012 shall be equal to 99 percent of the fee schedule amount that would otherwise apply to such PFS services. As noted previously,
we do not believe that the criteria that
will be used to determine the applicability of the payment adjustment, or penalty, for 2012 need to be identical
to the criteria for determination of successful electronic prescriber.

We note also that although earning an incentive payment under the EHR incentive payment program precludes an EP from earning an eRx incentive payment, it does not preclude the EP from being subject to the eRx penalty. In order to avoid the eRx penalty, an EP participating in the Medicare EHR incentive program still must meet the relevant eRx penalty criteria for being a successful electronic prescriber.

(1) The eRx Penalty Reporting Period

For purposes of the 2012 eRx penalty, we propose to make a determination of whether an EP or a group practice is a successful electronic prescriber based on the reporting period that begins January 1, 2011 through June 30, 2011. We are proposing a 6-month reporting period for the 2012 penalty rather than a 12-month reporting period so that we may be able to complete the analysis of
2011 data to determine whether an EP or group practice is a successful electronic prescriber prior to January 1, 2012. In order to apply the penalty in 2012 concurrently with claims submission, we will need to make a determination of whether the penalty applies sufficiently in advance of 2012. We believe that establishing a 6-month reporting period for the first year of the penalty will provide administrative efficiencies and avoid the need to apply a retroactive penalty or to make retroactive payments based on application of a penalty.

For EPs and group practices using the claims-based reporting mechanism, we propose that all claims for services furnished between January 1, 2011 and June 30, 2011 must be processed by no later than July 31, 2011 for the claim to be included in our data analysis. This is in contrast to the incentive, where we
allow 2 months for claims to be processed. In order to be able to make a determination of whether the penalty applies sufficiently in advance of 2012, we will need to begin our analysis of the claims shortly after June 30, 2011. We invite comments on the proposed reporting period for the 2012 penalty and our proposal to require claims to be submitted by no later than 1 month after the reporting period.

(2) Criteria for Determining Applicability of the 2012 eRx Penalty to
Individual EPs

Based on the authority under section 1848(m)(3)(D) of the Act, we propose that the 2012 eRx penalty would apply
to an individual EP unless one of the following conditions is met:

• The EP is not a physician (includes MDs, DOs, and podiatrists), nurse practitioner, or physician assistant as of June 30, 2011. We believe that it is appropriate to limit the application of the penalty to those professionals who generally have prescribing privileges
nationwide. Other EPs not listed above may have prescribing privileges in some states but not others. Therefore, we propose to exempt EPs who do not generally have prescribing privileges from being subject to the penalty.

• The EP does not have at least 100 cases (that is, claims for patient services) containing an encounter code
that falls within the denominator of the
eRx measure for dates of service between January 1, 2011 through June 30, 2011. We seek to apply the penalty only to EPs who have a sufficient number of cases between January 1, 2011 and June 30, 2011 to meet the
criteria for successful electronic prescribing for purposes of the penalty. We believe that, on average, for every 10 eligible cases, there will be at least one electronic prescribing opportunity, which provides a sufficient number of
cases to allow EPs to meet the criteria for being a successful electronic prescriber. In addition, we seek to prevent EPs who are new to Medicare from being subject to the eRx penalty.

• The EP is a successful electronic prescriber for the January 1, 2011 through June 30, 2011 reporting period. Specifically, we propose that the EP must report that at least 1 prescription for Medicare Part B FFS patients created during an encounter that is represented by 1 of the codes in the denominator of the 2011 electronic prescribing measure was generated and transmitted electronically using a qualified eRx system at least 10 times during the 2012 eRx penalty reporting period (that is, January 1, 2011 through June 30, 2011). We propose reporting criteria that are lower for the 2012 eRx penalty than for
the 2011 eRx incentive because EPs will only have 6 months to satisfy the


### 40209 Federal Register / Vol. 75, No. 133 / Tuesday, July 13, 2010 / Proposed Rules

criteria for the 2012 penalty but have a full year to satisfy the criteria for the

2011 incentive.

The limitation with respect to the electronic prescribing measures required under section 1848(m)(2)(B)(i) of the Act also applies to the penalty. Therefore, we propose that if less than 10 percent of the EP’s estimated total allowed charges for the January 1, 2011 through June 30,2011 reporting period are comprised of services which appear
in the denominator of the 2011 electronic prescribing measure, then the EP would not be subject to the eRx penalty.

We invite comments on the proposed
conditions under which we would prospectively apply the 1.0 percent reduction in PFS charges for services furnished January 1, 2012 through December 31, 2012. We specifically invite comments on our proposals to exempt certain types of EPs and EPs
who do not have a certain number of cases from the penalty as well as the proposed criteria for successful reporting of the electronic prescribing measure for individual EPs with respect to the penalty.

As with the 2011 incentive payment, we propose that the determination of whether an EP is subject to the penalty
will be made at the individual professional level, based on the NPI and for each unique TIN/NPI combination.

(3) Criteria for Determining Applicability of the 2012 eRx Penalty to Group Practices

As required by section 1848(m)(3)(C) of the Act, we are also required to establish and have in place a process under which EPs in a group practice
shall be treated as a successful electronic prescriber for purposes of the eRx penalty. Thus, we propose that for purposes of the 2012 eRx penalty, a payment adjustment would not be applied to a a group practice participating in the 2011 eRx GPRO if the group practice is participating in either the 2011 PQRI GPRO I or the 2011 PQRI GPRO II and meets the proposed
2011 criteria for successful electronic prescribing described in sections VI.F.2.b.(4).(ii). (with respect to the eRx requirements for GPRO I participants who wish to participate in the 2011 eRx GPRO) and VI.F.1.g.(3).(ii). of the preamble to this proposed rule (with respect to the eRx requirements for GPRO II participants who wish to participate in the 2011 eRx GPRO) for
the 2011 eRx incentive.

For purposes of the 2012 eRx penalty, we propose that the proposed 2011
criteria for successful electronic prescribing would need to be satisfied during the 2012 eRx penalty reporting period of January 1, 2011 through June 30, 2011 for the same operational reasons that we are proposing a 6-month reporting period for the penalty for individual EPs. Furthermore, we do not believe that group practices would be disadvantaged by having to satisfy the proposed criteria for being a successful electronic prescriber for the 2011
incentive in 6 months rather than 12 months to avoid the penalty. When compared to the criteria for individual EPs, the proposed criteria for being a successful electronic prescriber for the 2011 eRx incentive payment for group practices enable group practices, on average, to earn the incentive by electronically prescribing a fewer number of prescriptions per EP than what individual EPs are required to do.

For purposes of determining whether the eRx penalty applies to a group practice, we propose to conduct our analysis for each unique TIN/NPI combination so as not to disadvantage EPs who may have joined the group practice after January 1, 2011.

In addition, in accordance with section 1848(m)(2)(B)(i) of the Act, we also propose that the 2012 eRx penalty would not apply to an eRx GPRO in which less than 10 percent of the group practice’s estimated total allowed charges for the January 1, 2011 through June 30, 2011 reporting period are comprised of services which appear in
the denominator of the 2011 electronic prescribing measure. To be consistent with how this limitation is applied to group practices for purposes of the incentive, we propose to determine whether this limitation applies to a group practice for the penalty at the TIN
level.

For the same reasons that we are proposing a 6-month reporting period for the 2012 eRx penalty for group practices, we also propose that we will use only claims processed by July 31, 2011 in our analysis. This is consistent with our proposed approach for analyzing individual EP claims. Similarly, we propose that registries
would need to submit eRx data for services furnished January 1, 2011 through June 30, 2011 to CMS between July 1, 2011 and August 19, 2011 so that we may include registry data in our analysis. We propose also that group practices participating in the eRx group practice reporting option via EHR-based reporting would be required to submit eRx data for services furnished January 1, 2011 through June 30, 2011 to CMS between July 1, 2011 and August 19,

2011.

We invite comments on the proposed criteria for determining applicability of the 2012 eRx penalty to group practices, including the proposed criteria for successful reporting of the electronic prescribing measure for group practices, and our proposed analytical approach.

(4) Significant Hardship Exemption

Section 1848(a)(5)(B) of the Act provides that the Secretary may, on a case-by-case basis, exempt an EP from the application of the payment adjustment, or penalty, if the Secretary determines, subject to annual renewal, that compliance with the requirement for being a successful electronic prescriber would result in a significant hardship, such in the case of an EP who practices in a rural area without sufficient Internet access. Therefore, we propose that in addition to meeting the
criteria for successful electronic prescriber described in sections VI.F.2.(c).(2) and VI.F.2.(c).(3) of the preamble to this proposed rule, an EP or group practice may also be exempt from application of the 2012 eRx penalty, if during the 2012 eRx penalty reporting period (that is, January 1, 2011 through June 30, 2011), one of the following circumstances applies to the EP or group practice:

• The EP or group practice practices in a rural area with limited high speed

Internet access.

• The EP or group practice practices
in an area with limited available pharmacies for electronic prescribing.

We propose to add two additional ‘‘ G ’’ codes to the 2011 electronic prescribing measure’s specifications describing these 2 circumstances. EPs or group practices to whom one or more of these circumstances apply would be required to report the appropriate G-code at least once between January 1, 2011 and June 30, 2011 using their selected 2011 eRx reporting mechanism. Reporting of one of these two G-codes prior to June 30,
2011 will indicate to us that the EP or group practice would like to be considered for an exemption from the 2012 penalty under the significant hardship exception. We invite comments on the proposed process for the significant hardship exception as well as comments regarding other
circumstances that should be considered a significant hardship.

d. The 2013 eRx Penalty

Section 1848(a)(5) of the Act also requires that with respect to covered professional services furnished by an EP in 2013, if the EP is not a successful electronic prescriber for the reporting period for the year, the fee schedule amount for such services furnished by such professional during 2013 shall be equal to 98.5 percent of the fee schedule


### 40210 Federal Register / Vol. 75, No. 133 / Tuesday, July 13, 2010 / Proposed Rules

amount that would otherwise apply to
such PFS services. Under section 1848(m)(3)(C) of the Act, we are also required to establish and have in place a process under which EPs in a group practice shall be treated as a successful electronic prescriber for purposes of the eRx penalty.

For purposes of the 2013 eRx penalty, we propose to use the proposed 2011
criteria for successful electronic prescriber to determine whether an EP or a group practice is a successful electronic prescriber for purposes of the 2013 eRx penalty. In addition, we propose that the reporting period for the 2013 eRx penalty would be the 2011 eRx incentive reporting period of January 1, 2011 through December 31, 2011. We believe that matching the criteria that will be applied for the 2013 penalty with the criteria that will be applied for the incentive in an earlier year would be the most effective means of encouraging EPs and group practices to adopt and use electronic prescribing systems since anyone who does not qualify for an incentive in 2011 would be subject to a payment adjustment in
2013. We invite comments on this proposal.

e. Public Reporting of Names of
Successful Electronic Prescribers

Section 1848(m)(5)(G) of the Act requires the Secretary to post on the CMS Web site, in an easily understandable format, a list of the names of EPs (or group practices) who satisfactorily submit data on quality measures for the PQRI and the names of the EPs (or group practices) who are successful electronic prescribers. As required by section 1848(m)(5)(G) of the Act, we are proposing to make public the names of EPs and group practices
who are successful electronic prescribers for the 2011 eRx Incentive Program on the Physician Compare Web site that we are required to establish by January 1, 2011 under section 10331 of
the ACA. As stated under section VI.F.1.k. of this proposed rule, we plan to use the existing Physician and Other Health Care Professionals directory as the foundation for the Physician Compare Web site.

We anticipate that the names of individual EPs and group practices who are successful electronic prescribers for the 2011 eRx Incentive Program will be
available in 2012 after the 2011 incentive payments are paid.

To comply with section 1848(m)(5)(G) of the Act, we specifically propose to post the names of individual EPs who report the electronic prescribing measure at least 25 times during the 2011 reporting period for patient encounters included in the measure’s denominator, without regard to whether
the limitation under section 1848(m)(2)(B) of the Act applies to the EP and without regard to whether the EP actually qualifies to earn an incentive payment. In addition, since the PQRI and the eRx Incentive Program are two separate incentive programs and individual EPs are not required to participate in both programs to earn an incentive under either program, we point out that it is possible for an EP who participates in both incentive programs to be listed both as an individual EP who satisfactorily submits data on quality measures for the PQRI and is a successful electronic prescriber under the eRx Incentive Program. Likewise, an individual EP may be
listed as an individual EP who satisfactorily submits data on quality measures for the PQRI but not as a successful electronic prescriber under the eRx Incentive Program (or vice versa) even if he or she participated in both incentive programs.

Similarly, for purposes of publicly reporting the names of group practices, on the Physician Compare Web site, we intend to post the names of group practices that report the electronic prescribing measure the required number of times during the 2011 reporting period for patient encounters
included in the measure’s denominator without regard to whether the limitation under section 1848(m)(2)(B) of the Act applies to the group practice or whether the group practice actually qualifies to earn an incentive payment. Although any group practice participating in the eRx Incentive Program under the group practice reporting option would also have to participate in a PQRI group practice reporting option, the criteria for satisfactory reporting of PQRI measures for group practices are different from the criteria for successful reporting of the electronic prescribing measure by group practices. Therefore, it is possible for a group practice to be listed as a group practice that satisfactorily submits data on quality measures for the PQRI but not as a successful electronic prescriber under the eRx Incentive Program, or

vice versa.

G. DMEPOS Provisions

1. Medicare Durable Medical Equipment, Prosthetics, Orthotics, and Supplies (DMEPOS) Competitive Bidding Program (CBP)

a. Legislative and Regulatory History of

DMEPOS CBP

Medicare pays for most DMEPOS furnished after January 1, 1989 pursuant to fee schedule methodologies set forth in section 1834 of the Act, as added by section 4062 of the Omnibus Budget Reconciliation Act of 1987 (OBRA ’87) (Pub. L. 100–203). Specifically, sections 1834(a)(1)(A) and (B), and 1834 (h)(1)(A) of the Act provide that Medicare payment for these items is equal to 80 percent of the lesser of the actual charge
for the item or the fee schedule amount for the item. We implemented this payment methodology at 42 CFR part 414, subpart D of our regulations. Sections 1834(a)(2) through (a)(5) and 1834(a)(7) of the Act, and implementing regulations at § 414.200 through § 414.232 (with the exception of § 414.228), set forth separate payment categories of durable medical equipment (DME) and describe how the fee schedule for each of the following categories is established:

• Inexpensive or other routinely purchased items (section 1834(a)(2) of the Act and § 414.220 of the regulations);

• Items requiring frequent and substantial servicing (sections 1834(a)(3) of the Act and § 414.222 of the regulations);

• Customized items (section 1834(a)(4) of the Act and § 414.224 of the regulations);

• Oxygen and oxygen equipment (section 1834(a)(5) of the Act and § 414.226 of the regulations);

• Other items of DME (section 1834(a)(7) of the Act and § 414.229 of the regulations).

For a detailed discussion of payment for DMEPOS under fee schedules, see the final rule published in the April 10,

2007 Federal Register (72 FR 17992).

Blood glucose testing strips or diabetic testing strips are covered under
the Medicare DME benefit in accordance with section 1861(n) of the Act. Other supplies that are necessary for the
effective use of DME are also covered
under the Medicare DME benefit in accordance with longstanding program instructions at section 110.3 of chapter 15 of the Medicare Benefit Policy
Manual.

Section 1847 of the Act, as amended by section 302(b)(1) of the MMA, requires the Secretary to establish and implement a DMEPOS CBP. Under the DMEPOS CBP, Medicare sets payment
amounts for selected DMEPOS items
and services furnished to beneficiaries in competitive bidding areas (CBAs) based on bids submitted by qualified suppliers and accepted by Medicare. For competitively bid items, these new payment amounts, referred to as ‘‘ single payment amounts (SPA), ’’ replace the fee schedule payment methodology. Section 1847(b)(5) of the Act provides that Medicare payment for these


### 40211 Federal Register / Vol. 75, No. 133 / Tuesday, July 13, 2010 / Proposed Rules

competitively bid items and services is made on an assignment-related basis equal to 80 percent of the applicable SPA, unless any unmet Part B deductible described in section 1833(b) of the Act. Section 1847(b)(2)(A)(iii) of the Act prohibits the awarding of contracts to any entity unless the total amounts to be paid to contractors in a CBA are expected to be less than the
total amounts that would otherwise be paid under the fee schedule methodologies set forth in section 1834(a) of the Act. This requirement guarantees savings to both the Medicare program and beneficiaries under the program. The fee schedule methodologies will continue to set payment amounts for noncompetitively
bid DMEPOS items and services. The program also includes provisions to ensure beneficiary access to quality
DMEPOS items and services. Section 1847 of the Act limits participation in the program to suppliers who have met applicable quality and financial standards and requires the Secretary to maintain beneficiary access to multiple suppliers.

When first enacted by the Congress, section 1847(a)(1)(B) of the Act required the Secretary to phase in the DMEPOS CBP in a manner so that the competition under the program occurred in 10 of the largest metropolitan statistical areas (MSAs) in 2007. The program was to be expanded into 70 additional MSAs in 2009, and then into additional areas
after 2009.

In the May 1, 2006 Federal Register (72 FR 25654), we issued a proposed rule that would implement the DMEPOS
CBP for certain DMEPOS items and services and solicited public comment on our proposals. In the April 10, 2007 Federal Register (72 FR 17992), we issued a final rule addressing the comments on the proposed rule and establishing the regulatory framework
for the DMEPOS CBP in accordance
with section 1847 of the Act.

Consistent with the requirements of
section 1847 of the Act and the competitive bidding regulations, we began implementation of the program by conducting the first round of competition in 10 of the largest MSAs in 2007. We limited competition during this first round of the program to
DMEPOS items and services included in 10 selected product categories, including mail order diabetic supplies. The bidding window opened on May 15, 2007 and was extended to allow bidders adequate time to prepare and
submit their bids. We then evaluated
each submission and awarded contracts consistent with the requirements of section 1847(b)(2) of the Act and § 414.414. Following the bid evaluation process, we awarded over 329 contracts to qualified suppliers.

The DMEPOS CBP was effective on July 1, 2008. Beginning on that date, Medicare coverage for competitively bid
DMEPOS items and services furnished
in the first 10 CBAs was limited to items and services furnished by contract and grandfathered suppliers of oxygen and oxygen equipment and rented DME, and payment to these suppliers was based on the SPA, as determined under the competitive bidding regulations. For
further discussion of the DMEPOS CBP and the bid evaluation process, see the final rule published in the April 10,

2007 Federal Register (72 FR 17992).

On July 15, 2008, the MIPPA was
enacted. Section 154 of the MIPPA
amended section 1847 of the Act to make certain limited changes to the DMEPOS CBP. Section 154(a) of the MIPPA delayed competition under the program and amended section 1847(a)(1)(D)(i) of the Act to terminate the competitive bidding contracts effective June 30, 2008 and prohibit payment based on the contracts.

Section 154(a) of the MIPPA required the Secretary to conduct a second competition to select suppliers for Round 1 in 2009 ( ‘‘ Round 1 Rebid ’’ ). The
Round 1 Rebid includes the ‘‘ same items
and services ’’ and is to be conducted in
the ‘‘ same areas ’’ as the 2007 Round 1 competition, with certain limited exceptions. Specifically, we were required to exclude the product category of negative pressure wound therapy (NPWT) items and services and the San Juan, Puerto Rico CBA from the Round 1 Rebid. In addition, section 154(a) of the MIPPA permanently excluded group 3 complex rehabilitative wheelchairs from the DMEPOS CBP by amending the
definition of ‘‘ items and services ’’ in section 1847(a)(2) of the Act. Section 154(a) of the MIPPA delayed competition for Round 2 of the DMEPOS CBP from 2009 to 2011, and subsequent competitions under the program to after 2011. Finally, section 154(a) of the MIPPA specifically addresses the phase in of a competition
for national mail order items and services by specifying that such competitions may be phased in after

2010.

b. Implementation of a National Mail Order DMEPOS Competitive Bidding Program (CBP) for Diabetic Testing Supplies

We conducted competitions for mail order diabetic testing supplies in the 10
CBAs selected for Round 1. In the
Round 1 rebid we conducted competition for mail order diabetic testing supplies in 9 of the 10 CBAs selected in Round 1. These competitions were limited to diabetic testing supplies furnished by mail order contract suppliers, as defined in the April 10, 2007 DMEPOS Competitive Bidding final rule (72 FR 17992) to individuals
located in those CBAs. As defined in the final rule, a mail order contract supplier

is ‘‘ a contract supplier that furnishes items through the mail to beneficiaries who maintain a permanent residence in

a CBA ’’ . We clarified in program
instructions that ‘‘ mail order ’’ means items ordered remotely (that is, by phone, e-mail, Internet, or mail) and delivered to a beneficiary’s residence by common carriers (for example, U.S. Postal Service, Federal Express, United Parcel Service, or other shipping or courier service companies) but not items obtained by beneficiaries from local
retail storefronts.

Due to the inclusion of mail order diabetic supplies as a product category in Round 1 of the program, Medicare
beneficiaries in a CBA who obtain diabetic testing supplies through mail order must purchase these supplies from a mail order contract supplier in order for Medicare to pay for these items. Payment for these items will be
at the SPA determined consistent with the program’s regulations. Beneficiaries who do not obtain their testing supplies through mail order may purchase these products from any enrolled Medicare supplier and Medicare payment for
these items will be at the fee schedule amount. The home blood glucose monitor (diabetic testing equipment)
itself is not included in the Round 1
DMEPOS CBP for mail order diabetic supplies. This allows the beneficiary to go to any enrolled supplier to obtain the glucose monitor that the beneficiary and
their clinician believes best meets their medical needs. The supplier of the glucose monitor is responsible for training the beneficiary on how to use the monitor and for answering all follow up questions and providing all services required by the DMEPOS quality standards and supplier standards, found in § 424.57, related to the glucose monitoring system selected by the beneficiary and their clinician. The beneficiary then has the choice of obtaining the replacement diabetic testing supplies that work with their purchased monitoring system from any local, non-mail order supplier (typically a pharmacy) or from a mail order supplier whose contract requires them to ship the replacement diabetic supplies directly to the beneficiary’s home. If the beneficiary wants to continue receiving their replacement


### 40212 Federal Register / Vol. 75, No. 133 / Tuesday, July 13, 2010 / Proposed Rules

supplies from a local pharmacy because that is their preference or because they
want to have face-to-face access to a local pharmacist who, in addition to the supplier of the glucose monitoring system, can answer questions about the use of their system in testing their blood glucose levels, this choice is preserved. However, if they choose the convenience and savings associated with having their replacement supplies shipped directly to their home, the beneficiary can decide to obtain their supplies from a mail order contract supplier.

The SPA was on average 43 percent
lower than the fee schedule amount for diabetic testing supplies during the
Round 1 of DMEPOS CBP. This reduction in payment would have
resulted in a reduction of the beneficiary’s co-insurance payment. The
contracts and SPAs for the Round 1 Rebid for mail order diabetic testing supplies are scheduled to be effective for diabetic supplies furnished on a mail
order basis to beneficiaries in the 9 CBAs from January 1, 2011, through December 31, 2012.

(1) National Mail Order DMEPOS CBP

As part of our rulemaking implementing the DMEPOS CBP, we established regulations to implement competitions on a regional or national
level for certain items such as diabetic testing supplies that are furnished on a mail order basis. We explained our rationale for establishing a national
DMEPOS CBP for items furnished on a
mail order basis in the Federal Register in the May 1, 2006 proposed rule (71 FR 25669) and April 10, 2007 final rule (72 FR 18018). A national mail order program would generate immediate national savings at a magnitude that may not be possible with local competitions among suppliers that are not able to obtain the type of volume purchasing discounts from manufacturers that are available to large, national mail order suppliers. In a September 2004 report (GAO–04–765), the Government Accountability Office (GAO) recommended that we consider using mail delivery for items that can be provided directly to beneficiaries in the home as a way to implement a DMEPOS competitive bidding strategy. In the case of diabetic supplies and other items furnished by local neighborhood pharmacies, establishing a competition
for items furnished on a mail order basis would exempt local pharmacies from competing with national mail order suppliers while preserving the choice of the beneficiary to go to any local pharmacy to pick up their diabetic supplies. Manufacturers and suppliers have stated to CMS at different meetings
on numerous occasions that the choice
for beneficiaries to obtain diabetic supplies from local pharmacies with licensed pharmacists in house who can provide instructions and guidance to beneficiaries related to their testing needs is important and needs to be preserved.

(2) DMEPOS CBP for National Mail Order Diabetic Supplies

In the January 16, 2009 Federal Register , we published an interim final rule (IFC) (74 FR 2873) implementing certain changes to the DMEPOS CBP. Specifically, the rule implemented certain MIPPA provisions that delayed implementation of Round 1 of the program; required CMS to conduct a second Round 1 competition in 2009, and mandated certain changes for both the Round 1 Rebid and subsequent rounds of the program. In the January 16, 2009 IFC preamble, we indicated that we would be considering alternatives for competition of diabetic testing supplies in future notice and comment rulemaking. We explained
that we believed it was consistent with section 1847(a) to employ competitive bidding for diabetic suppliers in both
the mail order and traditional retail markets, in part due to concerns raised
about the bifurcation of the method of delivery of diabetic supplies and the difficulty in defining what constitutes

‘‘ mail order ’’ for purposes of competition.

(3) Overview of Proposed Rule

As part of the phase in of the DMEPOS CBP, we are proposing to implement a national mail order DMEPOS CBP for diabetic testing supplies. Under the proposed mail order DMEPOS CBP, we would award contracts to suppliers to furnish these
items across the nation to beneficiaries who elect to have replacement diabetic testing supplies delivered to their residence. Suppliers wishing to furnish these items through mail order to
Medicare beneficiaries would be required to submit bids to participate in any DMEPOS CBP implemented for the furnishing of mail order items. In
accordance with the DMEPOS CBP final rule, payment for mail order diabetic supplies would be based on the SPA
determined from the bids submitted and accepted for the furnishing of diabetic testing supplies by mail order throughout the national CBA.

As part of our proposal to implement the national mail order DMEPOS CBP, we are also proposing a revised definition in regulation of ‘‘ mail order ’’
so that there would be a clear distinction between mail order items
and non-mail order items. This revised definition would apply to all future competitions for mail order items and services. We are also proposing to implement the special rule mandated by section 1847(b)(10)(A) of the Act for competitions for diabetic testing strips following the Round 1 Rebid. Section 1847(b)(10)(A) requires suppliers bidding in competitions to furnish diabetic testing strips after the Round 1
Rebid to demonstrate that their bid covers at least 50 percent of all types of diabetic testing strips furnished by suppliers. If the supplier is not able to satisfy this requirement, the Secretary must reject that bid. Finally, we are proposing to include an additional term in contracts of mail order suppliers of diabetic testing supplies following the Round 1 Rebid. The proposed term would prohibit suppliers from influencing or incentivizing beneficiaries to change their brand of glucose monitor and test strips.

(4) Future Competitions for Diabetic Testing Supplies

Section 1847(a)(1)(A) of the Act
mandates the establishment of DMEPOS
CBP for items described in section 1847(a)(2)(A) of the Act, including diabetic testing supplies. Section 1847(a)(1)(B)(ii) of the Act authorizes the phase in of items and services under these programs beginning with the highest cost and highest volume items
and services or those items and services that are determined to have the largest savings potential. Current Medicare claims data from fiscal year 2009 shows that over 62 percent of beneficiaries currently receive their replacement diabetic testing supplies from mail order suppliers. Mail order diabetic testing supplies account for approximately one billion dollars in allowed charges per year and are therefore high volume
items. We believe that a national mail order CBP for diabetic testing supplies would result in large savings as a result of competition between entities that would factor into their bids savings from volume discount purchasing of quantities of supplies needed on a
national rather than local basis. Therefore, we believe that implementing
a national mail order DMEPOS CBP for diabetic testing supplies is the best option for meeting the requirements of the statute referenced above as long as
certain refinements discussed below are made to the program to address
concerns about the mail order/non-mail
order bifurcation.

We have heard from industry groups and suppliers that furnish diabetic testing supplies on a national mail order


### 40213 Federal Register / Vol. 75, No. 133 / Tuesday, July 13, 2010 / Proposed Rules

basis of their concerns that national chain pharmacies that furnish diabetic testing supplies through both a national
mail order business and local retail pharmacies will encourage beneficiaries
to obtain these items from local retail locations by inappropriately offering
certain incentives to Medicare beneficiaries such as coupons for other store items. Based on our experience from Round 1, we believe DMEPOS CBP for mail order diabetic testing supplies would be subject to manipulation
without a clearer definition of what we mean by mail order. We agree with the industry groups and suppliers that have indicated that this practice will harm businesses that only furnish diabetic testing supplies on a mail order basis. In order to address these concerns, we are proposing to add to § 414.402 a
definition of ‘‘ National mail order

DMEPOS CBP. ’’ We propose to define that term as a program whereby contracts are awarded to suppliers for the furnishing of mail order items across
the nation. We believe that implementing a national competitive bidding program for diabetic supplies would preserve beneficiary choice to purchase testing supplies in person from any local pharmacy that is an enrolled Medicare supplier that furnishes diabetic supplies, while clarifying the definition of mail order will provide significant savings potential for beneficiaries and the program. Savings would be generated in
the near future from national SPAs for supplies furnished on a mail order or home delivery basis and on a long term basis for all diabetic supplies as a result of the requirement of section 1834(a)(1)(F) of the Act to either competitively bid in all areas or adjust prices in all areas by January 1, 2016.
We believe that more beneficiaries will
elect to choose the mail order/home delivery option, thereby further increasing short term savings under the program. Even if this is not the case, and the percentage of beneficiaries choosing the mail order/home delivery option remains at the current rate of 62 percent, savings for the remaining 38 percent must be achieved by no later than January 1, 2016, as a result of the requirements of section 1834(a)(1)(F) of
the Act.

We considered other alternatives for establishing DMEPOS CBP for diabetic testing supplies that would eliminate
the mail order/non-mail order
bifurcation and associated concerns.
These alternatives include:

• A national competition among all types of suppliers for all replacement diabetic supplies. Under this alternative, all beneficiaries would receive their replacement diabetic supplies from contract suppliers responsible for furnishing diabetic supplies throughout the nation using any method of delivery as long as the supplies are delivered on a timely basis.

• Competitions in regional CBAs among all types of suppliers for all replacement diabetic supplies. Under this alternative, all beneficiaries would receive their replacement diabetic supplies from contract suppliers responsible for furnishing diabetic supplies throughout a designated region of the country using any method of delivery to a beneficiary home as long as the supplies are delivered on a timely
basis.

• Competitions in local CBAs among all types of suppliers for all replacement diabetic supplies. Under this alternative, all beneficiaries would receive their replacement diabetic supplies from contract suppliers responsible for furnishing diabetic supplies throughout the local area using any method of delivery to a beneficiary as long as the supplies are delivered on a timely basis.

We believe that the first option to bid
on a national basis for all diabetic supplies, would result in most beneficiaries using mail order and might generate more savings than a national competition for diabetic supplies furnished on a mail order basis only. However, this first option would likely eliminate the beneficiary choice to obtain replacement diabetic supplies on a non-mail order basis from any enrolled supplier that is a pharmacy or other local supplier storefront where a licensed pharmacist is on hand to offer guidance and consultation to the beneficiary. We believe the other two options would also diminish this choice. In addition, the alternatives of regional or local competitions are not likely to result in savings at or above the level that can be generated from a national competition for mail order supplies. Suppliers participating in a national program may be able to obtain volume purchasing discounts for the quantities of supplies needed nationwide. Therefore, we are not proposing any of these alternatives at this time. However, we are specifically requesting public comments on these and other alternatives for establishing DMEPOS CBP for diabetic supplies.

In § 414.411, we are proposing to
establish a national mail order DMEPOS CBP with competitions taking place after 2010 for the purpose of awarding contracts to suppliers to furnish replacement diabetic testing supplies across the nation, with additional program refinements described below. We note that the decision to proceed with a national mail order competition after 2010 does not prevent us from phasing in competitions for non-mail order diabetic supplies or from conducting competitions for diabetic supplies in general in the future consistent with section 1847(a)(1) of the

Act.

(5) Definition of Mail Order Item

We are proposing to define ‘‘ mail
order item ’’ in 42 CFR 414.402 to mean any item (for example, diabetic testing supplies) shipped or delivered to the beneficiary’s home, regardless of the method of delivery. We are also proposing to define ‘‘ non-mail order

item ’’ as any item (for example, diabetic testing supplies) that a beneficiary or caregiver picks up in person at a local pharmacy or supplier storefront. Therefore, the only items excluded from
the mail order definition and mail order competition would be those that a beneficiary or caregiver picks up in person at a local pharmacy or other local supplier storefront. These revised
definitions of mail order item and nonmail order item are intended to clearly identify which items are truly mail order. In addition, we believe this definition will preserve the choice of the beneficiary to obtain replacement diabetic supplies in person from a local pharmacy and eliminate the
circumvention of the mail order

program.

As discussed above, for Round 1 and the Round 1 Rebid of the DMEPOS CBP, we defined mail order contract supplier in our regulations at § 414.402 to mean a contract supplier that furnishes items through the mail. We further defined mail order in program instructions to

mean ‘‘ items ordered remotely (that is, by telephone, e-mail, Internet or mail) and delivered to beneficiary’s residence by common carriers (for example, U.S. Postal Service, Federal Express, United Parcel Service) and does not include items obtained by beneficiaries from
local storefronts. ’’ The intent of the Round 1 definition was to distinguish between mail order supplies (supplies furnished directly to the beneficiary’s home) and non-mail order supplies (supplies picked up at a local pharmacy). Manufacturers and suppliers of blood glucose monitors and test strips have expressed on numerous occasions the importance of maintaining the patient option of obtaining diabetic testing supplies from a local pharmacy that provides full time access to a licensed pharmacist who can provide instructions and guidance to the beneficiary or caregiver related to the use of the diabetic supplies (the


### 40214 Federal Register / Vol. 75, No. 133 / Tuesday, July 13, 2010 / Proposed Rules

pharmacy pickup option). This is the

‘‘ non-mail order ’’ option we attempted to separate from the mail order option with
the Round 1 definition of mail order.

During implementation of Round 1 of the program, we discovered that suppliers that did not successfully compete and win a contract under the program tried to adopt certain approaches to circumvent the mail order
definition. In the first round of competitive bidding, suppliers that lost their bid to be a contract supplier for mail order diabetic testing supplies considered ways to change their delivery methods to circumvent the mail order DMEPOS CBP. For example, some mail order suppliers considered purchasing a fleet of cars to deliver these items to the beneficiary’s home so
as not to be considered a mail order supplier. Other suppliers attempted to enter into special ‘‘ private ’’ arrangements with well known delivery
services and claimed that because of such arrangements they should not be considered mail order suppliers. These alternative home delivery methods do not provide any benefits to the patient beyond what the traditional mail order home delivery method offers. They are simply ways to continue furnishing diabetic supplies on a home delivery basis after submitting a bid for mail
order that does not result in the award
of a contract under the DMEPOS CBP.
Without a clear distinction between mail order (home delivery option) and non-mail order (pharmacy pickup option), suppliers could continue to attempt to make arrangements as they did in the initial Round 1 competition
to circumvent the DMEPOS CBP. We consider these practices to be
inconsistent with the DMEPOS CBP statute and regulations currently in effect, and our proposal is intended to further clarify the existing definition of mail order. Such arrangements prevent beneficiaries and the Medicare program from realizing savings afforded by the
mail order DMEPOS CBP and is unfair to winning suppliers who bid in good faith for a contract for furnishing supplies to the home delivery market.

This proposed definition of mail order item would not apply to the Round 1 competition because of the specific requirement of MIPPA to rebid Round 1
in 2009 for the same items and services
included in the initial Round 1 competition. However, for a national competition, it is imperative that the
new definition of mail order item be in place because of the implications such a program would have on the entire mail order delivery market in the United States. In these future competitions, we would continue to emphasize in our educational efforts the basic distinction between mail order (home delivery) and non-mail order (pharmacy pickup). In addition, we will continue to take appropriate and necessary action against suppliers that do not comply with the
revised definition.

As mentioned above, an alternative DMEPOS CBP for replacement diabetic supplies would be to hold a national competition among all types of suppliers for all replacement diabetic supplies. One benefit to this approach is
that it would eliminate the need to
differentiate between mail order and non-mail order supplies; however, it would likely eliminate the pharmacy pickup choice since most local pharmacies would not be able to service the entire CBA if they did not also operate a national mail order service.

We invite comments on our proposed
definition of ‘‘ mail order ’’ and its impact on future rounds of bidding.

(6) Special Rule in Case of Competition for Diabetic Testing Strips

Following Round 1 of the program, any competition for diabetic testing strips, such as the national mail order program for diabetic testing supplies proposed in this rule, must include the special rule set forth in section 1847(b)(10)(A) of the Act. Under that section, a supplier must demonstrate that their bid to furnish diabetic testing strips covers the furnishing of a sufficient number of different types of diabetic testing strip products that, in the aggregate and taking into account volume for the different products, to account for at least 50 percent of all such types of products on the market. Section 1847(a)(10)(A) also specifies
that the volume for the different products may be determined in accordance with data (which may include market based data) recognized by the Secretary. When a beneficiary needs to obtain replacement test strips, they must obtain the specific brand of test strips products that work with their brand and model of blood glucose monitor. The test strips are not manufactured in a way that allows use of different brands of test strips in different brands of monitors. Therefore, when replacement test strips are furnished, the supplier must ensure that the specific brand and model of test strips that the patient requires for use with their purchased monitor is
furnished.

Section 1847(b)(10)(B) of the Act mandates the Office of Inspector General (OIG) of the Department to conduct a study before 2011 to generate volume data for the various products that could be used for this purpose. Under the DMEPOS CBP, bidding suppliers are required to provide information on the products they plan

to furnish if awarded a contract. We propose to use this information and

information on the market share (volume) of the various diabetic testing strip products to educate suppliers on meeting the requirements of this special rule. In addition, it may be necessary to

obtain additional information from suppliers such as invoices or purchase orders to verify that the requirements in

the statute have been met.

We are proposing that suppliers be required to demonstrate that its bid covers the minimum 50 percent threshold provided in the statute, but

we invite comments on whether a higher threshold should be used. We have proposed the 50 percent threshold in part because we believe that all suppliers have an inherent incentive to furnish a wide variety of types of diabetic testing products to generate a

wider customer referral base. The 50 percent threshold would ensure that

beneficiaries have access to mail order delivery of the top-selling diabetic test strip products. In addition, as explained below, we are proposing an ‘‘ antiswitching provision ’’ that we believe

should obviate the need to establish a threshold of greater than 50 percent for the purpose of implementing this special rule because the contract suppliers would not be able to carry a limited variety of products and switch beneficiaries to those products.

For purposes of implementing the special rule in section 1847(b)(10)(A), we are proposing to define ‘‘ diabetic testing strip product ’’ as a specific brand and model of test strip, as that is the best way to distinguish among different products. Therefore, we plan to use market based data for specific brands and models of diabetic test strips to

determine the relative market share or volume of the various products on the

market that are available to Medicare beneficiaries. We plan to review a variety of data, including but not

limited to data furnished in the OIG report, to determine the market share of the various products. The special rule mandated by section 1847(b)(10)(A) of the Act applies to all competitions for diabetic testing strips after the first round of the DMEPOS CBP. Therefore, we would apply this rule to non-mail order competitions and/or local competitions conducted for diabetic testing strips after Round 1 of the

DMEPOS CBP.


### 40215 Federal Register / Vol. 75, No. 133 / Tuesday, July 13, 2010 / Proposed Rules

(7) Anti-Switching Rule in Case of Competition for Diabetic Test Strips

We do not believe that we can effectively apply the 50 percent rule, as required by section 1847(b)(10)(A) of theAct, if we do not establish an antiswitching rule to prevent suppliers from influencing beneficiaries to switch
monitors. We have heard concerns from beneficiary advocacy groups, as well as industry representatives, that contract suppliers furnishing diabetic testing supplies in the first round encouraged
beneficiaries to switch to a different brand of blood glucose monitor and testing supplies than they and/or their physician or clinician previously selected. Suppliers attempted to switch beneficiaries to the less expensive monitor or the monitor that provided them with the most profit rather than
the monitor that was most suitable for them. Without the anti-switching rule, suppliers may offer 50 percent of the
brands on the market but continue to
switch beneficiaries to the least expensive brands so that the requirement to offer at least 50 percent
of the brands on the market rather than a few specific brands becomes meaningless.

We are proposing to prohibit suppliers awarded contracts for diabetic testing supplies from influencing or incentivizing the beneficiary in any way to switch the brand of glucose monitor and testing supplies they are currently using. We would propose that contract suppliers continue to furnish the brand of testing supplies that work with the monitor currently in use by the beneficiary. In the case where the beneficiary is receiving a monitor for the first time or a replacement monitor, the contract supplier would be subject to the requirements of § 414.420 in order to protect beneficiaries from feeling forced or incentivized to use a particular type
or brand of monitor We continue to believe the proper role of the contract supplier is to furnish diabetic testing strips and other supplies to beneficiaries, not to interfere with the beneficiary’s selection of the type of monitor and supplies. This requires the supplier to furnish the brand of testing supplies that work with the blood glucose monitor product that the beneficiary and/or clinician, and not the supplier of the testing supplies, selects. If the beneficiary needs a blood glucose monitor for the first time, or needs to replace their existing blood glucose monitor, and neither the beneficiary nor their physician has determined which brand or type of monitor to obtain, the beneficiary may continue to ask for assistance from the supplier to select a monitor and the supplier should show them the full range of products. However, if the beneficiary has already selected a monitor and simply needs replacement diabetic testing supplies, the supplier must furnish the brands of testing supplies that work with the brand monitor that the beneficiary has selected. We believe this proposal would preserve the integrity of the clinical decision regarding choice of glucose monitoring system and would result in contract suppliers offering a wide variety of diabetic testing supply products.

We are proposing to amend § 414.422 to add the anti-switching requirement to the terms of the contract for a supplier of diabetic testing supplies. A supplier
would be in breach of their contract and subject to the sanctions set forth under § 414.423(g), including termination, if they violate this term. We welcome comments on this proposal.

c. Off-the-Shelf (OTS) Orthotics Exemption

In the April 10, 2007 final rule (72 FR 17992), we established § 414.404(b)(1), which sets forth several exemptions to the DMEPOS CBP. These exceptions are applicable to providers, physicians, and treating practitioners that furnish
certain DMEPOS items under Medicare Part B. The exempted items are limited to crutches, canes, walkers, folding manual wheelchairs, blood glucose monitors, and infusion pumps that are DME. For an explanation as to why these items were exempt see the DMEPOS Competitive Bidding final rule (CMS–1270–F) published April 10, 2007, (72 FR 17992). For the exemptions to apply, the items must be furnished by a physician or treating practitioner to his or her own patients as part of his or her professional service. The items are to be billed under a billing number assigned to the physician, the treating practitioner (if possible), or a group practice to which the physician or treating practitioner has reassigned the right to receive Medicare payment.

The April 10, 2007 final rule also established an exemption for a physical therapist in private practice (as defined in § 410.60(c)) or an occupational therapist in private practice (as defined in § 410.59(c)) to furnish competitively bid OTS orthotics without submitting a bid and being awarded a contract under the DMEPOS CBP, provided that the items are furnished only to the therapist’s own patients as part of a physical or occupational therapy

service.

Section 154(d) of MIPPA amended section 1847(a) of the Act by adding paragraph (7), which expands the exemptions from the DMEPOS CBP for certain OTS orthotics to physicians or other practitioners (as defined by the Secretary) if furnished to their own patients as part of their professional service. Section 1847(a)(7) of the Act, as added by MIPPA, also expanded the exemption from the program to hospitals for certain OTS orthotics, crutches, canes, walkers, folding manual wheelchairs, blood glucose monitors, and infusion pumps if these items are furnished to the hospital’s own patients during an admission or on the date of discharge.

The DMEPOS CBP Round 1 Rebid interim final rule with comment period (IFC) included the expanded exemption for certain DMEPOS items as provided by MIPPA for hospitals. We noted in the
IFC that we would address the expanded exemption of OTS orthotics for hospitals, physicians and other practitioners in future rulemaking.

In this proposed rule, we are proposing to revise current provisions at § 414.404(b)(1)(i) to incorporate the provision of section 1847(a)(7)(A)(i) and (ii) of the Act that exempts from the program OTS orthotics furnished by physicians and other practitioners to their own patients as part of their professional service or by hospitals to the hospital’s own patients during an admission or on the date of discharge.

d. Grandfathering Rules Resulting in Additional Payments To Contract Suppliers Under the DMEPOS Competitive Bidding Program (CBP)

Section 1847(a)(4) of the Act requires
that in the case of rented DME and oxygen and oxygen equipment, the Secretary shall establish a

‘‘ grandfathering ’’ process. This requirement was implemented through regulations at § 414.408(j) that were published in the April 10, 2007 Federal Register (72 FR 17992). The grandfathering process allows beneficiaries who were renting DME items or receiving oxygen and oxygen equipment prior to the start of a DMEPOS CBP from a supplier who did

not win a contract to continue to rent the equipment from that noncontract supplier if that supplier chooses to become a grandfathered supplier. Under § 414.408(i)(2), when the beneficiary decides to use a contract supplier instead of a grandfathered supplier to receive their oxygen equipment and supplies, the contract supplier receives a minimum of 10 monthly payments for taking over the furnishing of oxygen and oxygen equipment. When a beneficiary decides to use a contract supplier to furnish capped rental DME, section § 414.408(h)(2) restarts the 13-month


### 40216 Federal Register / Vol. 75, No. 133 / Tuesday, July 13, 2010 / Proposed Rules

capped rental period. These rules were established, in part, based on advice from the Program Advisory and Oversight Committee (PAOC) and are intended to give bidding suppliers an assurance that they would be compensated in these situations and
would not have to factor into their bids the cost of receiving as few as one monthly payment for beneficiaries near the end of the 13-month cap for capped rental items and 36-month cap for oxygen equipment.

At the time these rules were developed, the supplier was mandated by the statute to transfer title to the equipment to the beneficiary after the both the 13-month cap for capped rental items and the 36-month cap for oxygen equipment. Section 144(b) of the MIPPA repealed the transfer of title requirement for oxygen equipment, as established by Deficit Reduction Act of 2005, replacing that requirement with the 36-month rental cap. Under the revised oxygen payment provisions, suppliers now get the equipment back when the beneficiary no longer needs it. Also, at the time these rules were developed, the beneficiary had the option to acquire standard power wheelchairs on a lump sum purchase basis, an option which greater than 95% of the beneficiaries selected, based upon historic claims data. Therefore, those items generally would not be affected by the grandfathering rules. However, as
discussed in section 3136 of this proposed rule, section 3136 of the ACA eliminates the lump sum purchase option for standard power wheelchairs. This new policy applies to items
furnished under the DMEPOS CBP beginning with Round 2 of the program. Over 200,000 beneficiaries received standard power wheelchairs nationwide in 2009, and the Medicare allowed charges for these wheelchairs was over $650 million, including both rental and purchase options. Therefore, this large volume of capped rental items will be subject to the grandfathering rules
effective with Round 2 of the DMEPOS CBP, thus increasing the overall magnitude of the effect these rules have on the program and beneficiaries.

In some cases, the grandfathering rules described above place a financial
burden on beneficiaries who are near the end of the 13 or 36-month rental cap periods. If a beneficiary’s existing supplier chooses not to be a grandfathered supplier, the beneficiary will be required to switch to a contract supplier in order for Medicare to continue to pay for the furnishing of the rental equipment. In such cases, the beneficiary will be responsible for
additional co-insurance amounts. Based on experience from the initial Round 1 competition in 2008, we believe that most suppliers will choose to grandfather and therefore these rules will have no impact on these situations. However, in those limited situations in which the beneficiary does not use a grandfathered supplier and the beneficiary is near the end of the 13 or 36-month rental cap period, the impact on the beneficiary could be significant. As mentioned above, our current grandfathering rules will result in a limited number of beneficiaries facing additional co-insurance payments. To illustrate the impact some beneficiaries may face as a result of these rules, a beneficiary who has already made 12 coinsurance payments for a capped rental item could make as many as 12 additional copayments as a result of restarting the capped rental period when they transition from a noncontract supplier to a contract supplier at the beginning of a DMEPOS CBP. In another example, a beneficiary who has already made 35 coinsurance payments for oxygen and oxygen equipment could make as many as 9 additional copayments as a result of the rule that provides a minimum of 10 monthly payments when they transition from a noncontract supplier to a contract supplier at the beginning of a DMEPOS CBP. As stated above, we expect that most noncontract suppliers will choose to become grandfathered suppliers, therefore limiting the number of
instances where these rules would apply. However, in light of the beneficiary impact in the those extreme cases illustrated above, and in light of the recent legislative changes by the MIPPA and the ACA as explained above, we are reevaluating whether or not changes to these grandfathering rules are necessary. As discussed above, as a result of the MIPPA, suppliers of oxygen equipment no longer lose title to the equipment after receiving the 36th payment and this may warrant
reconsideration of the minimum number of payments they should receive as contract suppliers when a beneficiary transitions to them from a noncontract supplier at the beginning of a DMEPOS CBP. In addition, we believe it is important to reevaluate the policy that restarts the 13-month capped rental period in situations where a beneficiary transitions from a noncontract supplier to a contract supplier at the beginning of a DMEPOS CBP. Therefore, we are soliciting public comments on whether
or not the current rules should be changed to reduce the number of payments the contract supplier would
receive in these situations above the 13 and 36-month limits set forth under the standard payment rules in section 1834(a) of the Act. We also plan to
solicit advice from the PAOC on this subject at a future committee meeting.

e. Appeals Process

The DMEPOS CBP final rule issued on April 10, 2007 includes § 414.422(g)(1), which states that ‘‘ any deviation from contract requirements, including a failure to comply with governmental agency or licensing organization requirements, constitutes a
breach of contract. ’’ In the event we determine that a contract supplier’s actions constitute a breach of contract, § 414.422(g)(2) authorizes us to take one or more of the following actions:

• Require the contract supplier to submit a corrective action plan;

• Suspend the contract supplier’s

contract;

• Terminate the contract;

• Preclude the contract supplier from participating in the DMEPOS CBP;

• Revoke the supplier number of the contract supplier; or

• Avail itself of other remedies allowed by the statute.

Proposed Appeals Process

We are proposing to add a new § 414.423 to establish an appeals process for contracts terminated under section 1847(a) and (b) of the Act. Section § 414.423, as proposed in this rule, would set forth policies and procedures relating to our
determinations of a breach of contract and the appeals process for contract suppliers that are considered to be in breach of contract. In addition, we are proposing to add new definitions to § 414.402 that are used in the proposed § 414.423.

Given the impact that termination has on a contract supplier, we believe it is appropriate for contract suppliers whose contract(s) may be terminated due to a
breach of contract to have access to an appeal process that will reconsider that termination. In establishing this process we reviewed other appeals processes, such as the appeals process under Part D located at 42 CFR 423.641 through 423.668, Subpart N—Medicare Contract Determinations and Appeals, to consider essential steps to ensure suppliers have access to an appropriate
review of certain CMS decisions. We chose to propose a simplified process that would not result in disruption to the program by having suppliers going in and out of the program. For this reason, we propose a process for review
and reconsideration before the contract is actually terminated. This proposal would avoid the necessity to reinstate


### 40217 Federal Register / Vol. 75, No. 133 / Tuesday, July 13, 2010 / Proposed Rules

retroactively suppliers because the contracts would generally not be
terminated before the full review process has occurred. This would protect the supplier because we generally would not terminate a supplier until a final decision is made. Another feature of this process that may be beneficial to some suppliers is allowing them to submit a corrective action plan (CAP) depending upon the
nature of the breach. We believe our proposal would allow most suppliers to
correct identified deficiencies.

(1) Purpose and Definitions: (§ 414.402)

We are proposing to amend § 414.402 to define the following terms:

• Affected party means a contract supplier that has been notified that their
DMEPOS CBP contract would be
terminated for a breach of contract.

• Breach of contract means any deviation from contract requirements, including a failure to comply with a governmental agency or licensing organization requirements.

• Corrective Action Plan (CAP) means a contract supplier’s written document with supporting information that
describes the actions the contract supplier would take within a specified timeframe to remedy the breach of

contract.

• Competitive Bidding Implementation Contractor (CBIC) Hearing Officer (HO) means an individual, who was not involved with
the CBIC recommendation to terminate a DMEPOS CBP contract, who is designated by CMS to review and make an unbiased and independent
determination from the CBIC’s
recommendation to terminate a

DMEPOS CBP contract.

• Parties to the Hearing means the DMEPOS contract supplier and CMS.

(2) Applicability

The appeals process proposed in this regulation would allow contract suppliers the opportunity for a review of the following:

• A CMS determination under § 414.422(g)(1) that the contract supplier
breached its contract entered into as part of the DMEPOS CBP; and

• Certain agency actions taken under § 414.422(g)(2).

The proposed appeals process would not apply to any other actions made by CMS, nor would the existence of other appeals processes preclude us from terminating a DMEPOS CBP contract. In other words, the proposed appeals process would be in addition to—and would not replace—existing CMS regulations regarding other appeals mechanisms. For example, a contract may be terminated because a supplier’s National Supplier Clearinghouse (NSC)
number has been revoked or inactivated. In this case, the supplier would not appeal the decision to inactive or revoke its number through this appeals process. Instead, the supplier would continue to appeal the inactivation or revocation of its supplier number through the NSC’s appeals process, and we would postpone the termination decision until the supplier completes the NSC appeals

process.

Under our proposal, when we issue a termination decision, it would be final and binding unless a postponement of the termination decision is allowed by proposed § 414.423. We welcome comments on the scope of the proposed appeals process.

(3) Contract Termination

We are proposing that this appeals process applies in situations where the supplier has received a notice that we have determined that they are in breach
of contract and that their contract is therefore subject to termination. A contract may be terminated for any
violation of the terms of the contract. Examples of violations include, but are not limited to, situations where the contract supplier—

• Has committed or participated in false, fraudulent, or abusive activities affecting the Medicare program, including the submission of false or fraudulent data or claims;

• Experiences financial difficulties so that they are unable to effectively provide the necessary services to a Medicare beneficiary; or

• Fails to meet the nondiscrimination policy and provides
different items to beneficiaries located in a competitive bidding area (CBA) than it provides to its non-Medicare beneficiaries at § 414.422(c).

We welcome comments on our proposed termination process.

(4) Notice of Termination

Under the proposed rule, the CBIC would work with suppliers to informally resolve performance
deficiencies under its DMEPOS CBP contract prior to sending a
recommendation to CMS that the supplier’s contract be terminated. If the CBIC cannot informally resolve the supplier’s deficiencies and recommends that we terminate the contract, we
would review the CBIC’s
recommendation to terminate the supplier’s contract. If we find that a breach occurred, we would begin the contract termination process by sending
out a notice of termination to the supplier. We also propose requirements for the notice of termination so that suppliers
are informed of the basis for CMS’s action as well as their options to respond to this action. The notice would explain all actions we plan to take in response to the supplier’s breach, such as the ability to submit a CAP or our determination to preclude a supplier from participating in future rounds of competitive bidding if found in breach of contract. If the supplier decides to appeal any of these decisions the supplier would submit an appeal in response to the notice to terminate. If we consider a supplier to be in breach of its contract, either in part or in whole, we would notify the contract supplier of the termination by certified mail. The
notice would indicate that the contract supplier has been found to be in breach of contract and that the supplier’s
contract would be terminated within 45 calendar days of the date of the
notification of termination. The notice would be sent by the CBIC using
certified mail on the same date as the
date on the notification of termination.
The date of the notification of
termination is the date that the notification is signed. The notification
will be mailed on the date that it is signed. This date will be indicated on
the notification.

The proposed rule requires the notice to include, at a minimum, the following
information:

• The reasons for the termination in
sufficient detail to allow the contract supplier to understand the nature of its breach of contract;

• Depending on the nature of the breach, whether the supplier may be
allowed to submit a CAP in lieu of requesting a hearing by the HO;

• The right to request a hearing by the
HO;

• The address to which the written request for a hearing must be mailed;

• The address to which the CAP must be mailed; and

• The effective date of the termination of the contract, if a CAP is not submitted or if a request for a hearing has not been filed timely.

We believe that this information would be sufficient to provide the supplier with the basis for CMS’s action, as well as their options in responding to
our decision. We welcome comments on our proposal regarding the contents of
the notice.

In addition, our proposed rule requires the notice to indicate any additional penalties that may result from the termination, such as not being eligible to bid in future rounds of competitive bidding. An appeal of the termination would include the appeal of


### 40218 Federal Register / Vol. 75, No. 133 / Tuesday, July 13, 2010 / Proposed Rules

any other results from the termination that are permissible under § 414.423, such as preclusion from participation in
future rounds of the DMEPOS CBP. We believe this information may help the supplier to decide whether to appeal the
notice of termination.

(5) Corrective Action Plan

We are also proposing a process by which a contract supplier may be able
to submit a CAP to address the breach of contract. Depending on the nature of the breach of contract, we propose that the notice to the supplier would indicate whether a contract supplier would be allowed to provide the CBIC
with a written CAP instead of submitting a request for a hearing by a HO. For example, under this proposal
we would not allow a CAP if the supplier has been excluded, debarred or
convicted of a health care related crime. We may also not allow a CAP that would result in negative consequences to the beneficiaries or the program caused by delaying the termination of
the contract.

We are proposing timelines related to the CAP. Under the proposed rule, if the supplier decides to submit a CAP, the CAP must be received by the CBIC within 30 calendar days from the date
on the notice of termination. If the supplier decides not to submit a CAP, the supplier retains the right to request a review by a HO within 30 days from
the date of the notice for termination. While the CAP is being evaluated, the
termination determination would be postponed. We believe that 30 days is a sufficient amount of time for suppliers to prepare and submit a CAP and this
would also ensure that there are no unnecessary delays in the appeals

process.

Under the proposed rule, we would require the CAP to demonstrate that the contract supplier has a plan to remedy
all of the deficiencies that were
identified in its notice of termination and must specify the timeframes for correcting these deficiencies. The CBIC
would review the CAP to ensure that the contract supplier would be taking the appropriate measures in a timely manner to remedy the breach of contract. What constitutes a timely manner is dependent on the type of deficiency that is being corrected. Once the nature of the deficiency is identified
the CBIC and CMS would make a caseby-case determination concerning what constitutes a timely manner for correcting the deficiency. However, we expect most deficiencies to be corrected within 90 days or less. Further guidance of what constitutes a timely manner
would be communicated to the contract supplier by the CBIC as part of the review process.

As part of the review process, the CBIC would provide guidance, in accordance with CMS instructions, regarding the type of documentation that the CAP and the follow-up report must provide to substantiate that the
deficiencies have been corrected. To
make a determination if a CAP would be considered acceptable, we may discuss the CAP with the supplier, and as a result of these discussions, the CBIC will allow a supplier to make revisions to its CAP during the review process. Suppliers may only revise their CAP one time during the review process. The timeframe for the review process would vary upon the circumstances for each case. If the supplier does not submit an acceptable CAP during the review process, the supplier would receive a
new notice that their CAP is not acceptable or has not been implemented consistent with the supplier’s original
submission and its contract would be terminated within 45 calendar days. Every supplier would have a one time opportunity to revise their CAP based upon deficiencies identified by the CBIC. Failure to develop and implement an approved CAP would result in a new notice to the supplier of the termination
of the DMEPOS CBP contract and provide notice that the supplier may request a hearing on this termination. Under the proposed rule, once an acceptable CAP has been completed thecontract supplier must provide a followup report within 5 days of the agreed upon date for the completion of the CAP to verify that all of the deficiencies
identified in the CAP have been
corrected consistent with the timeframes specified in the CAP, as approved by the CMS. We believe that 5 days is sufficient time for a supplier to submit a report to CBIC outlining all steps that have been completed to
correct the identified deficiencies.

We welcome comments on our proposals relating to the option for a

CAP.

(6) Right To Request a Hearing by the CBIC Hearing Officer (HO)

We propose that a contract supplier
that has received a notice that we consider the supplier in breach of contract has the right to request a hearing before a HO who was not involved with the original breach of
contract determination. We consider this process to be a reconsideration of the original decision, and consistent with other Medicare appeals provisions, we believe it is important that an individual not involved in making the
initial recommendation conduct the reconsideration of the initial decision. As mentioned previously, the HO would be an individual who is designated by
CMS to review and to make an unbiased and independent recommendation of whether to terminate the supplier’s
DMEPOS CBP contract. The notice to the contract supplier would also identify the location to which a request for hearing must be sent.

Under the proposed rule, a contract supplier may appeal the notice of termination by submitting a written request to the CBIC for a hearing by a HO. The written request should include any evidence to support its appeal. The HO is not required to allow evidence
submitted in addition to the evidence submitted along with the written request. The hearing request must be received by the CBIC within 30 calendar days from the date of the termination letter. A request for a hearing must be
sent to the address identified on the notice. Failure to request a hearing within the allotted 30 calendar days
would result in a termination of the supplier’s contract, as of the effective
date of termination identified in the notice to the supplier. There would be no extensions to this 30-day timeframe. We believe suppliers have sufficient time to decide whether or not to request a hearing and the deficiencies identified in the notice may pose a risk to the DMEPOS CBP. The date the request is received by the CBIC determines if the hearing request was timely filed.

We would require that the request for hearing be filed by a supplier’s authorized official, because an authorized official of the company signed the contract and this ensures the validity of the request. The authorized
official must be an official of the company who is identified on the supplier’s CMS 855–S form as an authorized official of the supplier. A supplier may appoint someone other
than the authorized official to be a representative for them at the hearing. However, the representative may not be an individual who has been disqualified or suspended from acting as a representative by the Secretary or otherwise prohibited by law. The request for a hearing must be filed with
the CBIC at the address identified on the
notice of termination.

We welcome comments on our proposed process for requesting a hearing by a HO.

(7) Scheduling of the Hearing

The proposed rule also addresses scheduling the hearing. We propose that within 30 calendar days from the receipt of a supplier’s timely hearing request the HO would contact the parties to


### 40219 Federal Register / Vol. 75, No. 133 / Tuesday, July 13, 2010 / Proposed Rules

schedule a hearing. The request for a hearing would result in the postponement of the date of the contract termination. The only exception to this rule is when a supplier has been excluded, debarred or convicted of a health care related crime; in that situation the supplier’s contract would be terminated immediately. In the hearing request the contract supplier may ask for the hearing to be held in person or by telephone. The HO would send a notice to the parties to the hearing indicating the time and place for the hearing at least 30 days before the date of the hearing. The HO may, on his or her own motion, or at the request of a party, change the time and place for the hearing, but must give the parties to the hearing a 30-day notice of the change.

The proposed rule would require that the HO’s notice scheduling the hearing must provide, at a minimum, the following information:

• Date, time, and location of the scheduled hearing;

• Description of the hearing procedure;

• Issues to be resolved;

• Requirement that the contract supplier bears the burden of proof to
demonstrate that it is not in breach of contract; and

• Provide an opportunity for the supplier to submit evidence to support its appeal. We believe this information provides the supplier with sufficient information regarding the hearing date, time, and matters that would be
addressed at that time. We welcome
comments on the content of this notice and the procedures for scheduling a hearing.

(8) Burden of Proof

We propose that the contract supplier would present to the HO the basis for its disagreement with the termination
notice and would have the burden of proof to demonstrate to the HO with supporting evidence that it is not in
breach of its contract and that the termination action is not appropriate. The supplier’s supporting evidence must be submitted with its request for a hearing. The supporting evidence and the request for a hearing must be submitted together and received by the HO within 30 calendar days from the
date identified on the notice of termination. In the absence of good cause, the HO may not allow evidence
to be submitted in addition to the evidence submitted along with the written request. We also have the opportunity to submit evidence to the HO within 30 days of receiving the notice announcing the hearing. The HO will share all evidence submitted, both from the supplier and CMS, in preparation for the hearing with all affected parties within 15 days prior to the scheduled date of the hearing.

We welcome comments on our proposal regarding the burden of proof.

(9) Role of the Hearing Officer (HO)

Our proposal requires that the HO conduct a thorough and independent review. Such a review requires the
consideration of all information and documentation relevant to the hearing
and submitted consistent with this proposal. Consistent with this goal, we propose that the HO is responsible for all of the following:

• Sharing all evidence submitted, both from supplier and CMS, in preparation for the hearing with all affected parties within 15 days prior to the scheduled date of the hearing.

• Conducting the hearing and deciding the order in which the evidence and the arguments of the parties would be presented.

• Determining the rules on admissibility of the evidence.

• Examining the witnesses, in
addition to the examinations conducted by CMS and the contract supplier.

• Determining the rules for requesting
documents and other evidence from other parties.

• Ensuring a complete recording of the hearing is available and provided to all parties to the hearing and the CBIC.

• Preparing a file of the record of the hearing which includes all evidence submitted as well as any relevant documents identified by the HO and considered as part of the hearing.

• Complying with all applicable provisions of 42 U.S.C. Title 18 and related provisions of the Act, the applicable regulations issued by the Secretary, and manual instructions issued by CMS.

The HO would make a
recommendation based on the information presented and submitted.
The HO would issue a written recommendation to CMS within 30 days of the close of the hearing, unless the HO requests an extension from CMS and
demonstrates to CMS that he or she needs an extension due to complexity of the matter or heavy work load. The HO’s
recommendation would include the
rationale for his or her recommendation regarding the termination of the supplier’s contract and the HO would
submit this recommendation to CMS for
its determination.

We welcome comments on the role of the CBIC HO in our proposed rule. (10) CMS’s Final Determination

Under the proposed rule, the HO’s recommendation is submitted to CMS, and the agency would make the final determination regarding whether the supplier’s contract would be terminated. Our determination would be based upon on the record of the hearing, evidence, and documents considered by the HO as part of the HO recommendation. Information submitted after the hearing
would not be considered. Our decision would be made within 30 days of the receipt of the HO’s recommendation. If our decision is to terminate the contract, the supplier would be notified of the effective date of termination by certified mail. Our decision regarding the
termination of the contract is final and binding.

We welcome comments on our proposal relating to CMS’s final determination of a supplier’s contract

termination.

(11) Effective Date of the Contract

Termination

Under the proposed rule, suppliers who submit a CAP or request a hearing
would have the termination date identified on the notice delayed. The only exception to this rule is when a supplier has been excluded, debarred or convicted of a health care related crime;
in that situation the contract would be terminated immediately. For
terminations that do not meet these exceptions, the effective date of a final
termination would be determined as
follows:

• The termination of a supplier’s
DMEPOS CBP contract is effective on the date specified in the initial notice of termination, which will be 45 days from the date of the notice, unless the supplier request a hearing with the HO or the supplier submits an acceptable

CAP.

• After reviewing the HO recommendation, if we terminate a supplier’s contract the effective date of
the termination would be the date specified in the post-hearing notice sent to the supplier indicating CMS’s final
determination to terminate the contract.

We welcome comments on our proposals related to the effective date of

contract termination.

(12) Effect of Contract Termination

Under our proposal, once a supplier’s
contract is terminated for breach of contract under the DMEPOS CBP, the contract supplier is no longer a DMEPOS CBP contract supplier for any DMEPOS CBP product category for
which it was awarded a contract. This termination applies to all areas and


### 40220 Federal Register / Vol. 75, No. 133 / Tuesday, July 13, 2010 / Proposed Rules

product categories because there is only one contract that encompasses all CBAs and product categories for which the supplier was awarded a contract. We would not make payment and would reject claims for DMEPOS competitive bid items and services furnished by a supplier whose contract has been
terminated after the effective date of the
termination for the remainder of the contract period.

We recognize that a supplier’s termination would impact beneficiaries within the CBA. Therefore, we therefore propose that terminated suppliers must notify all beneficiaries within the CBA who are receiving rented competitively
bid items of the termination of their
contract status so that the beneficiaries can make arrangements to receive equipment and suppliers through other contract suppliers. After we have made
our final determination and sent notification to the supplier, the supplier must notify beneficiaries within 5 days of receipt of the contract supplier’s final
notice of termination. This notice must inform beneficiaries that they would have to select a new contract supplier to
furnish their DMEPOS items in order for Medicare to pay for these items. For beneficiary protection, we also propose that contract suppliers who fail to give proper notification to beneficiaries may be prevented from participating in
future rounds of DMEPOS CBP. We also propose that rental items may not be picked up from the beneficiary’s home until after the last day of the rental month for which the supplier has already received payment. We are proposing both of these policies to protect the beneficiary and to ensure that suppliers do not pick up equipment from a beneficiary for a time period for which they have already been paid to provide the service.

2. Changes to Payment Rules for Oxygen and Oxygen Equipment

a. Background

The general Medicare payment rules for DME are set forth in section 1834(a) of the Act and 42 CFR part 414, subpart D of our regulations. Section 1834(a)(1) of the Act and § 414.210(a) of our regulations establish the Medicare payment for a DME item as equal to 80 percent of either the lower of the actual charge or the fee schedule amount for the item. The beneficiary coinsurance is equal to 20 percent of either the lower of the actual charge or the fee schedule
amount for the item once the deductible

is met.

The specific payment rules for oxygen and oxygen equipment under the existing fee schedules are set forth in section 1834(a)(5) of the Act and § 414.226 of our regulations. Suppliers are paid a monthly payment amount for furnishing medically necessary oxygen contents (for both stationary and portable) and stationary oxygen equipment described under the class described in § 414.226(c)(1)(i). Equipment in the stationary class includes stationary oxygen concentrators, which concentrate oxygen from room air; stationary liquid oxygen systems, which use oxygen stored as a very cold liquid in cylinders and tanks; and gaseous oxygen systems, which administer compressed oxygen directly from cylinders.

A monthly add-on payment is also made to suppliers furnishing medically necessary portable oxygen equipment falling under one of two classes described in § 414.226(c)(1)(ii) and (iii). Equipment in these classes includes traditional portable equipment, that is, portable liquid oxygen systems and portable gaseous oxygen systems, and oxygen generating portable equipment (OGPE), that is, portable oxygen concentrators and oxygen transfilling equipment used to fill portable tanks or cylinders in the home. Both the liquid and gaseous oxygen systems (for stationary and traditional portable systems) require on-going delivery of
oxygen contents.

Section 1834(a)(5)(F) of the Act, as amended by section 144(b) of MIPPA, limits the monthly rental payments to suppliers for oxygen equipment to 36 months of continuous use, although monthly payments for furnishing gaseous or liquid oxygen contents continue after the 36-month equipment rental cap is reached for gaseous or liquid systems. In the CY 2009 PFS final rule with comment period (73 FR 69875 through 69876), we discussed section 144(b) of MIPPA and included a
detailed discussion of how section 5101(b) of the Deficit Reduction Act of 2005 (DRA) previously required suppliers to transfer title to oxygen equipment to the beneficiary at the end of the 36-month rental period. Section 144(b) of the MIPPA repealed this requirement to transfer title to the oxygen equipment to the beneficiary and allows suppliers to retain title to the oxygen equipment after 36 monthly rental payments are made for the equipment.

Section 414.210 establishes the requirements for the replacement of DME, including oxygen equipment. Section 414.210(f)(1) states that if an item of DME, which includes oxygen equipment, has been in continuous use by the patient for the equipment’s
reasonable useful lifetime or if the original equipment is lost, stolen, or irreparably damaged, the patient may elect to obtain a new piece of equipment. In such circumstances, § 414.420(f)(2) authorizes payment for the new oxygen equipment in accordance with § 414.226(a). Section 414.210(f)(1) states that the reasonable useful lifetime for DME, which includes oxygen equipment, is determined through program instructions. In the absence of CMS program instructions, the carrier may determine the
reasonable useful lifetime for equipment, but in no case can it be less than 5 years. Computation is based on when the equipment is delivered to the beneficiary, not the age of the equipment. If the beneficiary elects to obtain new oxygen equipment after the reasonable useful lifetime, the payment
is made for a new 36-month rental period in accordance with § 414.226(a).

We are proposing to revise the payment rule for oxygen and oxygen equipment at § 414.226(g)(1) to address
situations where beneficiaries relocate outside the service area of a supplier during the 36-month rental payment cap period for the oxygen equipment. Beneficiaries are experiencing great difficulties in finding suppliers willing to furnish oxygen equipment in situations where only a few months are left in the 36-month rental payment period at the time they relocate. For example, if a beneficiary is in the 30th rental month, the new supplier would be entitled to only 6 months of rental payments and then would have to continue to furnish the oxygen and oxygen equipment during any period of
medical need for the remainder of the
reasonable useful lifetime of the equipment. This creates a financial disincentive for oxygen suppliers to furnish oxygen and oxygen equipment
to beneficiaries in these situations.

The proposed changes to the payment rules for oxygen and oxygen equipment would apply to oxygen and oxygen equipment furnished under Part B and would also apply to oxygen and oxygen equipment furnished under programs implemented in accordance with section 1847(a) of the Act.

b. Furnishing Oxygen Equipment after the 36-Month Rental Period (Cap)

In the CY 2010 PFS final rule with comment period (74 FR 61887 through 61890), we finalized § 414.226(g)(1) which, in accordance with section 1834(a)(5)(F)(ii)(I) of the Act, requires the supplier that furnishes oxygen equipment during the 36-month rental period to continue furnishing the oxygen equipment after the 36-month rental period. The supplier is required


### 40221 Federal Register / Vol. 75, No. 133 / Tuesday, July 13, 2010 / Proposed Rules

to continue to furnish the equipment during any period of medical need for
the remainder of the reasonable useful lifetime of the equipment. As we noted when finalizing this rule, section 1834(a)(5)(F)(ii)(I) does not provide any exceptions to this requirement. If the beneficiary relocates outside the supplier’s normal service area at some time after the 36-month rental period
but before the end of the reasonable useful lifetime of the equipment, the supplier must make arrangements for the beneficiary to continue receiving the equipment at his or her new place of residence. This responsibility for furnishing the equipment does not transfer to another supplier.

We revised § 414.226(f) to conform our regulations to this new MIPPA requirement. We deleted the transfer of ownership requirement and added the new requirement that the supplier must continue furnishing the oxygen equipment after the 36-month rental period during any period of medical
need for the remainder of the reasonable useful lifetime of the equipment. It is important to note that § 414.226(g)(1)(ii) does not apply this same requirement in situations where the beneficiary relocates outside of the supplier’s normal service area during the 36- month rental period.

c. Furnishing Oxygen Equipment during the 36-Month Rental Period (Cap)

Section § 414.226(g)(1) contains the requirement that the supplier that furnishes oxygen and oxygen equipment
for the first month of the 36th month of the rental cap period must continue to furnish the equipment for the entire 36- month period of continuous use, with limited exceptions. One exception at § 414.226(g)(1)(ii) applies when a beneficiary permanently relocates his or her residence during the 36-month rental period outside of the current supplier’s normal service area. This exception was proposed in the ‘‘ Home Health Prospective Payment System Rate Update for Calendar Year 2007 and Deficit Reduction Act of 2005 Changes to Medicare Payment for Oxygen Equipment and Capped Rental Durable Medical Equipment; Proposed Rule ’’ published in the August 3, 2006 Federal Register (71 FR 44094) and was
intended to reduce the burden on the supplier in these situations. This approach is also consistent with the regulations addressing capped rental items described in § 414.229. We addressed this issue in the capped rental context in the July 10, 1995 Federal Register (60 FR 35494) in response to comments. The discussion states that since the implementation of the capped rental payment methodology on January 1, 1989, we received no reports of beneficiaries having difficulty obtaining access to capped rental DME after relocating outside the supplier’s
service area. Since enactment of the capped rental DME payment category in section 4062 of the Omnibus Budget Reconciliation Act of 1987 (Pub. L. 100– 203), representatives of the DME industry indicated that suppliers would
be able to accommodate beneficiaries in these situations, and this has proven to be true for capped rental items. In fact,
we have found this to be the case to this day.

For this reason, we believed that
beneficiaries would not encounter problems obtaining access to oxygen and oxygen equipment in similar situations, that is, following the 36- month cap imposed by section 144(b) of MIPPA. However, since the changes to the payment rules for oxygen and oxygen equipment mandated by the
DRA became effective in 2006 and the 36-month rental cap imposed by MIPPA was reached for the first time in January 2009, we have received many reports of beneficiaries relocating prior to the end of the 36-month rental payment cap period and having difficulty finding an oxygen supplier in the new location. We have learned that many suppliers are unwilling to provide services in
situations where there are a few number
of months left in the 36-month rental payment period.

We do not believe that beneficiaries
have encountered similar issues following the 36-month rental cap, which most likely is the result of different statutory requirements for these two periods (that is, during and after the 36-month rental period). Section 1834(a)(5)(F)(ii) of the Act requires the supplier that furnishes the oxygen equipment during the 36-month rental payment period to continue furnishing the equipment after the 36- month rental payment period. Consistent with this requirement, we established regulations at § 414.226(f)(1) that require the supplier to furnish the equipment or make arrangements for furnishing the equipment in situations where the beneficiary relocates outside the supplier’s normal service area. Since no such requirement currently applies in situations where the beneficiary relocates prior to the end of the 36- month rental payment period, and in fact current regulations at § 414.226(g)(1)(ii) absolve the supplier of the obligation to continue furnishing oxygen equipment in these situations, beneficiaries are experiencing difficulties finding suppliers of oxygen equipment in their new locations that are willing to accommodate them. As noted above, we have not seen this problem in the capped rental DME context. The requirement at § 414.226(g)(1) to furnish oxygen equipment for the entire 36 month rental cap period was established in the course of implementing section 5101(b) of the DRA in order to safeguard the beneficiary from situations where suppliers might discontinue service and pick up oxygen equipment prior to the end of the 36-month rental cap in order to avoid losing title to the equipment. As mentioned earlier, the transfer of title of oxygen and oxygen equipment after the 36th paid rental month was repealed. The exception to this rule at § 414.226(g)(1)(ii) was established based on our experience that suppliers of capped rental DME have accommodated beneficiaries in these situations, which, unfortunately, has not been our experience in the context of oxygen equipment.

In order to address this vulnerability facing beneficiaries as a result of regulations currently in effect, we are proposing to revise the exception at § 414.226(g)(1)(ii) to apply only to situations where the beneficiary relocates before the 18th paid rental
month to an area that is outside the normal service area of the supplier that initially furnished the equipment. We are proposing to revise the regulation to require the supplier that furnishes the oxygen equipment and receives payment for month 18 or later to either furnish the equipment for the remainder of the 36-month rental payment period or, in the case where the beneficiary has
relocated outside the service area of the supplier, make arrangements for furnishing the oxygen equipment with another supplier for the remainder of the 36-month rental payment period. The supplier that is required to furnish the equipment on the basis of this requirement must also furnish the equipment after the 36-month rental payment period in accordance with the requirements of section 1834(a)(5)(F)(ii) and § 414.226(f).

The proposed revision would mean that a supplier does not have to continue to furnish the oxygen equipment if the beneficiary relocates
outside the normal service area before the 18th paid rental month during a period of continuous use. Under the current rule, a supplier does not have to furnish the oxygen equipment if the beneficiary relocated before the 36th paid rental month during a period of
continuous use. The current rule was established based on the long term, demonstrated ability of suppliers of capped rental DME to accommodate


### 40222 Federal Register / Vol. 75, No. 133 / Tuesday, July 13, 2010 / Proposed Rules

beneficiaries in situations where they relocate near the end of a capped rental payment period. With regard to oxygen equipment, suppliers in general have not demonstrated a willingness to
accommodate beneficiaries in similar situations. Therefore, it is necessary to revisit this rule in order to protect
beneficiaries in these situations. This proposal would allow either a new supplier in the beneficiary’s new service area or a supplier in the old service area to receive at least half of the 36 monthly payments allowed for under the current statutory payment rule for oxygen equipment. We believe this approach would be fair to suppliers in either
scenario since the same minimum number of payments applies. Based on
current 2010 Medicare allowed fee schedule amounts for stationary oxygen equipment, total payments for 18 months is $3,117.06. We believe this new rule would provide greater financial incentive to suppliers in areas
where beneficiaries relocate to furnish oxygen equipment in these situations. We also believe that this proposal would not disadvantage suppliers required to continue furnishing oxygen equipment or make arrangements for furnishing oxygen equipment to
beneficiaries that relocate outside their
normal service area since these suppliers would receive 18 or more monthly payments. Most of the cases that have been reported regarding problems encountered by beneficiaries in obtaining access to oxygen equipment after relocating during the 36-month rental cap period have been situations where the beneficiary has relocated during the second half of the 36-month rental cap period. Therefore, we believe that this rule would largely address access problems associated with relocations during the 36-month rental cap period because the supplier that received payments during the first half of the 36-month rental cap period would be obligated to continuing furnishing the equipment during the second half of the 36-month rental cap period.

H. Provider and Supplier Enrollment
Issue: Air Ambulance Provision

The National Transportation Safety Board (NTSB) is an independent Federal agency charged by the Congress with investigating transportation accidents, determining their probable cause and making recommendations to prevent similar accidents from occurring. Based on information derived from testimony provided at the NSTB public hearing and investigations into recent Helicopter Emergency Medical Services (HEMS) accidents, the NTSB made several specific recommendations to the Secretary of Health and Human Services on September 24, 2009.

Specifically, the NTSB recommended that the Secretary develop minimum safety accreditation standards for HEMS operators that augment the operating standards of 14 CFR part 135 by including for all fights with medical personnel on board: (a) Scenario-based pilot training; (b) implementation of preflight risk evaluation programs; and (c) the installation of FAA-approved terrain awareness warning systems, night vision imaging systems, flight data recording systems for monitoring and autopilots if a second pilot is not used.

In response to the NTSB concerns, the Secretary noted that the
recommendations to CMS were similar to those being made to the Federal Aviation Administration (FAA). While we have expertise to regulate health and safety requirements that suppliers and providers of healthcare should meet, we do not have the expertise to determine aircraft safety requirements. The Secretary stated that, ‘‘ we believe the
FAA should determine the minimum level of safety that HEMS operators should meet and CMS should adopt regulations that require any HEMS operator that enrolls in Medicare to meet those requirements. ’’ The Secretary also added that, ‘‘ while we do not believe CMS should augment FAA regulations, we do believe that CMS’ regulations should ensure that only those HEMS operators that maintain the minimum level of requirements established by the FAA through its regulations are enrolled or maintain enrollment in the Medicare program. ’’

In the April 21, 2006 Federal Register , we published the

‘‘ Requirements for Providers and Suppliers to Establish and Maintain
Medicare Enrollment ’’ final rule. This final rule implemented section 1866(j)(1)(A) of the Act. In this final rule, we required that all providers and suppliers (other than physicians or practitioners who have elected to ‘‘ optout ’’ of the Medicare program) must complete an enrollment form and submit specific information to CMS in order to obtain Medicare billing privileges. Section 424.515 required that ambulance service providers continue to
resubmit enrollment information in accordance with § 410.41(c)(2), which

states, ‘‘ Upon a carrier’s request, complete and return the ambulance supplier form designated by CMS and provide Medicare carrier with documentation of compliance with emergency vehicle and staff licensure and certification requirements in
accordance with State and local laws. ’’
This final rule also established § 424.510(d)(2)(iii) which states,

‘‘ Submission of all documentation, including all applicable Federal and State licensure and regulatory requirements that apply to the specific provider or supplier type that related to providing health care services, required by CMS under this or other statutory or regulatory authority, or under the Paperwork Reduction Act of 1995, to establish the provider or supplier’s eligibility to furnish Medicare covered
items or services to beneficiaries in the Medicare program. ’’

While the Airline Deregulation Act (Pub. L. 95–504) preempts a State, political subdivision of a State, or political authority of at least 2 States from enacting or enforcing a law, regulation, or other provision having the force and effect of law related to a price, route, or service of an air carrier that may provide air transportation, air ambulances remain subject to Federal laws and regulations. In accordance with § 424.516(a)(2), providers and suppliers must adhere to all Federal regulations and State laws and regulations, as required, based on the type of services or supplies the provider or supplier type will furnish and bill
Medicare.

In § 424.510(d)(iii), we are proposing to clarify that ambulance suppliers and other providers and suppliers include documentation regarding all applicable
Federal and State certifications. Accordingly we are propsing to revise § 424.510(d)(iii) from ‘‘ Submission of all documentation, including all applicable
Federal and State licenses and regulatory requirements that apply to the specific provider or supplier type that relate to providing health care service, required by CMS under this or other statutory or regulatory authority, or under the Paperwork Reduction Act of 1995, to establish the provider or supplier’s eligibility to furnish Medicare
covered items or services to beneficiaries in the Medicare program, ’’

to ‘‘ Submission of all documentation, including all applicable Federal and State licenses, certifications (including,
but not limited to Federal Aviation Administration and Clinical Laboratory Improvement Act certifications), and regulatory requirements that apply to the specific provider or supplier type that relate to providing health care service, required by CMS under this or other statutory or regulatory authority, or under the Paperwork Reduction Act of 1995, to establish the provider or supplier’s eligibility to furnish Medicare
covered items or services to beneficiaries in the Medicare program. ’’

We are also proposing to revise § 424.516(e)(2) and add new paragraph


### 40223 Federal Register / Vol. 75, No. 133 / Tuesday, July 13, 2010 / Proposed Rules

(e)(3) to clarify that Medicare enrolled providers and suppliers must report a revocation or suspension of a Federal or State license or certification, including
but not limited to FAA and Clinical Laboratory Improvement Act (CLIA) certifications. This revision will clarify that fixed-wing ambulance operators and HEMS operators are responsible for notifying the designated Medicare
contractor for their State when FAA revokes or suspends any license or certification. Moreover, fixed-wing ambulance operators and HEMS operators must maintain all requirements as specified in 14 CFR part

135.

We believe that requiring fixed-wing ambulance and HEMS operators to notify their Medicare contractor of a suspension or revocation of a license or certification will ensure that any action taken by the FAA or other regulating authority will have a direct linkage to the operator’s ability to maintain their
Medicare enrollment. We believe that such a policy will help improve aircraft safety for operators that are enrolled in Medicare and providing services to Medicare beneficiaries. In addition, since the FAA is responsible for the issuance and enforcement of regulations and minimum standards covering manufacturing, operating, and maintaining aircraft, we will work with the FAA to confirm that fixed-wing ambulance operators and HEMS operators remain in compliance with FAA safety regulations (including, but
not limited to Federal Aviation Administration and certifications) to the Medicare contractor within 30 days of the revocation or suspension of the license or certification, the provider or supplier is making the decision to voluntarily terminate its Medicare billing privileges because the provider or supplier is no longer in compliance with the applicable licensing or certification requirements for their provider or supplier type. We believe that allowing providers and suppliers to self-report licensure or certification revocations and suspensions within a 30 day period via the Medicare enrollment application (such as, the Internet-based
Provider Enrollment Chain and Ownership System (PECOS) or the paper CMS–855) promotes compliance with the Medciare reporting requirements found in § 424.516. In addition, by reporting a licensure or certification revocation or suspension within 30 days, the provider or supplier avoids the Medicare contractor bringing an action to revoke its Medicare billing privileges and establishing and Medicare enrollment bar, see § 424.535(c). Thus, by complying with the reporting responsibilities found in § 424.516 and voluntarily terminating from the Medicare program, the air ambulance supplier can submit an initial application to enroll in the Medicare program as soon as the
licensure or certification revocation or suspension action is resolved with the applicable licensing or certification organization.

In § 424.502, we are proposing to define the term, ‘‘ voluntary termination ’’ as it is currently used in the Medicare program and throughout this regulation in the context of the provider enrollment requirements: We are proposing that the term, ‘‘ voluntary

termination ’’ to mean an air ambulance supplier, that submits written
confirmation to CMS of its decision to
discontinue enrollment in the Medicare

program.

Futhermore, we belive that an air ambulance supplier, can make the decision to voluntary terminate their business relationship with the Medicare program at any time, including when the provider or supplier makes the decision that they will no longer furnish
services to Medicare beneficiaries.

In those situations, where an air ambulance supplier does not meet their reporting responsibilities and notify the Medicare program of a Federal or State
licensure or certification revocation or suspension within 30 days of the reportable event, we believe that it is appropriate to that CMS or the Medicare contractor revoke the supplier’s Medicare billing privileges using § 424.535(a)(1). We believe that this change will clarify that CMS or our Medicare contractor may revoke Medicare billing privileges when these types of suppliers do not report a revocation or suspension of a Federal or
State license or certification.

I. Technical Corrections

1. Physical Therapy, Occupational Therapy and Speech-language Pathology

We are proposing to revise § 409.23(c) by making a minor technical correction
to remove an extraneous cross-reference which was initially proposed in the CY 2008 PFS proposed rule (72 FR 38122, 72 FR 38193, and 72 FR 38221). This
cross-reference refers the reader to

‘‘ paragraph (c)(1)(ii) of this section, ’’ a paragraph also proposed in the CY 2008 PFS proposed rule, but never finalized.
In the CY 2008 PFS final rule with comment period, we inadvertently neglected to remove the associated cross-reference from the regulations text. Accordingly, we now propose to rectify that oversight by making an appropriate correction in the regulations text, along with other minor formatting revisions. We are also proposing to
make a minor clarification to the section heading and introductory text of § 409.23 (along with a conforming revision to the corresponding regulations text at § 409.20(a)(3)) by revising the existing phrase ‘‘ speech therapy ’’ to read ‘‘ speech-language pathology services, ’’ so that it more accurately reflects the currently used terminology for this type of therapeutic

treatment.

In addition, we are also proposing to make a minor wording change in the provision at § 409.17(d) (which is incorporated by reference in § 409.23(c)(2)), in order to clarify that the former provision’s reference to

‘‘ hospital ’’ policies and procedures can alternatively refer, depending on the particular context, to SNF policies and procedures.

2. Scope of Benefits

In § 410.3, we are proposing a technical correction to paragraph (b)(2). Currently, § 410.3(b)(2) states that the specific rules on payment are set forth in subpart E of part 410. However, the specific payment rules are actually listed in subpart I of part 410. Therefore, we are proposing to correct § 410.3(b)(2) in this proposed rule.

VII. Collection of Information Requirements

Under the Paperwork Reduction Act of 1995, we are required to provide 60- day notice in the Federal Register and solicit public comment before a collection of information requirement is submitted to the Office of Management and Budget (OMB) for review and approval. In order to fairly evaluate
whether an information collection should be approved by OMB, section 3506(c)(2)(A) of the Paperwork Reduction Act of 1995 requires that we solicit comment on the following issues:

• The need for the information collection and its usefulness in carrying out the proper functions of our agency.

• The accuracy of our estimate of the
information collection burden.

• The quality, utility, and clarity of
the information to be collected.

• Recommendations to minimize the
information collection burden on the affected public, including automated collection techniques.

We are soliciting public comment on each of these issues for the following
sections of this document that contain information collection requirements (ICRs):


### 40224 Federal Register / Vol. 75, No. 133 / Tuesday, July 13, 2010 / Proposed Rules

A. ICRs Regarding Diagnostic X-ray Tests, Diagnostic Laboratory Tests, and Other Diagnostic Tests: Conditions (§ 410.32)

Proposed § 410.32(d)(2)(i) would require the physician or qualified non physician practitioner (as defined in § 410.32(a)(2)) who orders the service
must maintain documentation of medical necessity in the beneficiary’s medical record. In addition, both the medical record and the laboratory requisition (or order) would be required to be signed by the physician or qualified non physician practitioner (as defined in § 410.32(a)(2) of this section)
who orders the service. The burden associated with these requirements would be the time and effort necessary for a physician or qualified nonphysician practitioner to sign the medical record or laboratory requisition (or order). There would also be a recordkeeping requirement associated with maintaining the documentation of medical necessity in the beneficiary
medical record. While these requirements are subject to the PRA, we believe the associated burden is exempt
from the PRA in accordance with 5 CFR 1320.3(b)(2). We believe that the time, effort, and financial resources necessary to comply with the aforementioned information collection requirements would be incurred by persons in the
normal course of their activities and
therefore considered to be usual and customary business practices.

B. ICRs Regarding General Exceptions to the Referral Prohibition Related to Both Ownership/Investment and Compensation (§ 411.355)

Proposed § 411.355(b)(7)(i) states that with respect to magnetic resonance imaging, computed tomography, and positron emission tomography, the referring physician shall provide written notice to the patient at the time of the referral that the patient may receive the same services from a person other than one described in § 411.355(b)(1). The
written notice shall include a list of other suppliers (as defined in § 400.202 of this title) that provide the services for which the individual is being referred.
The list shall include a minimum of 10 suppliers within a 25-mile radius of the referring physician’s office location at
the time of the referral. The notice
should be written in a manner sufficient to be reasonably understood by all patients and should include for each supplier on the list, at a minimum, the supplier’s name, address, telephone number, and distance from the referring physician’s office. A record of the disclosure notification, signed by the patient, shall be maintained as a part of the patient’s medical record.

Section 411.355(b)(7)(ii) proposes that if the referring physician makes a
referral within an area with fewer than 10 other suppliers within the 25-mile radius of the physician’s office location at the time of the referral, the physician shall list all of the other suppliers of the imaging service that are present within a 25-mile radius of the referring physician’s office location, including up to 10 suppliers. Provision of the written list of alternate suppliers will not be required if no other suppliers provide
the services for which the individual is being referred within the 25-mile radius. These physicians must still disclose to the patient that the patient may receive these services from a person other than one described in § 411.355(b)(1) in a manner sufficient to reasonably be understood by all patients. A record of the disclosure notification, signed by the patient and the referring physician, shall be maintained as a part of the patient’s medical record.

The burden associated with the requirements contained in this section would be the time and effort necessary for a physician to develop a standard
disclosure. There would also be burden
associated with the time and effort necessary for a physician to provide the disclosure to the patient, to obtain the patient’s signature, and to record the paper as part of the patient’s medical
record. We estimate that it would take 1 hour for a physician’s office to develop a standard disclosure. We further estimate that 71,000 physicians will be required to comply with these requirements. The total burden associated with the development of the standard disclosure is 71,000 hours at a cost of $1,042,280. Similarly, we estimate that it will take each physician 1 minute to provide the disclosure to the patient, to obtain the patient’s signature, and to record the paper as part of the patient’s medical record. We believe that each provider will make approximately 106 disclosures. The
total estimated annual for this requirement is 125,433 hours at a cost of $10,536,400.

C. ICRs Regarding Appeals Process for Termination of Competitive Bidding Contract (§ 414.423)

Proposed § 414.423(c)(1)(i) states that CMS has the option to allow a DMEPOS supplier to provide a written CAP to remedy the deficiencies identified in the notice, when CMS determines that the delay in the termination date caused by allowing a CAP will not cause harm to beneficiaries. As stated in proposed § 414.423(c)(2)(i) a CAP must be submitted within 30 calendar days from
the date on the notification letter. If the supplier decides not to submit a CAP the supplier may within 30 days of the date on the termination letter request a hearing by a CBIC hearing officer.

The burden associated with this requirement is the time and effort necessary for a supplier that has received a termination notice to develop
and submit a CAP. We estimate that 10 suppliers will need to comply with this requirement annually. Similarly, we estimate that it will take a supplier an average of 3 hours to develop a CAP.
The total estimated annual burden associated with this requirement is 30 hours at a cost of $2,250.

Proposed § 414.423(e)(2) would require that if CMS accepts the CAP, including supplier’s designated timeframe for its completion, the supplier must provide a follow-up report within 5 days after the supplier has fully implemented the CAP that
verifies that all of the deficiencies
identified in the CAP have been
corrected in accordance with the timeframes accepted by CMS. The burden associated with this requirement is the time and effort necessary for a supplier to develop and submit a follow-up report. While this requirement is subject to the PRA, we believe the associated burden is exempt under 5 CFR 1320.3(h)(6). In accordance with 5 CFR 1320.3(h)(6), a request for facts or opinions addressed to a single person is not defined as information collection requirements and is therefore exempt from the PRA.

Proposed § 414.423(f)(1) states that a supplier who has received a notice that
CMS considers them in breach of
contract or that their CAP is not acceptable has the right to request a hearing before a CBIC HO who was not involved with the original determination. Section 414.423(f)(2) further proposes that a supplier who wishes to appeal the termination notice must submit a written request to the CBIC. The request for a hearing must be received by the CBIC within 30 calendar days from the date of the notice to

terminate.

The burden associated with this section is the time and effort necessary for a supplier to develop and submit a written request for a hearing by a CBIC Hearing Officer. We estimate that it will take a supplier 8 hours to develop and submit a request for a hearing. We believe 5 suppliers will be subject to this requirement on an annual basis.
The total estimated annual burden associated with developing and submitting a written request for a


### 40225 Federal Register / Vol. 75, No. 133 / Tuesday, July 13, 2010 / Proposed Rules

hearing by a CBIC Hearing Officer is 40 hours at a cost of $3,000.

Proposed § 414.423 would require a contract suppliers whose contract has been terminated to notify all beneficiaries who are receiving rented competitive bid items or competitive bid items received on a recurring basis,
of the termination of their contract. The notice to the beneficiary from the supplier whose contract was terminated must be provided within 5 days of receipt of the notice of termination. The
notification to the beneficiaries must inform the beneficiaries that they are going to have to select a new contract supplier for these items.

The burden associated with this section is the time and effort necessary for a supplier to develop and distribute
notification of its termination to all beneficiaries receiving rented competitive bid items or competitive bid items received on a recurring basis. We estimate that it will take a supplier 3 hours to develop and distribute a notice announcing its termination to all of its beneficiaries receiving rented competitive bid items or competitive bid items received on a recurring basis. We believe 2 suppliers will be subject to this requirement on an annual basis.
The total estimated annual burden associated with this requirement is 6 hours at a cost of $450.

D. ICRs Regarding Additional Provider and Supplier Requirements for Enrolling and Maintaining Active Enrollment Status in the Medicare Program (§ 424.516)

Proposed § 424.516(e)(2) would require a provider or supplier to report a revocation or suspension to the applicable Medicare contractor within 30 days any revocation or suspension of
a Federal or State license or certification. Similarly, proposed § 424.516(e)(2) states that within 30 days of voluntary withdrawal or involuntary termination from the Medicare program, the provider or supplier must report voluntary withdraw or involuntary termination to the applicable Medicare contractor. The
burden associated with the requirements in § 424.516(e)(2) and (3) is the time and effort necessary for a provider or supplier to report the required information to the applicable
Medicare contractor. While these requirements are subject to the PRA, each submission will be evaluated on a case-by-case basis.

E. ICRs Regarding Additional Provider and Supplier Requirements for Enrolling and Maintaining Active Enrollment Status in the Medicare Program (§ 424.516)

Proposed § 424.516(e)(2) would require a provider or supplier to report a revocation or suspension to the applicable Medicare contractor within 30 days any revocation or suspension of
a Federal or State license or certification. Similarly, proposed § 424.516(e)(2) states that within 30 days of voluntary withdrawal or involuntary termination from the Medicare program, the provider or supplier must report voluntary withdraw or involuntary termination to the applicable Medicare contractor. The
burden associated with the requirements in § 424.516(e)(2) and (3) is the time and effort necessary for a provider or supplier to report the required information to the applicable
Medicare contractor. While these requirements are subject to the PRA,
each submission will be evaluated on a case-by-case basis.



### T ABLE 

### 72—E STIMATED 

### A NNUAL 

### R ECORDKEEPING AND 

### R EPORTING 

### B URDEN

Regulation section(s) OMB Control No. Respondents Responses Burden per

response (hours) Total annual
burden (hours) Hourly labor cost of

reporting

(in $) Total labor cost of

reporting

(in $) Total capital/mainte-

nance costs (in $) Total cost (in $)

§ 411.355 ................................ 0938–New .. 71,000 71,000 1 71,000 14.68 1,042,280 0 1,042,280
71,000 7,454,760 0 .0167 125,433 83.79 10,536,400* 0 10,536,400 § 414.423 ................................ 0938–New .. 10 10 3 30 75.00 2,250 0 2,250

5 5 8 40 75.00 3000 .................... 3000

2 2 3 6 75.00 450

.................... 450

Total ................................. .................... 71,017 7,525,777 ...................... 196,509 .................... .. .................. .................... 11,584,380

* The annual cost burden for this provision was calculated by taking 106 disclosures per year per physician × $1.40 per disclosure = $148.40 a year per physician × 71,000 physicians = $10,536,400.

If you comment on these information collection and recordkeeping requirements, please do either of the following:

1. Submit your comments electronically as specified in the

**ADDRESSES** section of this proposed rule;

or 2. Submit your comments to the Office of Information and Regulatory Affairs, Office of Management and Budget, Attention: CMS Desk Officer, [CMS–1503–P] Fax: (202) 395–6974; or
E-mail: OIRA

_ submission@omb.eop.gov.

F. Additional Information Collection Requirements

This proposed rule imposes collection of information requirements as outlined in the regulation text and specified above. However, this proposed rule also makes reference to several associated
information collections that are not discussed in the regulation text
contained in this document. The following is a discussion of these information collections, some of which have already received OMB approval.

1. Part B Drug Payment

The discussion of average sales price (ASP) issues in section VI.A.1 of this proposed rule does not contain any new information collection requirements with respect to payment for Medicare Part B drugs and biologicals under the ASP methodology. Drug manufacturers are required to submit ASP data to us on a quarterly basis. The ASP reporting requirements are set forth in section 1927(b) of the Act. The burden associated with this requirement is the time and effort required by manufacturers of Medicare Part B drugs and biologicals to calculate, record, and submit the required data to CMS. While

the burden associated with this requirement is subject to the PRA, it is currently approved under OMB control

number 0938–0921.

3. Physician Quality Reporting Initiative (PQRI)

Section VI.F.1. of this proposed rule discusses the background of the PQRI, provides information about the proposed measures and reporting mechanisms to be available to eligible professionals (EPs) and group practices who choose to participate in the 2011 PQRI, and the proposed criteria for satisfactory reporting in 2011.


### 40226 Federal Register / Vol. 75, No. 133 / Tuesday, July 13, 2010 / Proposed Rules

With respect to satisfactory submission of data on quality measures by EPs, EPs include physicians, other practitioners as described in section 1842(b)(18)(c) of the Act, physical and occupational therapists, qualified speech-language pathologists, and qualified audiologists. EPs may choose whether to participate and, to the extent they satisfactorily submit data on quality measures for covered professional services, they can qualify to receive an incentive payment. To qualify to receive an incentive payment for 2011, the EP (or group practice) must meet one of the proposed criteria for satisfactory reporting described in
sections VI.F.1.e. or VI.F.1.f. of this proposed rule (or section VI.F.1.g. for group practices).

Because this is a voluntary program, it is difficult to accurately estimate how many EPs will opt to participate in the PQRI in CY 2011. Information from the

‘‘ PQRI 2007 Reporting Experience Report, ’’ which is available on the PQRI
section of the CMS Web site at http:// www.cms.hhs.gov/PQRI, indicates that nearly 110,000 unique TIN/NPI combinations attempted to submit PQRI quality measures data via claims for the 2007 PQRI. Therefore, for purposes of conducting a burden analysis for the 2011 PQRI, we will assume that all EPs who attempted to participate in the 2007 PQRI will also attempt to participate in the 2011 PQRI. Furthermore, we believe that the burden for EPs who are participating in the PQRI for the first time in 2011 will be considerably higher than the burden for EPs who have participated in PQRI in prior years.

For individual EPs, the burden associated with the requirements of this reporting initiative is the time and effort associated with EPs identifying applicable PQRI quality measures for which they can report the necessary information, collecting the necessary information, and reporting the information needed to report the EP’s or group practice’s measures. We believe it is difficult to accurately quantify the burden because EPs may have different processes for integrating the PQRI into their practice’s work flows. Moreover,
the time needed for an EP to review the quality measures and other information, select measures applicable to his or her patients and the services he or she furnishes to them, and incorporate the use of quality data codes into the office work flows is expected to vary along
with the number of measures that are potentially applicable to a given professional’s practice. Since EPs are generally required to report on at least 3 measures to earn a PQRI incentive, we will assume that each EP who attempts to submit PQRI quality measures data is attempting to earn a PQRI incentive payment and reports on an average of 3 measures for this burden analysis.

Because we anticipate even greater participation in the 2011 PQRI than in previous years, including participation by EPs who are participating in PQRI for the first time in 2011, we will assign 5
hours as the amount of time needed for EPs to review the 2011 PQRI Measures List, review the various reporting options, select the most appropriate reporting option, identify the applicable measures or measures groups for which they can report the necessary information, review the measure specifications for the selected measures or measures groups, and incorporate reporting of the selected measures or measures groups into the office work
flows. This estimate is based on our assumption that an EP will need up to 2 hours to review the 2011 PQRI Measures List, review the reporting options, and select a reporting option and measures on which to report and 3
hours to review the measure specifications for up to 3 selected measures or up to 1 selected measures group and to develop a mechanism for incorporating reporting of the selected measures or measures group into the
office work flows.

Information from the Physician Voluntary Reporting Program (PVRP), which was a predecessor to the PQRI, indicated an average labor cost of $50 per hour. To account for salary increases over time, we will use an average practice labor cost of $58 per hour in our estimates based on an assumption of an average annual increase of approximately 3 percent. Thus, we
estimate the cost for EP associated with preparing to report PQRI quality measures would be approximately $290 per EP ($58 per hour x 5 hours).

We continue to expect the ongoing costs associated with PQRI participation to decline based on an EP’s familiarity with and understanding of the PQRI, experience with participating in the PQRI, and increased efforts by CMS and
stakeholders to disseminate useful
educational resources and best practices.

We believe the burden associated with actually reporting the PQRI quality measures will vary depending on the reporting mechanism selected by the EP. For claims-based reporting, EPs must gather the required information, select the appropriate quality data codes (QDCs), and include the appropriate QDCs on the claims they submit for payment. The PQRI will collect QDCs as additional (optional) line items on the existing HIPAA transaction 837–P and/ or CMS Form 1500 (OCN: 0938–0999). We do not anticipate any new forms and no modifications to the existing
transaction or form. We also do not anticipate changes to the 837–P or CMS
Form 1500 for CY 2011.

Based on our experience with the PVRP, we continue to estimate that the time needed to perform all the steps necessary to report each measure (that is, reporting the relevant quality data code(s) for a measure) on claims ranges from 15 seconds (0.25 minutes) to over 12 minutes for complicated cases and/ or measures, with the median time being 1.75 minutes. At an average labor cost of $58 per hour per practice, the cost associated with this burden ranges from $0.24 in labor to about $11.60 in labor time for more complicated cases and/or measures, with the cost for the median practice being $1.69.

The total estimated annual burden for this requirement will also vary along
with the volume of claims on which quality data is reported. In previous years, when we required reporting on 80percent of eligible cases for claimsbased reporting, we found that on average, the median number of reporting instances for each of the PQRI measures was 9. Since we propose to reduce the required reporting rate by over one-third to 50 percent, then for purposes of this burden analysis we will assume that an EP will need to report each selected measure for 6 reporting instances. The
actual number of cases on which an eligible professional would be required to report quality measures data will vary, however, with the EP’s patient population and the types of measures on which the EP chooses to report (each measure’s specifications includes a required reporting frequency).

Based on the assumptions discussed above, we estimate the total annual reporting burden per EP associated with claims-based reporting to range from 4.5 minutes (0.25 minutes per measure × 3

measures × 6 cases per measure) to 180 minutes (12 minutes per measure × 3

measures × 6 cases per measure), with the burden to the median practice being 31.5 minutes (1.75 minutes per measure

× 3 measures × 6 cases). We estimate the total annual reporting cost per EP associated with claims-based reporting to range from $4.32 ($0.24 per measure

× 3 measures × 6 cases per measure) to $208.80 ($11.60 per measure × 3

measures × 6 cases per measure), with the cost to the median practice being $30.42 per EP ($1.69 per measure × 3

measures × 6 cases per measure).

For registry-based reporting, there
would be no additional time burden for EP to report data to a registry as EP


### 40227 Federal Register / Vol. 75, No. 133 / Tuesday, July 13, 2010 / Proposed Rules

opting for registry-based reporting would more than likely already be reporting data to the registry for other purposes. Little, if any, additional data would need to be reported to the registry for purposes of participation in the 2011 PQRI. However, EPs would need to authorize or instruct the registry to submit quality measures results and
numerator and denominator data on quality measures to CMS on their
behalf. We estimate that the time and
effort associated with this would be approximately 5 minutes per EP.

Registries interested in submitting quality measures results and numerator and denominator data on quality measures to CMS on their participants’ behalf in 2011 would need to complete a self-nomination process in order to be
considered ‘‘ qualified ’’ to submit on behalf of EPs unless the registry was qualified to submit on behalf of EPs for prior years and did so successfully. We
estimate that the self-nomination process for qualifying additional registries to submit on behalf of EPs for the 2011 PQRI involves approximately 1 hour per registry to draft the letter of
intent for self-nomination. It is
estimated that each self-nominated entity will also spend 2 hours for the
interview with CMS officials and 2 hours calculating numerators, denominators, and measure results for each measure the registry wishes to report using a CMS-provided measure flow. However, the time it takes to complete the measure flow could vary depending on the registry’s experience and the number and type of measures for which the registry wishes to submit on behalf of EPs. Additionally, part of the self-nomination process involves the completion of an XML submission by the registry, which is estimated to take approximately 5 hours, but may vary depending on the registry’s experience. We estimate that the registry staff involved in the registry self-nomination process have an average labor cost of $50 per hour. Therefore, assuming the total burden hours per registryassociated with the registry selfnomination process is 10 hours, we estimate the total cost to a registryassociated with the registry selfnomination process to be approximately $500 ($50 per hour × 10 hours per registry).

The burden associated with the registry-based reporting requirements of this voluntary reporting initiative is the
time and effort associated with the registry calculating quality measure
results from the data submitted to the registry by its participants and submitting the quality measures results
and numerator and denominator data on quality measures to CMS on behalf of their participants. The time needed for a registry to review the quality measures and other information, calculate the measures results, and submit the
measures results and numerator and denominator data on the quality measures on their participants behalf is expected to vary along with the number of EPs reporting data to the registry and the number of applicable measures. However, we believe that registries already perform many of these activities for their participants. The number of measures that the registry intends to report to CMS and how similar the registry’s measures are to CMS’ PQRI
measures will determine the time burden to the registry.

For EHR-based reporting, the EP must have an IACS account, which we
believe takes less than 1 hour to obtain. Once an EP has an IACS account, he or she must extract the necessary clinical data from his or her EHR, and submitthe necessary data to the CMSdesignated clinical data warehouse. With respect to our proposal to require an EP to submit a test file, we believe that doing so would take less than 1 hour. With respect to submitting the actual 2011 data file in 2012, we believe
that this would take an EP no more than 2 hours, depending on the number of patients on which the EP is submitting.
We believe that once the EHR is programmed by the vendor to allow data submission to CMS, the burden to the
EP associated with submission of data on PQRI quality measures should be
minimal. Because this manner of reporting quality data to CMS was new to PQRI for 2010 and no EHR data submissions have taken place yet, it is difficult to estimate how many EPs will opt to participate in the PQRI through
the EHR mechanism in CY 2011.

An EHR vendor interested in having their product(s) be used by EPs to submit PQRI quality measures data toCMS were required to complete a selfnomination process in order for the vendor’s product(s) to be considered

‘‘ qualified ’’ for 2011. It is difficult to accurately quantify the burden
associated with the EHR selfnomination process as there is variation regarding the technical capabilities and experience among vendors. For purposes of this burden analysis, however, we estimate that the time required for an EHR vendor to complete the self-nomination process will be similar to the time required for registries to self-nominate that is approximately 10 hours at $50 per hour for a total of $500 per EHR vendor ($50 per hour x 10 hours per EHR vendor). The burden associated with the EHR vendor programming its EHR product(s)
to extract the clinical data that the EP needs to submit to CMS for purposes of reporting 2010 PQRI quality measures will be dependent on the EHR vendor’s familiarity with PQRI, the vendor’s system capabilities, as well as the vendor’s programming capabilities. Some vendors already have these necessary capabilities and for such vendors, we estimate the total burden hours to be 40 hours at a rate of $50 per
hour for a total burden estimate of $2,000 ($50 per hour x 40 hours per vendor). However, given the variability in the capabilities of the vendors, those vendors with minimal experience would have a burden of approximately 200 hours at $50 per hour, for a total estimate of $10,000 per vendor ($50 per hour x 200 hours per EHR vendor).

With respect to the process for group practices to be treated as satisfactorily submitting quality measures data under the 2011 PQRI discussed in section VI.F.1. of this proposed rule, group practices interested in participating in the 2011 PQRI through one of the proposed group practice reportingoptions would need to complete a selfnomination process similar to the selfnomination process required of registries and EHR vendors. Therefore, assuming 2 hours for a group practice to decide whether to participate as a group or individually, approximately 2 hours per group practice to draft the letter of intent for self-nomination, gather the requested information, and provide this requested information, and an additional 2 hours undergoing the vetting process with CMS officials, we
estimate a total of 6 hours associated with the self-nomination process. Assuming that the group practice staffinvolved in the group practice selfnomination process have the same average practice labor cost as the average practice labor cost estimates we used for individual EPs of $58 per hour, we estimate the total cost to a group practice associated with the group practice self-nomination process to be approximately $348 ($58 per hour x 6 hours per group practice).

The burden associated with the group practice reporting requirements of this voluntary reporting initiative is the time and effort associated with the group practice submitting the quality measures data. For practices participating under the proposed GPRO I process, this
would be the time associated with the physician group completing the data
collection tool. The information collection components of this data collection tool have been reviewed by OMB and are currently approved under


### 40228 Federal Register / Vol. 75, No. 133 / Tuesday, July 13, 2010 / Proposed Rules

OMB control number 0938–0941, with an expiration date of December 31, 2011, for use in the Physician Group Practice, Medicare Care Management Performance (MCMP), and EHR
demonstrations. Based on burden estimates for the PGP demonstration,
which uses the same data submission methods, we estimate the burden associated with a physician group completing the data collection tool would be approximately 79 hours per physician group. Based on an average labor cost of $58 per physician group,
we estimate the cost of data submission per physician group associated with participating in the proposed PQRI GPRO I would be $4,582 ($58 per hour x 79 hours per group practice).

For group practices participating under the proposed GPRO II process, the burden associated with submitting the PQRI quality measures data would be the time associated with the group practice submitting the required data to CMS via claims or a registry. We would expect that data submission under
GPRO II would take no more time than
the time it would take an individual EP to submit via claims or registry. We believe it would be appropriate to multiply the appropriate burden estimates for each reporting mechanism for individual EPs by the number of EPs in a group to obtain the burden
estimates for data submission under GPRO II. For example, based on our estimate of 15.75 minutes per EP under claims-based reporting, we would expect that a 2-person group would
have a burden of 31.50 minutes for
claims-based submission under GPRO

II. We invite comments on this burden analysis, including the underlying assumptions used in developing our
burden estimates.

3. Electronic Prescribing (eRx) Incentive Program

We believe it is difficult to accurately estimate how many EPs will opt to participate in the eRx Incentive Program in CY 2011. Final participation numbers from the first year of the eRx Incentive Program (2009) are not available.
Information from the ‘‘ PQRI 2007 Reporting Experience Report, ’’ which is available on the PQRI section of the
CMS Web site at http:// www.cms.hhs.gov/PQRI, however, indicates that nearly 110,000 unique TIN/NPI combinations attempted to submit PQRI quality measures data via claims for the 2007 PQRI. Therefore, for purposes of conducting a burden analysis for the 2011 eRx Incentive Program, we will assume that as many EPs who attempted to participate in the 2007 PQRI will attempt to participate in the 2011 eRx Incentive Program. As such, we can estimate that nearly 110,000 unique TIN/NPI combinations will participate in the 2011 eRx Incentive Program.

Section VI.F.2 of this proposed rule discusses the background of the eRx Incentive Program. Section VI.F.2.b.(2) of this proposed rule provides information on how we propose EPs and group practices can qualify to be
considered a successful electronic prescriber in 2011 in order to earn an incentive payment. For 2011, EPs and group practices may choose whether to participate and, to the extent they meet— (1) certain thresholds with respect to the volume of covered professional services furnished; and (2)
the criteria to be considered a successful electronic prescriber described in section VI.F.2.b.(2) of this proposed rule, they can qualify to receive an incentive payment for 2011 and/or avoid being subject to a penalty that goes into effect in 2012.

For the 2011 eRx Incentive Program,
as discussed in section VI.F.2. of this proposed rule, we propose that each EP would need to report the G-code indicating that at least one prescription generated during an encounter was electronically submitted at least 25 instances during the reporting period. We expect the ongoing costs associated with participation in the eRx Incentive Program to decline based on an EP’s familiarity with and understanding of the eRx Incentive Program, experience with participating in the eRx Incentive Program, and increased efforts by CMS
and stakeholders to disseminate useful
educational resources and best practices.

Similar to PQRI, one factor in the
burden to individual EPs would be the
time and effort associated with individual EPs reviewing the electronic prescribing measure to determine whether it is applicable to them, reviewing the available reporting options (we propose this measure would be reportable through claims-based reporting, registry-based reporting, or through EHRs) and selecting one, gathering the required information, and incorporating reporting of the measure
into their office work flows. Since the eRx Incentive Program consists of only 1 measure to report, we estimate 2 hours
as the amount of time needed for individual EPs to prepare for participation in the eRx Incentive Program. At an average cost of approximately $58 per hour per practice, we estimate the total preparation costs to individual EPs to be approximately $116 (2 hours × $58 per hour).

Another factor that influences the burden to EPs is how they choose to report the electronic prescribing
measure. For EPs who choose to do so via claims, we estimate that the burden associated with the requirements of this incentive program is the time and effort associated with gathering the required information, selecting the appropriate quality data codes (QDCs), and including the appropriate QDCs on the claims they submit for payment. For claims-based reporting, the QDCs will be collected as additional (optional) line items on the existing HIPAA transaction
837–P and/or CMS Form 1500. We do not anticipate any new forms and no modifications to the existing transaction or form. We also do not anticipate changes to the 837–P or CMS Form 1500
for CY 201.

Based on the information from the
PVRP described above for the amount of time it takes a median practice to report one measure one time on claims (1.75 minutes) and our proposal to require EPs to report the measure 25 times, we
estimate the burden associated with
claims-based data submission to be 43.75 minutes (1.75 minutes per case ×

1 measure × 25 cases per measure). This equates to a cost of approximately $42.29 (1.75 minutes per case × 1

measure × 25 cases per measure × $58 per hour) per individual EP.

Because registry-based reporting of the electronic prescribing measure to
CMS was added to the eRx Incentive Program for 2010 and EPs are not required to indicate to us how they plan to report the electronic prescribing measure each year, it is difficult to accurately estimate how many EPs will opt to participate in the eRx Incentive Program through the registry-based reporting mechanism in CY 2011. We do not anticipate, however, any additional burden for EPs to report data to a registry as EPs opting for registry-based reporting would more than likely already be reporting data to the registry for other purposes. Little, if any,
additional data would need to be reported to the registry for purposes of participation in the 2011 eRx Incentive Program. However, EPs would need to authorize or instruct the registry to submit quality measures results and
numerator and denominator data on the electronic prescribing measure to CMS
on their behalf. We estimate that the
time and effort associated with this would be approximately 5 minutes for
each EP that wishes to authorize or instruct the registry to submit quality
measures results and numerator and
denominator data on the electronic


### 40229 Federal Register / Vol. 75, No. 133 / Tuesday, July 13, 2010 / Proposed Rules

prescribing measure to CMS on their
behalf.

Based on our proposal to consider only registries qualified to submit PQRI quality measures results and numerator and denominator data on quality measures to CMS on their participants’ behalf for the 2010 PQRI to be qualified
to submit results and numerator and
denominator data on the electronic prescribing measure for the 2010 eRx Incentive Program, there would be no need for a registry to undergo a separate self-nomination process for the eRx Incentive Program and therefore, no
additional burden associated with the registry self-nomination process.

There would also be a burden to the registry associated with the registry calculating results for the electronic prescribing measure from the data submitted to the registry by its participants and submitting the quality
measures results and numerator and
denominator data on the electronic prescribing quality measure to CMS on behalf of their participants. The time needed for a registry to review the electronic prescribing measure and other information, calculate the measure’s results, and submit the
measure’s results and numerator and
denominator data on the measure on their participants behalf is expected to vary along with the number of EPs reporting data to whom the measure applies. However, we believe that registries already perform many of these activities for their participants. Since the E–Prescribing Incentive Program consists of only one measure, we believe
that the burden associated with the registry reporting the measure’s results
and numerator and denominator to CMS on behalf of their participants would be
minimal.

For EHR-based reporting, the EP must extract the necessary clinical data from his or her EHR and submit the necessary data to the CMS-designated clinical data
warehouse. Because this manner of reporting quality data to CMS was first added to the eRx Incentive Program in 2010 and EPs are not required to indicate to us how they intend to report the electronic prescribing measure, it is difficult to estimate how many EPs will opt to participate in the eRx Incentive Program through the EHR-based reporting mechanism in CY 2011. We
believe that once an EP’s EHR is programmed by the vendor to allow data submission to CMS, the burden to the
EP associated with submission of data on the electronic prescribing measure
should be minimal.

Since we are considering only EHR products qualified for the 2010 PQRI to be qualified for the 2011 eRx Incentive Program, there would be no need forEHR vendors to undergo a separate selfnomination process for the 2011 eRx Incentive Program and therefore, no
additional burden associated with the self-nomination process.

There would also be a burden to the
EHR vendor associated with the EHR vendor programming its EHR product(s)
to extract the clinical data that the EP needs to submit to CMS for purposes of reporting the proposed 2011 electronic prescribing measure. The time needed
for an EHR vendor to review the
measure and other information and program each qualified EHR product to
enable EPs to submit data on the measure to the CMS-designated clinical data warehouse will be dependent on the EHR vendor’s familiarity with the electronic prescribing measure, the vendor’s system capabilities, as well as the vendor’s programming capabilities. Since only EHR products qualified for the 2011 PQRI would be qualified for the 2011 eRx Incentive Program and the eRx Incentive Program consists of only one measure, we believe that any
burden associated with the EHR vendor to program its product(s) to enable EPs
to submit data on the electronicprescribing measure to the CMSdesignated clinical data warehouse
would be minimal.

Finally, with respect to the process for group practices to be treated as successful electronic prescribers under the 2011 eRx Incentive Program
discussed in section VI.F.2. of this proposed rule, we propose that group practices would have the same options
as individual EPs in terms of the form and manner for reporting the electronic prescribing measure (that is, group practices would have the option of reporting the measure through claims, a qualified registry, or a qualified EHR product). There are only 2 differences between the proposed requirements for an individual EP and a group practice: (1) The fact that a group practice would have to self-nominate; and(2) the number of times that a group practice would be required to report the electronic prescribing measure.

We do not anticipate any additional burden associated with the group practice self-nomination practice since we propose to limit the group practices to those selected to participate in the 2011 PQRI GPRO I or PQRI GPRO II. The practice only would need to indicate their desire to participate in theeRx GPRO at the same time they selfnominate for either PQRI GPRO I or PQRI GPRO II and indicate how they intend to report the electronic prescribing measure. In terms of the burden to group practices associated with submission of the electronic prescribing measure, we
believe that this would be similar to the burden to individual EPs for submitting the electronic prescribing measure. In fact, overall, there could be less burden associated with a practice participating as a group rather than as individual EPs because the total number of reporting instances required by the group could
be less than the total number of reporting instances that would be required if each member of the group separately reported the electronic prescribing measure. Thus, we believe that the burden to a group practice associated with reporting the electronic prescribing measure could range from almost no burden (for groups who choose to do so through a qualified EHR or registry) to 72.92 hours (1.75 minutes

per measure × 1 measure × 2,500 cases per measure) for a GPRO I group who chooses to report the electronic prescribing measures through claims submission. Consequently, the total estimated cost per group practice to report the electronic prescribing measure could be as high as $4,225 ($1.69 per measure × 1 measure × 2,500 cases per measure).

As with individual EPs, we believe that group practices that choose to participate in the 2011 eRx GPRO through registry-based reporting of the electronic prescribing measure would more than likely already be reporting data to the registry. Little, if any,
additional data would need to be reported to the registry for purposes of participation in the 2011 eRx Incentive Program beyond authorizing or instructing the registry to submit quality
measures results and numerator and
denominator data on the electronic prescribing measure to CMS on their
behalf. We estimate that the time and
effort associated with this would be approximately 5 minutes for each group practice that wishes to authorize or instruct the registry to submit quality
measures results and numerator and
denominator data on the electronic prescribing measure to CMS on their
behalf.

For group practices that choose to participate in the 2011 eRx Incentive Program through EHR-based reporting of the electronic prescribing measure, once the EHR is programmed by the vendor to allow data submission to CMS, the burden to the group practice associated
with submission of data on the electronic prescribing measure should
be minimal.

We invite comments on this burden analysis, including the underlying


### 40230 Federal Register / Vol. 75, No. 133 / Tuesday, July 13, 2010 / Proposed Rules

assumptions used in developing our
burden estimates.

VIII. Response to Comments

Because of the large number of public comments we normally receive on Federal Register documents, 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, when we proceed with a subsequent document, we will respond to the comments in the preamble to that document.

IX. Regulatory Impact Analysis

We have examined the impacts of this rule as required by Executive Order 12866 on Regulatory Planning and Review (September 30, 1993), the Regulatory Flexibility Act (RFA) (September 19, 1980, Pub. L. 96–354), section 1102(b) of the Social Security Act, section 202 of the Unfunded Mandates Reform Act of 1995 (Pub. L. 104–4), Executive Order 13132 on Federalism (August 4, 1999), and the Congressional Review Act (5 U.S.C. 804(2)).

Executive Order 12866 directs agencies to assess all costs and benefits of available regulatory alternatives and, if regulation is necessary, to select regulatory approaches that maximize net benefits (including potential economic, environmental, public health and safety effects, distributive impacts, and equity). A regulatory impact analysis (RIA) must be prepared for major rules with economically significant effects ($100 million or more in any 1 year). We estimate, as discussed below in this section, that the PFS provisions included in this proposed rule will redistribute more than $100 million in 1 year. Therefore, we estimate that this rulemaking is

‘‘ economically significant ’’ as measured by the $100 million threshold, and hence also a major rule under the Congressional Review Act. Accordingly, we have prepared a Regulatory Impact Analysis that to the best of our ability presents the costs and benefits of the rulemaking.

The RFA requires agencies to analyze options for regulatory relief of small businesses, if a rule has a significant impact on a substantial number of small entities. For purposes of the RFA, we estimate that most hospitals and most other providers are small entities as that term is used in the RFA (including small businesses, nonprofit organizations, and small governmental jurisdictions). The great majority of hospitals and most other health care providers and suppliers are small entities, either by being nonprofit organizations or by meeting the SBA definition of a small business (having revenues of less than $34.5 million in any 1 year) (for details see the SBA’s
Web site at http://sba.gov/idc/groups/ public/documents/sba

_ homepage/

serv

_ sstd

_ tablepdf.pdf (refer to the 620000 series). Individuals and States
are not included in the definition of a small entity. The RFA requires that we analyze regulatory options for small
businesses and other entities. We prepare a regulatory flexibility analysis unless we certify that a rule would not have a significant economic impact on
a substantial number of small entities. The analysis must include a justification concerning the reason action is being taken, the kinds and number of small entities the rule affects, and an explanation of any meaningful options that achieve the objectives with less significant adverse economic impact on
the small entities.

For purposes of the RFA, physicians, NPPs, and suppliers including IDTFs are considered small businesses if they generate revenues of $10 million or less
based on SBA size standards. Approximately 95 percent of physicians
are considered to be small entities. There are over 1 million physicians, other practitioners, and medical suppliers that receive Medicare payment under the PFS.

For purposes of the RFA approximately 85 percent of suppliers of durable medical equipment, prosthetics, orthotics, and supplies (DMEPOS) are considered small businesses according
to the SBA size standards. Our most
recent claims information includes 47,000 entities billing Medicare for DMEPOS each year. Total annual estimated Medicare expenditures for DMEPOS suppliers are approximately $10.1 billion in CY 2009, for which $8.1 billion was fee-for-service (FFS) and $2 billion was for managed care.

For purposes of the RFA, approximately 80 percent of clinical diagnostic laboratories are considered small businesses according to the SBA
size standards.

Ambulance providers and suppliers for purposes of the RFA are also
considered to be small entities.

In addition, most ESRD facilities are considered small entities for purposes of the RFA, either based on nonprofit status or by having revenues of $34.5 million or less in any year. We note that
a considerable number of ESRD facilities are owned and operated by large dialysis organizations (LDOs) or regional chains, which would have total revenues more than $34.5 million in any year if revenues from all locations are combined. However, the claims data we use to estimate payments for this RFA and RIA does not identify which dialysis facilities are parts of an LDO, regional chain, or other type of ownership. Each individual dialysis facility has its own provider number and bills Medicare using this number. Therefore, we consider each ESRD facility to be a small entity for purposes
of the RFA. We consider a substantial number of entities to be significantly affected if the proposed rule has an annual average impact on small entities of 3 to 5 percent or more. The majority of ESRD facilities will experience impacts of approximately 2 percent of total revenues. There are 954 nonprofit
ESRD facilities with a combined increase of 2.1 percent in overall payments relative to current overall payments. We note that although the overall effect of the wage index changes is budget neutral, there are increases
and decreases based on the location of individual facilities. The analysis and discussion provided in this section and elsewhere in this proposed rule complies with the RFA requirements.

Because we acknowledge that many of the affected entities are small entities, the analysis discussed throughout the preamble of this proposed rule constitutes our regulatory flexibility analysis for the remaining provisions
and addresses comments received on
these issues.

In addition, section 1102(b) of the Act requires us 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. Any such regulatory impact 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 100 beds. We do not believe this proposed rule has impact on significant operations of a substantial number of small rural hospitals because most dialysis facilities are freestanding. While there are 184 rural hospital-based dialysis facilities, we do not know how many of them are based at hospitals with fewer than 100 beds. However, overall, the 184 rural hospital-based dialysis facilities will experience an estimated 2.1 percent increase in payments. As a result, this rule will not have a significant impact on small rural hospitals. Therefore, the Secretary has determined that this proposed rule will not have a significant impact on the operations of a substantial number of small rural hospitals.


### 40231 Federal Register / Vol. 75, No. 133 / Tuesday, July 13, 2010 / Proposed Rules

Section 202 of the Unfunded Mandates Reform Act of 1995 (UMRA) also requires that agencies assess anticipated costs and benefits before issuing any rule whose mandates require spending in any 1 year of $100 million in 1995 dollars, updated annually for inflation. In 2010, that threshold is approximately $135 million. This proposed rule will not mandate any requirements for State, local, or tribal governments in the aggregate, or by the private sector, of $135 million. Medicare beneficiaries are considered to be part of the private
sector and as a result a more detailed discussion is presented on the Impact of
Beneficiaries in section IX.G. of this regulatory impact analysis.

Executive Order 13132 establishes certain requirements that an agency must meet when it promulgates a proposed rule (and subsequent final rule) that imposes substantial direct requirement costs on State and local governments, preempts State law, or otherwise has Federalism implications. We have examined this proposed rule in
accordance with Executive Order 13132
and have determined that this regulation would not have any
substantial direct effect on State or local governments, preempt States, or
otherwise have a Federalism implication.

We have prepared the following analysis, which together with the information provided in the rest of this preamble, meets all assessment requirements. The analysis explains the rationale for and purposes of this proposed rule; details the costs and benefits of the rule; analyzes alternatives; and presents the measures
we will use to minimize the burden on
small entities. As indicated elsewhere in this rule, we are implementing a variety of changes to our regulations, payments, or payment policies to ensure that our payment systems reflect changes in medical practice and the relative value of services. We provide information for each of the policy changes in the relevant sections of this proposed rule. We are unaware of any relevant Federal rules that duplicate, overlap, or conflict with this proposed rule. The relevant
sections of this rule contain a description of significant alternatives if applicable.

A. RVU Impacts

1. Resource-Based Work, PE, and Malpractice RVUs

Section 1848(c)(2)(B)(ii) of the Act requires that increases or decreases in RVUs may not cause the amount of expenditures for the year to differ by more than $20 million from what expenditures would have been in the absence of these changes. If this threshold is exceeded, we make adjustments to preserve budget neutrality.

Our estimates of changes in Medicare revenues for PFS services compare payment rates for CY 2010 with proposed payment rates for CY 2011 using CY 2009 Medicare utilization for all years. To the extent that there are year-to-year changes in the volume and mix of services provided by physicians, the actual impact on total Medicare
revenues will be different than those shown in Table 73. The payment impacts reflect averages for each specialty based on Medicare utilization. The payment impact for an individual physician would be different from the average, based on the mix of services the physician furnishes. The average change
in total revenues would be less than the impact displayed here because physicians furnish services to both Medicare and non-Medicare patients and specialties may receive substantial
Medicare revenues for services that are not paid under the PFS. For instance, independent laboratories receive approximately 85 percent of their
Medicare revenues from clinical laboratory services that are not paid
under the PFS.

Table 73 shows only the payment impact on PFS services. We note that these impacts do not include the effect
of the current law

¥ 6.1 percent CY 2011 PFS update. The following is an explanation of the information represented in Table 73:

• Column A (Specialty): The Medicare specialty code as reflected in our physician/supplier enrollment files.

• Column B (Allowed Charges): The aggregate estimated PFS allowed charges for the specialty based on CY
2009 utilization and CY 2010 rates. That is, allowed charges are the PFS amounts
for covered services and include coinsurance and deductibles (which are the financial responsibility of the beneficiary). These amounts have been summed across all services furnished by physicians, practitioners, or suppliers within a specialty to arrive at the total allowed charges for the specialty.

• Column C (Impact of Work and Malpractice (MP) RVU Changes): This
column shows the estimated CY 2011 impact on total allowed charges of the changes in the work and malpractice

RVUs.

• Column D (Impact of PE RVU and Multiple Procedure Payment Reduction Changes—Full): This column shows the estimated CY 2011 impact on total allowed charges of the changes in the PE RVUs if there were no remaining
transition to the full use of the new PPIS
data. This column also includes the impact of the various MPPR and imaging equipment utilization policies.

• Column E (Impact of PE RVU and MPPR Changes—Tran): This column shows the estimated CY 2011 impact on total allowed charges of the changes in the PE RVUs under the second year of the 4-year transition to the full use of
the new PPIS data. This column also includes the impact of the various MPPR and imaging equipment utilization policies.

• Column F (Impact of MEI Rebasing):
This column shows the estimated CY 2011 impact on total allowed charges of the proposed CY 2011 rescaling of the RVUs so that the proportions of total payments based on the work, PE, and malpractice RVUs match the proportions proposed in the rebased CY

2006 MEI.

• Column G (Combined Impact— Full): This column shows the estimated CY 2011 combined impact on total allowed charges of all the changes in the previous columns if there were no remaining transition to the new PE RVUs using the PPIS data.

• Column H (Combined Impact— Tran): This column shows the estimated CY 2011 combined impact on total allowed charges of all the changes in the previous columns under the second year of the 4-year transition to the new PE RVUs using the PPIS data.


### 40232 Federal Register / Vol. 75, No. 133 / Tuesday, July 13, 2010 / Proposed Rules

T ABLE 

### 73—CY 2011 PFS P ROPOSED 

### R ULE 

### T OTAL 

### A LLOWED 

### C HARGE 

### E STIMATED 

### I MPACT FOR 

### RVU, MPPR, AND 

### MEI

R EBASING 

### C HANGES 

### *

Specialty Allowed charges

(mil) Impact of
work and
MP RVU changes Impact of PE RVU and MPPR changes Impact of
MEI rebasing Combined impact

Full Tran Full Tran

(A) (B) (C) (D) (E) (F) (G) (H)

TOTAL ...................................................... $79,731 0% 0% 0% 0% 0% 0% 01—ALLERGY/IMMUNOLOGY ............... $176 0% 0% 0% 4% 4% 4% 02—ANESTHESIOLOGY ........................ $1,729 0% 3% 1%

¥ 3% 0%

¥ 2% 03—CARDIAC SURGERY ...................... $373 0%

¥ 1% 0% 0%

¥ 1% 0% 04—CARDIOLOGY .................................. $6,801 0%

¥ 5%

¥ 2% 0%

¥ 5%

¥ 2% 05—COLON AND RECTAL SURGERY .. $134 0% 4% 1% 0% 4% 1% 06—CRITICAL CARE .............................. $233 0% 2% 1%

¥ 2% 0%

¥ 1% 07—DERMATOLOGY .............................. $2,678 0% 1% 1% 2% 3% 3% 08—EMERGENCY MEDICINE ................ $2,527 0% 1% 1%

¥ 3%

¥ 2%

¥ 2% 09—ENDOCRINOLOGY .......................... $382 0% 3% 1%

¥ 1% 2% 0% 10—FAMILY PRACTICE ......................... $5,351 0% 3% 1% 0% 3% 1% 11—GASTROENTEROLOGY ................. $1,752 0% 2% 1%

¥ 1% 1% 0% 12—GENERAL PRACTICE ..................... $704 0% 2% 1% 0% 2% 1% 13—GENERAL SURGERY ..................... $2,221 0% 3% 1% 0% 3% 1% 14—GERIATRICS .................................... $182 0% 5% 2%

¥ 2% 3% 0% 15—HAND SURGERY ............................ $100 0% 3% 1% 2% 5% 3% 16—HEMATOLOGY/ONCOLOGY .......... $1,870 0%

¥ 5%

¥ 2% 1%

¥ 4%

¥ 1% 17—INFECTIOUS DISEASE ................... $567 0% 4% 2%

¥ 2% 2% 0% 18—INTERNAL MEDICINE ..................... $10,381 0% 3% 1%

¥ 1% 2% 0% 19—INTERVENTIONAL PAIN MGMT ..... $379 0% 4% 2% 1% 5% 3% 20—INTERVENTIONAL RADIOLOGY .... $222 0%

¥ 9%

¥ 4% 0%

¥ 9%

¥ 4%
21—MULTISPECIALTY CLINIC/OTHER $44 0%

¥ 5%

¥ 4% 1%

¥ 4%

¥ 3% 22—NEPHROLOGY ................................ $1,891 0% 0% 0%

¥ 1%

¥ 1%

¥ 1% 23—NEUROLOGY ................................... $1,415 0% 4% 1% 0% 4% 1% 24—NEUROSURGERY ........................... $622 0% 2% 1% 1% 3% 2% 25—NUCLEAR MEDICINE ...................... $57 0%

¥ 7%

¥ 4% 1%

¥ 6%

¥ 3% 27—OBSTETRICS/GYNECOLOGY ........ $649 0% 1% 0% 1% 2% 1% 28—OPHTHALMOLOGY ......................... $5,154 0% 7% 3% 1% 8% 4% 29—ORTHOPEDIC SURGERY ............... $3,339 0% 2% 1% 1% 3% 2% 30—OTOLARNGOLOGY ......................... $915 0% 3% 1% 1% 4% 2% 31—PATHOLOGY ................................... $1,040 0%

¥ 1% 0%

¥ 1%

¥ 2%

¥ 1% 32—PEDIATRICS .................................... $65 0% 2% 1% 0% 2% 1% 33—PHYSICAL MEDICINE ..................... $868 0% 4% 1%

¥ 1% 3% 0% 34—PLASTIC SURGERY ........................ $306 0% 4% 2% 1% 5% 3% 35—PSYCHIATRY ................................... $1,105 0% 1% 1%

¥ 3%

¥ 2%

¥ 2% 36—PULMONARY DISEASE .................. $1,736 0% 2% 1%

¥ 1% 1% 0% 37—RADIATION ONCOLOGY ................ $1,889 0%

¥ 5%

¥ 2% 4%

¥ 1% 2% 38—RADIOLOGY .................................... $4,975 0%

¥ 12%

¥ 6% 0%

¥ 12%

¥ 6% 39—RHEUMATOLOGY ........................... $496 0% 0% 0% 1% 1% 1% 40—THORACIC SURGERY .................... $388 0%

¥ 1% 0% 0%

¥ 1% 0% 41—UROLOGY ........................................ $1,909 0%

¥ 6%

¥ 2% 1%

¥ 5%

¥ 1% 42—VASCULAR SURGERY ................... $702 0%

¥ 2%

¥ 1% 2% 0% 1% 43—AUDIOLOGIST ................................. $52 0%

¥ 7%

¥ 2% 1%

¥ 6%

¥ 1% 44—CHIROPRACTOR ............................ $732 0% 3% 1%

¥ 2% 1%

¥ 1% 45—CLINICAL PSYCHOLOGIST ............ $557 0%

¥ 6%

¥ 2%

¥ 5%

¥ 11%

¥ 7% 46—CLINICAL SOCIAL WORKER .......... $376 0%

¥ 5%

¥ 2%

¥ 5%

¥ 10%

¥ 7%
47—DIAGNOSTIC TESTING FACILITY $851 0%

¥ 26%

¥ 13% 6%

¥ 20%

¥ 7% 48—INDEPENDENT LABORATORY ...... $1,009 0%

¥ 6%

¥ 2% 4%

¥ 2% 2% 49—NURSE ANES/ANES ASST ............. $706 0% 2% 2%

¥ 3%

¥ 1%

¥ 1% 50—NURSE PRACTITIONER ................. $1,175 0% 4% 1%

¥ 1% 3% 0% 51—OPTOMETRY ................................... $937 0% 7% 3% 1% 8% 4% 52—ORAL/MAXILLOFACIAL SURGERY $38 0% 3% 2% 2% 5% 4%

53—PHYSICAL/OCCUPATIONAL

THERA ................................................. $2,138 0%

¥ 7%

¥ 11%

¥ 1%

¥ 8%

¥ 12% 54—PHYSICIAN ASSISTANT ................. $868 0% 3% 1% 0% 3% 1% 55—PODIATRY ....................................... $1,738 0% 4% 2% 1% 5% 3% 56—PORTABLE X-RAY SUPPLIER ....... $91 0% 3% 2% 6% 9% 8%

57—RADIATION THERAPY CENTERS $69 0%

¥ 9%

¥ 3% 8%

¥ 1% 5% OTHER ..................................................... $67 0% 2% 1%

¥ 1% 2% 2%

* Does not include the impact of the current law

¥ 6.1 percent CY 2011 update.


### 40233 Federal Register / Vol. 75, No. 133 / Tuesday, July 13, 2010 / Proposed Rules

2. CY 2011 PFS Impact Discussion

a. Changes in RVUs

The most widespread specialty impacts of the RVU changes are generally related to two factors. First, as
discussed in section II.A.2. of this proposed rule, we are currently implementing the second year of the 4- year transition to new PE RVUs using the new PPIS data that were adopted in
the CY 2010 PFS final rule with comment period (74 FR 61751). The impacts of using the new PPIS data are generally consistent with the impacts
discussed in the CY 2010 PFS final rule with comment period (74 FR 61983 through 61984).

The second general factor contributing to the CY 2011 impacts shown in Table 73 is the proposed CY 2011 rescaling of the RVUs so that in the aggregate they match the proposed work, PE, and malpractice proportions in the rebased CY 2006 MEI. That is, as
discussed in section II.E.1. of this proposed rule, the proposed rebased MEI has a greater proportion attributable to malpractice and PE and, correspondingly, a lesser proportion attributable to work. Specialties that have a high proportion of total RVUs attributable to work, such as anesthesiology, are estimated to experience a decrease in aggregate payments as a result of this rescaling, while specialties that have a high proportion attributable to PE, such as radiation oncology, are estimated to experience an increase in aggregate payments. Malpractice generally represents a small proportion of total payments and the rescaling of the malpractice RVUs is not the primary driver of the specialty impacts. As
discussed in section II.E.1. of this proposed rule, the proposed rescaling of the RVUs to match the proposed rebased MEI is budget neutral overall. Table 73 also includes the impacts resulting from our proposed regulatory change to apply the current 50 percent MPPR policy to therapy services. Under the PFS, we estimate that this change would primarily reduce payments to the specialties of physical therapy and occupational therapy. In order to maintain budget neutrality, we are proposing to redistribute the PFS savings back into other services paid under the PFS by increasing all PE RVUs by approximately 1 percent.

Because providers in settings outside of the PFS, such as outpatient hospital departments, are also paid using the PFS payment rates and policies for physical therapy services, we estimate that this proposal would reduce (not redistribute) payments in those settings for therapy services by approximately 13 percent in CY 2011.

In addition, Table 73 includes the impacts resulting from the proposed regulatory change to the scope of the current contiguous body area MPPR policy for imaging services from contiguous body areas to include noncontiguous body areas. We estimate that this change would primarily reduce payments to the specialties of IDTF and radiology. In order to maintain budget neutrality, we are proposing to redistribute these savings back into other services paid under the PFS by increasing all PE RVUs by approximately 0.1 percent.

Table 73 also reflects the impacts resulting from certain ACA provisions, including section 3135 that amends section 1848(b)(4) of the Act to reduce the payment for expensive diagnostic imaging equipment, and, effective July 1, 2010, increases the level of the MPPR for contiguous body areas from 25 percent to 50 percent. The proposed expansion of the MPPR policy is further
discussed in section II.C.4. of this proposed rule, while the discussions of the provisions of section 3135 of the

ACA are found in sections V.M. and II.A.3.a. of this proposed rule. As required by sections 1848(c)(2)(B)(v)(V) and (VI) of the Act (as added by sections 3135(a) and (b) of the ACA), these changes are not budget neutral and result in program savings. See section

IX.D below for a discussion of the budget impacts of the ACA provisions.

We note that the payment impact for an individual physician may be different from the average, based on the mix of services the physician furnishes.

b. Combined Impact

Column H of Table 73 displays the estimated CY 2011 combined impact on total allowed charges by specialty of all the proposed RVU and MPPR changes. These impacts range from an increase of 8 percent for portable x-ray suppliers, to a decrease of 12 percent for physical/ occupational therapy. There is generally a slightly positive net effect of our proposals on primary care specialties, such as family practice, internal medicine, and geriatrics. Again, these impacts are estimated prior to the application of the negative CY 2011 CF update specified under the current

statute.

Table 74 shows the estimated impacton total payments for selected highvolume procedures of all of the changes discussed previously, including the effect of the CY 2011 negative PFS CF update. We selected these procedures because they are the most commonly furnished by a broad spectrum of physician specialties. There are separate columns that show the change in the facility rates and the nonfacility rates. For an explanation of facility and nonfacility PE, we refer readers to Addendum A of this proposed rule.



### T ABLE 

### 74.—I MPACT OF 

### P ROPOSED 

### R ULE AND 

### E STIMATED 

### P HYSICIAN 

### U PDATE ON 

### CY 2011 P AYMENT FOR 

### S ELECTED


### P ROCEDURES

CPT 1 HCPCS Code MOD Short descriptor Facility Nonfacility

CT 2010 2 CY 2011 3 Percent change CY 2010 2 CY 2011 3 Percent change

11721 ........... ............ Debride nail, 6 or more .......... $20.72 $18.41

¥ 11 $31.23 $29.71

¥ 5 17000 ........... ............ Destruct premalg lesion ......... 40.88 39.04

¥ 4 57.91 55.98

¥ 3 27130 ........... ............ Total hip arthroplasty ............. 1,084.09 1,005.16

¥ 7 NA NA NA 27244 ........... ............ Treat thigh fracture ................ 918.31 854.90

¥ 7 NA NA NA 27447 ........... ............ Total knee arthroplasty .......... 1,159.32 1,074.64

¥ 7 NA NA NA 33533 ........... ............ CABG, arterial, single ............ 1,536.01 1,374.42

¥ 11 NA NA NA 35301 ........... ............ Rechanneling of artery ........... 869.49 783.95

¥ 10 NA NA NA 43239 ........... ............ Upper GI endoscopy, biopsy 133.42 122.76

¥ 8 256.05 243.80

¥ 5 66821 ........... ............ After cataract laser surgery ... 216.59 210.41

¥ 3 228.80 222.69

¥ 3 66984 ........... ............ Cataract surg w/iol, 1 stage ... 549.57 524.43

¥ 5 NA NA NA

67210 ........... ............ Treatment of retinal lesion ..... 479.17 457.89

¥ 4 494.21 473.12

¥ 4 71010 ........... ............ Chest x-ray ............................. NA NA NA 18.17 16.94

¥ 7 71010 ........... 26 Chest x-ray ............................. 7.10 6.38

¥ 10 7.10 6.38

¥ 10


### 40234 Federal Register / Vol. 75, No. 133 / Tuesday, July 13, 2010 / Proposed Rules

T ABLE 

### 74.—I MPACT OF 

### P ROPOSED 

### R ULE AND 

### E STIMATED 

### P HYSICIAN 

### U PDATE ON 

### CY 2011 P AYMENT FOR 

### S ELECTED


### P ROCEDURES 

### —Continued

CPT 1 HCPCS Code MOD Short descriptor Facility Nonfacility

CT 2010 2 CY 2011 3 Percent change CY 2010 2 CY 2011 3 Percent change

77056 ........... ............ Mammogram, both breasts .... NA NA NA 82.61 78.08

¥ 5 77056 ........... 26 Mammogram, both breasts .... 34.63 30.69

¥ 11 34.63 30.69

¥ 11 77057 ........... ............ Mammogram, screening ........ NA NA NA 61.60 57.45

¥ 7 77057 ........... 26 Mammogram, screening ........ 27.82 24.80

¥ 11 27.82 24.80

¥ 11 77427 ........... ............ Radiation tx management, × 5 153.00 141.17

¥ 8 153.00 141.17

¥ 8 88305 ........... 26 Tissue exam by pathologist ... 28.67 26.03

¥ 9 28.67 26.03

¥ 9 90801 ........... ............ Psy dx interview ..................... 100.21 88.14

¥ 12 120.93 109.75

¥ 9 90862 ........... ............ Medication management ........ 35.77 32.16

¥ 10 44.28 41.00

¥ 7 90935 ........... ............ Hemodialysis, one evaluation 53.08 48.37

¥ 9 NA NA NA 92012 ........... ............ Eye exam established pat ..... 38.32 36.09

¥ 6 58.48 56.96

¥ 3 92014 ........... ............ Eye exam & treatment ........... 58.48 55.00

¥ 6 85.44 82.74

¥ 3 92980 ........... ............ Insert intracoronary stent ....... 689.80 608.64

¥ 12 NA NA NA 93000 ........... ............ Electrocardiogram, complete NA NA NA 15.61 14.24

¥ 9 93010 ........... ............ Electrocardiogram report ....... 7.10 6.38

¥ 10 7.10 6.38

¥ 10
93015 ........... ............ Cardiovascular stress test ..... NA NA NA 72.67 66.29

¥ 9

93307 ........... 26 Echo exam of heart ............... 38.32 34.13

¥ 11 38.32 34.13

¥ 11

93510 ........... 26 Left heart catheterization ....... 198.71 174.81

¥ 12 198.71 174.81

¥ 12 98941 ........... ............ Chiropractic manipulation ...... 24.13 21.85

¥ 9 27.25 25.29

¥ 7 99203 ........... ............ Office/outpatient visit, new ..... 57.34 52.79

¥ 8 76.93 72.67

¥ 6 99213 ........... ............ Office/outpatient visit, est ....... 38.04 35.11

¥ 8 51.38 48.86

¥ 5 99214 ........... ............ Office/outpatient visit, est ....... 58.48 53.77

¥ 8 76.93 72.43

¥ 6 99222 ........... ............ Initial hospital care ................. 101.62 93.54

¥ 8 NA NA NA 99223 ........... ............ Initial hospital care ................. 149.60 137.25

¥ 8 NA NA NA 99231 ........... ............ Subsequent hospital care ...... 29.81 27.25

¥ 9 NA NA NA 99232 ........... ............ Subsequent hospital care ...... 53.93 49.35

¥ 9 NA NA NA 99233 ........... ............ Subsequent hospital care ...... 77.50 70.96

¥ 8 NA NA NA 99236 ........... ............ Observ/hosp same date ......... 166.06 151.73

¥ 9 NA NA NA 99239 ........... ............ Hospital discharge day .......... 77.78 71.94

¥ 8 NA NA NA 99283 ........... ............ Emergency dept visit ............. 48.26 43.21

¥ 10 NA NA NA 99284 ........... ............ Emergency dept visit ............. 91.41 81.76

¥ 11 NA NA NA 99291 ........... ............ Critical care, first hour ............ 170.04 153.94

¥ 9 203.25 187.33

¥ 8 99292 ........... ............ Critical care, add’l 30 min ...... 85.16 77.09

¥ 9 91.97 83.97

¥ 9 99348 ........... ............ Home visit, est patient ........... NA NA NA 63.59 58.19

¥ 8 99350 ........... ............ Home visit, est patient ........... NA NA NA 130.58 120.30

¥ 8
G0008 .......... ............ Admin influenza virus vac ...... NA NA NA 16.75 16.45

¥ 2

1 CPT codes and descriptions are copyright 2010 American Medical Association. All Rights Reserved. Applicable FARS/DFARS apply.

2 Payments based upon corrected CY 2010 conversion factor of $28.3868 under the statute as of October 30, 2009 that would be in effect on December 31, 2010 under current law.

3 Payments based upon the projected CY 2011 conversion factor of $26.6574 adjusted by the proposed MEI rescaling factor of 0.921.

B. Geographic Practice Cost Indices (GPCIs)

As discussed in section II.D. of this proposed rule, we are required to update the GPCI values at least every 3 years and phase in the adjustment over 2 years (if there has not been an adjustment in the past year). For CY 2011, we are proposing new GPCIs for each Medicare locality. The updated GPCIs reflect the first year of the 2-year phase in. The new GPCIs rely upon the 2010 HUD data for determining the
relative cost differences in the office rent component of the PE GPCIs, as well as the 2006 through 2007 professional malpractice premium data for determining the malpractice GPCIs. The 2006 through 2008 Bureau of Labor and Statistics (BLS) Occupational Employment Statistics (OES) data were used as a replacement for 2000 Census data for determining the physician work GPCIs and the employee compensation component of the PE GPCIs. As
discussed in section II.D. of this proposed rule, the cost share weights for each GPCI value, that is, work, PE, and malpractice, reflect the same proportions determined for the proposed 2006-based MEI.

Additionally, the proposed GPCIs reflect several provisions required by the ACA. Section 1848(e)(1)(H) of the Act (as added by section 3102(b) of the ACA) specifies that for CY 2010 and CY 2011, the employee wage and rent portions of the PE GPCIs reflect only
one-half of the relative cost differences for each locality compared to the national average and includes a ‘‘ hold
harmless ’’ provision for any PFS locality
that would receive a reduction to its PE GPCI resulting from the limited recognition of cost differences. Section 1848(e)(1)(E) of the Act (as amended by section 3102(a) of the ACA) extends the 1.000 work GPCI floor only through December 31, 2010. Therefore, the proposed CY 2011 GPCIs reflect the
sunset of the 1.000 work GPCI floor. Section 1848(e)(1)(G) of the Act (as amended by section 134(b) of the MIPPA) established a permanent 1.500 work GPCI floor in Alaska, beginning January 1, 2009 and, therefore, the 1.500
work GPCI floor in Alaska will remain in place for CY 2011. Moreover, section 1848(e)(1)(I) of the Act (as added by section 10324(c) of the ACA) establishes
a 1.000 PE GPCI floor for services
furnished in frontier states effective January 1, 2011. OACT estimates the combined impact of these provisions on a fiscal year cash basis as $580 million
for FY 2011.

As required by the statute, the updated GPCIs would be phased in over a 2-year period. Addendum D to this proposed rule shows the estimated effects of the revised GPCIs on locality


### 40235 Federal Register / Vol. 75, No. 133 / Tuesday, July 13, 2010 / Proposed Rules

GAFs for the transitional year (CY 2011) in descending order. The GAFs reflect the use of updated underlying GPCI data, updated cost share weights, and the ACA provisions. The GAFs are a weighted composite of each area’s work, PE, and malpractice GPCIs using the national GPCI cost share weights. While we do not actually use the GAFs in computing the PFS payment for a specific service, they are useful in comparing the estimated overall costs and payments for different localities. The actual effect on payment for any specific service would deviate from the estimated payment based on the GAF to the extent that the proportions of work, PE, and malpractice expense RVUs for the specific service differ from those of the GAF. The most significant changes would occur in 12 payment localities, where the GAF increases by more than 1 percent or decreases by more than 2 percent. The cumulative effects of all of the GPCI revisions, including the updated underlying GPCI data, updated cost share weights, and provisions of the ACA, are reflected in the CY 2012 GPCI values that are displayed in Addendum E to this proposed rule.

C. Rebasing and Revising of the MEI

As discussed in section II.E.1. of this proposed rule, we are proposing to
rebase and revise the MEI for the CY 2011 PFS. Substituting the proposed 2006 MEI weights in place of the 2000 weights and implementing the proposed revisions to the MEI has no impact on the projected MEI increase for CY 2011. The projected MEI update for CY 2011 is 0.3 percent under both the 2000-based and 2006-based MEI. After CY 2011, the MEI updates are slightly higher (0.1 percentage point) in the early part of the forecast, unchanged in the medium term, and slightly lower in the long term (between 0.1 to 0.2 percentage points).

D. The Affordable Care Act Provisions

1. Section 3103: Extension of Exceptions Process for Medicare Therapy Caps

This provision extends the exceptions process for therapy caps through December 31, 2010. Therapy caps are
discussed in detail in section III.A.1. of this proposed rule. OACT estimates the impact on a fiscal year cash basis as $1.16 billion for FY 2011.

2. Section 3104: Extension of Payment for Technical Component of Certain Physician Pathology Services

As discussed in section V.E. of this proposed rule, this provision continues payment to independent laboratories for the TC of physician pathology services
for fee-for-service Medicare beneficiaries who are inpatients or outpatients of a covered hospital through CY 2010. OACT estimates the impact on a fiscal year cash basis as $80
million for FY 2011.

3. Sections 3105 and 10311: Extension
of Ambulance Add-Ons

As discussed in section V.F. of this proposed rule, these provisions require
the extension of certain add-on payments for ground ambulance services, and the extension of certain rural area designations for purposes of air ambulance payment. As further discussed in section V.F., we are amending the Medicare program regulations to conform the regulations to these provisions of the ACA. These statutory provisions are essentially prescriptive and do not allow for discretionary alternatives on the part of the Secretary.

As discussed in the July 1, 2004 interim final rule (69 FR 40288), in determining the super-rural bonus amount under section 1834(l)(12) of Act, we followed the statutory guidance of using the data from the Comptroller General (GAO) of the U.S. We obtained
the same data as the data that were used in the GAO’s September 2003 Report
titled ‘‘ Ambulance Services: Medicare Payments Can Be Better Targeted to Trips in Less Densely Populated Rural

Areas ’’ (GAO report number GAO–03– 986) and used the same general methodology in a regression analysis as was used in that report. The result was that the average cost per trip in the lowest quartile of rural county populations was 22.6 percent higher than the average cost per trip in the highest quartile. As required by section 1834(l)(12) of the Act, this percent increase is applied to the base rate for ground ambulance transports that originate in qualified rural areas, which were identified using the methodology set forth in the statute. Payments for
ambulance services under Medicare are determined by the point of pick-up (by zip code area) where the beneficiary is
loaded on board the ambulance. We determined that ground ambulance transports originating in 7,842 zip code areas (which were determined to be in

‘‘ qualified rural areas ’’ ) out of 42,879 zip code areas, according to the July 2010 zip code file, will realize increased base rate payments under this provision; however, the number and level of services that might occur in these areas
for CY 2011 is unknown at this time. While many elements may factor into the final impact of sections 3105(a), (b), and (c) and 10311(a), (b), and (c) of the ACA, our Office of the Actuary (OACT) estimates the impact of all these provisions to be $10 million for FY

2011.

4. Section 3107: Extension of Physician
Fee Schedule Mental Health Add-On

As discussed in section V.G. of this proposed rule, this provision extends the period of time for the five percent increase in Medicare payment for specified mental health services through CY 2010. OACT estimates the impact on a fiscal year cash basis as $20 million
for FY 2011.

5. Section 3111: Payment for Bone Density Tests

As discussed in section V.I. of this proposed rule, this provision restores payment for dual-energy x-ray absorptiometry (DXA) services furnished during CYs 2010 and 2011 to 70 percent of the Medicare rate paid in CY 2006. OACT estimates the impact on a fiscal year cash basis as $60 million
for FY 2011.

6. Section 3122: Extension of Medicare Reasonable Costs Payments for Certain Clinical Diagnostic Laboratory Tests Furnished to Hospital Patients in
Certain Rural Areas

As discussed in section V.K. of this proposed rule, this provision reinstitutes reasonable cost payment for clinical diagnostic laboratory tests performed by hospitals with fewer than 50 beds that are located in qualified rural areas as part of their outpatient services for cost reporting periods beginning on or after July 1, 2010 through June 30, 2011. For some hospitals with cost reports that begin as late as June 30, 2011, this reinstitution of reasonable cost payment could affect services performed as late as June 29, 2012, because this is the date those cost reports will close.

7. Section 3135: Modification of Equipment Utilization Factor For Advanced Imaging Services

As discussed in section V.M. of this proposed rule, for services furnished on or after July 1, 2010, section 1848(b)(4)(D) of the Act (as added by section 3135(b) of the ACA) adjusts the technical component MPPR for multiple imaging studies provided in a single imaging session on contiguous body parts within families of codes from 25 percent to 50 percent as of July 1, 2010.
For services furnished on or after January 1, 2011, section 1848(b)(4)(C) of the Act (as added by section 3135(a) of the ACA) increases the equipment utilization rate to 75 percent for expensive diagnostic imaging equipment, changing the CY 2011 transitional utilization rate adopted in


### 40236 Federal Register / Vol. 75, No. 133 / Tuesday, July 13, 2010 / Proposed Rules

the CY 2010 PFS final rule with comment period to the 75 percent rate. Both of these provisions are not budget neutral. OACT estimates the impact on a fiscal year cash basis to be savings to the Medicare program of $160 million
for FY 2011.

8. Section 3136: Revisions in Payments
for Power Wheelchairs

As discussed in section V.N. of this proposed rule, this provision requires the Secretary to revise the capped rental fee schedule amounts for all power wheelchairs effective for power
wheelchairs furnished on or after January 1, 2011. Under the monthly capped rental payment structure, the fee schedule will pay 15 percent (instead of 10 percent) of the purchase price for the first three months and 6 percent (instead of 7.5 percent) for the remaining rental
months not to exceed 13 months. In addition, the lump sum (up front) purchase payment will be eliminated for standard power-driven wheelchairs. For complex rehabilitative power-driven wheelchairs, the provision permits payment to be made on a lump sum purchase method or a monthly rental method. These changes are prescriptive
in the statute and does not allow for discretionary alternatives.

We expect the changes mandated by
section 3136 of the ACA as a whole to achieve program savings as a result of total payments per standard power wheelchair being less than 100 percent of the purchase fee schedule amount. This decrease in expenditures is expected for two reasons. Primarily, the provision will eliminate the lump sumpayment method for standard powerdriven wheelchairs and instead payment will be made under the monthly rental method resulting in lower aggregate payments because many beneficiaries who use standard power wheelchairs do not use them for as long as 13 months. In addition, we note that currently a significantly lower volume of power-driven wheelchairs are paid under the monthly payment method. The payment impact of increasing monthly rental payments in the initial 3 months will be offset both by the savings achieved from eliminating the lump sum payment method for standard power-driven wheelchairs and by decreasing payments for the remaining months of rental from 7.5 percent to 6 percent of the purchase price for all power-driven wheelchairs. We compared the estimates of current payments for power-driven wheelchairs to estimates of payments resulting from the changes which showed an estimated payment impact of a decrease in expenditures of approximately $780 million over a 5-year period. The FY 2011 cash savings was $120 million.

9. Section 3401: Revisions of Certain Market Basket Updates and Incorporation of Productivity Adjustments

As discussed in section V.P. of this proposed rule, section 3401 of the ACA incorporates a productivity adjustment into the update factors for certain payment systems. Specifically, section 3401 requires that in CY 2011 (and in subsequent years), update factors under the ambulatory surgical center payment system, the ambulance fee schedule, and the clinical laboratory fee schedule be adjusted by the productivity adjustment. OACT estimates the impact to be savings to the Medicare program of $20 million, $30 million, and $50 million for the ambulatory surgical center payment system, the ambulance fee schedule, and the clinical laboratory fee schedule, respectively, for FY 2011. Furthermore section 3401 changed the 2011 ESRD composite rate Market
Basket minus one increase to a Market Basket increase. This provision would be a cost to the Medicare program of $40 million (does not include coinsurance).

10. Section 4103: Medicare Coverage of Annual Wellness Visit Providing a
Personalized Prevention Plan

As discussed in section V.Q. of this proposed rule, for services furnished on or after January 1, 2011, section 1861(s)(2)(FF) of the Act (as added by section 4103 of the ACA) provides Medicare coverage, with no coinsurance or deductible, for an annual wellness
visit. The annual wellness visit entails the creation of a personalized prevention plan for an individual that
includes a health risk assessment and may include other elements, such as updating the family history, identifying providers that regularly provide medical care to the individual, body mass index measurement, development of a screening service schedule, and
identification of risk factors. OACT estimates the impact on a fiscal year cash basis to be $110 million for FY

2011.

11. Section 4104: Removal of Barriers to
Preventive Services in Medicare

As discussed in section V.R. of this proposed rule, for services furnished on or after January 1, 2011, sections 1833(a)(1) and 1833(b) of the Act (as amended by section 4104 of the ACA)
waive the deductible and coinsurance requirements for most preventive services, and waive the deductible for colorectal cancer screening tests that are reported with other codes. Services to which no coinsurance or deductible would be applied are the annual wellness visit, the initial preventive physical examination, and any covered preventive service if it is recommended with a grade of A or B by the United
States Preventive Services Task Force.
We estimate that this new benefit will
result in an increase in Medicare payments. OACT estimates the impact on a fiscal year cash basis to be $110
million for FY 2011.

12. Section 5501: Expanding Access to Primary Care Services and General Surgery Services

As discussed in section V.S. of this proposed rule, for services furnished on or after January 1, 2011 and before January 1, 2016, sections 1833(x) and (y) of the Act (as added by section 5501 of the ACA) provide primary care practitioners, as well as general surgeons practicing in geographic health professional shortage areas, with 10 percent incentive payments based on their provision of primary care or major surgical services, respectively. OACT estimates the impact on a fiscal year cash basis to be $170 million for FY

2011.

13. Section 6003: Disclosure Requirements for In-office Ancillary Services Exception to the Prohibition of Physician Self-Referral for Certain Imaging Services

In section V.T of the preamble of this proposed rule, we propose to amend § 411.355(b)(2) to include a new disclosure requirement created by
section 6003 of the ACA and related to the in-office ancillary services exception to the physician self-referral prohibition. Specifically, the statute requires that, with respect to magnetic resonance imaging, computed tomography, and positron emission tomography, the referring physician must inform the patient in writing at the time of the referral that the patient may obtain the same imaging services from another supplier. In addition, the statute requires physicians to provide a written list of other suppliers who furnish the same imaging services in the area in which the patient resides.

We propose that the written notice
shall include a list of at least 10 other suppliers who provide the services for which the individual is being referred
and which are located within a 25-mile radius of the referring physician’s office
location. If there are fewer than 10 other suppliers located within a 25-mile radius of the physician’s office location, the physician shall list all of the other suppliers of the imaging service that are present within a 25-mile radius of the


### 40237 Federal Register / Vol. 75, No. 133 / Tuesday, July 13, 2010 / Proposed Rules

referring physician’s office location, including up to 10 suppliers. Provision of the written list of alternate suppliers will not be required if no other suppliers provide the services for which the individual is being referred within a 25-mile radius. We also propose that
the notice should be written in a manner sufficient to be reasonably understood by all patients and should include for each supplier on the list, at a minimum, the supplier’s name, address, telephone number, and distance from the referring physician’s
office location. A record of the disclosure notification, signed by the patient, shall be maintained as a part of the patient’s medical record.

Our proposal minimizes the administrative burden for the physician by requiring the development of only one list of alternative suppliers for each office location, rather than multiple lists targeting the various areas in which the physician’s patients reside.

We do not anticipate that our proposals in section V.T. of the preamble of this proposed rule would have a significant economic impact on a substantial number of physicians, other health care providers and suppliers, or the Medicare or Medicaid programs and their beneficiaries. Specifically, we believe that this proposed rule would affect only those physicians who provide MRI, CT, PET services under the in-office ancillary services exception and beneficiaries receiving those services. We are uncertain of the number of physicians who will have to comply with this disclosure requirement. Using data from the 2009 CMS Statistics booklet, we propose an estimate of 71,000 Medicare enrolled physicians would have to comply with this new requirement. This figure represents 20 percent of primary care and medical specialty physicians
enrolled in Medicare Part B. In order to ensure accuracy of the effect of this provision on physician practices, we are soliciting comments regarding the appropriateness of this estimate. The burden associated with disclosing the information, receiving the patient’s signature on the form and maintaining
a record of such disclosure will be de minimis for the individual physician.

Our proposed criteria for the new disclosure requirement would present a negligible economic impact on the physician or group practice required to
create the disclosure notice. The physician or group practice would incur only a one-time cost associated with developing a disclosure notice that informs patients that they may receive the same imaging services from another supplier and also lists other suppliers located within a 25-mile radius of the physician’s office location at the time of
the referral. We believe it would take an
individual 1 hour to create the notice informing patients that they may receive imaging services from another supplier as well as to compile the list of 10 other suppliers. In addition, we believe it would require a negligible amount of time to provide the notice and list of suppliers to the patient and to maintain a copy of the notice in the patient’s
medical record.

We believe that beneficiaries would be impacted positively by this new provision. The disclosure that the patient may receive the referred imaging services from another supplier
contributes to informed decisionmaking about the availability of such imaging services from other suppliers. We also believe that furnishing a list of other suppliers who provide the same services in the vicinity of the referring physician serves patient convenience. The proposed regulation makes no significant changes that would impede patient access to health care services, and it will likely improve patients’ awareness of options in deciding where to receive imaging services.

14. Section 6404: Maximum Period for
Submission of Medicare Claims
Reduced to Not More Than 12 Months

As discussed in section V.U. of this proposed rule, section 6404 of the ACA reduces the maximum time period for filing Medicare claims to no more than
12 months after the date of service. Under the new law, claims for services furnished on or after January 1, 2010, must be filed within 1 calendar year after the date of service. In addition, section 6404 of the ACA provides that
claims for services furnished before January 1, 2010, must be filed no later than December 31, 2010.

Section 6404 of the ACA also permits the Secretary to make certain exceptions to the 1-year filing deadline. This proposed rule would create two new exceptions to the 1-year filing deadline.

The first exception would permit the time limits for filing claims to be extended where a beneficiary becomes retroactively entitled to Medicare benefits, but was not entitled to
Medicare benefits at the time the
services were furnished. Under this exception, the time to file a claim would be extended through the last day of the sixth month following the month in which the beneficiary received
notification of the retroactive Medicare
entitlement to the date of the furnished

service.

The second exception would permit the time limits for filing claims to be extended where: (1) At the time the service was furnished, the beneficiary was not entitled to Medicare; (2) subsequently, the beneficiary received notification of Medicare entitlement, retroactively effective to the date of the furnished service; and (3) subsequently the State Medicaid agency recovered the Medicaid payment for the furnished service from a provider or supplier 11
months or more after date the service was furnished. Under this exception,
the time to file a claim would be extended through the last day of the sixth month following the month in
which the State recovered the Medicaid payment from the provider or supplier.

The budgetary impact related to this provision is significant as future payment of claims for services incurred will now be made at an earlier date,
relative to the 12-month submission expiration. This is reflected by the Part A and Part B payment amounts of $60 and $50 million for FY 2011. However, for purposes of the Regulatory Impact Analysis, the economic impact of this provision is non-economically significant, as to the interest lost on money now required to pay claims prior to the 12-month submission expiration
is minimal.

Providers and suppliers have established billing practices for the submission of claims for payment to the Medicare program. Although this proposed rule would require providersand suppliers to submit Medicare feefor-service claims within 12 months from the date of service, we believe providers and suppliers would easilyrevise their billing practices on a onetime basis, and suffer no economic impact. In fact, analysis of Medicare
claims data shows that more than 99 percent of Part A and Part B claims are filed in 12 months or less. In addition, some providers and suppliers will receive payment and interest on claims
that are filed at an earlier date.

Lastly, providers, suppliers, or the
small number of beneficiaries that occasionally submit claims may benefit from the availability of the two proposed new exceptions to the timely filing rule; however, we believe the impact on program costs would be negligible.

E. Other Provisions of the Proposed Regulation

1. Part B Drug Payment: ASP Issues

Application of our proposed policies
for ‘‘ Carry Over ASP ’’ and ‘‘ Partial Quarter ASP Data, ’’ as discussed in section VI.A. of this proposed rule, are dependent on the status and quality of quarterly manufacturer data


### 40238 Federal Register / Vol. 75, No. 133 / Tuesday, July 13, 2010 / Proposed Rules

submissions, so we cannot quantify associated savings.

Furthermore, we do not expect that our proposed policy for determining the payment amount for drugs and biologicals which include intentional overfill, as discussed in section VI.A of this proposed rule, will impact payments made by the Medicare

program.

Finally, as discussed in section VI.A of this proposed rule, we are proposing to provide for appropriate price
substitutions that account for marketrelated pricing changes and would allow Medicare to pay based off lower market prices for those drugs and biologicals that consistently exceed the applicable threshold percentage. We believe that this proposal will generate some savings for the Medicare program and its beneficiaries since any substituted prices would be for amounts less than the calculated 106 percent of
the ASP.

2. Ambulance Fee Schedule: Proposed Policy for Reporting Units When Billing for Ambulance Fractional Mileage

As discussed in section VI.B. of this proposed rule, we are proposing to implement fractional mileage billing for all providers and suppliers of
ambulance services. For all claims for mileage totaling up to 100 covered miles, we are proposing to require all providers and suppliers of ambulance services to bill mileage rounded up to
the nearest tenth of a mile rather than
the nearest whole mile and are proposing to pay based on that amount. By requiring that providers and suppliers round up to the nearest tenth
of a mile rather than the nearest whole mile, providers and suppliers would be submitting claims for anywhere between 0.1 and 0.9 of a mile less per claim and Medicare would pay based on that amount. We anticipate that requiring greater accuracy in billing for ambulance mileage will generate modest cost savings for the Medicare program. Based on our rough estimates using CY 2008 claims data, Medicare could potentially save at least $45 million per year in payments for base mileage billed by suppliers, and perhaps as much as $80 million per year when considering other types of ambulance mileage payments such as those for rural mileage and those made to institutional providers.

3. Chiropractic Services Demonstration

As discussed in section VI.D. of this proposed rule, we are continuing the recoupment of the $50 million in expenditures from this demonstration in order to satisfy the budget neutrality requirement in section 651(f)(1)(b) of the MMA. We initiated this recoupment in
CY 2010 and this will be the second year. As discussed in the CY 2010 PFS final rule with comment period, we finalized a policy to recoup $10 million each year through adjustments to the PFS for all chiropractors in CYs 2010 through 2014. To implement this required budget neutrality adjustment, we are recouping $10 million in CY 2011 by reducing the payment amount under the PFS for the chiropractic CPT codes (that is, CPT codes 98940, 98941, and 98942) by approximately 2 percent.

4. Renal Dialysis Services Furnished by
ESRD Facilities

The ESRD related provisions are
discussed in sections V.P. and VI.E. of this proposed rule. To understand the impact of the changes affecting payments to different categories of ESRD facilities, it is necessary to compare estimated payments under the current year (CY 2010 payments) to estimated payments under the revisions to the composite rate payment system (CY 2011 payments) as discussed in section VI.E. of this proposed rule. To estimate the impact among various classes of ESRD facilities, it is imperative that the estimates of current payments and estimates of proposed payments contain similar inputs. Therefore, we simulated payments only
for those ESRD facilities for which we
are able to calculate both current CY 2010 payments and proposed CY 2011
payments.

Also, as explained in the ESRD PPS proposed rule (74 FR 50019), section 1881(b)(14)(E)(i) of the Act requires a 4- year transition (phase-in) from the current composite payment system to the ESRD PPS, and section 1881(b)(14)(E)(ii) allows ESRD facilities
to make a one-time election to be
excluded from the transition. As of January 1, 2011, ESRD facilities that elect to go through the transition would be paid a blended amount that willconsist of 75 percent of the basic casemix adjusted composite payment system and the remaining 25 percent would be based on the ESRD PPS payment. Therefore, these proposed rates listed in the impact table below reflect only the composite rate portion of the blended payment amounts for facilities going through the first year of the 4-year
transition under the new ESRD PPS. A full analysis of the projected impact of
the ESRD PPS will be addressed in the
ESRD PPS final rule which will be published in the summer.

ESRD providers were grouped into the categories based on characteristics provided in the Online Survey and Certification and Reporting (OSCAR) file and the most recent cost report data from the Healthcare Cost Report Information System (HCRIS). We also used the December 2009 update of CY 2009 National Claims History file as a basis for Medicare dialysis treatments and separately billable drugs and biologicals. Since the December 2009 update of the CY 2009 National Claims History File is incomplete, we updated the data. The description of the updates for the separately billable drugs is
described in section IV.E. of this proposed rule. To update the treatment counts we used the ratio of the June 2009 to the December 2008 updates of the CY 2008 National Claims History File figure for treatments. This was an increase of 12.4 percent. Due to data limitations, we are unable to estimate current and proposed payments for 32
of the 5318 ESRD facilities that bill for ESRD dialysis treatments.

Table 75 shows the impact of this year’s proposed changes to CY 2011 payments to hospital-based and independent ESRD facilities. The first column of Table 75 identifies the type of ESRD provider, the second column
indicates the number of ESRD facilities for each type, and the third column indicates the number of dialysis
treatments. The fourth column shows the effect of all proposed changes to the ESRD wage index for CY 2011 as it affects the composite rate payments to
ESRD facilities. The fourth column compares aggregate ESRD wage-adjusted composite rate payments in CY 2011 to aggregate ESRD wage-adjusted composite rate payments in CY 2010. In CY 2010, ESRD facilities receive 100 percent of the CBSA wage-adjusted composite rate. The overall effect to all ESRD providers in aggregate is zero because the CY 2011 ESRD wage index has been multiplied by a budget neutrality adjustment factor to comply with the statutory requirement that any wage index revisions be done in a
manner that results in the same aggregate amount of expenditures as would have been made without any changes in the wage index. The fifth column shows the effect of proposed changes to the ESRD wage index in CY 2011 and the effect of section 3401(h) of the ACA, which amends section 1881(b)(14)(F) of the Act to revise the
ESRD market basket increase factor. Effective January 1, 2011, there is a full ESRD bundled market basket update to the composite rate component of the blended payment amount under the payment system. We anticipate an
estimated ESRD market basket increase factor of 2.5 percent for those facilities


### 40239 Federal Register / Vol. 75, No. 133 / Tuesday, July 13, 2010 / Proposed Rules

electing to go through the ESRD PPS

transition. The sixth column shows the overall effect of the proposed changes in composite rate payments to ESRD providers, including the drug add-on.

The overall effect is measured as the difference between the proposed CY 2011 payment with all changes as proposed in this rule and current CY 2010 payment. This payment amount iscomputed by multiplying the wageadjusted composite rate with the drug add-on for each provider times the number of dialysis treatments from the CY 2009 claims. The CY 2011 proposed payment is the composite rate for each provider (with the proposed 14.7 percent drug add on) times dialysis
treatments from CY 2009 claims. The CY 2010 current payment is the composite rate for each provider (with the current 15.0 percent drug add on) times dialysis treatments from CY 2009
claims.

The overall impact to ESRD providers in aggregate is 2.2 percent as shown in
Table 75. Most ESRD facilities will see an increase in payments as a result of the ACA provision. While section 3401(h) of the ACA modifies the ESRD bundled market basket, which we anticipate will be a 2.5 percent increase to the ESRD composite rate portion of the blended payment amount, this 2.5 percent increase does not apply to the drug add-on to the composite rate. For this reason, the impact of all changes in this proposed rule is a 2.2 percent increase for all ESRD providers. Overall, payments to independent ESRD facilities will increase by 2.2 percent and payments to hospital-based ESRD facilities will increase by 2.1 percent.



### T ABLE 

### 75—I MPACT OF 

### CY 2012 C HANGES IN 

### P AYMENTS TO 

### H OSPITAL 

### -B ASED AND 

### I NDEPENDENT 

### ESRD F ACILITIES

[Percent change in composite rate payments to ESRD facilities]

1 2 3 4 5 6

Number of

facilities Number of dialysis

treatments (in millions) Effect of changes in wage index 1 Effect of changes in wage index and of affordable care

act provision 2 Overall effect of wage index affordable care act

& drug add-on 3

All Providers ........................................... 5,286 38.8 0.0% 2.5% 2.2% Independent .................................... 4,715 35.1 0.0% 2.5% 2.2% Hospital Based ............................... 571 3.7

¥ 0.1% 2.4% 2.1% By Facility Size

Less than 5000 treatments ............. 1,973 5.6 0.1% 2.6% 2.3%

5000 to 9999 treatments ................ 2,042 14.8 0.1% 2.6% 2.3%
Greater than 9999 treatments ........ 1,271 18.3

¥ 0.1% 2.4% 2.1% Type of Ownership

Profit ............................................... 4,332 32.1 0.0% 2.5% 2.3% Nonprofit ......................................... 954 6.7

¥ 0.1% 2.4% 2.1% By Geographic Location

Rural ............................................... 1,167 6.3 0.2% 2.7% 2.4%

Urban .............................................. 4,119 32.5 0.0% 2.5% 2.2% By Region New England .................................. 163 1.3

¥ 0.6% 1.9% 1.6%

Middle Atlantic ................................ 591 4.8

¥ 0.4% 2.1% 1.8%
East North Central .......................... 869 6.0 0.2% 2.7% 2.4%
West North Central ......................... 397 2.1

¥ 0.1% 2.4% 2.2%
South Atlantic ................................. 1,188 8.8 0.0% 2.5% 2.2%
East South Central ......................... 415 2.9 0.0% 2.5% 2.3%
West South Central ........................ 712 5.6 0.4% 2.9% 2.7%

Mountain ......................................... 310 1.8 0.2% 2.7% 2.4%

Pacific ............................................. 603 5.1 0.0% 2.5% 2.3% Puerto Rico & Virgin Islands .......... 38 0.4

¥ 2.4% 0.0%

¥ 0.2%

**Notes:** Payments have been adjusted to reflect budget neutrality. 2010 includes the MIPPA 1 percent increase and site neutral rates. 2010 & 2011 are 100 percent new CBSA wage adjusted compsite rate.

1 This column shows the overall effect of wage index changes on ESRD providers. Composite rate payments are computed using the pr oposed CY 2011 wage indexes which are compared to composite rate payments using the current CY 2010 wage indexes.

2 This column shows the effect of the changes in the Wage Indexes and the ACA provision which includes an ESRD Bundled Market Bas ket (anticipated 2.5 percent) increase to the composite rate. This provision is effective January 1, 2011.

3 This column shows the percent change between CY 2011 and CY 2010 composite rate payments to ESRD facilities.

4 The CY 2011 payments include the CY 2011 wage adjusted composite rate, an anticipated 2.5 percent increase due to the ACA effec tive January 1, 2011, and the drug add-on of 14.7 percent. The CY 2010 payments include the CY 2010 wage adjusted composite rate, a 1 percent increase and site neutral rates effective January 1, 2009, and the drug add-on of 15.0 percent. This column shows the effect of wage index, ACA, and drug add-on changes. Although as a result of the ACA provision we anticipate a 2.5 percent increase to the composite rate in CY 2011, this increase does not apply to the drug add-on to the composite rate. For this reason, the impact of all changes in this proposed rule is a 2.2 percent increase for all ESRD providers.

5. Section 131(b) of the MIPPA: Physician Payment, Efficiency, and Quality Improvements—Physician Quality Reporting Initiative (PQRI)

As discussed in section VI.F.1 of this proposed rule, we propose several different reporting options for EPs who wish to participate in the 2011 PQRI. Although there may be some cost incurred in the PQRI and their associated code sets, and for expanding an existing clinical data warehouse to accommodate registry-based reporting and EHR-based reporting for the PQRI, we do not anticipate a significant cost impact on the Medicare program.

Participation in the CY 2011 PQRI by individual EPs is voluntary and individual EPs and group practices may have different processes for integrating the PQRI into their practice’s work flows. Given this variability and the multiple reporting options that we propose to provide, it is difficult to accurately estimate the impact of the PQRI on providers. Furthermore, we

believe that costs for EPs who are


### 40240 Federal Register / Vol. 75, No. 133 / Tuesday, July 13, 2010 / Proposed Rules

participating in the PQRI for the first time in 2011 will be considerably higher than the cost for EPs who participated in PQRI in prior years. In addition, for many EPs, the cost of participating in the PQRI is offset by the incentive payment received.

With respect to the potential incentive payment that will be made for the 2011 PQRI, we estimate this amount to be approximately $100 million. This estimate is derived from looking at our 2008 incentive payment of more than $93 million and then accounting for the fact that the 2008 incentive payment was 1.5 percent of an EP’s total
estimated Medicare Part B PFS allowed charges for all covered professional services furnished during the 2008 reporting period. For 2011, the incentive payment is 1.0 percent of an EP’s total
estimated Medicare Part B PFS allowed charges for all covered professional services furnished during the 2011 reporting period. Although we expect that the lower incentive payment
amount for 2011 would reduce the total outlay by approximately one-third, we also expect more EPs to participate in the 2011 PQRI as there are more
methods of data submission and additional alternative reporting periods.

One factor that influences the cost to
individual EPs is the time and effort
associated with individual EPs identifying applicable PQRI quality measures and reviewing and selecting a reporting option. This burden will vary with each individual EP by the number of applicable measures, the EP’s familiarity and understanding of the PQRI, experience with PQRI participation, and the method(s) selected by the EP for reporting of the measures, and incorporating the reporting of the measures into the office
work flows. Information obtained from the Physician Voluntary Reporting Program (PVRP), which was a predecessor to the PQRI and was the first step for the reporting of physician quality of care through certain quality metrics, indicated an average labor cost per practice of approximately $50 per hour. To account for salary increases over time, we will use an average practice labor cost of $58 per hour for our estimates, based on an assumption of an average annual increase of approximately 3 percent. Therefore, assuming that it takes an individual EP approximately 5 hours to review the PQRI quality measures, review the various reporting options, select the most appropriate reporting option, identify the applicable measures for which they can report the necessary information, and incorporate reporting
of the selected measures into their office work flows, we estimate that the cost to EPs associated with preparing to report PQRI quality measures would be approximately $290 per individual EP ($58 per hour × 5 hours).

Another factor that influences the cost to individual EPs is how they choose to report the PQRI measures (that is, whether they select the claims-based, registry-based or EHR-based reporting mechanism). For claims-based PQRI reporting, estimates from the PVRP indicate the time needed to perform all the steps necessary to report quality data codes (QDCs) for 1 measure on a claim ranges from 15 seconds (0.25 minutes) to 12 minutes for complicated cases or measures. In previous years, when we required reporting on 80percent of eligible cases for claimsbased reporting, we found that on average, the median number of reporting instances for each of the PQRI measures was 9. Since we propose to reduce the required reporting rate by over one-third to 50 percent, then for purposes of this impact analysis we will assume that an EP will need to report each selected measure for 6 reporting instances, or 6 cases. Assuming that an EP, on average, will report 3 measures and that an EP reports on an average of 6 reporting instances per measure, we estimate that
the cost to an individual EP associated with claims-based reporting of PQRI measures would range from approximately $4.35 (0.25 min per reporting instance × 6 reporting instances per measure × 3 measures × $58 per hour) to $208.80 (12 min per reporting instance × 6 reporting instances per measure × 3 measures × $58 per hour). If an EP satisfactorily reports, these costs will more than likely be negated by the incentive earned. For the 2007 PQRI, which had a 1.5 percent incentive for a 6-month reporting period, the mean incentive amount was close to $700 for an individual EP and the median incentive payment amount
was over $300.

For registry-based reporting, individual EPs must generally incur a cost to submit data to registries. Estimated fees for using a qualified registry range from no charge, or a nominal charge, for an individual EP to use a registry to several thousand dollars, with a majority of registries charging fees ranging from $500–$1000. However, our impact analysis should be
limited to the incremental costs associated with PQRI reporting, which we believe are minimal. Many EPs who select registry-based reporting were already utilizing the registry for other purposes and would not need to report additional data to the registry specifically for PQRI. The registries also often provide the EP services above and beyond what is required for PQRI.

For EHR-based reporting, an individual EP generally would incur a cost associated with purchasing an EHR product. Although we do not believe that the majority of EPs would purchase an EHR solely for the purpose of participating in PQRI, we estimate that
an individual EP who chooses to do so would have to spend anywhere from $25,000–$54,000 to purchase and implement a certified EHR and $10,000 annually for ongoing maintenance.

Although we believe that the majority of EPs attempting to qualify for the additional 0.5 percent incentive payment authorized by section 1848(m)(7) of the Act would be those who are already required by their Boards to participate in an MOCP, individual EPs who wish to qualify for the additional 0.5 percent incentive payment and are not currently participating in an MOCP would also have to incur a cost for participating in
an MOCP. The manner in which fees are charged for participating in an MOCP vary by specialty. Some Boards charge a single fee for participation in the full cycle of MOC. Such fees appear to range anywhere from over $1,100 to nearly $1,800 per cycle. Some Boards have annual fees that are paid by their diplomates. On average, ABMS diplomates pay approximately $200.00 per year for participating in MOC. Some
Boards have an additional fee for the MOC Part III secure examination, but
most Boards do not have additional charges for participation in the Part IV practice/quality improvement activities.

With respect to the proposed process for group practices to be treated as satisfactorily submitting quality measures data for the CY 2011 PQRI
discussed in section VI.F.1 of this proposed rule, group practices interested in participating in the CY 2011 PQRI through the group practice reporting option (GPRO) I or GPRO II may also incur a cost. However, for groups that satisfactorily report for 2011 PQRI, we believe these costs would be completely offset by the incentive payment earned since the group practice would be eligible for an incentive payment equal to 1 percent of the entire group’s total estimated Medicare Part B PFS allowed charges for covered professional services furnished during the reporting period.

One factor in the cost to group practices would be the costs associated with the self-nomination process.
Similar to our estimates for staff
involved with the claims-based reporting option for individual EPs, we also estimate that the group practice


### 40241 Federal Register / Vol. 75, No. 133 / Tuesday, July 13, 2010 / Proposed Rules

staff involved in the group practice selfnomination process has an average labor cost of $58 per hour. Therefore, assuming 2 hours for a group practice to decide whether to participate individually or as a group and 4 hours for the self-nomination process, we estimate the total cost to a group practice associated with the group practice self-nomination process to be approximately $348 ($58 per hour × 6 hours per group practice).

For groups participating under the proposed GPRO I process, another factor in the cost to the group would be the
time and effort associated with the group practice completing and submitting the proposed data collection
tool. The information collection components of this data collection tool have been reviewed by OMB and are currently approved under OMB control number 0938–0941, with an expiration date of December 31, 2011. Based on the Physician Group Practice (PGP)
demonstration’s estimate that it takes approximately 79 hours for a group practice to complete the data collection tool, which uses the same data
submission methods as those we have proposed, we estimate the cost associated with a physician group completing the data collection tool would be approximately $4,582 ($58 per
hour × 79 hours per group practice).

For group practices participating under the proposed GPRO II process, the costs associated with submitting the PQRI quality measures data would be the time associated with the group practice submitting the required data to CMS via claims or a registry. The costs for a group practice reporting to a registry should be similar to the costs associated with registry reporting for an individual EP, as the process is the same with the exception that more patients and more measures must be reported in GPRO II compared to an individual EP. For similar reasons, the costs for a group practice reporting via claims should also
be similar to the costs associated with claims-based reporting for an individual EP. Overall, there is significantly less burden associated with a group practice participating in PQRI via GPRO II than doing so as individual EPs. Participation in GPRO II requires the group practice as a whole to report a fewer number of measures on a fewer number of people since EPs within a group who share patients would not be required to separately report measures for those shared patients. Therefore, assuming that an average group practice would spend 20 hours for data submission, we
estimate the cost of data submission under GPRO II would be approximately $1,160 (20 hours for data submission × $58 per hour). Smaller groups may need less time for data submission as they would be required to report fewer measures and presumably have a smaller patient population while larger groups may need more time for data submission since they would be required to report more measures and presumably have a larger patient population.

In addition to costs incurred by EPs and group practices, registries and EHR vendors may also incur some costs related to the PQRI. Registries interested in becoming ‘‘ qualified ’’ to submit on
behalf of individual EPs would also
have to incur a cost associated with the vetting process and with calculating quality measures results from the data submitted to the registry by its participants and submitting the quality
measures results and numerator and denominator data on quality measures to CMS on behalf of their participants. We estimate the registry self-nomination process would cost approximately $500 per registry ($50 per hour × 10 hours per registry). This cost estimate includes the cost of submitting the self-nomination letter to CMS and completing the CMS vetting process. Our estimate of $50 per hour average labor cost for registries is based on the assumption that registry staff include IT professionals whose average hourly rates range from $36 to $84 per hour depending on experience, with an average rate of nearly $50 per hour for a mid-level programmer. However, the 2010 qualified registries would not incur any costs associated with the self-nomination process unless they are unsuccessful at submitting 2010 PQRI results, they wish to be qualified to submit additional measures or for additional methods, or we finalize new requirements for 2011. We do not believe that there are any additional costs for registries associated with a registry calculating quality measures
results from the data submitted to the registry by its participants and submitting the quality measures results
and numerator and denominator data on quality measures to CMS on behalf of their participants. We believe that the majority of registries already perform these functions for their participants.

An EHR vendor interested in having its product(s) be used by individual EPs to submit PQRI measures to CMS for 2012 would have to complete a vetting process during 2011 and program its EHR product(s) to extract the clinical
data that the EP needs to submit to CMS for purposes of reporting 2012 quality measures as well. We propose that previously qualified vendors would need to only update their electronic measure specifications and data transmission schema to incorporate any
new EHR measures to maintain their qualification for the 2012 PQRI. Therefore, for EHR vendors that were not previously qualified, the costassociated with completing the selfnomination process, including the vetting process with CMS officials, is estimated to be $500 ($50 per hour × 10 hours per EHR vendor). Our estimate of a $50 per hour average labor cost for
EHR vendors is based on the assumption that vendor staff include IT professionals whose average hourly rates range from $36 to $84 per hour depending on experience, with an average rate of nearly $50 per hour for a mid-level programmer. We believe
that the cost associated with the time
and effort needed for an EHR vendor to review the quality measures and other information and program the EHR product to enable individual EPs to submit PQRI quality measures data to the CMS-designated clinical warehouse will be dependent on the EHR vendor’s familiarity with PQRI, the vendor’s system’s capabilities, as well as the vendor’s programming capabilities. Some vendors already have the necessary capabilities and for such vendors, we estimate the total cost to be approximately $2,000 ($50 per hour × 40 hours per vendor). However, given the variability in the capabilities of the vendors, we believe an estimate for those vendors with minimal experience would be approximately $10,000 per vendor ($50 per hour × 200 hours per EHR vendor).

6. Section 132 of the MIPPA: Incentives for Electronic Prescribing (eRx)—The eRx Incentive Program

Section VI.F.2. of this proposed rule describes the proposed 2011 Electronic Prescribing (eRx) Incentive Program. To
be considered a successful electronic prescriber in CY 2011, an individual EP would need to meet the requirements proposed in section VI.F.2. of this proposed rule.

We anticipate that the cost impact of the eRx Incentive Program on the Medicare program would be the cost incurred for maintaining the electronic prescribing measure and its associated code set, and for maintaining the existing clinical data warehouse to accommodate registry-based reporting and EHR-based reporting for the electronic prescribing measure. However, we do not anticipate a significant cost impact on the Medicare program since much of this infrastructure has already been established for the PQRI program.

Individual EPs and group practices may have different processes for


### 40242 Federal Register / Vol. 75, No. 133 / Tuesday, July 13, 2010 / Proposed Rules

integrating the eRx Incentive Program into their practices’ work flows. Given this variability and the multiple reporting options that we propose to provide, it is difficult to accurately estimate the impact of the eRx Incentive Program on providers. Furthermore, we
believe that costs for EPs who are participating in the eRx Incentive Program for the first time in 2011 will be considerably higher than the cost for EPs who participated in the eRx Incentive Program in prior years. In addition, for many EPs (especially those who participated in the eRx Incentive Program in prior years), the cost of participating in the eRx Incentive Program will be offset by the incentive payment received.

At this time, no eRx incentive payments have been made yet. We are currently analyzing 2009 eRx data, which was the first year of the program, and anticipate making the 2009 incentive payments later this year. We estimate that the incentive payments for the 2011 eRx Incentive Program (which will be paid in 2012) will be approximately $81 million. This estimate is based on preliminary participation numbers from the early part of 2010 and incentive payments that have been made for PQRI. We anticipate that despite a decrease in the incentive payment amount from 2 percent in 2010 to 1 percent of total
estimated Medicare Part B allowed charges for covered professional services in 2011, more EPs (and groups) will choose to participate in the 2011 eRx Incentive Program to avoid a prospective 1 percent payment penalty in 2012 for not demonstrating that they are successful electronic prescribers. Even though the incentive payment
amount for the 2011 eRx Incentive Program is equal to the incentive payment amount for the 2011 PQRI, we
believe that the total incentive amount that will be paid for the 2011 eRx Incentive Program will be less than the total incentive payment amount that will be paid for the PQRI discussed above. The eRx Incentive Program does not apply to all EPs. For example, EPs who do not have prescribing privileges or EPs who do not practice in a particular care setting would not be able to participate in the eRx Incentive Program even though they can participate in PQRI.

Any EP who wishes to participate in the eRx Incentive Program must have a qualified electronic prescribing systemin order to participate. Therefore, a onetime potential cost to some individual EPs would be the cost of purchasing and using an eRx system, which varies by the commercial software package selected, the level at which the professional currently employs information technology in his or her practice and the training needed. One study indicated that a midrange complete electronic medical record with electronic prescribing functionality costs $2,500 per license with an annual fee of $90 per license for quarterly updates of the drug database after setup costs while standalone prescribing, messaging, and problem list system may cost $1,200 per physician per year after setup costs. Hardware costs and setup fees substantially add to the final cost of any software package. (Corley, S.T. (2003). ‘‘ Electronic prescribing: a review
of costs and benefits. ’’ Topics in Health Information Management 24(1):29–38.). These are the estimates that we propose to use for our impact analysis.

Similar to PQRI, one factor in the cost
to individual EPs is the time and effort
associated with individual EPs reviewing the electronic prescribing
measure to determine whether it is applicable to them, reviewing the available reporting options and selecting one, gathering the required information, and incorporating reporting of the
measure into their office work flows. Since the eRx Incentive Program consists of only 1 quality measure, we propose to estimate 2 hours as the
amount of time needed for individual EPs to prepare for participation in the eRx Incentive Program. Information obtained from the Physician Voluntary Reporting Program (PVRP), which was a predecessor to the PQRI and was the first step for the reporting of physician quality of care through certain quality metrics, indicated an average labor cost per practice of approximately $50 per hour. To account for salary increases over time, we will use an average practice labor cost of $58 per hour for our estimates, based on an assumption of an average annual increase of approximately 3 percent. At an average cost of approximately $58 per hour, we estimate the total preparation costs to individual EPs to be approximately $116 ($58 per hour × 2 hours).

Another factor that influences the cost to individual EPs is how they choose to report the electronic prescribing measure (that is, whether they select theclaims-based, registry-based or EHRbased reporting mechanism). For claims-based reporting, there would be a cost associated with reporting the appropriate QDC on the claims an individual EP submits for payment.
Based on the information from the PVRP
described above for the amount of time it takes a median practice to report one measure one time (1.75 min) and the proposed requirement to report 25 electronic prescribing events during 2011, we estimate the annual estimated cost per individual EP to report the electronic prescribing measure via claims-submission to be $42.29 (1.75 min per case × 1 measure × 25 cases per

measure × $58 per hour). Assuming that
the mean and median incentive payment amounts per individual EP would be comparable to those for the PQRI since the incentive payments are calculated in the same manner, we
believe that for most successful electronic prescribers who earn an incentive, these costs would be negated by the incentive payment received.

For EPs who select the registry-based reporting mechanism, we do not anticipate any additional cost for individual EPs to report data to a registry, as individual EPs opting for registry-based reporting are more than likely already reporting data to the registry. Little if any, additional data would need to be reported to the registry for purposes of participation in the CY 2011 eRx Incentive Program. Individual EPs using registries for PQRI will likely experience minimal, if any, increased costs charged by the registry to report this 1 additional measure.

For EHR-based reporting, the EP must extract the necessary clinical data from his or her EHR, and submit the necessary data to the CMS-designated
clinical data warehouse. Once the EHR is programmed by the vendor to allow data submission to CMS, the cost to the
individual EP associated with the time
and effort to submit data on the electronic prescribing measure should
be minimal.

With respect to the proposed process for group practices to be treated as successful electronic prescribers under the CY 2011 eRx Incentive Program
discussed in section VI.F.2 of this proposed rule, group practices have the same option as individual eligible professionals in terms of the form and manner for reporting the eRx measure (that is, group practices have the option of reporting the measure through claims, a qualified registry, or a qualified EHR product). There are only 2 differences between the requirements for an individual EP and a group practice: (1) The fact that a group practice would have to self-nominate; and (2) the number of times a group practice would be required to report the eRx measure. Overall, there could be less cost associated with a practice participating in the eRx Incentive Program as a group
rather than the individual members of the group separately participating. We do not anticipate any additional costsassociated with the group practice selfnomination process since we propose to


### 40243 Federal Register / Vol. 75, No. 133 / Tuesday, July 13, 2010 / Proposed Rules

limit the group practices to those selected to participate in the 2011 PQRI GPRO I or PQRI GPRO II. The practices only would need to indicate their desire to participate in the eRx GPRO at the time they self-nominate for either PQRI GPRO I or PQRI GPRO II.

The costs for a group practice reporting to an EHR or registry should
be similar to the costs associated with registry and EHR reporting for an individual EP, as the process is the same with the exception that more electronic prescribing events must be reported by the group. For similar reasons, the costs for a group practice reporting via claims
should also be similar to the costs associated with claims-based reporting for an individual EP. Therefore, we estimate that the costs for group practices who are selected to participate in the CY 2011 eRx Incentive Program as a group would range from $126.88 (1.75 min per case × 1 measure × 75

cases per measure × $58 per hour) for the smallest groups participating under GPRO II to $4,229.17 (1.75 min per case

× 2500 cases per measure × $58 per hour) for the groups participating under

GPRO I.

We believe that the costs to individual EPs and group practices associated with avoiding the eRx penalty that goes into
effect in 2012 would be similar to the costs of an EP or group practice reporting the electronic prescribing measure for purposes of the 2011 eRx incentive. The proposed requirements for avoiding the 2012 eRx penalty, including the reporting period, essentially overlaps with the proposed requirements for the 2011 eRx incentive.

Based on our proposal to consider only registries qualified to submit quality measures results and numerator and denominator data on quality measures to CMS on their participant’s behalf for the 2011 PQRI to be qualified
to submit results and numerator and
denominator data on the eRx measure for the CY 2011 eRx Incentive Program, we do not anticipate any cost to the registry associated with becoming a registry qualified to submit the eRx
measure for CY 2011.

The cost for the registry would be the
time and effort associated with the registry calculating results for the eRx
measure from the data submitted to the registry by its participants and submitting the quality measures results
and numerator and denominator data on the eRx quality measure to CMS on behalf of their participants. We believe
such costs would be minimal as registries would already be required to perform these activities for PQRI.

Likewise, based on our proposal to consider only EHR products qualified for the CY 2011 PQRI to be qualified to
submit results and numerator and
denominator data on the electronic prescribing measure for the CY 2011 eRx Incentive Program, there would be no need for EHR vendors to undergo a separate self-nomination process for the eRx Incentive Program. Therefore, there
would be no additional cost associated with the self-nomination process.

The cost to the EHR vendor associated with the EHR-based reporting requirements of this reporting initiative
is the time and effort associated with the EHR vendor programming its EHR product(s) to extract the clinical data
that the individual EP needs to submit to CMS for purposes of reporting the CY 2011 eRx measure. Since we propose that only EHR products qualified for the 2011 PQRI would be qualified for the CY 2011 eRx Incentive Program, and the eRx Incentive Program consists of only one measure, we believe that any
burden associated with the EHR vendor to program its product(s) to enable
individual EPs to submit data on the eRx measure to the CMS-designated
clinical data warehouse would be
minimal.

7. Durable Medical Equipment-Related

Issues

a. Off-the-Shelf (OTS) Orthotics Exemption

In section VI.G. of this proposed rule, we are proposing to expand the exemptions from the Competitive Bidding Program (CBP) for certain OTS orthotics to physicians or other practitioners (as defined by the Secretary) if furnished to their own patients as part of their professional

service.

The proposed exemption is a selfimplementing mandate required by section 154(d) of MIPPA, which added section 1847(a)(7) of the Act. Section 1847(a)(7)(A) of the Act expanded the exemptions from the CBP for certain OTS orthotics to physicians or other practitioners (as defined by the Secretary) if furnished to their own patients as part of their professional service. Section 1847(a)(7)(B) of the Act, as added by section 154(d) of MIPPA, also expanded the exemption from CBP for certain OTS DME items (crutches, canes, walkers, folding manual wheelchairs, blood glucose monitors, and infusion pumps) when furnished by hospitals to the hospital’s own patients during an admission or on the date of discharge.

We believe this exemption would have a negligible impact on physicians and other providers. The exemption will allow physicians to continue to provide these items to their own patients without submitting a bid and becoming a contract supplier. This will also allow
continued access to OTS items for beneficiaries while being seen in their physician’s office.

b. Changes to Payment for Oxygen Equipment

The revisions pertaining to oxygen and oxygen equipment in section VI.G. of this proposed rule reflect changes made by section 144(b) of MIPPA and regulations implementing that provision. In § 414.226(g), exceptions are listed to the requirement that the supplier that furnishes oxygen equipment in the 1st month of the 36- month period must continue to furnish it until medical necessity ends or the
36-month of continuous use ends. Section VI.G. changes one exception (§ 414.226(g)(1)(ii)) to read that if a beneficiary relocates to an area that is
outside the normal service area of the supplier before the 18th month, then the supplier does not have to continue to furnish the item or make arrangements.

We expect that revising § 414.226(g)(1)(ii) so that only suppliers
that have received at least 18 months of rental payments must continue to furnish the oxygen equipment until medical necessity ends or the end of the
reasonable useful lifetime should have a minor impact on the supplier, but should provide protection to beneficiaries. The reason that we expect the revised exception will have little impact has foremost to do with the fact that it applies in cases that are the exception to the normal circumstances. Only 38 percent of the beneficiaries are still renting by the 18th month of the rental period; only suppliers furnishing oxygen equipment to this subgroup of beneficiaries will be affected by this proposed change. Further, relocation
between the 18th to the 36th month is
not a common occurrence. Such relocation happens with less than 0.5 percent of the beneficiaries using oxygen equipment. In addition, between the 32nd and 35th month, relocation happens with the beneficiaries in about 0.06 percent of the time on average.

c. Diabetic Testing Supplies

We are establishing requirements for conducting a national competition for furnishing diabetic supplies on a mail order basis. Specifically this proposed rule will establish 3 requirements: A
new definition for what constitutes mail order; a rule that requires contract suppliers to provide at a minimum 50 percent of all of the different types of diabetic testing products on the market by brand and model name; and a


### 40244 Federal Register / Vol. 75, No. 133 / Tuesday, July 13, 2010 / Proposed Rules

prohibition against influencing and incentivizing beneficiaries to switch their brand of monitor and testing suppliers.

Currently based on claims data from fiscal year 2009 over 62 percent of beneficiaries receive their replacement diabetic testing supplies from mail order suppliers. This definition will not impact these beneficiaries because they
can continue to obtain their items through mail order. The remaining 38 percent of beneficiaries may continue to
obtain these items from a local storefront. We do not expect this rule to have any adverse affects on beneficiaries
because the new definition of mail order is reflective of the way that beneficiaries currently get their testing supplies. However, we believe that by clarifying this definition we will protectbeneficiaries from paying higher copayment amounts and we anticipate program savings that would have been eroded by suppliers circumventing our definition to continue to provide items,
even if not awarded a contract under competitive bidding and to obtain the higher fee schedule payment amount.
This definition is also consistent with the way that suppliers currently do business by either providing items through mail order or at a local
storefront. For these reasons we believe
this new definition will have minimal impact.

Also, we considered the option to not bifurcate bidding based on delivery method and to bid for diabetic testing suppliers regardless of how the items were obtained. We rejected this approach because it would force companies with different business models to compete against each other, by requiring local pharmacies to compete with national mail order suppliers in order to win a contract to be able to furnish testing supplies.

In order to implement a national mail order competition for diabetic supplies, we are also proposing to implement the special ‘‘ 50 percent rule ’’ mandated by MIPPA. This rule requires a bidder to
demonstrate that its bid ‘‘ covers types of diabetic testing strip products that, in the aggregate and taking into account volume for the different products, cover 50 percent (or such higher percentage as the Secretary may specify) of all such types of products. ’’ The 50 percent
threshold would ensure that
beneficiaries have access to mail order delivery of the top-selling diabetic test strip products from every contract supplier. We plan to use the information that bidding suppliers provide on their bidding Form B where suppliers list the products they plan to furnish. We believe this requirement will have a minimal impact on suppliers because most suppliers currently provide a wide range of the brands and models in order to gain market share. The statute states that suppliers are required to carry at least 50 percent of all brands on the market. However, the Secretary can establish suppliers to carry a higher percentage of brands. We have adopted 50 percent criteria because we believe this is reflective of what suppliers are currently doing and ensures appropriate
access for beneficiaries.

In addition to the 50 percent rule, weare also proposing to establish an antiswitching requirement. This provision would prevent contract suppliers from switching beneficiaries from their current brand to a brand provided by the supplier. We believe this requirement will protect the beneficiary and physician choice of glucose monitoring systems. The decision concerning the type of monitor and testing supplies that a beneficiary chooses should not be made by the supplier but rather by the beneficiary and their physician. We believe that this provision will have a minimal impact on suppliers because suppliers currently offer a variety of products and generally do require beneficiaries to switch from the brands they are familiar with and customarily use.

d. Metropolitan Statistical Areas

We believe that the provisions pertaining to subdividing metropolitan statistical areas (MSAs) with populations of at least 8,000,000 for the purpose of establishing competitive bidding areas (CBAs) under Round 2 of the DMEPOS Competitive Bidding Program will have a positive impact on most suppliers, particularly small suppliers. The authority provided by section 1847(a)(1)(D)(ii)(II) of the Act
would be used to create CBAs that are smaller than the highly and denselypopulated MSAs of: Chicago-NapervilleJoliet, IL–IN–WI; Los Angeles-LongBeach-Santa Ana, CA; and New YorkNorthern New Jersey-Long Island, NY– NJ–PA. This should result in more manageable service areas for suppliers to navigate when furnishing items. More importantly, it should ensure more timely delivery of items and services to beneficiaries located throughout each of
the MSAs. It should also benefit small suppliers because they would have smaller geographic areas to cover as contract suppliers than the large MSAs, which in some cases, might prevent them from being considered for participation under the program. The larger suppliers would still have the opportunity to bid in all of the CBAs within each MSA. We expect that subdividing the large MSAs of Chicago, Los Angeles, and New York would not have a negative impact on program savings, as long as each CBA is large enough to be attractive to suppliers for bidding purposes.

Table 76 considers FY cash impact on the entire Medicare program, including Medicare Advantage for FYs 2011 thru 2015 of the provisions of this proposed
rule related to the establishment of CBAs during Round 2 and prior to calendar year 2015. The FY–CY distinction is an important one when comparing savings. For example, the savings for the Medicare DMEPOS Competitive Bidding Program will be for 9 months of FY 2013, but for 12 months
of CY 2013. Table 76 considers the impact on program expenditures, and does not include beneficiary coinsurance. Finally, the estimates in Table 76 incorporate spillover effects from the competitive acquisition program onto the Medicare Advantage program. The expectation is that the 21
additional MSAs added to the Medicare DMEPOS Competitive Bidding Program would lower prices for DME products in FFS would lead to lower prices in the Medicare Advantage market. The table below considers FY cash impact of the above provisions on the entire Medicare program, including Medicare Advantage
for the FY.



### T ABLE 

### 76—F ISCAL 

### Y EAR 

### C OSTS TO

THE 

### M EDICARE 

### P ROGRAM

FY Cost (in $millions)

2011 .................................. 0

2012 .................................. 0

2013 ..................................

¥ 40

2014 ..................................

¥ 70

2015 ..................................

¥ 110

Subdividing the large MSAs of Chicago, Los Angeles, and New York is
considered to have little to no fiscal impact. The exceptions to the Medicare DMEPOS Competitive Bidding program involving rural areas, MSAs with populations less than 250,000, and low population density areas in selected
MSAs before 2015 are considered to have little to no impact because the
baseline never considered these areas as subject to competitive bidding prices.

8. Air Ambulance

In section VI.G. of this proposed rule, we present our proposals regarding air ambulance and provider and supplier enrollment. We note that this proposal is an administrative initiative that may result in Medicare program savings but at this time those savings are inestimable. We believe the probable


### 40245 Federal Register / Vol. 75, No. 133 / Tuesday, July 13, 2010 / Proposed Rules

costs providers or suppliers will incur as a result of this rule to be negligible.

F. Alternatives Considered

This proposed rule contains a range of policies, including some provisions related to specific MIPPA and ACA provisions. The preceding preamble provides descriptions of the statutory provisions that are addressed, identifies those policies when discretion has been exercised, presents rationale for our proposals and, where relevant,
alternatives that were considered.

G. Impact on Beneficiaries

There are a number of changes in this proposed rule that would have an effect on beneficiaries. In general, we believe that many of the proposed changes, including the refinements of the PQRI with its focus on measuring, submitting, and analyzing quality data, theexpansion of the list of Medicareapproved telehealth services, the incentive payments for primary care services furnished by primary care practitioners in any location and major surgical procedures furnished by general surgeons in HPSAs, the waiver of beneficiary cost-sharing for most preventive services, and the annual wellness visit proposals, will have a positive impact and improve the quality and value of care provided to Medicare
beneficiaries.

The regulatory provisions may affect beneficiary liability in some cases. For example, the waiver of the deductible
and coinsurance for the annual wellness visit, the IPPE, and preventive services with a grade of A or B from the USPSTF would reduce beneficiary liability for these services. Most changes in aggregate beneficiary liability due to a particular provision would be a function of the coinsurance (20 percent if applicable for the particular provision after the beneficiary has met the deductible). To illustrate this point, as shown in Table 74, the CY 2010 national payment amount in the nonfacility setting for CPT code 99203 (Office/outpatient visit, new) under the
conversion factor that was consistent with the statute as of October 30, 2009
and that would be in effect on December 31, 2010 under current law, is $76.93
which means that in CY 2010 a beneficiary would be responsible for 20 percent of this amount, or $15.39. Based on this proposed rule, the CY 2011 national payment amount in the nonfacility setting for CPT code 99203, as shown in Table 74, is $72.67, which means that, in CY 2011, the beneficiary
coinsurance for this service would be
$14.53. Additionally, beneficiary liability would also be impacted by the effect of the aggregate cost (savings) of the provisions on the standard calculation of the Medicare Part B premium rate (generally 25 percent of the provision’s cost or savings).

Most policies discussed in this rule that impact payment rates, such as the expansion of the MPPR to therapy

services and the increased discount on the TC of multiple imaging procedures from 25 percent to 50 percent, would similarly impact beneficiaries’

coinsurance.

H. Accounting Statement

As required by OMB Circular A–4 (available at http:// www.whitehouse.gov/omb/circulars/ a004/a-4.pdf ), in Table 77, we have prepared an accounting statement showing the estimated expenditures associated with this proposed rule. This

estimate includes the estimated FY 2011 cash benefit impact associated with certain ACA and MIPPA provisions, and the CY 2011 incurred benefit impact

associated with the estimated CY 2011 PFS conversion factor update based on the FY 2011 President’s Budget

baseline.



### T ABLE 

### 77—A CCOUNTING 

### S TATEMENT 

### : C LASSIFICATION OF 

### E STIMATED 

### E XPENDITURES

Category Transfers

CY 2011 Annualized Monetized

Transfers. Estimated decrease in expenditures of $5.7 billion for PFS conversion factor update.

From Whom To Whom? ................. Federal Government to physicians, other practitioners and providers and suppliers who receive payment

under Medicare.

FY 2011 Annualized Monetized

Transfers. Estimated increase in expenditures of $2 billion for Affordable Care Act provisions.

From Whom To Whom? ................. Federal Government to providers.

In accordance with the provisions of Executive Order 12866, this proposed rule was reviewed by the Office of Management and Budget.

List of Subjects

42 CFR Part 405

Administrative practice and procedure, Health facilities, Health professions, Kidney diseases, Medical devices, Medicare, Reporting and recordkeeping requirements, Rural areas, X-rays.

42 CFR Part 409

Health facilities, Medicare.

42 CFR Part 410

Health facilities, Health professions, Kidney diseases, Laboratories, Medicare, Reporting and recordkeeping requirements, Rural areas, X-rays.

42 CFR Part 411

Kidney diseases, Medicare, Physician Referral, Reporting and record keeping requirements.

42 CFR Part 413

Health facilities, Kidney diseases, Medicare Reporting and recordkeeping requirements.

42 CFR Part 414

Administrative practice and procedure, Health facilities, Health professions, Kidney diseases, Medicare, Reporting and recordkeeping. 42 CFR Part 415

Health facilities, Health professions, Medicare, Reporting and recordkeeping requirements.

42 CFR Part 424

Emergency medical services, Health facilities, Health professions, Medicare, Reporting and recordkeeping requirements.

For the reasons set forth in the preamble, the Centers for Medicare & Medicaid Services proposes to amend 42 CFR chapter IV as set forth below:

**PART 405—FEDERAL HEALTH**
**INSURANCE FOR THE AGED AND**
**DISABLED**

1. The authority citation for part 405
continues to read as follows:


### 40246 Federal Register / Vol. 75, No. 133 / Tuesday, July 13, 2010 / Proposed Rules

Authority: Secs. 1102, 1861, 1862(a), 1871, 1874, 1881, and 1886(k) of the Social Security Act (42 U.S.C. 1302, 1395x, 1395y(a), 1395hh, 1395kk, 1395rr and 1395ww(k)), and sec. 353 of the Public Health Service Act (42 U.S.C. 263a).

**Subpart X—Rural Health Clinic and Federally Qualified Health Center** 
**Services**

2. A new § 405.2449 is added to read
as follows.

**§ 405.2449 Preventive services.**

For services furnished on or after January 1, 2011, preventive services covered under the Medicare Federally qualified health center benefit are those preventive services defined in section 1861(ddd)(3) of the Act, and § 410.2 of this chapter. Specifically, these include the following:

(a) The specific services currently listed in section 1861(ww)(2) of the Act, with the explicit exclusion of electrocardiograms;

(b) The Initial Preventive Physical Examination (IPPE) (as specified by section 1861(ww)(1) of the Act as added by section 611 of the Medicare Prescription Drug, Improvement and Modernization Act of 2003 (Pub. L. 108– 173) and § 410.16 of this chapter); and

(c) The Personalized Prevention Plan Services (PPPS), also known as the

‘‘ Annual Wellness Visit ’’ (as specified by section 1861(hhh) of the Act as added by section 4103 of the Affordable Care Act (Pub. L. 111–148) and part 410, subpart B, § 410.15 of this chapter).

3. Section 405.2470 is amended by adding a new paragraph (d) to read as
follows:

**§ 405.2470 Reports and maintenance of**

**records.**

* * * * *

(d) Collection of additional claims
data. Beginning January 1, 2011, a Medicare FQHC must report on its
Medicare claims such information as the Secretary determines is needed to develop and implement a prospective payment system for FQHCs including, but not limited to all pertinent HCPCS (Healthcare Common Procedure Coding System) code(s) corresponding to the service(s) provided for each Medicare FQHC visit (as defined in § 405.2463).

**PART 409—HOSPITAL INSURANCE**
**BENEFITS**

4. The authority citation for part 409
continues to read as follows:

Authority: Secs. 1102 and 1871 of the Social Security Act (42 U.S.C. 1302 and 1395hh). **Subpart B—Inpatient Hospital Services and Inpatient Critical Access Hospital** 
**Services**

**§ 409.17 [Amended]**

5. Amend § 409.17(d) by removing the phrase ‘‘ hospital policies and procedures ’’ and adding in its place the phrase ‘‘ the provider’s policies and procedures. ’’

**Subpart C—Posthospital SNF Care**

6. Section 409.20 is amended by revising paragraph (a)(3) to read as
follows:

**§ 409.20 Coverage of services.**

(a) * * * (3) Physical therapy, occupational therapy, and speech-language pathology

services.

* * * * *

7. Section 409.23 is revised to read as
follows:

**§ 409.23 Physical therapy, occupational therapy, and speech-language pathology** 

**services.**

Medicare pays for physical therapy,occupational therapy, or speechlanguage pathology services as posthospital SNF care if they are
furnished—

(a) By (or under arrangements made by) the facility and billed by (or through) the facility;

(b) By qualified physical therapists, physical therapist assistants, occupational therapists, occupational therapy assistants, or speech-language pathologists as defined in part 484 of this chapter; and

(c) In accordance with a plan that meets the requirements of § 409.17(b) through (d) of this part.

**PART 410—SUPPLEMENTARY MEDICAL INSURANCE (SMI)** 
**BENEFITS**

8. The authority citation for part 410
continues to read as follows:

Authority: Secs. 1102, 1834, 1871, and 1893 of the Social Security Act (42 U.S.C. 1302, 1395m, 1395hh, and 1395ddd).

**Subpart A—General Provisions**

9. Section 410.2 is amended by adding the definition of ‘‘ Preventive

services ’’ in alphabetical order to read as
follows:

**§ 410.2 Definitions.**

* * * * *

Preventive services means all of the following:

(1) The specific services listed in section 1861(ww)(2) of the Act, with the explicit exclusion of electrocardiograms; (2) The Initial Preventive Physical Examination (IPPE) (as specified by section 1861(ww)(1) of the Act); and

(3) The Personalized Prevention Plan Services (PPPS), also known as the

‘‘ Annual Wellness Visit ’’ (as specified by section 1861(hhh) of the Act)

**§ 410.3 [Amended]**

10. Amend § 410.3(b)(2) by removing
the reference ‘‘ subpart E ’’ and adding in its place the reference ‘‘ subpart I. ’’

**Subpart B—Medical and Other Health**
**Services**

11. Section 410.15 is added to read as
follows:

**§ 410.15 Annual wellness visits providing**

**Personalized Prevention Plan Services: Conditions for and limitations on coverage.** 

(a) Definitions. Detection of any cognitive impairment, for the purpose of this section, means assessment of an individual’s cognitive function by direct observation, with due consideration of information obtained by way of patient report, concerns raised by family members, friends, caretakers or others.

Eligible beneficiary for purposes of
this section means an individual who is no longer within 12 months after the
effective date of his or her first Medicare Part B coverage period and who has not received either an initial preventive physical examination or an annual wellness visit providing a personalized prevention plan within the past 12
months.

Establishment of, or an update to the individual’s medical and family history for purposes of this section means, at a minimum, the collection and documentation of the following:

(i) Past medical and surgical history, including experiences with illnesses, hospital stays, operations, allergies, injuries and treatments.

(ii) Use or exposure to medications and supplements, including calcium
and vitamins.

(iii) Medical events in the beneficiary’s parents and any siblings and children, including diseases that may be hereditary or place the
individual at increased risk.

First annual wellness visit providing personalized prevention plan services for purposes of this section means the following services furnished an eligible beneficiary by a health professional as
those terms are defined in this section:

(i) Establishment of an individual’s medical and family history.

(ii) Establishment of a list of current providers and suppliers that are regularly involved in providing medical
care to the individual.


### 40247 Federal Register / Vol. 75, No. 133 / Tuesday, July 13, 2010 / Proposed Rules

(iii) Measurement of an individual’s height, weight, body-mass index (or waist circumference, if appropriate), blood pressure, and other routine measurements as deemed appropriate, based on the beneficiary’s medical and family history.

(iv) Detection of any cognitive impairment that the individual may have, as that term is defined in this

section.

(v) Review of the individual’s potential (risk factors) for depression, including current or past experiences with depression or other mood disorders, based on the use of an appropriate screening instrument for persons without a current diagnosis of depression, which the health professional may select from various available standardized screening tests designed for this purpose and recognized by national medical professional organizations.

(vi) Review of the individual’s functional ability and level of safety,
based on direct observation or the use of appropriate screening questions or a screening questionnaire, which the health professional as defined in this section may select from various available screening questions or standardized questionnaires designed for this purpose and recognized by national professional medical organizations.

(vii) Establishment of the following: (A) A written screening schedule for
the individual such as a checklist for the next 5 to 10 years, as appropriate, based
on recommendations of the United
States Preventive Services Task Force and the Advisory Committee on Immunization Practices, and the individual’s health status, screening history, and age-appropriate preventive services covered by Medicare.

(B) A list of risk factors and conditions for which primary, secondary or tertiary interventions are recommended or are underway for the individual, including any mental health conditions or any such risk factors or
conditions that have been identified through an initial preventive physical examination (as described under § 410.16 of this subpart), and a list of treatment options and their associated
risks and benefits.

(viii) Furnishing of personalized health advice and a referral, as appropriate, to health education or preventive counseling services or programs aimed at reducing identifiedrisk factors and improving selfmanagement, or community-based lifestyle interventions to reduce health risks and promote self-management and wellness, including weight loss, physical activity, smoking cessation, fall prevention and nutrition.

(ix) Any other element determined appropriate through the National Coverage Determination process.

Health professional for purposes of
this section means:

(i) A physician who is a doctor of medicine or osteopathy (as defined in section 1861(r)(1) of the Social Security Act); or

(ii) A physician assistant, nurse practitioner, or clinical nurse specialist (as defined in section 1861(aa)(5) of the
Act; or

(iii) A medical professional (including a health educator, registered dietitian or nutritionist) or a team of medical professionals, who are working under the supervision of a physician as defined in paragraph (i) of this
definition.

Review of the individual’s functional ability and level of safety for purposes of this section includes, at minimum, assessment of the following topics:

(i) Hearing impairment, (ii) Ability to successfully perform activities of daily living,

(iii) Fall risk and (iv) Home safety. Subsequent annual wellness visit providing personalized prevention plan

services means the following services furnished an eligible beneficiary by a health professional as those terms are
defined in this section:

(i) An update of the individual’s medical and family history.

(ii) An update of the list of current providers and suppliers that are regularly involved in providing medical
care to the individual as that list was developed for the first annual wellness visit providing personalized prevention plan services.

(iii) Measurement of an individual’s weight (or waist circumference), blood pressure and other routine measurements as deemed appropriate,
based on the individual’s medical and family history.

(iv) Detection of any cognitive impairment that the individual may have, as that term is defined in this

section.

(v) An update to the following: (A) The written screening schedule
for the individual as that schedule is defined in paragraph (a) of this section
for the first annual wellness visit providing personalized prevention plan

services.

(B) The list of risk factors and conditions for which primary, secondary or tertiary interventions are recommended or are underway for the individual as that list was developed at the first annual wellness visit providing personalized prevention plan services. (vi) Furnishing of personalized health advice to the individual and a referral, as appropriate, to health education or preventive counseling services or programs as that advice and related services are defined in paragraph (a) of
this section.

(vii) Any other element determined appropriate through the National Coverage Determination process.

(b) Conditions for coverage of annual wellness visits providing personalized prevention plan services. Medicare Part B pays for first and subsequent annual wellness visits providing personalized prevention plan services that are furnished to an eligible beneficiary, as described in this section, if they are furnished by a heath professional, as
defined in this section.

(c) Limitations on coverage of an annual wellness visit providing personalized prevention plan services.

(1) Payment may not be made for either a first or a subsequent annual wellness visit providing personalized prevention plan services that is performed for an individual who is not an eligible beneficiary as described in
this section.

(2) Payment may not be made for either a first or a subsequent annual wellness visit providing personalized prevention plan services that is performed for an individual who is an eligible beneficiary as described in this
section and who has had either an initial preventive physical examination as specified in section 410.16 of this subpart or either a first or a subsequent annual wellness visit providing personalized prevention plan services performed within the past 12 months.

(d) Effective date. Coverage for an annual wellness visit providing personalized prevention plan services is
effective for services furnished on or after January 1, 2011.

12. Section 410.32 is amended by adding paragraph (b)(2)(vii) to read as
follows:

**§ 410.32 Diagnostic x-ray tests, diagnostic laboratory tests, and other diagnostic tests:** 
**Conditions.**

* * * * *

(b) * * * (2) * * * (vii) Diagnostic tests performed by a
certified nurse-midwife authorized to perform the tests under applicable State
laws.

* * * * *

13. Section 410.78 is amended by revising the introductory text of paragraph (b) to read as follows:

**§ 410.78 Telehealth services.**

* * * * *


### 40248 Federal Register / Vol. 75, No. 133 / Tuesday, July 13, 2010 / Proposed Rules

(b) General rule. Medicare Part B pays for office or other outpatient visits, subsequent hospital care services (with
the limitation of one telehealth visit every 3 days), subsequent nursing facility care services (not including the Federally-mandated periodic visits under § 483.40(c) of this chapter and
with the limitation of one telehealth visit every 30 days), professional consultations, psychiatric diagnostic interview examination, neurobehavioral status exam, individual psychotherapy, pharmacologic management, end-stage
renal disease-related services included in the monthly capitation payment (except for one ‘‘ hands on ’’ visit per month to examine the access site), individual and group medical nutrition therapy services, individual and group kidney disease education services,individual and group diabetes selfmanagement (DSMT) training services (except for one hour of in-person services to be furnished in the year following the initial DSMT service to ensure effective injection training), and individual and group health and
behavior assessment and intervention services furnished by an interactive telecommunications system if the following conditions are met:

* * * * *

**Subpart I—Payment for SMI Benefits**

14. Section 410.150 is amended by adding paragraph (a)(20) to read as
follows:

**§ 410.150 To whom payment is made.**

(a) * * * (20) To a certified nurse-midwife for professional services furnished by the certified nurse-midwife in all settings and for services and supplies furnished incident to those services. Payment is made only if no facility or other provider charges or is paid any amount for the furnishing of the professional
services of the certified nurse-midwife.

15. Section 410.152 is amended by revising paragraph (l) to read as follows:

**§ 410.152 Amounts of payment.**

* * * * *

(l) Amount of payment: Preventive

services. Medicare Part B pays 100 percent of the Medicare payment
amount established under the applicable payment methodology for the service setting for providers and suppliers for the following preventive

services:

(1) Pneumococcal (as specified in paragraph (h) of this section), influenza, and hepatitis B vaccine and
administration.

(2) Screening mammography. (3) Screening pap tests and screening pelvic exam.

(4) Prostate cancer screening tests (excluding digital rectal examinations).

(5) Colorectal cancer screening tests (excluding barium enemas).

(6) Bone mass measurement. (7) Medical nutrition therapy (MNT)

services.

(8) Cardiovascular screening blood

tests.

(9) Diabetes screening tests. (10) Ultrasound screening for abdominal aortic aneurysm (AAA).

(11) Additional preventive services identified for coverage through the national coverage determination (NCD)

process.

(12) Initial Preventive Physical Examination (IPPE).

(13) Personalized Prevention Plan Services (PPPS).

16. Section 410.160 is amended by— A. Revising paragraph (b)(2). B. Adding paragraphs (b)(10), (11), (12), and (13).

The revisions and additions read as
follows:

**§ 410.160 Part B annual deductible.**

* * * * *

(b) * * * (2) Pneumococcal, influenza, and hepatitis b vaccines and their
administration.

* * * * *

(10) Bone mass measurement. (11) Medical nutrition therapy (MNT)

services.

(12) Personalized prevention plan services (PPPS).

(13) Additional preventive services identified for coverage through the national coverage determination (NCD)

process.

* * * * *

**PART 411—EXCLUSIONS FROM**
**MEDICARE AND LIMITATIONS ON**
**MEDICARE PAYMENT**

17. The authority citation for part 411
continues to read as follows:

Authority: Secs. 1102, 1860D–1 through 1860D–42, 1871, and 1877 of the Social Security Act (42 U.S.C. 1302, 1395w–101 through 1395w–152, 1395hh, and 1395nn).

**Subpart A—General Exclusions and**
**Exclusion of Particular Services**

18. Section 411.15 is amended by— A. Republishing the introductory text. B. Revising paragraph (a)(1). C. Adding new paragraph (k)(16). The revision and addition read as
follows:

**§ 411.15 Particular services excluded from**

**coverage.**

The following services are excluded from coverage. (a) * * * (1) Examinations performed for a purpose other than treatment or diagnosis of a specific illness, symptoms, complaint, or injury, except for screening mammography, colorectal cancer screening tests, screening pelvic exams, prostate cancer screening tests, glaucoma screening exams, ultrasound screening for abdominal aortic screening for abdominal aortic aneurysms (AAA), cardiovascular disease screening tests, diabetes screening tests, a screening electrocardiogram, initial preventive physical examinations that meet the criteria specified in paragraphs (k)(6) through (k)(15) of this section, additional preventive services that meet the criteria in § 410.64 of this chapter, or annual wellness visits providing personalized prevention plan services

* * * * *

(k) * * * (16) In the case of an annual wellness visit providing a personalized prevention plan, subject to the conditions and limitations specified in § 410.15 of this chapter.

* * * * *

**Subpart J—Financial Relationships Between Physicians and Entities**  **Furnishing Designated Health Services**

19. Section 411.355 is amended by adding paragraph (b)(7) to read as
follows:

**§ 411.355 General exceptions to the referral prohibition related to both**  **ownership/investment and compensation.**

* * * * *

(b) * * * (7) Disclosure requirement for certain imaging services.

(i) With respect to magnetic resonance imaging, computed tomography, and positron emission tomography, the referring physician shall provide written notice to the patient at the time of the referral that the patient may receive the same services from a person other than one described in paragraph (b)(1) of this section. Except as set forth in paragraph (b)(7)(ii) of this section, the written
notice shall include a list of at least 10 other suppliers (as defined in § 400.202 of this chapter) that provide the services for which the individual is being
referred and which are located within a 25-mile radius of the referring physician’s office location at the time of
the referral. The notice should be
written in a manner sufficient to be reasonably understood by all patients and should include for each supplier on the list, at a minimum, the supplier’s name, address, telephone number, and distance from the referring physician’s


### 40249 Federal Register / Vol. 75, No. 133 / Tuesday, July 13, 2010 / Proposed Rules

office location. A record of the disclosure notification, signed by the patient, shall be maintained as a part of the patient’s medical record.

(ii) If there are fewer than 10 other suppliers located within a 25-mile radius of the physician’s office location at the time of the referral, the physician shall list all of the other suppliers of the imaging service that are present within a 25-mile radius of the referring physician’s office location, including up to 10 suppliers. Provision of the written list of alternate suppliers will not be required if no other suppliers provide
the services for which the individual is being referred within the 25-mile radius.

* * * * *

**PART 413—PRINCIPLES OF**
**REASONABLE COST REIMBURSEMENT; PAYMENT FOR** 
**END-STAGE RENAL DISEASE SERVICES; OPTIONAL** 
**PROSPECTIVELY DETERMINED**
**PAYMENT RATES FOR SKILLED**
**NURSING FACILITIES**

20. The authority citation for part 413
continues to read as follows:

Authority: Secs. 1102, 1812(d), 1814(b), 1815, 1833(a), (i), and (n), 1861(v), 1871, 1881, 1883, and 1886 of the Social Security Act (42 U.S.C. 1302, 1395d(d), 1395f(b), 1395g, 1395l(a), (i), and (n), 1395x(v), 1395hh, 1395rr, 1395tt, and 1395ww); and sec. 124 of Public Law 106–133 (113 Stat. 1501A–332).

**Subpart E—Payments to Providers**

21. Section 413.70 is amended by adding a sentence at the end of paragraph (b)(3)(ii)(B) to read as follows:

**§ 413.70 Payment for services of a CAH.**

* * * * *

(b) * * * (3) * * * (ii) * * * (B) * * * Effective for primary care services furnished by primary care practitioners (as defined in § 414.80(a)) and major surgical procedures furnished by general surgeons in health professional shortage areas (as defined in § 414.2) furnished on or after January 1, 2011 and before January 1, 2016, incentive payments specified under § 414.80 and § 414.67(b), respectively, of this chapter shall not be included in determining payment made under this paragraph.

* * * * *

**PART 414—PAYMENT FOR PART B**
**MEDICAL AND OTHER HEALTH**
**SERVICES**

22. The authority citation for part 414
continues to read as follows: Authority: Secs. 1102, 1871, and 1881(b)(l) of the Social Security Act (42 U.S.C. 1302, 1395hh, and 1395rr(b)(l)).

**Subpart A—General Provisions**

23. Section 414.2 is amended by adding the definitions of ‘‘ Health Professional Shortage Area ’’ and ‘‘ Major surgical procedure ’’ in alphabetical
order to read as follows:

**§ 414.2 Definitions.**

* * * * *

Health Professional Shortage Area (HPSA) means an area designated under section 332(a)(1)(A) of the Public Health Service Act as identified by the Secretary prior to the beginning of such

year.

Major surgical procedure means a surgical procedure for which a 10-day or 90-day global period is used for payment under the PFS and section 1848(b) of the Act.

* * * * *

24. Section 414.26 is amended by— A. Redesignating paragraph (c) as paragraph (d).

B. Adding a new paragraph (c).

The addition reads as follows:

**§ 414.26 Determining the GAF.**

* * * * *

(c) Adjusting the practice expense index to account for the Frontier State floor. (1) General criteria. Effective on or after January 1, 2011, CMS will adjust the practice expense index for physicians’ services furnished in qualifying States to recognize the practice expense index floor established for Frontier States. A qualifying State must meet the following criteria:

(i) At least 50 percent of counties
located within the State have a population density less than 6 persons per square mile.

(ii) The State does not receive a nonlabor related share adjustment determined by the Secretary to take into account the unique circumstances of hospitals located in Alaska and Hawaii.

(2) Amount of adjustment. The practice expense value applied for physicians’ services furnished in a qualifying State will be not less than

1.00.

(3) Process for determining adjustment. (i) CMS will use the most recent Population Estimate data published by the U.S. Census Bureau to determine county definitions and population density. This analysis will be periodically revised, such as for updates to the decennial census data.

(ii) CMS will publish annually a listing of qualifying Frontier States receiving a practice expense index floor attributable to this provision.

* * * * *

**Subpart B—Physicians and Other**

**Practitioners**

25. Section 414.54 is revised to read
as follows:

**§ 414.54 Payment for certified nurse**

**midwives’ services.**

(a) For services furnished after December 31, 1991, allowed amounts
under the fee schedule established under section 1833(a)(1)(K) of the Actfor the payment of certified nursemidwife services may not exceed 65 percent of the physician fee schedule
amount for the service.

(b) For certified nurse midwife services furnished on or after January 1, 2011, allowed amounts may not exceed 100 percent of the physician fee
schedule amount for the services.

26. Section 414.65 is amended by revising the introductory text of paragraph (a)(1) to read as follows:

**§ 414.65 Payment for telehealth services.**

(a) * * * (1) The Medicare payment amount for office or other outpatient visits, subsequent hospital care services (with
the limitation of one telehealth subsequent hospital care service every 3 days), subsequent nursing facility careservices (not including the Federallymandated periodic visits under § 483.40(c) and with the limitation of one telehealth nursing facility care service every 30 days), professional consultations, psychiatric diagnostic interview examination, neurobehavioral status exam, individual psychotherapy, pharmacologic management, end-stage
renal disease-related services included in the monthly capitation payment (except for one ‘‘ hands on ’’ visit per month to examine the access site), individual and group medical nutrition therapy services, individual and group kidney disease education services,individual and group diabetes selfmanagement training (DSMT) services (except for 1 hour of in-person DSMT services to be furnished in the year following the initial DSMT service to ensure effective injection training), and individual and group health and
behavior assessment and intervention
furnished via an interactive telecommunications system is equal to
the current fee schedule amount applicable for the service of the physician or practitioner.

* * * * *

27. Section 414.67 is revised to read
as follows:


### 40250 Federal Register / Vol. 75, No. 133 / Tuesday, July 13, 2010 / Proposed Rules

**§ 414.67 Incentive payments for services furnished in Health Professional Shortage** 

**Areas.**

(a) Health Professional Shortage Area (HPSA) physician bonus program. A HPSA physician incentive payment will be made subject to the following:

(1) HPSA bonuses are payable for services furnished by physicians as defined in section 1861(r) of the Act in areas designated as of December 31 of the prior year as geographic primary
medical care HPSAs as defined in section 332(a)(1)(A) of the Public Health

Service Act.

(2) HPSA bonuses are payable for services furnished by psychiatrists in areas designated as of December 31 of the prior year as geographic mental
health HPSAs if the services are not already eligible for the bonus based on being in a geographic primary care

HPSA.

(3) Physicians eligible for the HPSA physician bonus are entitled to a 10 percent incentive payment above the amount paid for their professional services under the physician fee
schedule.

(4) Physicians furnishing services in areas that are designated as geographic HPSAs prior to the beginning of the year but not included on the published list of zip codes for which automated HPSA bonus payments are made should use the AQ modifier to receive the HPSA physician bonus payment.

(b) HPSA surgical incentive payment

program. A HPSA surgical incentive payment will be made subject to the following:

(1) A major surgical procedure as defined in § 414.2 of this part is furnished by a general surgeon on or after January 1, 2011 and before January 1, 2016 in an area recognized for the HPSA physician bonus program under paragraph (a)(1) of this section.

(2) Payment will be made on a quarterly basis in an amount equal to 10 percent of the Part B payment amount for major surgical procedures furnished as described in paragraph (1), in addition to the amount the physician would otherwise be paid.

(3) Physicians furnishing services in areas that are designated as geographic HPSAs eligible for the HPSA physician bonus program under paragraph (a)(1) of this section prior to the beginning of the year but not included on the published list of zip codes for which automated HPSA surgical bonus payments are made should report a specified HCPCS
code modifier to receive the HPSA surgical bonus payment.

(4) The payment described in paragraph (b)(2) of this section is made to the surgeon or, where the surgeon has reassigned his or her benefits to a critical access hospital (CAH) paid under the optional method, to the CAH
based on an institutional claim.

28. Section 414.80 is added to subpart
B to read as follows:

**§ 414.80 Incentive payment for primary**

**care services.**

(a) Definitions. As defined in this

section—

Eligible primary care practitioner means one of the following:

(i) A physician (as defined in section 1861(r)(1)) who meets all of the following criteria:

(A) Enrolled in Medicare with a primary specialty designation of 08- family practice, 11-internal medicine, 37-pediatrics, or 38-geriatrics.

(B) At least 60 percent of the physician’s allowed charges during a reference period specified by the Secretary are for primary care services.

(ii) A nurse practitioner, clinical nurse specialist, or physician assistant (as defined in section 1861(aa)(5)) who meets all of the following criteria:

(A) Enrolled in Medicare with a primary specialty designation of 50- nurse practitioner, 89-certified clinical nurse, or 97-physician assistant.

(B) At least 60 percent of the practitioner’s allowed charges during a reference period specified by the Secretary are for primary care services.

Primary care services means new and established patient office or other outpatient evaluation and management (E/M) visits; initial, subsequent, discharge, and other nursing facility E/ M services; new and established patient domiciliary, rest home (e.g., boarding home), or custodial care E/M services; domiciliary, rest home (e.g., assisted living facility), or home care plan oversight services; and new and established patient home E/M visits.

(b) Payment.

(1) For primary care services furnished by an eligible primary care practitioner on or after January 1, 2011 and before January 1, 2016, payment is made on a quarterly basis in an amount equal to 10 percent of the payment amount for the primary care services under Part B, in addition to the amount the primary care practitioner would otherwise be paid for the primary care
services under Part B.

(2) The payment described in paragraph (b)(1) of this section is made to the eligible primary care practitioner or, where the physician has reassigned
his or her benefits to a critical access hospital (CAH) paid under the optional method, to the CAH based on an
institutional claim. 29. A new § 414.90 is added to subpart B to read as follows:

**§ 414.90 Physician quality reporting initiative (PQRI).** 

(a) Basis and Scope. This part implements the following provisions of
the Act:

(1) 1848(a)—Payment Based on Fee
Schedule.

(2) 1848(k)—Quality Reporting System.

(3) 1848(m)—Incentive Payments for Quality Reporting.

(b) Definitions. As used in this section, unless otherwise indicated—

Covered professional services means services for which payment is made under, or is based on, the Medicare physician fee schedule as provided under section 1848(k)(3) of the Act and which are furnished by an eligible professional.

Eligible professional (EP) means any of the following:

(i) A physician. (ii) A practitioner described in section 1842(b)(18)(C) of the Act.

(iii) A physical or occupational therapist or a qualified speech-language pathologist.

(iv) A qualified audiologist (as defined in section 1861(ll)(3)(B) of the Act).

Group practice means a single Taxpayer Identification Number (TIN) with 2 or more eligible professionals, as identified by their individual National Provider Identifier (NPI), who have reassigned their Medicare billing rights
to the TIN. This term also includes group practices participating in Medicare demonstration projects approved by the Secretary.

Maintenance of certification program

means a continuous assessment program, such as qualified American Board of Medical Specialties Maintenance of Certification Program or an equivalent program (as determined by the Secretary), that advances qualityand the lifelong learning and selfassessment of board certified specialty physicians by focusing on the competencies of patient care, medical knowledge, practice-based learning, interpersonal and communication skills and professionalism. Such a program must include the following:

(i) The program requires the physician
to maintain a valid unrestricted license
in the United States.

(ii) The program requires a physicianto participate in educational and selfassessment programs that require an
assessment of what was learned.

(iii) The program requires a physician to demonstrate, through a formalized secure examination, that the physician


### 40251 Federal Register / Vol. 75, No. 133 / Tuesday, July 13, 2010 / Proposed Rules

has the fundamental diagnostic skills, medical knowledge, and clinical judgment to provide quality care in their respective specialty.

(iv) The program requires successful completion of a qualified Maintenance of Certification Program practice

assessment.

Maintenance of certification program practice assessment means an assessment of a physician’s practice
that—

(i) Includes an initial assessment of an eligible professional’s practice that is designed to demonstrate the physician’s use of evidence-based medicine;

(ii) Includes a survey of patient experience with care; and

(iii) Requires a physician to implement a quality improvement intervention to address a practice
weakness identified in the initial assessment under paragraph (i) and then to remeasure to assess performance improvement after such intervention.

Measures group means a subset of four or more PQRI measures that have a particular clinical condition or focus
in common. The denominator definition and coding of the measures group
identifies the condition or focus that is
shared across the measures within a particular measures group.

Performance rate means the percentage of a defined population who receives a particular process of care or achieve a particular outcome for a particular quality measure.

Physician quality reporting initiative (PQRI) means the physician reporting system under section 1848(k) of the Act for the reporting by eligible professionals of data on quality measures and the incentive payment associated with this physician reporting
system.

Qualified electronic health record (EHR) means an EHR vendor’s product and version that, with respect to aparticular program year, has selfnominated and successfully completed a vetting process (as specified by CMS) to demonstrate the product’s compliance with the PQRI qualification requirements specified by CMS for a

program year.

Qualified registry means a medical registry or a Maintenance of Certification Program operated by a specialty body of the American Board of Medical Specialties that, with respect toa particular program year, has selfnominated and successfully completed a vetting process (as specified by CMS) to demonstrate its compliance with the PQRI qualification requirements specified by CMS for that program year. The registry may act as a data submission vendor, which has the requisite legal authority to provide PQRI data (as specified by CMS) on behalf of an eligible professional to CMS.

Quality reporting period means with respect to a year, a period specified by the Secretary.

Reporting rate means the percentage of patients that the eligible professional indicated a quality action was or was not performed divided by the total number of patients in the denominator
of the measure.

(c) Incentive payments. With respect to covered professional services furnished during a reporting period by an eligible professional, if—

(1) There are any quality measures
that have been established under the PQRI that are applicable to any such services furnished by such professional (or in the case of a group practice under paragraph (h) of this section, such group practice) for such reporting period; and

(2) The eligible professional (or in the case of a group practice under paragraph (h) of this section, the group practice) satisfactorily submits (as determined under paragraph (g) of this section for eligible professionals and paragraph (h) of this section for group practices) to the Secretary data on such quality measures in accordance with the PQRI for such reporting period, in addition to the amount otherwise paid under section 1848 of the Act, there also shall be paid to the eligible professional (or to an employer or facility in the cases described in section 1842(b)(6)(A) of the Act or, in the case of a group practice) under paragraph (h) of this section, to the group practice, from the Federal Supplementary Medical Insurance Trust
Fund established under section 1841 an amount equal to the applicable quality percent (as specified in paragraph (c)(3) of this section) of the eligible professional’s (or, in the case of a group practice under paragraph (h) of this section, the group practice’s) total estimated allowed charges for all covered professional services furnished by the eligible professional (or, in the case of a group practice under paragraph (h) of this section, by the group practice) during the applicable reporting period. For purposes of this paragraph,

(i) The eligible professional’s (or, in the case of a group practice under paragraph (h) of this section, the group practice’s) total estimated allowed charges for covered professional services furnished during a reporting period are determined based on claims processed in the National Claims History (NCH) no later than 2 months after the end of the applicable reporting period;

(ii) In the case of an eligible professional who furnishes covered professional services in more than one practice, incentive payments are separately determined for each practice
based on claims submitted for the eligible professional for each practice;

(iii) Incentive payments earned by an eligible professional (or in the case of a group practice under paragraph (h) of this section, by a group practice) for a particular program year will be paid as a single consolidated payment to the
TIN holder of record.

(3) Applicable quality percent. The applicable quality percent is as follows:

(i) For 2011, 1.0 percent; and (ii) For 2012, 2013, and 2014, 0.5
percent;

(d) Additional incentive payment. (1) Through 2014, if an eligible professional meets the requirements described in paragraph (d)(2) of this section, the applicable percent for such year, as described in paragraphs (c)(3)(i) and (ii) of this section, must be increased by 0.5 percentage points.

(2) In order to qualify for the additional incentive payment described in paragraph (d)(1) of this section, an eligible professional shall meet the following requirements:

(i) The eligible professional must— (A) Satisfactorily submit data on quality measures for purposes of this section for a year; and

(B) Have such data submitted on their behalf through a Maintenance of Certification program (as defined in paragraph (b) of this section) that meets:

( 1 ) The criteria for a registry (as specified by CMS)); or

( 2 ) An alternative form and manner determined appropriate by the Secretary.

(ii) The eligible professional, more frequently than is required to qualify for
or maintain board certification status—

(A) Participates in such a Maintenance of Certification Program for a year; and

(B) Sucessfully completes a qualified Maintenance of Certification Program practice assessment (as defined in paragraph (b) of this section) for such

year.

(iii) A Maintenance of Certification program submits to the Secretary, on behalf of the eligible professional,
information —

(A) In a form and manner specified by the Secretary, that the eligible professional has successfully met the requirements of paragraph (d)(2)(ii) of this section which may be in the form of a structural measure);

(B) If requested by the Secretary, on the survey of patient experience with care (as described in paragraph (b) of this section); and

(C) As the Secretary may require, on the methods, measures, and data used


### 40252 Federal Register / Vol. 75, No. 133 / Tuesday, July 13, 2010 / Proposed Rules

under the Maintenance of Certification Program and the qualified Maintenance of Certification Program practice

assessment.

(e) Incentive payment adjustment. (1) With respect to covered professional services furnished by an eligible professional during 2015 or any subsequent year, if the eligible professional does not satisfactorily submit data on quality measures for covered professional services for the quality reporting period for the year (as determined under paragraph (g) for eligible professionals and paragraph (h) of this section for group practices), the
fee schedule amount for such services furnished by such professional during the year (including the fee schedule amount for purposes of determining a payment based on such amount) must be equal to the applicable percent of the
fee schedule amount that would otherwise apply to such services under section 1848(m) of the Act.

(2) Applicable percent. For purposes of paragraph (1) of this section, the term ‘applicable percent’ means—

(i) For 2015, 98.5 percent; and (ii) For 2016 and each subsequent
year, 98 percent.

(f) Use of consensus-based quality

measures. For each program year, CMS will publish the final list of measures
and the final detailed measure specifications for all quality measures selected for inclusion in the PQRI quality measure set for a given program year on a CMS Web site by no later than December 31 of the prior year.

(1) Subject to paragraph (f)(2) of this section, for purposes of reporting data on quality measures for covered professional services furnished during a year, subject to paragraph (g) of this section, the quality measures specified under this paragraph must be such measures selected by the Secretary from measures that have been endorsed by the entity with a contract with the Secretary under section 1890(a) of the

Act.

(2) Exception. In the case of a specified area or medical topic determined appropriate by the Secretary for which a feasible and practical measure has not been endorsed by the entity with a contract under section 1890(a) of the Act, the Secretary may specify a measure that is not so endorsed as long as due consideration is given to measures that have been endorsed or adopted by a consensus organization identified by the Secretary, such as the AQA alliance.

(3) Opportunity to provide input on

measures. For each quality measure adopted by the Secretary under this paragraph, the Secretary shall ensure that eligible professionals have the opportunity to provide input during the development, endorsement, or selection of quality measures applicable to services they furnish.

(g) Requirements for individual eligible professionals to qualify to receive an incentive payment. In order to qualify to earn a PQRI incentive payment for a particular program year, an individual eligible professional, as identified by a unique TIN/NPI combination, must meet the criteria for satisfactory reporting specified by CMS for such year by reporting on either individual PQRI quality measures or PQRI measures groups identified by CMS during a reporting period specified in paragraph (g)(1) of this section and using one of the reporting mechanisms specified in paragraph (g)(2) of this section. Although an eligible professional may attempt to qualify for the PQRI incentive payment by reporting on both individual PQRI quality measures and measures groups, using more than one reporting mechanism (as specified in paragraph (g)(2) of this section), or reporting for more than one reporting period, he or she will receive only one PQRI incentive payment per TIN/NPI combination for a program year.

(1) Reporting periods. For purposes of this paragraph, the reporting period with respect to a program year are—

(i) The 12-month period from January 1 through December 31 of each program

year; or

(ii) The 6-month period from July 1 through December 31 of each program

year.

(iii) Exceptions. The 6-month reporting period is not available for EHR-based reporting of individual PQRI quality measures or for reporting by group practices under the process described in paragraph (h) of this

section.

(2) Reporting mechanisms. For each program year, an eligible professional who wishes to participate in the PQRI must report information on the individual PQRI quality measures or PQRI measures groups identified by CMS in the following manner:

(i) Reporting the individual PQRI quality measures or PQRI measures groups to CMS, by no later than 2 months after the end of the applicable reporting period, on the eligible professional’s Medicare Part B claims for covered professional services furnished during the applicable reporting period;

(ii) Reporting the individual PQRI quality measures or PQRI measures groups to a qualified registry (as specified in paragraph (b) of this section) in the form and manner and by the deadline specified by the qualified registry selected by the eligible professional. The selected registry will submit information, as required by CMS, for covered professional services furnished by the eligible professional during the applicable reporting period to CMS on the eligible professional’s behalf; or

(iii) Reporting the individual PQRI quality measures to CMS by extracting clinical data using a secure data submission method, as required by CMS, from a qualified EHR product (as defined in paragraph (b) of this section) by the deadline specified by CMS for covered professional services furnished by the eligible professional during the applicable reporting period. Prior to actual data submission for a given program year and by a date specified by CMS, the eligible professional must submit a test file containing real or dummy clinical quality data extracted from the qualified EHR product selected by the eligible professional using a secure data submission method, as required by CMS.

(h) Requirements for group practices to qualify to receive an incentive
payment. A group practice (as defined in paragraph (b) of this section) will be treated as satisfactorily submitting data on quality measures under PQRI for covered professional services for a reporting period (or for purposes of paragraph (e) of this section, for a quality reporting period for the year), if, in lieu of reporting PQRI measures, the group practice—

(1) Meets the participation requirements specified by CMS for the PQRI group practice reporting option (GPRO);

(2) Is selected by CMS to participate in the PQRI GPRO;

(3) Reports measures specified by CMS in the form and manner, and at a time specified by CMS; and

(4) Meets the criteria for satisfactory reporting specified by CMS.

(5) No double payments. Payments to a group practice under this paragraph must be in lieu of the payments that
would otherwise be made under the PQRI to eligible professionals in the group practice for meeting the criteria for satisfactory reporting for individual eligible professionals.

(i) If an eligible professional, as identified by an individual NPI, has reassigned his or her Medicare billing rights to a TIN selected to participate in the PQRI GPRO for a program year, then for that program year the eligible professional must participate in the PQRI via the GPRO. For any program year in which the TIN is selected to


### 40253 Federal Register / Vol. 75, No. 133 / Tuesday, July 13, 2010 / Proposed Rules

participate in the PQRI GPRO, the eligible professional cannot individually qualify for a PQRI incentive payment by meeting the requirements specified in paragraph (g) of this section.

(ii) If, for the program year, the eligible professional participates in the PQRI under another TIN that is not selected to participate in the PQRI GPRO for that program year, then the eligible professional may individually qualify for a PQRI incentive by meeting the requirements specified in paragraph (g) of this section under that TIN.

(i) Limitations on review. (1) Except as specified in paragraph (h)(2) of this section, there is no administrative or judicial review under section 1869, section 1879, or otherwise of—

(i) The determination of measures applicable to services furnished by eligible professionals under PQRI;

(ii) The determination of the payment limitation; and

(iii) The determination of any PQRI incentive payment and the PQRI payment adjustment.

(j) Informal review. Except as specified in paragraph (i) of this section eligible professionals (or in the case of reporting under paragraph (h) of this section, group practices) may seek a
review of the determination that an eligible professional (or in the case of reporting under paragraph (h) of this section, group practices) did not satisfactorily submit data on quality measures under the PQRI.

(1) To request an informal review, an eligible professional (or in the case of reporting under paragraph (h) of this section, group practices) must submit a written request to CMS within 90 days of the release of the feedback reports. The request must summarize the concern(s) and reasons for requesting an informal review and may also include
information to assist in the review.

(2) CMS will provide a written response within 60 days of the receipt of the original request. All decisions
based on the informal review will be
final. There will be no further review or appeal.

(k) Public reporting of an eligible professional’s or group practice’s PQRI
data. For each program year, CMS will post on a public Web site, in an easily understandable format, a list of the names of eligible professionals (or in the case of reporting under paragraph (h), group practices) who satisfactorily submitted PQRI quality measures.

30. A new § 414.92 is added to subpart B to read as follows: **§ 414.92 Electronic prescribing incentive**

**program.**

(a) Basis and scope. This part implements the following provisions of
the Act:

(1) Section 1848(a)—Payment Based
on Fee Schedule.

(2) Section 1848(m)—Incentive Payments for Quality Reporting.

(b) Definitions. As used in the part,
unless otherwise indicated—

Covered professional services means services for which payment is made under, or is based on, the Medicare physician fee schedule as provided under section 1848(k)(3) of the Act and which are furnished by an eligible professional.

Electronic prescribing (eRx) incentive

program means the incentive payment program established under section 1848(m) of the Act for the adoption and use of electronic prescribing technology by eligible professionals.

Eligible professional means any of the following healthcare professionals who have prescribing authority:

(i) A physician. (ii) A practitioner described in section 1842(b)(18)(C) of the Act.

(iii) A physical or occupational therapist or a qualified speech-language pathologist.

(iv) A qualified audiologist (as defined in section 1861(ll)(3)(B) of the Act).

Group practice means a group practice, as defined at § 414.90(b), that—

(i) Is or is deemed to be participating in the Physician Quality Reporting Initiative (PQRI) group practice reporting option (GPRO) under § 414.90;
and

(ii) Has indicated its desire to participate in the eRx GPRO.

Qualified electronic health record (EHR) means an EHR product and version that, with respect to a particular program year, is designated by CMS as a qualified EHR for the purpose of the PQRI (as described in § 414.90) and the product’s vendor has indicated a desire to have the product qualified for purposes of the product’s users to
submit information related to the eRx

measure.

Qualified registry means a medical registry or a Maintenance of Certification Program operated by a specialty body of the American Board of Medical Specialties that, with respect to a particular program year, is designated by CMS as a qualified registry for the purpose of the PQRI (as described in § 414.90) and that has indicated its desire to be qualified to submit the eRx measure on behalf of eligible professionals for the purposes of the eRx Incentive Program. (c) Incentive payments. (1) Subject to paragraph (c)(3) of this section, with respect to covered professional services furnished during a reporting period by an eligible professional, if the eligible professional is a successful electronic prescriber for such reporting period, in addition to the amount otherwise paid under section 1848 of the Act, there also shall be paid to the eligible professional (or to an employer or facility in the cases described in paragraph (A) of section 1842(b)(6)) or, in the case of a group practice under paragraph (e) of this section, to the group practice, from the Federal Supplementary Medical
Insurance Trust Fund established under section 1841 of the Act an amount equal to the applicable eRx percent (as specified in paragraph (c)(1)(ii) of this section) of the eligible professional’s (or, in the case of a group practice under paragraph (e) of this section, the group practice’s) total estimated allowed charges for all covered professional services furnished by the eligible professional (or, in the case of a group practice under paragraph (e) of this section, by the group practice) during the applicable reporting period.

(i) For purposes of this paragraph, (A) The eligible professional’s (or, in the case of a group practice under paragraph (e) of this section, the group practice’s) total estimated allowed charges for covered professional services furnished during a reporting period are determined based on claims processed in the National Claims History (NCH) no later than 2 months after the end of the applicable reporting period;

(B) In the case of an eligible professional who furnishes covered professional services in more than one practice, incentive payments are separately determined for each practice
based on claims submitted for the eligible professional for each practice;

(C) Incentive payments earned by an eligible professional (or in the case of a group practice under paragraph (e) of this section, by a group practice) for a particular program year will be paid as a single consolidated payment to the
TIN holder of record.

(ii) Applicable eRx percent. The applicable eRx percent is as follows:

(A) For the 2011 and 2012 program years, 1.0 percent; and

(B) For the 2013 program year, 0.5
percent.

(iii) Limitation with respect to electronic health record (EHR) incentive
payments. The provisions of this paragraph do not apply to an eligible professional (or, in the case of a group practice under paragraph (e) of this section, a group practice) if, for the EHR


### 40254 Federal Register / Vol. 75, No. 133 / Tuesday, July 13, 2010 / Proposed Rules

reporting period the eligible professional (or group practice) receives an incentive payment under section 1848(o)(1)(A) of the Act with respect to a certified EHR technology (as defined in section 1848(o)(4) of the Act) that has the capability of eRx.

(2) Incentive payment adjustment. Subject to paragraph (c)(1)(ii) and paragraph (c)(3) of this section, with respect to covered professional services furnished by an eligible professional during 2012, 2013, or 2014, if the eligible professional (or in the case of a group practice under paragraph (e) of this section, the group practice) is not a successful electronic prescriber (as specified by CMS for purposes of the payment adjustment) for an applicable reporting period (as specified by CMS)
the fee schedule amount for such services furnished by such professional (or group practice) during the program year (including the fee schedule amount for purposes of determining a payment based on such amount) is equal to the applicable percent (as specified in paragraph (c)(2)(i) of this section) of the
fee schedule amount that would otherwise apply to such services under
section 1848 of the Act.

(i) Applicable percent. The applicable percent is as follows:

(A) For 2012, 99 percent; (B) For 2013, 98.5 percent; and (C) For 2014, 98 percent. (ii) Significant hardship exception. An eligible professional (or in the case of a group practice under paragraph (e) of this section, a group practice) may be exempt from the application of the payment adjustment under this paragraph if, subject to annual renewal, CMS determines that compliance with the requirement for being a successful electronic prescriber (as specified by CMS for purposes of the payment adjustment) would result in a significant hardship. For purposes of this paragraph, any of the following

circumstances constitute a ‘‘ significant hardship: ’’

(A) An eligible professional (or group practice) who practices in a rural area with limited high speed Internet access.

(B) An eligible professional (or group practice) who practices in an area with limited available pharmacies for electronic prescribing.

(C) Other circumstances identified by

CMS.

(3) Limitation with respect to electronic prescribing quality measures. The provisions of paragraphs (c)(1) and (c)(2) of this section do not apply to an eligible professional (or, in the case of a group practice under paragraph (e) of this section, a group practice) if for the reporting period the allowed charges under section 1848 of the Act for all covered professional services furnished by the eligible professional (or group, as applicable) for the codes to which the electronic prescribing measure (as identified by CMS) applies are less than 10 percent of the total of the allowed charges under section 1848 of the Act for all such covered professional services furnished by the eligible professional (or the group practice, as applicable).

(d) Requirements for individual eligible professionals to qualify to receive an incentive payment. In order
to be considered a successful electronic prescriber and qualify to earn an eRx an incentive payment (subject to paragraph (c)(3) of this section), an individual eligible professional, as identified by a unique TIN/NPI combination, must
meet the criteria for successful electronic prescriber specified by CMS during the reporting period specified in paragraph (d)(1) of this section and using one of the reporting mechanisms specified in paragraph (d)(2) of this section. Although an eligible professional may attempt to qualify for the eRx incentive payment using more than one reporting mechanism (as specified in paragraph (d)(2) of this section), he or she will receive only one eRx incentive payment per TIN/NPI combination for a program year.

(1) Reporting period. For purposes of this paragraph, the reporting period with respect to a program year is the entire calendar year.

(2) Reporting mechanisms. An eligible professional who wishes to participate in the eRx Incentive Program must report information on the eRx measure identified by CMS to—

(i) CMS, by no later than 2 months after the end of the applicable reporting period, on the eligible professional’s
Medicare Part B claims for covered professional services furnished by the eligible professional during the reporting period specified in paragraph (d)(1) of this section;

(ii) A qualified registry (as defined in paragraph (b)) in the form and manner and by the deadline specified by the qualified registry selected by the eligible professional. The selected registry will submit information, as required by CMS, for covered professional services furnished by the eligible professional during the reporting period specified in paragraph (d)(1) of this section to CMS on the eligible professional’s behalf; or

(iii) CMS by extracting clinical data using a secure data submission method, as required by CMS, from a qualified EHR product (as defined in paragraph (b) of this section) by the deadline specified by CMS for covered professional services furnished by the eligible professional during the reporting period specified in paragraph (d)(1) of this section. Prior to actual data submission for a given program year and by a date specified by CMS, the eligible professional must submit a test file containing real or dummy clinical quality data extracted from the qualified EHR product selected by the eligible professional using a secure data submission method, as required by

CMS.

(e) Requirements for group practices to qualify to receive an incentive
payment.

(1) A group practice (as defined in paragraph (b) of this section) will be
treated as a successful electronic prescriber for covered professional services for a reporting period if the group practice meets the criteria for successful electronic prescriber specified by CMS in the form and manner and at the time specified by

CMS.

(2) No double payments. Payments to a group practice under this paragraph must be in lieu of the payments that
would otherwise be made under the eRx Incentive Program to eligible professionals in the group practice for being a successful electronic prescriber.

(i) If an eligible professional, as identified by an individual NPI, has reassigned his or her Medicare billing rights to a TIN selected to participate in the eRx GPRO for a program year, then for that program year the eligible professional must participate in the eRx Incentive Program via the GPRO. For any program year in which the TIN is selected to participate in the eRx Incentive Program GPRO, the eligible professional cannot individually qualify for an eRx incentive payment by meeting the requirements specified in paragraph (d) of this section.

(ii) If, for the program year, the eligible professional participates in the eRx Incentive Program under another TIN that is not selected to participate in the eRx Incentive Program GPRO for that program year, then the eligible professional may individually qualify for an eRx incentive by meeting the requirements specified in paragraph (d)
of this section under that TIN.

(f) Public reporting of an eligible professional’s or group practice’s erx incentive program data. For each program year, CMS will post on a public Web site, in an easily understandable format, a list of the names of eligible professionals (or in the case of reporting under paragraph (e) of this section, group practices) who are successful electronic prescribers.


### 40255 Federal Register / Vol. 75, No. 133 / Tuesday, July 13, 2010 / Proposed Rules

**Subpart D—Payment for Durable Medical Equipment and Prosthetic and** 
**Orthotic Devices**

31. Section 414.202 is amended by adding a definition of ‘‘ complex rehabilitative power-driven wheelchair ’’ in alphabetical order to read as follows:

**§ 414.202 Definitions.**

* * * * *

Complex rehabilitative power-driven
wheelchair means a power-driven
wheelchair that is classified as—

(1) Group 2 power wheelchair with power options that can accommodate rehabilitative features (for example, tilt in space); or

(2) Group 3 power wheelchair.

* * * * *

32. Section 414.226 is amended by revising paragraph (g)(1) to read as
follows:

**§ 414.226 Oxygen and oxygen equipment.**

* * * * *

(g) * * * (1) The supplier that furnishes oxygen equipment for the first month during which payment is made under this
section must continue to furnish the equipment until medical necessity ends, or the 36-month period of continuous use ends, whichever is earlier, unless—

(i) The item becomes subject to a competitive acquisition program implemented in accordance with section 1847(a) of the Act;

(ii) Before the 18th month of continuous use, the beneficiary
relocates to an area that is outside the normal service area of the supplier that initially furnished the equipment;

(iii) The beneficiary elects to obtain oxygen equipment from a different supplier prior to the expiration of the 36-month rental period; or

(iv) CMS or the carrier determines that an exception should apply in an
individual case based on the

circumstances.

* * * * *

33. Section 414.229 is amended by— A. Revising paragraphs (a)(3), (d)(1), and (h).

B. Adding paragraphs (a)(4), (a)(5), and (b)(3).

The revisions and additions read as
follows:

**§ 414.229 Other durable medical equipment-capped rental items.** 

(a) * * * (3) For power-driven wheelchairs furnished on or after January 1, 2006 through December 31, 2010, payment is
made in accordance with the rules set forth in paragraphs (f) or (h) of this

section. (4) For power-driven wheelchairs that are not classified as complex rehabilitative power-driven wheelchairs, furnished on or after January 1, 2011, payment is made in
accordance with the rules set forth in paragraph (f) of this section.

(5) For power-driven wheelchairs classified as complex rehabilitative power-driven wheelchairs, furnished on or after January 1, 2011, payment is
made in accordance with the rules set forth in paragraphs (f) or (h) of this

section.

(b) * * * (3) For power-driven wheelchairs furnished on or after January 1, 2011, the monthly fee schedule amount for rental equipment equals 15 percent of the purchase price recognized as determined under paragraph (c) of this
section for each of the first 3 months and 6 percent of the purchase price for each of the remaining months.

* * * * *

(d) * * * (1) Suppliers must offer beneficiaries the option of purchasing power-driven wheelchairs at the time the supplier first furnishes the item. On or after January 1, 2011, this option is available only for complex rehabilitative power-driven wheelchairs. Payment must be on a lump-sum fee schedule purchase basis if the beneficiary chooses the purchase option. The purchase fee is the amount established in paragraph (c) of this

section.

* * * * *

(h) Purchase of power-driven wheelchairs furnished on or after January 1, 2006.

(1) Suppliers must offer beneficiaries the option to purchase power-driven wheelchairs at the time the equipment is initially furnished.

(2) Payment is made on a lump-sum purchase basis if the beneficiary chooses this option.

(3) On or after January 1, 2011, this option is available only for complex rehabilitative power-driven
wheelchairs.

**Subpart F—Competitive Bidding for Certain Durable Medical Equipment,**  **Prosthetics, Orthotics, and Supplies (DMEPOS)** 

34. Section 414.402 is amended by adding the definitions of ‘‘ Affected
party, ’’ ‘‘ Breach of contract, ’’ ‘‘ Corrective Action Plan, ’’ ‘‘ Hearing Officer, ’’ ‘‘ Mail order item, ’’ ‘‘ National mail order competitive bidding program, ’’

‘‘ Nonmail order item ’’ and ‘‘ Parties to the hearing ’’ in alphabetical order to read as
follows: **§ 414.402 Definitions.** Affected party means a contract supplier that has been notified that their
DMEPOS CBP contract will be
terminated for a breach of contract.

* * * * *

Breach of contract means any deviation from contract requirements, including a failure to comply with a governmental agency or licensing organization requirements, constitutes a
breach of contract.

* * * * *

Corrective action plan (CAP) means a contract supplier’s written document with supporting information that
describes the actions the contract supplier will take within a specified timeframe to remedy a breach of

contract.

* * * * *

Hearing Officer (HO) means an individual, who was not involved with
the CBIC recommendation to terminate a DMEPOS Competitive Bidding Program contract, who is designated by
CMS to review and make an unbiased and independent determination following the Competitive Bidding Implementation Contractor’s (CBIC’s)
recommendation to terminate a DMEPOS Competitive Bidding Program

contract.

* * * * *

Mail order item means any item (for example, diabetic testing supplies) shipped or delivered to the beneficiary’s home, regardless of the method of delivery.

* * * * *

National mail order competitive bidding program means a program and competition resulting in the award of contracts to suppliers for furnishing mail order items throughout the nation.

* * * * *

Nonmail order item means any item (for example, diabetic testing supplies) that a beneficiary or caregiver picks up in person at a local pharmacy or supplier storefront.

Parties to the hearing means the DMEPOS contract supplier and CMS.

* * * * *

35. Section 414.404 is amended by revising paragraph (b)(1)(i) to read as
follows:

**§ 414.404 Scope and applicability.**

* * * * *

(b) * * * (1) * * * (i) The items furnished are limited to crutches, canes, walkers, folding manual wheelchairs, blood glucose monitors, and infusion pumps that are DME, and,


### 40256 Federal Register / Vol. 75, No. 133 / Tuesday, July 13, 2010 / Proposed Rules

in addition, off-the-shelf (OTS)
orthotics.

* * * * *

36. Section 414.408 is amended by-– A. Revising paragraph (f)(1). B. Redesignating paragraphs (h)(2) through (h)(7) as paragraphs (h)(3) through (h)(8) respectively.

C. Adding new paragraph (h)(2). D. In newly designated paragraphs (h)(3)(i) and (ii), remove the phrase

‘‘ (h)(2) ’’ and add in its place the phrase

‘‘ (h)(3). ’’

The revision and addition reads as
follows:

**§ 414.408 Payment rules.**

* * * * *

(f) * * * (1) The single payment amounts for new purchased durable medical equipment, including power wheelchairs that are purchased when the equipment is initially furnished, and enteral nutrition equipment are
calculated based on the bids submitted and accepted for these items. For contracts entered into beginning on or after January 1, 2011, payment on a lump sum purchase basis is only available for power wheelchairs classified as complex rehabilitative power wheelchairs.

* * * * *

(h) * * * (2) For contracts entered into beginning on or after January 1, 2011, the monthly fee schedule amount for rental of power wheelchairs equals 15 percent of the single payment amounts
calculated for new durable medical equipment under paragraph (f)(1) of this section for each of the first 3 months, and 6 percent of the single payment
amounts calculated for these items for each of the remaining months 4 through

13.

* * * * *

37. Section 414.410 is amended as
follows:

A. Revising paragraphs (a)(2) and (a)(3).

B. Adding a new paragraph (a)(4).
The revisions and addition read as
follows:

**§ 414.410 Phase-in implementation of competitive bidding programs.** 

(a) * * * (2) In CY 2011, in an additional 91 MSAs (the additional 70 MSAs selected by CMS as of June 1, 2008, and the next 21 largest MSAs by total population based on 2009 population estimates, and not already phased in as of June 1, 2008). CMS may subdivide any of the 91 MSAs with a population of greater than 8,000,000 into separate CBAs, thereby resulting in more than 91 CBAs. (3) After CY 2011, additional CBAs (or, in the case of national mail order for items and services, after CY 2010).

(4) For competitions (other than for national mail order items and services) after CY 2011 and prior to CY 2015, the following areas are excluded:

(i) Rural areas.

(ii) MSAs not selected under paragraphs (a)(1) or (a)(2) of this section with a population of less than 250,000.

(iii) An area with low population density within an MSA not selected under paragraphs (a)(1) or (a)(2) of this

section.

* * * * *

38. Section 414.411 is added to read
as follows:

**§ 414.411 Special rule in case of competitions for diabetic testing strips**  **conducted on or after January 1, 2011.**

(a) National mail order competitions. A supplier must demonstrate that their bid submitted as part of a national mail order competition for diabetic testing strips covers the furnishing of a sufficient number of different types of diabetic testing strip products that, in the aggregate, and taking into account volume for the different products, includes at least 50 percent of all the different types of products on the market. A type of diabetic testing strip means a specific brand and model of testing strips.

(b) Other competitions. CMS may apply this special rule to non-mail order or local competitions for diabetic testing strips.

39. Section 414.422 is amended by adding paragraph (e)(3) to read as
follows:

**§ 414.422 Term of contracts.**

* * * * *

(e) * * * (3) Contract suppliers for diabetic testing supplies must furnish the brand of diabetic testing supplies that works with the home blood glucose monitor selected by the beneficiary. The contract supplier is prohibited from influencing or incentivizing the beneficiary by persuading, pressuring, or advising
them to switch from their current brand
or for new beneficiaries from their preferred brand of glucose monitor and testing supplies. The contract supplier may not furnish information about alternative brands to the beneficiary unless the beneficiary requests such
information.

* * * * *

40. Section 414.423 is added to read
as follows: **§ 414.423 Appeals process for termination of competitive bidding contract.** 

This section implements an appeals process for suppliers that CMS has
determined are in breach of their Medicare DMEPOS Competitive Bidding Program contracts and where CMS has taken action to terminate the supplier’s contract. Except as specified in this regulation termination decisions made under this section are final and binding.

(a) Terminations for breach of

contract. CMS may terminate a supplier’s DMEPOS Competitive Bidding Program contract when it determines that the supplier has violated any of the terms of its contract.

(b) Notice of termination —(1) CMS notification. If CMS determines a supplier to be in breach of its contract either in part or in whole, it will notify the Medicare DMEPOS supplier of the termination by certified mail.

(2) Content of the notice. The CMS notice sent by the CBIC will include the following:

(i) The reasons for the termination. (ii) The right to request a hearing by a CBIC Hearing Officer, and depending on the nature of the breach, the supplier may also be allowed to submit a CAP in lieu of requesting a hearing by a CBIC Hearing Officer, as specified in paragraph (c)(1)(i) of this section.

(iii) The address to which the written request for a hearing must be mailed.

(iv) The address to which the CAP must be mailed, if applicable.

(v) Penalties that will accompany the termination, such as not being eligible to bid in future rounds of competitive bidding.

(vi) The effective date of termination is 45 days from the date of the notification letter unless a timely hearing request has been filed or a Corrective Action Plan (CAP) has been submitted within 30 days of the date on
the notification letter.

(c) Corrective Action Plan. (1) Option for Corrective Action Plan (CAP).

(i) CMS has the option to allow a DMEPOS supplier to provide a written Corrective Action Plan (CAP) to remedy the deficiencies identified in the notice, when CMS determines that the delay in the termination date caused by allowing
a CAP will not cause harm to beneficiaries, for example, we would not allow a CAP if the supplier has been excluded, debarred, or convicted of a
healthcare related crime.

(ii) If a supplier chooses not to submit
a CAP or if CMS determines that a supplier’s CAP is insufficient, the supplier may request a hearing on the

termination.

(2) Submission of a CAP.


### 40257 Federal Register / Vol. 75, No. 133 / Tuesday, July 13, 2010 / Proposed Rules

(i) A Corrective Action Plan must be submitted within 30 calendar days from
the date on the notification letter. If the supplier decides not to submit a Corrective Action Plan the supplier may within 30 days of the date on the termination letter may request a hearing by a CBIC hearing officer.

(ii) Suppliers will only have the opportunity to submit a CAP when they are first notified that they have been
determined to be in breach of contract. If the CAP is not acceptable or properly implemented, suppliers will receive a

termination notice.

(d) The purpose of the Corrective
Action Plan.

(1) For the supplier to eliminate all of
the deficiencies that were identified in
the CBIC notice to terminate its contract
to avoid contract termination.

(2) To identify the timeframes by which the supplier will implement each of the components of the CAP.

(e) Review of the CAP. (1) The CBIC will review the CAP and
submit a recommendation to CMS concerning whether the CAP includes the steps necessary to remedy the
contract deficiencies as identified in the

notice.

(2) If CMS accepts the CAP, including supplier’s designated timeframe for its completion; the supplier must provide a follow-up report within 5 days after the supplier has fully implemented the CAP
that verifies that all of the deficiencies
identified in the CAP have been
corrected in accordance with the timeframes accepted by CMS.

(3) If the supplier does not implement an acceptable CAP the supplier will
receive a new notice that their contract
will be terminated within 45 calendar days of the date on the notice to

terminate.

(f) Right to request a hearing by the CBIC hearing officer (HO).

(1) A supplier who has received a notice that CMS considers the supplier
in breach of contract or that the supplier’s CAP is not acceptable has the right to request a hearing before a HO who was not involved with the original
determination.

(2) A supplier who wishes to appeal
the termination notice must submit a written request to the CBIC. The request for a hearing must be received by the CBIC within 30 calendar days from the
date of the notice to terminate.

(3) A request for hearing must be in writing and submitted by an authorized official of the supplier.

(4) The appeals process for the Medicare DMEPOS Competitive Bidding Program is not to be used in place of other existing appeals processes that apply to other parts of Medicare. (5) In the absence of submitting a CAP when the supplier is offered the opportunity to submit a CAP within 30 days of the notice in accordance with paragraph (c)(1) of this section, a supplier’s failure to timely request a hearing will result in a termination of the supplier’s DMEPOS Competitive Bidding Program contract effective 45 days from the date on the notice to

terminate.

(g) The CBIC Hearing Officer schedules and conducts the hearing.

(1) Within 30 calendar days from the receipt of the supplier’s timely request for a hearing the hearing officer will contact the parties to schedule the hearing.

(2) The hearing may be held in person or by telephone at the supplier’s
request.

(3) The scheduling notice to the parties must indicate the time and place for the hearing and must be sent to the supplier 30 days before the date of the hearing.

(4) The HO may, on his or her own motion, or at the request of a party, change the time and place for the hearing, but must give the parties to the hearing 30 day notice of the change.

(5) The HO’s scheduling notice must provide the parties to the hearing and the CBIC the following information:

(i) Description of the hearing procedure.

(ii) The general and specific issues to
be resolved.

(iii) The supplier has the burden to prove it is not in violation of the

contract.

(iv) The opportunity for parties to the hearing to submit evidence to support their positions.

(v) All evidence submitted, both from the supplier and CMS, in preparation for the hearing with all affected parties within 15 days prior to the scheduled dated of the hearing.

(h) Burden of proof. (1) The burden of proof is on the Competitive Bidding Program contract supplier to demonstrate to the HO with convincing evidence that it has not
breached its contract or that termination is not appropriate.

(2) The supplier’s supporting
evidence must be submitted with its request for a hearing.

(3) If the Medicare DMEPOS supplier
fails to submit this evidence at the time of its submission, the Medicare DMEPOS supplier is precluded from introducing new evidence later during the hearing process, unless permitted by the hearing officer.

(4) The CBIC and CMS also have the opportunity to submit evidence to the HO within 10 days of receiving a notice announcing the hearing. (5) The HO will share all evidence submitted, both from the supplier and/ or CMS, in preparation for the hearing with all affected parties within 15 days prior to the scheduled date of the hearing.

(i) Role of the Hearing Officer. The HO will conduct a thorough and independent review of the evidence including the information and
documentation submitted for the hearing and other information that the HO considers pertinent for the hearing. The role of the HO includes, at a minimum, the following:

(1) Conducts the hearing and decides
the order in which the evidence and the arguments of the parties are presented;

(2) Determine the rules on admissibility of the evidence;

(3) Examines the witnesses, in
addition to the examinations conducted by CMS, CBIC and the contract supplier;

(4) The CBIC may assist CMS in the appeals process including being present at the hearing, testifying as a witness, or performing other, related ministerial
duties.

(5) Determines the rules for requesting
documents and other evidence from other parties;

(6) Ensures a complete record of the hearing is made available to all parties to the hearing;

(7) Prepares a file of the record of the hearing which includes all evidence submitted as well as any relevant documents identified by the HO and considered as part of the hearing; and

(8) Complies with all applicable provisions of 42 U.S.C. Title 18 and related provisions of the Act, the applicable regulations issued by the Secretary, and manual instructions issued by CMS.

(j) Hearing Officer recommendation. (1) The HO will issue a written recommendation to CMS within 30 days of the close of the hearing or as soon as practical after the hearing.

(2) The recommendation will explain
the basis and the rationale for the HO’s
recommendation.

(3) The hearing officer must include the record of the hearing, along with evidence and documents produced during the hearing along with its
recommendation.

(k) CMS’ consideration of a HO’s
recommendation.

(1) CMS’ review of the HO
recommendation will not allow the supplier to submit new information.

(2) After reviewing the HO recommendation, CMS’ decision will be made within 30 days from the date of receipt of the HO’s recommendation.

(3) A CMS decision to terminate will
indicate the effective date of the

termination.


### 40258 Federal Register / Vol. 75, No. 133 / Tuesday, July 13, 2010 / Proposed Rules

(4) This decision is final and binding. (l) Effect of contract termination. (1) A contract supplier whose contract has been terminated may no longer furnish competitive bid items to
beneficiaries within a CBA and be reimbursed by Medicare for these items
after the effective date of the

termination.

(2) A contract supplier whose contract has been terminated must notify all beneficiaries who are receiving rented competitive bid items or competitive bid items received on a recurring basis,
of the termination of their contract. The notice to the beneficiary from the supplier whose contract was terminated must be provided within 5 days of receipt of the final notice of termination.
The notification to the beneficiaries must inform the beneficiaries that they are going to have to select a new contract supplier to furnish these items in order for Medicare to pay these items.

(m) Effective date of the contract

termination.

(1) A supplier’s DMEPOS CBP
contract is terminated effective on the termination date specified in the CBIC notice to the supplier, unless the supplier timely requests a hearing with the HO or the supplier has submitted a CAP under paragraph (x) of this section.

(2) If a supplier requests an HO
review of the CMS decision to terminate its contract, and CMS based upon on the
HO recommendation terminates the supplier’s contract, the effective date of
the termination will be the date specified in the CBIC notice to the supplier.

(3) For violations of the terms of the supplier’s DMEPOS CBP contract that may harm beneficiaries, such as a supplier providing an inferior product that causes harm to the beneficiary, no delays of the effective date of the
termination will be allowed.

**Subpart H–Fee Schedule for**
**Ambulance Services**

39. Section 414.610 is amended by revising paragraphs (c)(1)(i), (c)(5)(ii), (f), and (h) to read as follows:

**§ 414.610 Basis of payments.**

* * * * *

(c) * * * (1) Ground ambulance service levels. (i) The CF is multiplied by the applicable RVUs for each level of service to produce a service-level base rate. For services furnished during the period July 1, 2004 through December 31, 2006, ambulance services originating in urban areas (both base rate and mileage) are paid based on a rate that is one percent higher than otherwise is applicable under this section, and ambulance services originating in rural areas (both base rate and mileage) are paid based on a rate that is two percent higher than otherwise is applicable
under this section. For services furnished during the period July 1, 2008 through December 21, 2010, ambulance services originating in urban areas (both base rate and mileage) are paid based on a rate that is two percent higher than otherwise is applicable under this section, and ambulance services originating in rural areas (both base rate and mileage) are paid based on a rate that is three percent higher than otherwise is applicable under this

section.

* * * * *

(5) * * * (ii) For services furnished during the period July 1, 2004 through December 31, 2010, the payment amount for the ground ambulance base rate is increased by 22.6 percent where the point of pickup is in a rural area determined to be in the lowest 25 percent of rural population arrayed by population density. The amount of this increase is
based on CMS’s estimate of the ratio of the average cost per trip for the rural areas in the lowest quartile of population compared to the average cost per trip for the rural areas in the highest quartile of population. In making this estimate, CMS may use data provided by the GAO.

* * * * *

(f) Updates. The CF, the air ambulance base rates, and the mileage rates are updated annually by an inflation factor established by law. The
inflation factor is based on the consumer price index for all urban consumers (CPI–U) (U.S. city average) for the 12-month period ending with June of the previous year and, as of January 1, 2011, is reduced by the 10- year moving average of changes in annual economy-wide private nonfarm business multi-factor productivity (MFP) (as projected by the Secretary for the 10-year period ending with the applicable fiscal year, year, cost reporting period, or other annual period.)

* * * * *

(h) Treatment of certain areas for payment for air ambulance services. Any area that was designated as a rural area for purposes of making payments
under the ambulance fee schedule for
air ambulance services furnished on December 31, 2006, must be treated as a rural area for purposes of making payments under the ambulance fee
schedule for air ambulance services furnished during the period July 1, 2008 through December 31, 2010.

40. Section 414.620 is revised to read
as follows:

**§ 414.620 Publication of the ambulance fee**

**schedule.**

(a) Changes in payment rates resulting from incorporation of the annual
inflation factor and the multi-factor productivity adjustment as described in § 414.610(f) will be announced by CMS by instruction and on the CMS Web site.

(b) CMS will follow applicable rulemaking procedures in publishing
revisions to the fee schedule for ambulance services that result from any
factors other than those described in § 414.610(f).

**Subpart J—Submission of Manufacturer’s Average Sales Price** 

**Data**

41. Section 414.804 is amended by— A. Redesignating paragraph (a)(6) as (a)(7).

B. Adding new paragraph (a)(6).
The addition reads as follows:

**§ 414.804 Basis of payment.**

(a) * * * (6) The manufacturer’s average sales price must be calculated based on the amount of product in a vial or other container as conspicuously reflected on the FDA approved label as defined by section 201(k) of the Food, Drug, and

Cosmetic Act.

* * * * *

**Subpart K—Payment for Drugs and Biologicals Under Part B** 

42. Section 414.902 is amended by adding the definitions of ‘‘ Biosimilar biological product ’’ and ‘‘ Reference biological product ’’ in alphabetical order
to read as follows:

**§ 414.902 Definitions.**

* * * * *

Biosimilar biological product means a biological product approved under an abbreviated application for a license of a biological product that relies in part on data or information in an application for another biological product licensed
under section 351 of the Public Health Service Act (PHSA) as defined at section 1847A(c)(6)(H) of the Act.

* * * * *

Reference biological product means the biological product licensed under
such section 351 of the PHSA that is referred to in the application of the biosimilar biological product as defined at section 1847A(c)(6)(I) of the Act.

* * * * *

43. Section 414.904 is amended by—


### 40259 Federal Register / Vol. 75, No. 133 / Tuesday, July 13, 2010 / Proposed Rules

A. Adding paragraphs (a)(3), (i), and (j).

B. Revising paragraph (d)(3). The revisions and additions read as
follows:

**§ 414.904 Average sales price as the basis for payment.** 

(a) * * * (3) For purposes of this section— (i) CMS calculates an average sales price payment limit based on the amount of product included in a vial or
other container as reflected on the FDAapproved label.

(ii) Additional product contained in
the vial or other container does not represent a cost to providers and is not incorporated into the ASP payment
limit.

(iii) No payment shall be made for amounts of product in excess of that reflected on the FDA-approved label.

* * * * *

(d) * * * (3) Widely available market price and average manufacturer price. If the Inspector General finds that the average sales price exceeds the widely available market price or the average manufacturer price by the applicable threshold percentage specified in paragraph (d)(3)(iii) of this section, the Inspector General is responsible for informing the Secretary (at such times as specified by the Secretary) and the payment amount for the drug or biological will be substituted by the lesser of the widely available market price or 103 percent of the average manufacturer price as subject to the following adjustments:

(i) The payment amount substitution will be applied at the next ASP payment amount calculation period after the Inspector General informs the Secretary (at such times specified by the Secretary) about drugs or biologicals that have exceeded the applicable threshold percentage, and will remain in effect for one quarter after publication.

(ii) Payment at 103 percent of the average manufacturer price for a billing code will be applied at such times
when:

(A) The threshold for making price substitutions, as defined in section (iii) is met; and,

(B) When 103 percent of the AMP is less than the 106 percent of the ASP during the quarter in which the average manufacturer price would be applied.

(iii) The applicable threshold for AMP comparisons for calendar years 2005,
2006, 2007, 2008, 2009, 2010, is 5 percent. For CY 2011, the threshold for ASP comparisons is reached when:

(A) The ASP for the billing code has exceeded the AMP for the billing code by 5 percent or more in two consecutive quarters, or three of the last four quarters; immediately preceding the quarter to which the price substitution recommendation would apply; and,

(B) The average manufacturer price for the billing code is calculated using
the same set of NDCs used for the average sales price calculation as per this section for the billing code;

(iv) The applicable threshold for WAMP comparisons for calendar years 2005 through 2011 is 5 percent.

(v) No payment amount substitutions will occur before the preliminary injunction issued on December 19, 2007, by the United States District of
Columbia in National Association of Chain Drug Stores et al. v. Health and
Human Services, Civil Action No. 1:07– cv–02017 (RCL), is vacated.

* * * * *

(i) If manufacturer ASP data is not available prior to the publication deadline for quarterly payment limits, the payment limit is calculated by carrying over the most recent available manufacturer ASP price from a previous quarter for an NDC, adjusted by the weighted average of the change in the
manufacturer ASPs for the NDCs that were reported during both the most recently available quarter and the
current quarter.

(j) Biosimilar biological products. Effective July 1, 2010, the payment amount for a biosimilar biological drug product (as defined in § 414.902 of this subpart) is the sum of the average sales price of all NDCs assigned to the biosimilar biological product as determined under section 1847A(b)(6) of the Act and 6 percent of the amount determined under section 1847A(b)(4) of the Act for the reference drug product (as defined in § 414.902 of this subpart).

**PART 415—SERVICES FURNISHED BY PHYSICIANS IN PROVIDERS,** 
**SUPERVISING PHYSICIANS IN TEACHING SETTINGS, AND** 
**RESIDENTS IN CERTAIN SETTINGS**

44. The authority citation for part 415
continues to read as follows:

Authority: Secs. 1102 and 1871 of the Social Security Act (42 U.S.C. 1302 and 1395hh).

**Subpart C—Part B Carrier Payments for Physician Services to Beneficiaries** 

**in Providers**

45. Section 415.130 is amended by revising paragraph (d) to read as
follows:

**§ 415.130 Conditions for payment: Physician pathology services.** 

* * * * * (d) Physician pathology services furnished by an independent laboratory. (1) The technical component of physician pathology services furnished by an independent laboratory to a hospital inpatient or outpatient on or before December 31, 2010, may be paid to the laboratory by the contractor under the physician fee schedule if the Medicare beneficiary is a patient of a covered hospital as defined in paragraph (a)(1) of this section.

(2) For services furnished after December 31, 2010, an independent laboratory may not bill the Medicare contractor for the technical component of physician pathology services furnished to a hospital inpatient or outpatient.

(3) For services furnished on or after January 1, 2008, the date of service policy in § 414.510 of this chapter applies to the TC of specimens for physician pathology services.

**PART 424—CONDITIONS FOR**
**MEDICARE PAYMENT**

46. The authority citation for part 424
continues to read as follows:

Authority: Secs. 1102 and 1871 of the Social Security Act (42 U.S.C. 1302 and 1395hh).

**Subpart B—Certification and Plan of Treatment Requirements** 

47. Section 424.20 is amended by revising paragraph (e)(2) to read as
follows:

**§ 424.20 Requirements for posthospital**

**SNF care.**

* * * * *

(e) * * * (2) A physician extender (that is, a nurse practitioner, a clinical nurse specialist, or a physician assistant as
those terms are defined in section 1861(aa)(5) of the Act) who does not have a direct or indirect employment relationship with the facility but who is working in collaboration with a physician. For purposes of this

section—

(i) Collaboration. (A) Collaboration means a process whereby a physician extender works with a doctor of medicine or osteopathy
to deliver health care services.

(B) The services are delivered within the scope of the physician extender’s professional expertise, with medical direction and appropriate supervision as provided for in guidelines jointly developed by the physician extender and the physician or other mechanisms defined by Federal regulations and the
law of the State in which the services are performed.


### 40260 Federal Register / Vol. 75, No. 133 / Tuesday, July 13, 2010 / Proposed Rules

(ii) Types of employment relationships.

(A) Direct employment relationship. A direct employment relationship with the facility is one in which the physician
extender meets the common law definition of the facility’s ‘‘ employee, ’’ as specified in 20 CFR 404.1005, 404.1007, and 404.1009. When a physician extender meets this definition with respect to an entity other than the facility itself, and that entity has an agreement with the facility for the provision of nursing services under § 409.21 of this subchapter, the facility
is considered to have an indirect employment relationship with the physician extender.

(B) Indirect employment relationship. ( 1 ) When a physician extender meets the definition of a direct employment relationship in paragraph (e)(2)(ii)(A) of this section with respect to an entity other than the facility itself, and that entity has an agreement with the facility for the provision of nursing services under § 409.21 of this subchapter, the facility is considered to have an indirect employment relationship with the physician extender.

( 2 ) An indirect employment relationship does not exist if the agreement between the entity and the facility involves only the performance of delegated physician tasks under § 483.40(e) of this chapter.

* * * * *

**Subpart C—Claims for Payment**

48. Section 424.44 is amended by revising paragraphs (a), (b), and (e) to
read as follows:

**§ 424.44 Time limits for filing claims.**

(a) Time limits. (1) For services furnished on or after January 1, 2010, except as provided in paragraphs (b) and (e) of this section,
the claim must be filed no later than the close of the period ending 1 calendar year after the date of service.

(2) For services furnished before January 1, 2010, except as provided in paragraphs (b) and (e) of this section,
the claim must be filed on or before December 31 of the following year for services that were furnished during the first 9 months of a calendar year, and on
or before December 31st of the second following year for services that were furnished during the last 3 months of the calendar year, except that for services furnished during the last 3
months of 2009 all claims must be filed no later than December 31, 2010.

(b) Exceptions to time limits. Exceptions to the time limits for filing claims include the following: (1) The time for filing a claim will be
extended if CMS or one of its
contractors determines that a failure to meet the deadline in paragraph (a) of this section was caused by error or misrepresentation of an employee, Medicare contractor (including Medicare Administrative Contractor, intermediary, or carrier), or agent of the Department that was performing Medicare functions and acting within the scope of its authority.

(2) The time for filing a claim will be
extended if CMS or one of its
contractors determines that a failure to meet the deadline in paragraph (a) of this section is caused by all of the following conditions:

(i) At the time the service was furnished the beneficiary was not
entitled to Medicare.

(ii) The beneficiary subsequently
received notification of Medicare entitlement effective retroactively to or
before the date of the furnished service.

(3) The time for filing a claim will be
extended if CMS or one of its
contractors determines that a failure to meet the deadline in paragraph (a) of this section is caused by all of the following conditions:

(i) At the time the service was furnished the beneficiary was not
entitled to Medicare.

(ii) The beneficiary subsequently
received notification of Medicare entitlement effective retroactively to or
before the date of the furnished service.

(iii) A State Medicaid agency recovered the Medicaid payment for the furnished service from a provider or supplier 11 months or more after the
service was furnished.

(4) Extension of time. (i) The time to file a claim will be extended through the last day of the 6th calendar month following the month in which the error or misrepresentation referenced in paragraph (b)(1) of this section, is corrected. However, no extension of time will be granted for paragraph (b)(1) when the request for that exception is
made to CMS or one of its contractors more than 4 years after the date of

service.

(ii) If CMS or one of its contractors
determines that both of the conditions are met in paragraph (b)(2) of this
section but that all of the conditions in paragraph (b)(3) are not satisfied, the
time to file a claim will be extended through the last day of the 6th calendar month following the month in which the beneficiary received notification of
Medicare entitlement effective retroactively to or before the date of the
furnished service.

(iii) If CMS or one of its contractors
determines that all of the conditions are met in paragraph (b)(3) of this section,
the time to file a claim will be extended through the last day of the 6th calendar month following the month in which the State Medicaid agency recovered the Medicaid payment for the furnished service from the provider or supplier.

* * * * *

(e) As specified in §§ 424.520 and 424.521 of this subpart, there are restrictions on the ability of the following newly-enrolled suppliers to
submit claims for items or services furnished prior to the effective date of their Medicare billing privileges:

(1) Physician or non-physician practitioner organizations.

(2) Physicians. (3) Nonphysician practitioners. (4) Independent diagnostic testing
facilities.

* * * * *

**Subpart P—Requirements for Establishing and Maintaining Medicare**  **Billing Privileges**

49. Section 424.502 is amended by adding a definition of ‘‘ Voluntary

termination ’’ in alphabetical order to
read as follows:

**§ 424.502 Definitions.**

* * * * *

Voluntary termination means that a provider or supplier, including an individual physician or non-physician practitioner, submits written
confirmation to CMS of its decision to
discontinue enrollment in the Medicare

program.

50. Section 424.510 is amended by revising paragraph (d)(1)(iii) to read as
follows:

**§ 424.510 Requirements for enrolling in the Medicare program.** 

* * * * *

(d) * * * (1) * * * (iii) Submission of all documentation, including all applicable Federal and State licenses, certifications (including,
but not limited to Federal Aviation Administration and Clinical Laboratory Improvement Act certifications), and regulatory requirements that apply to the specific provider or supplier type that relate to providing health care service, required by CMS under this or other statutory or regulatory authority, or under the Paperwork Reduction Act of 1995, to establish the provider or supplier’s eligibility to furnish Medicare
covered items or services to beneficiaries in the Medicare program.

* * * * *

51. Section 424.516 is amended by adding paragraph (e)(3) to read as
follows:


### 40261 Federal Register / Vol. 75, No. 133 / Tuesday, July 13, 2010 / Proposed Rules

**§ 424.516 Additional provider and supplier requirements for enrolling and maintaining** 

**active enrollment status in the Medicare**

**program.**

* * * * *

(e) * * * (3) Within 30 days any revocation or suspension of a Federal or State license or certification (including Federal
Aviation Administration and Clinical Laboratory Improvement Act certifications), an air ambulance supplier must report a revocation or suspension of its license or certification to the applicable Medicare contractor.

* * * * *

Authority: (Catalog of Federal Domestic Assistance Program No. 93.773, Medicare— Hospital Insurance; and Program No. 93.774, Medicare—Supplementary Medical Insurance Program).

Dated: June 18, 2010.
Marilyn Tavenner, Acting Administrator and Chief Operating Officer, Centers for Medicare & Medicaid

Services.

Approved: June 24, 2010.

Kathleen Sebelius,
Secretary.

ADDENDUM A: Explanation and Use of
Addendum B

The Addenda on the following pages provide various data pertaining to the Medicare fee schedule for physicians’

services furnished in CY 2011. Addendum B contains the RVUs for work, nonfacility PE, facility PE, and malpractice expense, and

other information for all services included in

the PFS.

In previous years, we have listed many services in Addendum B that are not paid under the PFS. To avoid publishing as many pages of codes for these services, we are not including clinical laboratory codes or the alpha-numeric codes (Healthcare Common Procedure Coding System (HCPCS) codes not included in CPT) not paid under the PFS in

Addendum B.

Addendum B contains the followinginformation for each CPT code and alphanumeric HCPCS code, except for: Alphanumeric codes beginning with B (enteral and parenteral therapy); ‘‘ E ’’ (durable medical equipment); ‘‘ K ’’ (temporary codes for nonphysicians’ services or items); or ‘‘ L ’’ (orthotics); and codes for anesthesiology. Please also note the following:

• An ‘‘ NA ’’ in the ‘‘ Nonfacility PE RVUs ’’

column of Addendum B means that CMS has not developed PE RVUs in the nonfacility setting for the service because it is typically performed in the hospital (for example, an open heart surgery is generally performed in the hospital setting and not a physician’s office). If there is an ‘‘ NA ’’ in the nonfacility PE RVU column, and the contractor determines that this service can be performed in the nonfacility setting, the service will be paid at the facility PE RVU rate.

• Services that have an ‘‘ NA ’’ in the

‘‘ Facility PE RVUs ’’ column of Addendum B are typically not paid under the PFS when provided in a facility setting. These services (which include ‘‘ incident to ’’ services and the technical portion of diagnostic tests) are generally paid under either the hospital outpatient prospective payment system or bundled into the hospital inpatient prospective payment system payment. In some cases, these services may be paid in a facility setting at the PFS rate (for example, therapy services), but there would be no payment made to the practitioner under the

PFS in these situations.

1. CPT/HCPCS code. This is the CPT or alpha-numeric HCPCS number for the service. Alpha-numeric HCPCS codes are

included at the end of this Addendum.

2. Modifier. A modifier is shown if there is a technical component (modifier TC) and a professional component (PC) (modifier-26)

for the service. If there is a PC and a TC for the service, Addendum B contains three entries for the code, specifically a code for: The global values (both professional and technical); modifier—26 (PC); and modifier— TC. The global service is not designated by a modifier, and physicians must bill using the code without a modifier if the physician

furnishes both the PC and the TC of the

service. Modifier-53 is shown for a discontinued procedure, for example a colonoscopy that is not completed. There

will be RVUs for a code with this modifier.

3. Status indicator. This indicator shows
whether the CPT/HCPCS code is included in the PFS and whether it is separately payable

if the service is covered.

A = Active code. These codes are separately payable under the PFS if covered.

There will be RVUs for codes with this status. The presence of an ‘‘ A ’’ indicator does

not mean that Medicare has made a national coverage determination regarding the service. Contractors remain responsible for coverage

decisions in the absence of a national Medicare policy.

B = Bundled code. Payments for covered services are always bundled into payment for other services not specified. If RVUs are shown, they are not used for Medicare payment. If these services are covered, payment for them is subsumed by the payment for the services to which they are incident (an example is a telephone call from a hospital nurse regarding care of a patient).

C = Contractors price the code. Contractors establish RVUs and payment amounts for these services, generally on an individual case basis following review of documentation, such as an operative report.

E = Excluded from the PFS by regulation.

These codes are for items and services that CMS chose to exclude from the PFS by regulation. No RVUs are shown, and no payment may be made under the PFS for these codes. Payment for them, when covered, continues under reasonable charge procedures.

I = Not valid for Medicare purposes. Medicare uses another code for the reporting of, and the payment for these services. (Codes not subject to a 90-day grace period.)

M = Measurement codes, used for reporting purposes only. There are no RVUs and no payment amounts for these codes. CMS uses them to aid with performance measurement. No separate payment is made. These codes should be billed with a zero (($0.00) charge and are denied) on the MPFSDB.

N = Noncovered service. These codes are noncovered services. Medicare payment may

not be made for these codes. If RVUs are shown, they are not used for Medicare
payment.

R = Restricted coverage. Special coverage instructions apply. If the service is coveredand no RVUs are shown, it is contractorpriced.

T = There are RVUs for these services, but they are only paid if there are no other services payable under the PFS billed on the same date by the same provider. If any other services payable under the PFS are billed on the same date by the same provider, these services are bundled into the service(s) for which payment is made.

X = Statutory exclusion. These codes represent an item or service that is not within the statutory definition of ‘‘ physicians’

services ’’ for PFS payment purposes. No RVUs are shown for these codes, and no payment may be made under the PFS. (Examples are ambulance services and clinical diagnostic laboratory services.)

4. Description of code. This is an

abbreviated version of the narrative description of the code.

5. Physician work RVUs. These are the RVUs for the physician work in CY 2011.

6. Fully implemented nonfacility PE RVUs.These are the fully implemented resourcebased PE RVUs for nonfacility settings.

7. CY 2011 transitional nonfacility PE

RVUs. These are the CY 2011 resource-based PE RVUs for nonfacility settings.

8. Fully implemented facility PE RVUs.These are the fully implemented resourcebased PE RVUs for facility settings.

9. CY 2011 Transitional facility PE RVUs.

These are the CY 2011 resource-based PE RVUs for facility settings.

10. Malpractice expense RVUs. These are the RVUs for the malpractice expense for CY

2011.

Note: The BN reduction resulting from the chiropractic demonstration is not reflected in the RVUs for CPT codes 98940, 98941 and 98942. The required reduction will only be

reflected in the files used for Medicare
payment.

11. Global period. This indicator shows the number of days in the global period for the code (0, 10, or 90 days). An explanation of the alpha codes follows:

MMM = Code describes a service furnished in uncomplicated maternity cases, including antepartum care, delivery, and postpartum care. The usual global surgical concept does not apply. See the Physicians’ Current Procedural Terminology for specific

definitions.

XXX = The global concept does not apply. YYY = The global period is to be set by the contractor (for example, unlisted surgery codes).

ZZZ = Code related to another service that is always included in the global period of the other service. (Note: Physician work and PE are associated with intra-service time and, in some instances, with the post-service time.)


### 40262 Federal Register / Vol. 75, No. 133 / Tuesday, July 13, 2010 / Proposed Rules


### 40263 Federal Register / Vol. 75, No. 133 / Tuesday, July 13, 2010 / Proposed Rules


### 40264 Federal Register / Vol. 75, No. 133 / Tuesday, July 13, 2010 / Proposed Rules


### 40265 Federal Register / Vol. 75, No. 133 / Tuesday, July 13, 2010 / Proposed Rules


### 40266 Federal Register / Vol. 75, No. 133 / Tuesday, July 13, 2010 / Proposed Rules


### 40267 Federal Register / Vol. 75, No. 133 / Tuesday, July 13, 2010 / Proposed Rules


### 40268 Federal Register / Vol. 75, No. 133 / Tuesday, July 13, 2010 / Proposed Rules


### 40269 Federal Register / Vol. 75, No. 133 / Tuesday, July 13, 2010 / Proposed Rules


### 40270 Federal Register / Vol. 75, No. 133 / Tuesday, July 13, 2010 / Proposed Rules


### 40271 Federal Register / Vol. 75, No. 133 / Tuesday, July 13, 2010 / Proposed Rules


### 40272 Federal Register / Vol. 75, No. 133 / Tuesday, July 13, 2010 / Proposed Rules


### 40273 Federal Register / Vol. 75, No. 133 / Tuesday, July 13, 2010 / Proposed Rules


### 40274 Federal Register / Vol. 75, No. 133 / Tuesday, July 13, 2010 / Proposed Rules


### 40275 Federal Register / Vol. 75, No. 133 / Tuesday, July 13, 2010 / Proposed Rules


### 40276 Federal Register / Vol. 75, No. 133 / Tuesday, July 13, 2010 / Proposed Rules


### 40277 Federal Register / Vol. 75, No. 133 / Tuesday, July 13, 2010 / Proposed Rules


### 40278 Federal Register / Vol. 75, No. 133 / Tuesday, July 13, 2010 / Proposed Rules


### 40279 Federal Register / Vol. 75, No. 133 / Tuesday, July 13, 2010 / Proposed Rules


### 40280 Federal Register / Vol. 75, No. 133 / Tuesday, July 13, 2010 / Proposed Rules


### 40281 Federal Register / Vol. 75, No. 133 / Tuesday, July 13, 2010 / Proposed Rules


### 40282 Federal Register / Vol. 75, No. 133 / Tuesday, July 13, 2010 / Proposed Rules


### 40283 Federal Register / Vol. 75, No. 133 / Tuesday, July 13, 2010 / Proposed Rules


### 40284 Federal Register / Vol. 75, No. 133 / Tuesday, July 13, 2010 / Proposed Rules


### 40285 Federal Register / Vol. 75, No. 133 / Tuesday, July 13, 2010 / Proposed Rules


### 40286 Federal Register / Vol. 75, No. 133 / Tuesday, July 13, 2010 / Proposed Rules


### 40287 Federal Register / Vol. 75, No. 133 / Tuesday, July 13, 2010 / Proposed Rules


### 40288 Federal Register / Vol. 75, No. 133 / Tuesday, July 13, 2010 / Proposed Rules


### 40289 Federal Register / Vol. 75, No. 133 / Tuesday, July 13, 2010 / Proposed Rules


### 40290 Federal Register / Vol. 75, No. 133 / Tuesday, July 13, 2010 / Proposed Rules


### 40291 Federal Register / Vol. 75, No. 133 / Tuesday, July 13, 2010 / Proposed Rules


### 40292 Federal Register / Vol. 75, No. 133 / Tuesday, July 13, 2010 / Proposed Rules


### 40293 Federal Register / Vol. 75, No. 133 / Tuesday, July 13, 2010 / Proposed Rules


### 40294 Federal Register / Vol. 75, No. 133 / Tuesday, July 13, 2010 / Proposed Rules


### 40295 Federal Register / Vol. 75, No. 133 / Tuesday, July 13, 2010 / Proposed Rules


### 40296 Federal Register / Vol. 75, No. 133 / Tuesday, July 13, 2010 / Proposed Rules


### 40297 Federal Register / Vol. 75, No. 133 / Tuesday, July 13, 2010 / Proposed Rules


### 40298 Federal Register / Vol. 75, No. 133 / Tuesday, July 13, 2010 / Proposed Rules


### 40299 Federal Register / Vol. 75, No. 133 / Tuesday, July 13, 2010 / Proposed Rules


### 40300 Federal Register / Vol. 75, No. 133 / Tuesday, July 13, 2010 / Proposed Rules


### 40301 Federal Register / Vol. 75, No. 133 / Tuesday, July 13, 2010 / Proposed Rules


### 40302 Federal Register / Vol. 75, No. 133 / Tuesday, July 13, 2010 / Proposed Rules


### 40303 Federal Register / Vol. 75, No. 133 / Tuesday, July 13, 2010 / Proposed Rules


### 40304 Federal Register / Vol. 75, No. 133 / Tuesday, July 13, 2010 / Proposed Rules


### 40305 Federal Register / Vol. 75, No. 133 / Tuesday, July 13, 2010 / Proposed Rules


### 40306 Federal Register / Vol. 75, No. 133 / Tuesday, July 13, 2010 / Proposed Rules


### 40307 Federal Register / Vol. 75, No. 133 / Tuesday, July 13, 2010 / Proposed Rules


### 40308 Federal Register / Vol. 75, No. 133 / Tuesday, July 13, 2010 / Proposed Rules


### 40309 Federal Register / Vol. 75, No. 133 / Tuesday, July 13, 2010 / Proposed Rules


### 40310 Federal Register / Vol. 75, No. 133 / Tuesday, July 13, 2010 / Proposed Rules


### 40311 Federal Register / Vol. 75, No. 133 / Tuesday, July 13, 2010 / Proposed Rules


### 40312 Federal Register / Vol. 75, No. 133 / Tuesday, July 13, 2010 / Proposed Rules


### 40313 Federal Register / Vol. 75, No. 133 / Tuesday, July 13, 2010 / Proposed Rules


### 40314 Federal Register / Vol. 75, No. 133 / Tuesday, July 13, 2010 / Proposed Rules


### 40315 Federal Register / Vol. 75, No. 133 / Tuesday, July 13, 2010 / Proposed Rules


### 40316 Federal Register / Vol. 75, No. 133 / Tuesday, July 13, 2010 / Proposed Rules


### 40317 Federal Register / Vol. 75, No. 133 / Tuesday, July 13, 2010 / Proposed Rules


### 40318 Federal Register / Vol. 75, No. 133 / Tuesday, July 13, 2010 / Proposed Rules


### 40319 Federal Register / Vol. 75, No. 133 / Tuesday, July 13, 2010 / Proposed Rules


### 40320 Federal Register / Vol. 75, No. 133 / Tuesday, July 13, 2010 / Proposed Rules


### 40321 Federal Register / Vol. 75, No. 133 / Tuesday, July 13, 2010 / Proposed Rules


### 40322 Federal Register / Vol. 75, No. 133 / Tuesday, July 13, 2010 / Proposed Rules


### 40323 Federal Register / Vol. 75, No. 133 / Tuesday, July 13, 2010 / Proposed Rules


### 40324 Federal Register / Vol. 75, No. 133 / Tuesday, July 13, 2010 / Proposed Rules


### 40325 Federal Register / Vol. 75, No. 133 / Tuesday, July 13, 2010 / Proposed Rules


### 40326 Federal Register / Vol. 75, No. 133 / Tuesday, July 13, 2010 / Proposed Rules


### 40327 Federal Register / Vol. 75, No. 133 / Tuesday, July 13, 2010 / Proposed Rules


### 40328 Federal Register / Vol. 75, No. 133 / Tuesday, July 13, 2010 / Proposed Rules


### 40329 Federal Register / Vol. 75, No. 133 / Tuesday, July 13, 2010 / Proposed Rules


### 40330 Federal Register / Vol. 75, No. 133 / Tuesday, July 13, 2010 / Proposed Rules


### 40331 Federal Register / Vol. 75, No. 133 / Tuesday, July 13, 2010 / Proposed Rules


### 40332 Federal Register / Vol. 75, No. 133 / Tuesday, July 13, 2010 / Proposed Rules


### 40333 Federal Register / Vol. 75, No. 133 / Tuesday, July 13, 2010 / Proposed Rules


### 40334 Federal Register / Vol. 75, No. 133 / Tuesday, July 13, 2010 / Proposed Rules


### 40335 Federal Register / Vol. 75, No. 133 / Tuesday, July 13, 2010 / Proposed Rules


### 40336 Federal Register / Vol. 75, No. 133 / Tuesday, July 13, 2010 / Proposed Rules


### 40337 Federal Register / Vol. 75, No. 133 / Tuesday, July 13, 2010 / Proposed Rules


### 40338 Federal Register / Vol. 75, No. 133 / Tuesday, July 13, 2010 / Proposed Rules


### 40339 Federal Register / Vol. 75, No. 133 / Tuesday, July 13, 2010 / Proposed Rules


### 40340 Federal Register / Vol. 75, No. 133 / Tuesday, July 13, 2010 / Proposed Rules


### 40341 Federal Register / Vol. 75, No. 133 / Tuesday, July 13, 2010 / Proposed Rules


### 40342 Federal Register / Vol. 75, No. 133 / Tuesday, July 13, 2010 / Proposed Rules


### 40343 Federal Register / Vol. 75, No. 133 / Tuesday, July 13, 2010 / Proposed Rules


### 40344 Federal Register / Vol. 75, No. 133 / Tuesday, July 13, 2010 / Proposed Rules


### 40345 Federal Register / Vol. 75, No. 133 / Tuesday, July 13, 2010 / Proposed Rules


### 40346 Federal Register / Vol. 75, No. 133 / Tuesday, July 13, 2010 / Proposed Rules


### 40347 Federal Register / Vol. 75, No. 133 / Tuesday, July 13, 2010 / Proposed Rules


### 40348 Federal Register / Vol. 75, No. 133 / Tuesday, July 13, 2010 / Proposed Rules


### 40349 Federal Register / Vol. 75, No. 133 / Tuesday, July 13, 2010 / Proposed Rules


### 40350 Federal Register / Vol. 75, No. 133 / Tuesday, July 13, 2010 / Proposed Rules


### 40351 Federal Register / Vol. 75, No. 133 / Tuesday, July 13, 2010 / Proposed Rules


### 40352 Federal Register / Vol. 75, No. 133 / Tuesday, July 13, 2010 / Proposed Rules


### 40353 Federal Register / Vol. 75, No. 133 / Tuesday, July 13, 2010 / Proposed Rules


### 40354 Federal Register / Vol. 75, No. 133 / Tuesday, July 13, 2010 / Proposed Rules


### 40355 Federal Register / Vol. 75, No. 133 / Tuesday, July 13, 2010 / Proposed Rules


### 40356 Federal Register / Vol. 75, No. 133 / Tuesday, July 13, 2010 / Proposed Rules


### 40357 Federal Register / Vol. 75, No. 133 / Tuesday, July 13, 2010 / Proposed Rules


### 40358 Federal Register / Vol. 75, No. 133 / Tuesday, July 13, 2010 / Proposed Rules


### 40359 Federal Register / Vol. 75, No. 133 / Tuesday, July 13, 2010 / Proposed Rules


### 40360 Federal Register / Vol. 75, No. 133 / Tuesday, July 13, 2010 / Proposed Rules


### 40361 Federal Register / Vol. 75, No. 133 / Tuesday, July 13, 2010 / Proposed Rules


### 40362 Federal Register / Vol. 75, No. 133 / Tuesday, July 13, 2010 / Proposed Rules


### 40363 Federal Register / Vol. 75, No. 133 / Tuesday, July 13, 2010 / Proposed Rules


### 40364 Federal Register / Vol. 75, No. 133 / Tuesday, July 13, 2010 / Proposed Rules


### 40365 Federal Register / Vol. 75, No. 133 / Tuesday, July 13, 2010 / Proposed Rules


### 40366 Federal Register / Vol. 75, No. 133 / Tuesday, July 13, 2010 / Proposed Rules


### 40367 Federal Register / Vol. 75, No. 133 / Tuesday, July 13, 2010 / Proposed Rules


### 40368 Federal Register / Vol. 75, No. 133 / Tuesday, July 13, 2010 / Proposed Rules


### 40369 Federal Register / Vol. 75, No. 133 / Tuesday, July 13, 2010 / Proposed Rules


### 40370 Federal Register / Vol. 75, No. 133 / Tuesday, July 13, 2010 / Proposed Rules


### 40371 Federal Register / Vol. 75, No. 133 / Tuesday, July 13, 2010 / Proposed Rules


### 40372 Federal Register / Vol. 75, No. 133 / Tuesday, July 13, 2010 / Proposed Rules


### 40373 Federal Register / Vol. 75, No. 133 / Tuesday, July 13, 2010 / Proposed Rules


### 40374 Federal Register / Vol. 75, No. 133 / Tuesday, July 13, 2010 / Proposed Rules


### 40375 Federal Register / Vol. 75, No. 133 / Tuesday, July 13, 2010 / Proposed Rules


### 40376 Federal Register / Vol. 75, No. 133 / Tuesday, July 13, 2010 / Proposed Rules


### 40377 Federal Register / Vol. 75, No. 133 / Tuesday, July 13, 2010 / Proposed Rules


### 40378 Federal Register / Vol. 75, No. 133 / Tuesday, July 13, 2010 / Proposed Rules


### 40379 Federal Register / Vol. 75, No. 133 / Tuesday, July 13, 2010 / Proposed Rules


### 40380 Federal Register / Vol. 75, No. 133 / Tuesday, July 13, 2010 / Proposed Rules


### 40381 Federal Register / Vol. 75, No. 133 / Tuesday, July 13, 2010 / Proposed Rules


### 40382 Federal Register / Vol. 75, No. 133 / Tuesday, July 13, 2010 / Proposed Rules


### 40383 Federal Register / Vol. 75, No. 133 / Tuesday, July 13, 2010 / Proposed Rules


### 40384 Federal Register / Vol. 75, No. 133 / Tuesday, July 13, 2010 / Proposed Rules


### 40385 Federal Register / Vol. 75, No. 133 / Tuesday, July 13, 2010 / Proposed Rules


### 40386 Federal Register / Vol. 75, No. 133 / Tuesday, July 13, 2010 / Proposed Rules


### 40387 Federal Register / Vol. 75, No. 133 / Tuesday, July 13, 2010 / Proposed Rules


### 40388 Federal Register / Vol. 75, No. 133 / Tuesday, July 13, 2010 / Proposed Rules


### 40389 Federal Register / Vol. 75, No. 133 / Tuesday, July 13, 2010 / Proposed Rules


### 40390 Federal Register / Vol. 75, No. 133 / Tuesday, July 13, 2010 / Proposed Rules


### 40391 Federal Register / Vol. 75, No. 133 / Tuesday, July 13, 2010 / Proposed Rules


### 40392 Federal Register / Vol. 75, No. 133 / Tuesday, July 13, 2010 / Proposed Rules


### 40393 Federal Register / Vol. 75, No. 133 / Tuesday, July 13, 2010 / Proposed Rules


### 40394 Federal Register / Vol. 75, No. 133 / Tuesday, July 13, 2010 / Proposed Rules


### 40395 Federal Register / Vol. 75, No. 133 / Tuesday, July 13, 2010 / Proposed Rules


### 40396 Federal Register / Vol. 75, No. 133 / Tuesday, July 13, 2010 / Proposed Rules


### 40397 Federal Register / Vol. 75, No. 133 / Tuesday, July 13, 2010 / Proposed Rules


### 40398 Federal Register / Vol. 75, No. 133 / Tuesday, July 13, 2010 / Proposed Rules


### 40399 Federal Register / Vol. 75, No. 133 / Tuesday, July 13, 2010 / Proposed Rules


### 40400 Federal Register / Vol. 75, No. 133 / Tuesday, July 13, 2010 / Proposed Rules


### 40401 Federal Register / Vol. 75, No. 133 / Tuesday, July 13, 2010 / Proposed Rules


### 40402 Federal Register / Vol. 75, No. 133 / Tuesday, July 13, 2010 / Proposed Rules


### 40403 Federal Register / Vol. 75, No. 133 / Tuesday, July 13, 2010 / Proposed Rules


### 40404 Federal Register / Vol. 75, No. 133 / Tuesday, July 13, 2010 / Proposed Rules


### 40405 Federal Register / Vol. 75, No. 133 / Tuesday, July 13, 2010 / Proposed Rules


### 40406 Federal Register / Vol. 75, No. 133 / Tuesday, July 13, 2010 / Proposed Rules


### 40407 Federal Register / Vol. 75, No. 133 / Tuesday, July 13, 2010 / Proposed Rules


### 40408 Federal Register / Vol. 75, No. 133 / Tuesday, July 13, 2010 / Proposed Rules


### 40409 Federal Register / Vol. 75, No. 133 / Tuesday, July 13, 2010 / Proposed Rules


### 40410 Federal Register / Vol. 75, No. 133 / Tuesday, July 13, 2010 / Proposed Rules


### 40411 Federal Register / Vol. 75, No. 133 / Tuesday, July 13, 2010 / Proposed Rules


### 40412 Federal Register / Vol. 75, No. 133 / Tuesday, July 13, 2010 / Proposed Rules


### 40413 Federal Register / Vol. 75, No. 133 / Tuesday, July 13, 2010 / Proposed Rules


### 40414 Federal Register / Vol. 75, No. 133 / Tuesday, July 13, 2010 / Proposed Rules


### 40415 Federal Register / Vol. 75, No. 133 / Tuesday, July 13, 2010 / Proposed Rules


### 40416 Federal Register / Vol. 75, No. 133 / Tuesday, July 13, 2010 / Proposed Rules


### 40417 Federal Register / Vol. 75, No. 133 / Tuesday, July 13, 2010 / Proposed Rules


### 40418 Federal Register / Vol. 75, No. 133 / Tuesday, July 13, 2010 / Proposed Rules


### 40419 Federal Register / Vol. 75, No. 133 / Tuesday, July 13, 2010 / Proposed Rules


### 40420 Federal Register / Vol. 75, No. 133 / Tuesday, July 13, 2010 / Proposed Rules


### 40421 Federal Register / Vol. 75, No. 133 / Tuesday, July 13, 2010 / Proposed Rules


### 40422 Federal Register / Vol. 75, No. 133 / Tuesday, July 13, 2010 / Proposed Rules


### 40423 Federal Register / Vol. 75, No. 133 / Tuesday, July 13, 2010 / Proposed Rules


### 40424 Federal Register / Vol. 75, No. 133 / Tuesday, July 13, 2010 / Proposed Rules


### 40425 Federal Register / Vol. 75, No. 133 / Tuesday, July 13, 2010 / Proposed Rules


### 40426 Federal Register / Vol. 75, No. 133 / Tuesday, July 13, 2010 / Proposed Rules


### 40427 Federal Register / Vol. 75, No. 133 / Tuesday, July 13, 2010 / Proposed Rules


### 40428 Federal Register / Vol. 75, No. 133 / Tuesday, July 13, 2010 / Proposed Rules


### 40429 Federal Register / Vol. 75, No. 133 / Tuesday, July 13, 2010 / Proposed Rules


### 40430 Federal Register / Vol. 75, No. 133 / Tuesday, July 13, 2010 / Proposed Rules


### 40431 Federal Register / Vol. 75, No. 133 / Tuesday, July 13, 2010 / Proposed Rules


### 40432 Federal Register / Vol. 75, No. 133 / Tuesday, July 13, 2010 / Proposed Rules


### 40433 Federal Register / Vol. 75, No. 133 / Tuesday, July 13, 2010 / Proposed Rules


### 40434 Federal Register / Vol. 75, No. 133 / Tuesday, July 13, 2010 / Proposed Rules


### 40435 Federal Register / Vol. 75, No. 133 / Tuesday, July 13, 2010 / Proposed Rules


### 40436 Federal Register / Vol. 75, No. 133 / Tuesday, July 13, 2010 / Proposed Rules


### 40437 Federal Register / Vol. 75, No. 133 / Tuesday, July 13, 2010 / Proposed Rules


### 40438 Federal Register / Vol. 75, No. 133 / Tuesday, July 13, 2010 / Proposed Rules


### 40439 Federal Register / Vol. 75, No. 133 / Tuesday, July 13, 2010 / Proposed Rules


### 40440 Federal Register / Vol. 75, No. 133 / Tuesday, July 13, 2010 / Proposed Rules


### 40441 Federal Register / Vol. 75, No. 133 / Tuesday, July 13, 2010 / Proposed Rules


### 40442 Federal Register / Vol. 75, No. 133 / Tuesday, July 13, 2010 / Proposed Rules


### 40443 Federal Register / Vol. 75, No. 133 / Tuesday, July 13, 2010 / Proposed Rules


### 40444 Federal Register / Vol. 75, No. 133 / Tuesday, July 13, 2010 / Proposed Rules


### 40445 Federal Register / Vol. 75, No. 133 / Tuesday, July 13, 2010 / Proposed Rules


### 40446 Federal Register / Vol. 75, No. 133 / Tuesday, July 13, 2010 / Proposed Rules


### 40447 Federal Register / Vol. 75, No. 133 / Tuesday, July 13, 2010 / Proposed Rules


### 40448 Federal Register / Vol. 75, No. 133 / Tuesday, July 13, 2010 / Proposed Rules


### 40449 Federal Register / Vol. 75, No. 133 / Tuesday, July 13, 2010 / Proposed Rules


### 40450 Federal Register / Vol. 75, No. 133 / Tuesday, July 13, 2010 / Proposed Rules


### 40451 Federal Register / Vol. 75, No. 133 / Tuesday, July 13, 2010 / Proposed Rules


### 40452 Federal Register / Vol. 75, No. 133 / Tuesday, July 13, 2010 / Proposed Rules


### 40453 Federal Register / Vol. 75, No. 133 / Tuesday, July 13, 2010 / Proposed Rules


### 40454 Federal Register / Vol. 75, No. 133 / Tuesday, July 13, 2010 / Proposed Rules


### 40455 Federal Register / Vol. 75, No. 133 / Tuesday, July 13, 2010 / Proposed Rules


### 40456 Federal Register / Vol. 75, No. 133 / Tuesday, July 13, 2010 / Proposed Rules


### 40457 Federal Register / Vol. 75, No. 133 / Tuesday, July 13, 2010 / Proposed Rules


### 40458 Federal Register / Vol. 75, No. 133 / Tuesday, July 13, 2010 / Proposed Rules


### 40459 Federal Register / Vol. 75, No. 133 / Tuesday, July 13, 2010 / Proposed Rules


### 40460 Federal Register / Vol. 75, No. 133 / Tuesday, July 13, 2010 / Proposed Rules


### 40461 Federal Register / Vol. 75, No. 133 / Tuesday, July 13, 2010 / Proposed Rules


### 40462 Federal Register / Vol. 75, No. 133 / Tuesday, July 13, 2010 / Proposed Rules


### 40463 Federal Register / Vol. 75, No. 133 / Tuesday, July 13, 2010 / Proposed Rules


### 40464 Federal Register / Vol. 75, No. 133 / Tuesday, July 13, 2010 / Proposed Rules


### 40465 Federal Register / Vol. 75, No. 133 / Tuesday, July 13, 2010 / Proposed Rules


### 40466 Federal Register / Vol. 75, No. 133 / Tuesday, July 13, 2010 / Proposed Rules


### 40467 Federal Register / Vol. 75, No. 133 / Tuesday, July 13, 2010 / Proposed Rules


### 40468 Federal Register / Vol. 75, No. 133 / Tuesday, July 13, 2010 / Proposed Rules


### 40469 Federal Register / Vol. 75, No. 133 / Tuesday, July 13, 2010 / Proposed Rules


### 40470 Federal Register / Vol. 75, No. 133 / Tuesday, July 13, 2010 / Proposed Rules


### 40471 Federal Register / Vol. 75, No. 133 / Tuesday, July 13, 2010 / Proposed Rules


### 40472 Federal Register / Vol. 75, No. 133 / Tuesday, July 13, 2010 / Proposed Rules


### 40473 Federal Register / Vol. 75, No. 133 / Tuesday, July 13, 2010 / Proposed Rules


### 40474 Federal Register / Vol. 75, No. 133 / Tuesday, July 13, 2010 / Proposed Rules


### 40475 Federal Register / Vol. 75, No. 133 / Tuesday, July 13, 2010 / Proposed Rules


### 40476 Federal Register / Vol. 75, No. 133 / Tuesday, July 13, 2010 / Proposed Rules


### 40477 Federal Register / Vol. 75, No. 133 / Tuesday, July 13, 2010 / Proposed Rules


### 40478 Federal Register / Vol. 75, No. 133 / Tuesday, July 13, 2010 / Proposed Rules


### 40479 Federal Register / Vol. 75, No. 133 / Tuesday, July 13, 2010 / Proposed Rules


### 40480 Federal Register / Vol. 75, No. 133 / Tuesday, July 13, 2010 / Proposed Rules


### 40481 Federal Register / Vol. 75, No. 133 / Tuesday, July 13, 2010 / Proposed Rules


### 40482 Federal Register / Vol. 75, No. 133 / Tuesday, July 13, 2010 / Proposed Rules


### 40483 Federal Register / Vol. 75, No. 133 / Tuesday, July 13, 2010 / Proposed Rules


### 40484 Federal Register / Vol. 75, No. 133 / Tuesday, July 13, 2010 / Proposed Rules


### 40485 Federal Register / Vol. 75, No. 133 / Tuesday, July 13, 2010 / Proposed Rules


### 40486 Federal Register / Vol. 75, No. 133 / Tuesday, July 13, 2010 / Proposed Rules


### 40487 Federal Register / Vol. 75, No. 133 / Tuesday, July 13, 2010 / Proposed Rules


### 40488 Federal Register / Vol. 75, No. 133 / Tuesday, July 13, 2010 / Proposed Rules


### 40489 Federal Register / Vol. 75, No. 133 / Tuesday, July 13, 2010 / Proposed Rules


### 40490 Federal Register / Vol. 75, No. 133 / Tuesday, July 13, 2010 / Proposed Rules


### 40491 Federal Register / Vol. 75, No. 133 / Tuesday, July 13, 2010 / Proposed Rules


### 40492 Federal Register / Vol. 75, No. 133 / Tuesday, July 13, 2010 / Proposed Rules


### 40493 Federal Register / Vol. 75, No. 133 / Tuesday, July 13, 2010 / Proposed Rules


### 40494 Federal Register / Vol. 75, No. 133 / Tuesday, July 13, 2010 / Proposed Rules


### 40495 Federal Register / Vol. 75, No. 133 / Tuesday, July 13, 2010 / Proposed Rules


### 40496 Federal Register / Vol. 75, No. 133 / Tuesday, July 13, 2010 / Proposed Rules


### 40497 Federal Register / Vol. 75, No. 133 / Tuesday, July 13, 2010 / Proposed Rules


### 40498 Federal Register / Vol. 75, No. 133 / Tuesday, July 13, 2010 / Proposed Rules


### 40499 Federal Register / Vol. 75, No. 133 / Tuesday, July 13, 2010 / Proposed Rules


### 40500 Federal Register / Vol. 75, No. 133 / Tuesday, July 13, 2010 / Proposed Rules


### 40501 Federal Register / Vol. 75, No. 133 / Tuesday, July 13, 2010 / Proposed Rules


### 40502 Federal Register / Vol. 75, No. 133 / Tuesday, July 13, 2010 / Proposed Rules


### 40503 Federal Register / Vol. 75, No. 133 / Tuesday, July 13, 2010 / Proposed Rules


### 40504 Federal Register / Vol. 75, No. 133 / Tuesday, July 13, 2010 / Proposed Rules


### 40505 Federal Register / Vol. 75, No. 133 / Tuesday, July 13, 2010 / Proposed Rules


### 40506 Federal Register / Vol. 75, No. 133 / Tuesday, July 13, 2010 / Proposed Rules


### 40507 Federal Register / Vol. 75, No. 133 / Tuesday, July 13, 2010 / Proposed Rules


### 40508 Federal Register / Vol. 75, No. 133 / Tuesday, July 13, 2010 / Proposed Rules


### 40509 Federal Register / Vol. 75, No. 133 / Tuesday, July 13, 2010 / Proposed Rules


### 40510 Federal Register / Vol. 75, No. 133 / Tuesday, July 13, 2010 / Proposed Rules


### 40511 Federal Register / Vol. 75, No. 133 / Tuesday, July 13, 2010 / Proposed Rules


### 40512 Federal Register / Vol. 75, No. 133 / Tuesday, July 13, 2010 / Proposed Rules


### 40513 Federal Register / Vol. 75, No. 133 / Tuesday, July 13, 2010 / Proposed Rules


### 40514 Federal Register / Vol. 75, No. 133 / Tuesday, July 13, 2010 / Proposed Rules


### 40515 Federal Register / Vol. 75, No. 133 / Tuesday, July 13, 2010 / Proposed Rules


### 40516 Federal Register / Vol. 75, No. 133 / Tuesday, July 13, 2010 / Proposed Rules


### 40517 Federal Register / Vol. 75, No. 133 / Tuesday, July 13, 2010 / Proposed Rules


### 40518 Federal Register / Vol. 75, No. 133 / Tuesday, July 13, 2010 / Proposed Rules


### 40519 Federal Register / Vol. 75, No. 133 / Tuesday, July 13, 2010 / Proposed Rules


### 40520 Federal Register / Vol. 75, No. 133 / Tuesday, July 13, 2010 / Proposed Rules


### 40521 Federal Register / Vol. 75, No. 133 / Tuesday, July 13, 2010 / Proposed Rules


### 40522 Federal Register / Vol. 75, No. 133 / Tuesday, July 13, 2010 / Proposed Rules


### 40523 Federal Register / Vol. 75, No. 133 / Tuesday, July 13, 2010 / Proposed Rules


### 40524 Federal Register / Vol. 75, No. 133 / Tuesday, July 13, 2010 / Proposed Rules


### 40525 Federal Register / Vol. 75, No. 133 / Tuesday, July 13, 2010 / Proposed Rules


### 40526 Federal Register / Vol. 75, No. 133 / Tuesday, July 13, 2010 / Proposed Rules


### 40527 Federal Register / Vol. 75, No. 133 / Tuesday, July 13, 2010 / Proposed Rules


### 40528 Federal Register / Vol. 75, No. 133 / Tuesday, July 13, 2010 / Proposed Rules


### 40529 Federal Register / Vol. 75, No. 133 / Tuesday, July 13, 2010 / Proposed Rules


### 40530 Federal Register / Vol. 75, No. 133 / Tuesday, July 13, 2010 / Proposed Rules


### 40531 Federal Register / Vol. 75, No. 133 / Tuesday, July 13, 2010 / Proposed Rules


### 40532 Federal Register / Vol. 75, No. 133 / Tuesday, July 13, 2010 / Proposed Rules


### 40533 Federal Register / Vol. 75, No. 133 / Tuesday, July 13, 2010 / Proposed Rules


### 40534 Federal Register / Vol. 75, No. 133 / Tuesday, July 13, 2010 / Proposed Rules


### 40535 Federal Register / Vol. 75, No. 133 / Tuesday, July 13, 2010 / Proposed Rules


### 40536 Federal Register / Vol. 75, No. 133 / Tuesday, July 13, 2010 / Proposed Rules


### 40537 Federal Register / Vol. 75, No. 133 / Tuesday, July 13, 2010 / Proposed Rules


### 40538 Federal Register / Vol. 75, No. 133 / Tuesday, July 13, 2010 / Proposed Rules


### 40539 Federal Register / Vol. 75, No. 133 / Tuesday, July 13, 2010 / Proposed Rules


### 40540 Federal Register / Vol. 75, No. 133 / Tuesday, July 13, 2010 / Proposed Rules


### 40541 Federal Register / Vol. 75, No. 133 / Tuesday, July 13, 2010 / Proposed Rules


### 40542 Federal Register / Vol. 75, No. 133 / Tuesday, July 13, 2010 / Proposed Rules


### 40543 Federal Register / Vol. 75, No. 133 / Tuesday, July 13, 2010 / Proposed Rules


### 40544 Federal Register / Vol. 75, No. 133 / Tuesday, July 13, 2010 / Proposed Rules


### 40545 Federal Register / Vol. 75, No. 133 / Tuesday, July 13, 2010 / Proposed Rules


### 40546 Federal Register / Vol. 75, No. 133 / Tuesday, July 13, 2010 / Proposed Rules


### 40547 Federal Register / Vol. 75, No. 133 / Tuesday, July 13, 2010 / Proposed Rules


### 40548 Federal Register / Vol. 75, No. 133 / Tuesday, July 13, 2010 / Proposed Rules


### 40549 Federal Register / Vol. 75, No. 133 / Tuesday, July 13, 2010 / Proposed Rules


### 40550 Federal Register / Vol. 75, No. 133 / Tuesday, July 13, 2010 / Proposed Rules


### 40551 Federal Register / Vol. 75, No. 133 / Tuesday, July 13, 2010 / Proposed Rules


### 40552 Federal Register / Vol. 75, No. 133 / Tuesday, July 13, 2010 / Proposed Rules


### 40553 Federal Register / Vol. 75, No. 133 / Tuesday, July 13, 2010 / Proposed Rules


### 40554 Federal Register / Vol. 75, No. 133 / Tuesday, July 13, 2010 / Proposed Rules


### 40555 Federal Register / Vol. 75, No. 133 / Tuesday, July 13, 2010 / Proposed Rules


### 40556 Federal Register / Vol. 75, No. 133 / Tuesday, July 13, 2010 / Proposed Rules


### 40557 Federal Register / Vol. 75, No. 133 / Tuesday, July 13, 2010 / Proposed Rules


### 40558 Federal Register / Vol. 75, No. 133 / Tuesday, July 13, 2010 / Proposed Rules


### 40559 Federal Register / Vol. 75, No. 133 / Tuesday, July 13, 2010 / Proposed Rules


### 40560 Federal Register / Vol. 75, No. 133 / Tuesday, July 13, 2010 / Proposed Rules


### 40561 Federal Register / Vol. 75, No. 133 / Tuesday, July 13, 2010 / Proposed Rules


### 40562 Federal Register / Vol. 75, No. 133 / Tuesday, July 13, 2010 / Proposed Rules


### 40563 Federal Register / Vol. 75, No. 133 / Tuesday, July 13, 2010 / Proposed Rules


### 40564 Federal Register / Vol. 75, No. 133 / Tuesday, July 13, 2010 / Proposed Rules


### 40565 Federal Register / Vol. 75, No. 133 / Tuesday, July 13, 2010 / Proposed Rules


### 40566 Federal Register / Vol. 75, No. 133 / Tuesday, July 13, 2010 / Proposed Rules


### 40567 Federal Register / Vol. 75, No. 133 / Tuesday, July 13, 2010 / Proposed Rules


### 40568 Federal Register / Vol. 75, No. 133 / Tuesday, July 13, 2010 / Proposed Rules


### 40569 Federal Register / Vol. 75, No. 133 / Tuesday, July 13, 2010 / Proposed Rules


### 40570 Federal Register / Vol. 75, No. 133 / Tuesday, July 13, 2010 / Proposed Rules


### 40571 Federal Register / Vol. 75, No. 133 / Tuesday, July 13, 2010 / Proposed Rules


### 40572 Federal Register / Vol. 75, No. 133 / Tuesday, July 13, 2010 / Proposed Rules


### 40573 Federal Register / Vol. 75, No. 133 / Tuesday, July 13, 2010 / Proposed Rules


### 40574 Federal Register / Vol. 75, No. 133 / Tuesday, July 13, 2010 / Proposed Rules


### 40575 Federal Register / Vol. 75, No. 133 / Tuesday, July 13, 2010 / Proposed Rules


### 40576 Federal Register / Vol. 75, No. 133 / Tuesday, July 13, 2010 / Proposed Rules


### 40577 Federal Register / Vol. 75, No. 133 / Tuesday, July 13, 2010 / Proposed Rules


### 40578 Federal Register / Vol. 75, No. 133 / Tuesday, July 13, 2010 / Proposed Rules


### 40579 Federal Register / Vol. 75, No. 133 / Tuesday, July 13, 2010 / Proposed Rules


### 40580 Federal Register / Vol. 75, No. 133 / Tuesday, July 13, 2010 / Proposed Rules


### 40581 Federal Register / Vol. 75, No. 133 / Tuesday, July 13, 2010 / Proposed Rules


### 40582 Federal Register / Vol. 75, No. 133 / Tuesday, July 13, 2010 / Proposed Rules


### 40583 Federal Register / Vol. 75, No. 133 / Tuesday, July 13, 2010 / Proposed Rules


### 40584 Federal Register / Vol. 75, No. 133 / Tuesday, July 13, 2010 / Proposed Rules


### 40585 Federal Register / Vol. 75, No. 133 / Tuesday, July 13, 2010 / Proposed Rules


### 40586 Federal Register / Vol. 75, No. 133 / Tuesday, July 13, 2010 / Proposed Rules


### 40587 Federal Register / Vol. 75, No. 133 / Tuesday, July 13, 2010 / Proposed Rules


### 40588 Federal Register / Vol. 75, No. 133 / Tuesday, July 13, 2010 / Proposed Rules


### 40589 Federal Register / Vol. 75, No. 133 / Tuesday, July 13, 2010 / Proposed Rules


### 40590 Federal Register / Vol. 75, No. 133 / Tuesday, July 13, 2010 / Proposed Rules


### 40591 Federal Register / Vol. 75, No. 133 / Tuesday, July 13, 2010 / Proposed Rules


### 40592 Federal Register / Vol. 75, No. 133 / Tuesday, July 13, 2010 / Proposed Rules


### 40593 Federal Register / Vol. 75, No. 133 / Tuesday, July 13, 2010 / Proposed Rules


### 40594 Federal Register / Vol. 75, No. 133 / Tuesday, July 13, 2010 / Proposed Rules


### 40595 Federal Register / Vol. 75, No. 133 / Tuesday, July 13, 2010 / Proposed Rules


### 40596 Federal Register / Vol. 75, No. 133 / Tuesday, July 13, 2010 / Proposed Rules


### 40597 Federal Register / Vol. 75, No. 133 / Tuesday, July 13, 2010 / Proposed Rules


### 40598 Federal Register / Vol. 75, No. 133 / Tuesday, July 13, 2010 / Proposed Rules


### 40599 Federal Register / Vol. 75, No. 133 / Tuesday, July 13, 2010 / Proposed Rules


### 40600 Federal Register / Vol. 75, No. 133 / Tuesday, July 13, 2010 / Proposed Rules


### 40601 Federal Register / Vol. 75, No. 133 / Tuesday, July 13, 2010 / Proposed Rules


### 40602 Federal Register / Vol. 75, No. 133 / Tuesday, July 13, 2010 / Proposed Rules


### 40603 Federal Register / Vol. 75, No. 133 / Tuesday, July 13, 2010 / Proposed Rules


### 40604 Federal Register / Vol. 75, No. 133 / Tuesday, July 13, 2010 / Proposed Rules


### 40605 Federal Register / Vol. 75, No. 133 / Tuesday, July 13, 2010 / Proposed Rules


### 40606 Federal Register / Vol. 75, No. 133 / Tuesday, July 13, 2010 / Proposed Rules


### 40607 Federal Register / Vol. 75, No. 133 / Tuesday, July 13, 2010 / Proposed Rules


### 40608 Federal Register / Vol. 75, No. 133 / Tuesday, July 13, 2010 / Proposed Rules


### 40609 Federal Register / Vol. 75, No. 133 / Tuesday, July 13, 2010 / Proposed Rules


### 40610 Federal Register / Vol. 75, No. 133 / Tuesday, July 13, 2010 / Proposed Rules


### 40611 Federal Register / Vol. 75, No. 133 / Tuesday, July 13, 2010 / Proposed Rules


### 40612 Federal Register / Vol. 75, No. 133 / Tuesday, July 13, 2010 / Proposed Rules


### 40613 Federal Register / Vol. 75, No. 133 / Tuesday, July 13, 2010 / Proposed Rules


### 40614 Federal Register / Vol. 75, No. 133 / Tuesday, July 13, 2010 / Proposed Rules


### 40615 Federal Register / Vol. 75, No. 133 / Tuesday, July 13, 2010 / Proposed Rules


### 40616 Federal Register / Vol. 75, No. 133 / Tuesday, July 13, 2010 / Proposed Rules


### 40617 Federal Register / Vol. 75, No. 133 / Tuesday, July 13, 2010 / Proposed Rules


### 40618 Federal Register / Vol. 75, No. 133 / Tuesday, July 13, 2010 / Proposed Rules


### 40619 Federal Register / Vol. 75, No. 133 / Tuesday, July 13, 2010 / Proposed Rules


### 40620 Federal Register / Vol. 75, No. 133 / Tuesday, July 13, 2010 / Proposed Rules


### 40621 Federal Register / Vol. 75, No. 133 / Tuesday, July 13, 2010 / Proposed Rules


### 40622 Federal Register / Vol. 75, No. 133 / Tuesday, July 13, 2010 / Proposed Rules


### 40623 Federal Register / Vol. 75, No. 133 / Tuesday, July 13, 2010 / Proposed Rules


### 40624 Federal Register / Vol. 75, No. 133 / Tuesday, July 13, 2010 / Proposed Rules


### 40625 Federal Register / Vol. 75, No. 133 / Tuesday, July 13, 2010 / Proposed Rules


### 40626 Federal Register / Vol. 75, No. 133 / Tuesday, July 13, 2010 / Proposed Rules


### 40627 Federal Register / Vol. 75, No. 133 / Tuesday, July 13, 2010 / Proposed Rules


### 40628 Federal Register / Vol. 75, No. 133 / Tuesday, July 13, 2010 / Proposed Rules


### 40629 Federal Register / Vol. 75, No. 133 / Tuesday, July 13, 2010 / Proposed Rules


### 40630 Federal Register / Vol. 75, No. 133 / Tuesday, July 13, 2010 / Proposed Rules


### 40631 Federal Register / Vol. 75, No. 133 / Tuesday, July 13, 2010 / Proposed Rules


### 40632 Federal Register / Vol. 75, No. 133 / Tuesday, July 13, 2010 / Proposed Rules


### 40633 Federal Register / Vol. 75, No. 133 / Tuesday, July 13, 2010 / Proposed Rules


### 40634 Federal Register / Vol. 75, No. 133 / Tuesday, July 13, 2010 / Proposed Rules


### 40635 Federal Register / Vol. 75, No. 133 / Tuesday, July 13, 2010 / Proposed Rules


### 40636 Federal Register / Vol. 75, No. 133 / Tuesday, July 13, 2010 / Proposed Rules


### 40637 Federal Register / Vol. 75, No. 133 / Tuesday, July 13, 2010 / Proposed Rules


### 40638 Federal Register / Vol. 75, No. 133 / Tuesday, July 13, 2010 / Proposed Rules


### 40639 Federal Register / Vol. 75, No. 133 / Tuesday, July 13, 2010 / Proposed Rules


### 40640 Federal Register / Vol. 75, No. 133 / Tuesday, July 13, 2010 / Proposed Rules


### 40641 Federal Register / Vol. 75, No. 133 / Tuesday, July 13, 2010 / Proposed Rules


### 40642 Federal Register / Vol. 75, No. 133 / Tuesday, July 13, 2010 / Proposed Rules


### 40643 Federal Register / Vol. 75, No. 133 / Tuesday, July 13, 2010 / Proposed Rules


### 40644 Federal Register / Vol. 75, No. 133 / Tuesday, July 13, 2010 / Proposed Rules


### 40645 Federal Register / Vol. 75, No. 133 / Tuesday, July 13, 2010 / Proposed Rules


### 40646 Federal Register / Vol. 75, No. 133 / Tuesday, July 13, 2010 / Proposed Rules


### 40647 Federal Register / Vol. 75, No. 133 / Tuesday, July 13, 2010 / Proposed Rules


### 40648 Federal Register / Vol. 75, No. 133 / Tuesday, July 13, 2010 / Proposed Rules


### 40649 Federal Register / Vol. 75, No. 133 / Tuesday, July 13, 2010 / Proposed Rules


### 40650 Federal Register / Vol. 75, No. 133 / Tuesday, July 13, 2010 / Proposed Rules


### 40651 Federal Register / Vol. 75, No. 133 / Tuesday, July 13, 2010 / Proposed Rules


### 40652 Federal Register / Vol. 75, No. 133 / Tuesday, July 13, 2010 / Proposed Rules


### 40653 Federal Register / Vol. 75, No. 133 / Tuesday, July 13, 2010 / Proposed Rules


### 40654 Federal Register / Vol. 75, No. 133 / Tuesday, July 13, 2010 / Proposed Rules


### 40655 Federal Register / Vol. 75, No. 133 / Tuesday, July 13, 2010 / Proposed Rules


### 40656 Federal Register / Vol. 75, No. 133 / Tuesday, July 13, 2010 / Proposed Rules


### 40657 Federal Register / Vol. 75, No. 133 / Tuesday, July 13, 2010 / Proposed Rules


### 40658 Federal Register / Vol. 75, No. 133 / Tuesday, July 13, 2010 / Proposed Rules


### 40659 Federal Register / Vol. 75, No. 133 / Tuesday, July 13, 2010 / Proposed Rules


### 40660 Federal Register / Vol. 75, No. 133 / Tuesday, July 13, 2010 / Proposed Rules


### 40661 Federal Register / Vol. 75, No. 133 / Tuesday, July 13, 2010 / Proposed Rules


### 40662 Federal Register / Vol. 75, No. 133 / Tuesday, July 13, 2010 / Proposed Rules


### 40663 Federal Register / Vol. 75, No. 133 / Tuesday, July 13, 2010 / Proposed Rules


### 40664 Federal Register / Vol. 75, No. 133 / Tuesday, July 13, 2010 / Proposed Rules


### 40665 Federal Register / Vol. 75, No. 133 / Tuesday, July 13, 2010 / Proposed Rules


### 40666 Federal Register / Vol. 75, No. 133 / Tuesday, July 13, 2010 / Proposed Rules


### 40667 Federal Register / Vol. 75, No. 133 / Tuesday, July 13, 2010 / Proposed Rules


### 40668 Federal Register / Vol. 75, No. 133 / Tuesday, July 13, 2010 / Proposed Rules


### 40669 Federal Register / Vol. 75, No. 133 / Tuesday, July 13, 2010 / Proposed Rules


### 40670 Federal Register / Vol. 75, No. 133 / Tuesday, July 13, 2010 / Proposed Rules


### 40671 Federal Register / Vol. 75, No. 133 / Tuesday, July 13, 2010 / Proposed Rules


### 40672 Federal Register / Vol. 75, No. 133 / Tuesday, July 13, 2010 / Proposed Rules


### 40673 Federal Register / Vol. 75, No. 133 / Tuesday, July 13, 2010 / Proposed Rules


### 40674 Federal Register / Vol. 75, No. 133 / Tuesday, July 13, 2010 / Proposed Rules


### 40675 Federal Register / Vol. 75, No. 133 / Tuesday, July 13, 2010 / Proposed Rules


### 40676 Federal Register / Vol. 75, No. 133 / Tuesday, July 13, 2010 / Proposed Rules


### 40677 Federal Register / Vol. 75, No. 133 / Tuesday, July 13, 2010 / Proposed Rules


### 40678 Federal Register / Vol. 75, No. 133 / Tuesday, July 13, 2010 / Proposed Rules


### 40679 Federal Register / Vol. 75, No. 133 / Tuesday, July 13, 2010 / Proposed Rules


### 40680 Federal Register / Vol. 75, No. 133 / Tuesday, July 13, 2010 / Proposed Rules


### 40681 Federal Register / Vol. 75, No. 133 / Tuesday, July 13, 2010 / Proposed Rules


### 40682 Federal Register / Vol. 75, No. 133 / Tuesday, July 13, 2010 / Proposed Rules


### 40683 Federal Register / Vol. 75, No. 133 / Tuesday, July 13, 2010 / Proposed Rules


### 40684 Federal Register / Vol. 75, No. 133 / Tuesday, July 13, 2010 / Proposed Rules


### 40685 Federal Register / Vol. 75, No. 133 / Tuesday, July 13, 2010 / Proposed Rules


### 40686 Federal Register / Vol. 75, No. 133 / Tuesday, July 13, 2010 / Proposed Rules


### 40687 Federal Register / Vol. 75, No. 133 / Tuesday, July 13, 2010 / Proposed Rules


### 40688 Federal Register / Vol. 75, No. 133 / Tuesday, July 13, 2010 / Proposed Rules


### 40689 Federal Register / Vol. 75, No. 133 / Tuesday, July 13, 2010 / Proposed Rules


### 40690 Federal Register / Vol. 75, No. 133 / Tuesday, July 13, 2010 / Proposed Rules


### 40691 Federal Register / Vol. 75, No. 133 / Tuesday, July 13, 2010 / Proposed Rules


### 40692 Federal Register / Vol. 75, No. 133 / Tuesday, July 13, 2010 / Proposed Rules


### 40693 Federal Register / Vol. 75, No. 133 / Tuesday, July 13, 2010 / Proposed Rules


### 40694 Federal Register / Vol. 75, No. 133 / Tuesday, July 13, 2010 / Proposed Rules


### 40695 Federal Register / Vol. 75, No. 133 / Tuesday, July 13, 2010 / Proposed Rules


### 40696 Federal Register / Vol. 75, No. 133 / Tuesday, July 13, 2010 / Proposed Rules


### 40697 Federal Register / Vol. 75, No. 133 / Tuesday, July 13, 2010 / Proposed Rules


### 40698 Federal Register / Vol. 75, No. 133 / Tuesday, July 13, 2010 / Proposed Rules


### 40699 Federal Register / Vol. 75, No. 133 / Tuesday, July 13, 2010 / Proposed Rules


### 40700 Federal Register / Vol. 75, No. 133 / Tuesday, July 13, 2010 / Proposed Rules


### 40701 Federal Register / Vol. 75, No. 133 / Tuesday, July 13, 2010 / Proposed Rules


### 40702 Federal Register / Vol. 75, No. 133 / Tuesday, July 13, 2010 / Proposed Rules


### 40703 Federal Register / Vol. 75, No. 133 / Tuesday, July 13, 2010 / Proposed Rules


### 40704 Federal Register / Vol. 75, No. 133 / Tuesday, July 13, 2010 / Proposed Rules


### 40705 Federal Register / Vol. 75, No. 133 / Tuesday, July 13, 2010 / Proposed Rules


### 40706 Federal Register / Vol. 75, No. 133 / Tuesday, July 13, 2010 / Proposed Rules


### 40707 Federal Register / Vol. 75, No. 133 / Tuesday, July 13, 2010 / Proposed Rules


### 40708 Federal Register / Vol. 75, No. 133 / Tuesday, July 13, 2010 / Proposed Rules


### 40709 Federal Register / Vol. 75, No. 133 / Tuesday, July 13, 2010 / Proposed Rules

[FR Doc. 2010–15900 Filed 6–25–10; 4:15 pm]

**BILLING CODE 4120–01–P**