```

[Federal Register Volume 78, Number 237 (Tuesday, December 10, 2013)]
[Rules and Regulations]
[Pages 74683-74823]
From the Federal Register Online via the Government Printing Office [www.gpo.gov]
[FR Doc No: 2013-28696]

[[Page 74229]]

Vol. 78

Tuesday,

No. 237

December 10, 2013

Part II

 Department of Health and Human Services

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 Centers for Medicare & Medicaid Services

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42 CFR Parts 405, 410, 411, et al.

 Medicare Program; Revisions to Payment Policies Under the Physician 
Fee Schedule, Clinical Laboratory Fee Schedule & Other Revisions to 
Part B for CY 2014; Final Rule

Federal Register / Vol. 78 , No. 237 / Tuesday, December 10, 2013 / 
Rules and Regulations

[[Page 74230]]

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DEPARTMENT OF HEALTH AND HUMAN SERVICES

Centers for Medicare & Medicaid Services

42 CFR Parts 405, 410, 411, 414, 423, and 425

[CMS-1600-FC]
RIN 0938-AR56

Medicare Program; Revisions to Payment Policies Under the 
Physician Fee Schedule, Clinical Laboratory Fee Schedule & Other 
Revisions to Part B for CY 2014

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

ACTION: Final rule with comment period.

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SUMMARY: This major final rule with comment period addresses changes to 
the physician fee schedule, clinical laboratory 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. This final rule with comment period also includes a 
discussion in the Supplementary Information regarding various programs. 
(See the Table of Contents for a listing of the specific issues 
addressed in the final rule with comment period.)

DATES: Effective date: The provisions of this final rule with comment 
period are effective on January 1, 2014, except for the amendments to 
Sec. Sec.  405.350, 405.355, 405.405.2413, 405.2415, 405.2452, 410.19, 
410.26, 410.37, 410.71, 410.74, 410.75, 410.76, 410.77, and 414.511, 
which are effective January 27, 2014, and the amendments to Sec. Sec.  
405.201, Sec.  405.203, Sec.  405.205, Sec.  405.207, Sec.  405.209, 
Sec.  405.211, Sec.  405.212, Sec.  405.213, Sec.  411.15, and 423.160, 
which are effective on January 1, 2015.
    The incorporation by reference of certain publications listed in 
the rule is approved by the Director of the Federal Register as of 
January 1, 2014.
    Applicability dates: Additionally, the policies specified in under 
the following preamble sections are applicable January 27, 2014:
     Physician Compare Web site (section III.G.);
     Physician Self-Referral Prohibition: Annual Update to the 
List of CPT/HCPCS Codes. (section III.N.)
    Comment date: To be assured consideration, comments must be 
received at one of the addresses provided below, no later than 5 p.m. 
on January 27, 2014. (See the SUPLEMENTARY INFORMATION section of this 
final rule with comment period for a list of the provisions open for 
comment.)

ADDRESSES: In commenting, please refer to file code CMS-1600-FC. 
Because of staff and resource limitations, we cannot accept comments by 
facsimile (FAX) transmission.
    You may submit comments in one of four ways (please choose only one 
of the ways listed):
    1. Electronically. You may submit electronic comments on this 
regulation to 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-1600-FC, P.O. Box 8013, 
Baltimore, MD 21244-8013.
    Please allow sufficient time for mailed comments to be received 
before the close of the comment period.
    3. By express or overnight mail. You may send written comments to 
the following address ONLY: Centers for Medicare & Medicaid Services, 
Department of Health and Human Services, Attention: CMS-1600-FC, Mail 
Stop C4-26-05, 7500 Security Boulevard, Baltimore, MD 21244-1850.
    4. By hand or courier. If you prefer, you may deliver (by hand or 
courier) your written comments before the close of the comment period 
to either of the following addresses:
    a. For delivery in Washington, DC--Centers for Medicare & Medicaid 
Services, Department of Health and Human Services, Room 445-G, Hubert 
H. Humphrey Building, 200 Independence Avenue SW., Washington, DC 
20201.
    (Because access to the interior of the Hubert H. Humphrey Building 
is not readily available to persons without federal government 
identification, commenters are encouraged to leave their comments in 
the CMS drop slots located in the main lobby of the building. A stamp-
in clock is available for persons wishing to retain a proof of filing 
by stamping in and retaining an extra copy of the comments being 
filed.)
    b. For delivery in Baltimore, MD--Centers for Medicare & Medicaid 
Services, Department of Health and Human Services, 7500 Security 
Boulevard, Baltimore, MD 21244-1850.
    If you intend to deliver your comments to the Baltimore address, 
please call telephone number (410) 786-7195 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: 
    Elliott Isaac, (410) 786-4735 or Elliott.Isaac@cms.hhs.gov, for any 
physician payment issues not identified below.
    Chava Sheffield, (410) 786-2298 or Chava.Sheffield@cms.hhs.gov, for 
issues related to practice expense methodology, impacts, the 
sustainable growth rate, or conversion factors.
    Ryan Howe, (410) 786-3355 or Ryan.Howe@cms.hhs.gov, for issues 
related to direct practice expense inputs or interim final direct PE 
inputs.
    Kathy Kersell, (410) 786-2033 or Kathleen.Kersell@cms.hhs.gov, for 
issues related to misvalued services.
    Jessica Bruton, (410) 786-5991 or Jessica.Bruton@cms.hhs.gov, for 
issues related to work or malpractice RVUs.
    Heidi Oumarou, (410) 786-7942 or Heidi.Oumarou@cms.hhs.gov, for 
issues related to the revision of Medicare Economic Index (MEI).
    Gail Addis, (410) 786-4552 or Gail.Addis@cms.hhs.gov, for issues 
related to the refinement panel.
    Craig Dobyski, (410) 786-4584 or Craig.Dobyski@cms.hhs.gov, for 
issues related to geographic practice cost indices.
    Ken Marsalek, (410) 786-4502 or Kenneth.Marsalek@cms.hhs.gov, for 
issues related to telehealth services.
    Simone Dennis, (410) 786-8409 or Simone.Dennis@cms.hhs.gov, for 
issues related to therapy caps.
    Darlene Fleischmann, (410) 786-2357 or 
Darlene.Fleischmann@cms.hhs.gov, for issues related to ``incident to'' 
services or complex chronic care management services.
    Corinne Axelrod, (410) 786-5620 or Corrine.Axelrod@cms.hhs.gov, for 
issues related to ``incident to'' services in Rural Health Clinics or 
Federally Qualified Health Centers.
    Roberta Epps, (410) 786-4503 or Roberta.Epps@cms.hhs.gov, for 
issues related to chiropractors billing for evaluation and management 
services.
    Rosemarie Hakim, (410) 786-3934 or Rosemarie.Hakim@cms.hhs.gov, for 
issues related to coverage of items and services furnished in FDA-
approved investigational device exemption clinical trials.
    Jamie Hermansen, (410) 786-2064 or Jamie.Hermansen@cms.hhs.gov or 
Jyme Schafer, (410) 786-4643 or Jyme.Schafer@cms.hhs.gov, for issues 
related to ultrasound screening for abdominal aortic aneurysms or 
colorectal cancer screening.
    Anne Tayloe-Hauswald, (410) 786-4546 or Anne-E-Tayloe.Hauswald@

[[Page 74231]]

cms.hhs.gov, for issues related to ambulance fee schedule and clinical 
lab fee schedule.
    Ronke Fabayo, (410) 786-4460 or Ronke.Fabayo@cms.hhs.gov or Jay 
Blake, (410) 786-9371 or Jay.Blake@cms.hhs.gov, for issues related to 
individual liability for payments made to providers and suppliers and 
handling of incorrect payments.
    Rashaan Byers, (410) 786-2305 or Rashaan.Byers@cms.hhs.gov, for 
issues related to physician compare.
    Christine Estella, (410) 786-0485 or Christine.Estella@cms.hhs.gov, 
for issues related to the physician quality reporting system and EHR 
incentive program.
    Sandra Adams, (410) 786-8084 or Sandra.Adams@cms.hhs.gov, for 
issues related to Medicare Shared Savings Program.
    Michael Wrobleswki, (410) 786-4465 or 
Michael.Wrobleswki@cms.hhs.gov, for issues related to value-based 
modifier and improvements to physician feedback.
    Andrew Morgan, (410) 786-2543 or Andrew.Morgan@cms.hhs.gov, for 
issues related to e-prescribing under Medicare Part D.
    Pauline Lapin, (410)786-6883 or Pauline.Lapin@cms.hhs.gov, for 
issues related to the chiropractic services demonstration budget 
neutrality issue.

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

I. Executive Summary and Background
    A. Executive Summary
    B. Background
II. Provisions of the Final Rule With Comment Period for PFS
    A. Resource-Based Practice Expense (PE) Relative Value Units 
(RVUs)
    B. Misvalued Services
    C. Malpractice RVUs
    D. Medicare Economic Index (MEI)
    E. Establishing RVUs for CY 2014
    F. Geographic Practice Cost Indices (GPCIs)
    G. Allowed Expenditures for Physicians' Services and the 
Sustainable Growth Rate
    H. Medicare Telehealth Services for the Physician Fee Schedule
    I. Therapy Caps
    J. Requirements for Billing ``Incident to'' Services
    K. Chronic Care Management (CCM) Services
    L. Collecting Data on Services Furnished in Off-Campus Provider-
Based Departments
    M. Chiropractors Billing for Evaluation & Management Services
III. Other Provisions of the Proposed Regulations
    A. Medicare Coverage of Items and Services in FDA-Approved 
Investigational Device Exemption Clinical Studies--Revisions of 
Medicare Coverage Requirements
    B. Ultrasound Screening for Abdominal Aortic Aneurysms
    C. Colorectal Cancer Screening: Modification to Coverage of 
Screening Fecal Occult Blood Tests
    D. Ambulance Fee Schedule
    E. Policies Regarding the Clinical Laboratory Fee Schedule
    F. Liability for Overpayments to or on Behalf of Individuals 
Including Payments to Providers or Other Persons
    G. Physician Compare Web site
    H. Physician Payment, Efficiency, and Quality Improvements--
Physician Quality Reporting System
    I. Electronic Health Record (EHR) Incentive Program
    J. Medicare Shared Savings Program
    K. Value-Based Payment Modifier and Physician Feedback Program
    L. Updating Existing Standards for E-Prescribing Under Medicare 
Part D
    M. Discussion of Budget Neutrality for the Chiropractic Services 
Demonstration
    N. Physician Self-Referral Prohibition: Annual Update to the 
List of CPT/HCPCS Codes
IV. Collection of Information Requirements
V. Response to Comments
VI. Waiver of Proposed Rulemaking and Waiver of Delay of Effective 
Date
VII. Regulatory Impact Analysis
Regulations Text

Acronyms

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

AAA Abdominal aortic aneurysms
ACA Affordable Care Act (Pub. L. 111-148)
ACO Accountable care organization
AHE Average hourly earnings
AMA American Medical Association
AMA RUC AMA [Specialty Society] Relative (Value) Update Committee
ASC Ambulatory surgical center
ATRA American Taxpayer Relief Act (Pub. L. 112-240)
AWV Annual wellness visit
BBA Balanced Budget Act of 1997 (Pub. L. 105-33)
BBRA [Medicare, Medicaid and State Child Health Insurance Program] 
Balanced Budget Refinement Act of 1999 (Pub. L. 106-113)
BEA Bureau of Economic Analysis
CAH Critical access hospital
CBSA Core-Based Statistical Area
CCM Chronic Care Management
CED Coverage with evidence development
CEHRT Certified EHR technology
CF Conversion factor
CLFS Clinical Laboratory Fee Schedule
CMD Contractor medical director
CMHC Community mental health center
CMT Chiropractic manipulative treatment
CORF Comprehensive outpatient rehabilitation facility
CPC Comprehensive Primary Care
CPEP Clinical Practice Expert Panel
CPI-U Consumer Price Index for Urban Areas
CPS Current Population Survey
CPT [Physicians] Current Procedural Terminology (CPT codes, 
descriptions and other data only are copyright 2013 American Medical 
Association. All rights reserved.)
CQM Clinical quality measure
CT Computed tomography
CTA Computed tomographic angiography
CY Calendar year
DFAR Defense Federal Acquisition Regulations
DHS Designated health services
DRA Deficit Reduction Act of 2005 (Pub. L. 109-171)
DSMT Diabetes self-management training
ECEC Employer Costs for Employee Compensation
ECI Employment Cost Index
eCQM Electronic clinical quality measures
EHR Electronic health record
EMTALA Emergency Medical Treatment and Labor Act
eRx Electronic prescribing
ESRD End-stage renal disease
FAR Federal Acquisition Regulations
FFS Fee-for-service
FOBT Fecal occult blood test
FQHC Federally qualified health center
FR Federal Register
GAF Geographic adjustment factor
GAO Government Accountability Office
GPCI Geographic practice cost index
GPRO Group practice reporting option
HCPCS Healthcare Common Procedure Coding System
HHS [Department of] Health and Human Services
HOPD Hospital outpatient department
HPSA Health professional shortage area
IDE Investigational device exemption
IDTF Independent diagnostic testing facility
IOM Institute of Medicine
IPPE Initial Preventive Physical Examination
IPPS Inpatient Prospective Payment System
IQR Inpatient Quality Reporting
IWPUT Intensity of work per unit of time
KDE Kidney disease education

[[Page 74232]]

LCD Local coverage determination
LDT Laboratory-developed test
MA Medicare Advantage
MAC Medicare Administrative Contractor
MAPCP Multi-payer Advanced Primary Care Practice
MCTRJCA Middle Class Tax Relief and Job Creation Act of 2012 (Pub. 
L. 112-96)
MDC Major diagnostic category
MedPAC Medicare Payment Advisory Commission
MEI Medicare Economic Index
MFP Multi-Factor Productivity
MGMA Medical Group Management Association
MIEA-TRHCA The Medicare Improvements and Extension Act, Division B 
of the Tax Relief and Health Care Act (Pub. L. 109-432)
MIPPA Medicare Improvements for Patients and Providers Act (Pub. L. 
110-275)
MMEA Medicare and Medicaid Extenders Act (Pub. L. 111-309)
MMSEA Medicare, Medicaid, and State Children's Health Insurance 
Program Extension Act (Pub. L. 110-73)
MP Malpractice
MPPR Multiple procedure payment reduction
MRA Magnetic resonance angiography
MRI Magnetic resonance imaging
MSA Metropolitan Statistical Areas
MSPB Medicare Spending per Beneficiary
MSSP Medicare Shared Savings Program
MU Meaningful use
NCD National coverage determination
NCQDIS National Coalition of Quality Diagnostic Imaging Services
NP Nurse practitioner
NPI National Provider Identifier
NPP Nonphysician practitioner
OACT CMS's Office of the Actuary
OBRA '89 Omnibus Budget Reconciliation Act of 1989
OBRA '90 Omnibus Budget Reconciliation Act of 1990
OES Occupational Employment Statistics
OMB Office of Management and Budget
OPPS Outpatient prospective payment system
PC Professional component
PCIP Primary Care Incentive Payment
PDP Prescription Drug Plan
PE Practice expense
PE/HR Practice expense per hour
PEAC Practice Expense Advisory Committee
PECOS Provider Enrollment, Chain, and Ownership System
PFS Physician Fee Schedule
PLI Professional Liability Insurance
PMA Premarket approval
POS Place of Service
PQRS Physician Quality Reporting System
PPIS Physician Practice Expense Information Survey
QRUR Quality and Resources Use Report
RBRVS Resource-based relative value scale
RFA Regulatory Flexibility Act
RHC Rural health clinic
RIA Regulatory impact analysis
RoPR Registry of Patient Registries
RUCA Rural Urban Commuting Area
RVU Relative value unit
SBA Small Business Administration
SGR Sustainable growth rate
SMS Socioeconomic Monitoring System
SNF Skilled nursing facility
SOI Statistics of Income
TAP Technical Advisory Panel
TC Technical component
TIN Tax identification number
TPTCCA Temporary Payroll Tax Cut Continuation Act (Pub. L. 112-78)
UAF Update adjustment factor
USPSTF United States Preventive Services Task Force
VBP Value-based purchasing
VBM Value-Based Modifier

Addenda Available Only Through the Internet on the CMS Web site

    The PFS Addenda along with other supporting documents and tables 
referenced in this final rule with comment period are available through 
the Internet on the CMS Web site at http://www.cms.gov/Medicare/
Medicare-Fee-for-Service-Payment/PhysicianFeeSched/PFS-Federal-
Regulation-Notices.html. Click on the link on the left side of the 
screen titled, ``PFS Federal Regulations Notices'' for a chronological 
list of PFS Federal Register and other related documents. For the CY 
2014 PFS final rule with comment period, refer to item CMS-1600-FC. 
Readers who experience any problems accessing any of the Addenda or 
other documents referenced in this final rule with comment period and 
posted on the CMS Web site identified above should contact 
Elliot.Isaac@cms.hhs.gov.

CPT (Current Procedural Terminology) Copyright Notice

    Throughout this final rule with comment period, we use CPT codes 
and descriptions to refer to a variety of services. We note that CPT 
codes and descriptions are copyright 2013 American Medical Association. 
All Rights Reserved. CPT is a registered trademark of the American 
Medical Association (AMA). Applicable Federal Acquisition Regulations 
(FAR) and Defense Federal Acquisition Regulations (DFAR) apply.

I. Executive Summary and Background

A. Executive Summary

1. Purpose
    This major final rule with comment period revises payment polices 
under the Medicare Physician Fee Schedule (PFS) and makes other policy 
changes related to Medicare Part B payment. Unless otherwise noted, 
these changes are applicable to services furnished in CY 2014.
2. Summary of the Major Provisions
    The Social Security Act (Act) requires us to establish payments 
under the PFS based on national uniform relative value units (RVUs) 
that account for the relative resources used in furnishing a service. 
The Act requires that RVUs be established for three categories of 
resources: work, practice expense (PE); and malpractice (MP) expense; 
and that we establish by regulation each year payment amounts for all 
physicians' services, incorporating geographic adjustments to reflect 
the variations in the costs of furnishing services in different 
geographic areas. In this major final rule with comment period, we 
establish RVUs for CY 2014 for the PFS, and other Medicare Part B 
payment policies, to ensure that our payment systems are updated to 
reflect changes in medical practice and the relative value of services 
as well as changes in the statute. In addition, this final rule with 
comment period includes discussions and/or policy changes regarding:
     Misvalued PFS Codes.
     Telehealth Services.
     Applying Therapy Caps to Outpatient Therapy Services 
Furnished by CAHs.
     Requiring Compliance with State law as a Condition of 
Payment for Services Furnished Incident to Physicians' (and Other 
Practitioners') Services.
     Revising the MEI based on MEI TAP Recommendations.
     Updating the Ambulance Fee Schedule regulations.
     Adjusting the Clinical Laboratory Fee Schedule based on 
technological changes
     Updating the--
    ++ Physician Compare Web site.
    ++ Physician Quality Reporting System.
    ++ Electronic Prescribing (eRx) Incentive Program.
    ++ Medicare Shared Savings Program.
    ++ Electronic Health Record (EHR) Incentive Program.
     Budget Neutrality for the Chiropractic Services 
Demonstration.
     Physician Value-Based Payment Modifier and the Physician 
Feedback Reporting Program.
3. Summary of Costs and Benefits
    We have determined that this final rule with comment period is 
economically significant. For a detailed discussion of the economic 
impacts, see section VII. of this final rule with comment period.

B. Background

    Since January 1, 1992, Medicare has paid for physicians' services 
under section 1848 of the Act, ``Payment for

[[Page 74233]]

Physicians' Services.'' The system relies on national relative values 
that are established for work, PE, and MP, which are then adjusted for 
geographic cost variations. These values are multiplied by a conversion 
factor (CF) to convert the RVUs into payment rates. The concepts and 
methodology underlying the PFS were enacted as part of the Omnibus 
Budget Reconciliation Act of 1989 (OBRA '89) (Pub. L. 101-239, enacted 
on December 19, 1989), and the Omnibus Budget Reconciliation Act of 
1990 (OBRA '90 (Pub. L. 101-508, enacted on November 5, 1990). The 
final rule published on November 25, 1991 (56 FR 59502) set forth the 
first fee schedule used for payment for physicians' services.
    We note that throughout this final rule with comment period, unless 
otherwise noted, the term ``practitioner'' is used to describe both 
physicians and nonphysician practitioners who are permitted to bill 
Medicare under the PFS for services furnished to Medicare 
beneficiaries.
1. Development of the Relative Values
a. Work RVUs
    The 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 
under a cooperative agreement with the Department of Health and Human 
Services (HHS). In constructing the code-specific vignettes used in 
determining the original physician work RVUs, Harvard worked with 
panels of experts, both inside and outside the federal government, and 
obtained input from numerous physician specialty groups.
    We establish work RVUs for new and revised codes based, in part, on 
our review of recommendations received from the American Medical 
Association/Specialty Society Relative Value Update Committee (AMA 
RUC).
b. Practice Expense RVUs
    Initially, only the work RVUs were resource-based, and the PE and 
MP RVUs were based on average allowable charges. Section 121 of the 
Social Security Act Amendments of 1994 (Pub. L. 103-432, enacted on 
October 31, 1994), amended section 1848(c)(2)(C)(ii) of the Act and 
required us to develop resource-based PE RVUs for each physicians' 
service beginning in 1998. We were required to consider general 
categories of expenses (such as office rent and wages of personnel, but 
excluding malpractice expenses) comprising PEs. Originally, this method 
was to be used beginning in 1998, but section 4505(a) of the Balanced 
Budget Act of 1997 (BBA) (Pub. L. 105-33, enacted on August 5, 1997) 
delayed implementation of the resource-based PE RVU system until 
January 1, 1999. In addition, section 4505(b) of the BBA provided for a 
4-year transition period from the charge-based PE RVUs to the resource-
based PE RVUs.
    We established the resource-based PE RVUs for each physicians' 
service in a final rule, published November 2, 1998 (63 FR 58814), 
effective for services furnished in CY 1999. Based on the requirement 
to transition to a resource-based system for PE over a 4-year period, 
payment rates were not fully based upon resource-based PE RVUs until CY 
2002. This resource-based system was based on two significant sources 
of actual PE data: The Clinical Practice Expert Panel (CPEP) data and 
the AMA's Socioeconomic Monitoring System (SMS) data. (These data 
sources are described in greater detail in the CY 2012 final rule with 
comment period (76 FR 73033).)
    Separate PE RVUs are established for services furnished in facility 
settings, such as a hospital outpatient department (HOPD) or an 
ambulatory surgical center (ASC), and in non-facility settings, such as 
a physician's office. The nonfacility RVUs reflect all of the direct 
and indirect PEs involved in furnishing a service described by a 
particular HCPCS code. The difference, if any, in these PE RVUs 
generally results in a higher payment in the nonfacility setting 
because in the facility settings some costs are borne by the facility. 
Medicare's payment to the facility (such as the outpatient prospective 
payment system (OPPS) payment to the HOPD) would reflect costs 
typically incurred by the facility. Thus, payment associated with those 
facility resources is not made under the PFS.
    Section 212 of the Balanced Budget Refinement Act of 1999 (BBRA) 
(Pub. L. 106-113, enacted on November 29, 1999) directed the Secretary 
of Health and Human Services (the Secretary) to establish a process 
under which we accept and use, to the maximum extent practicable and 
consistent with sound data practices, data collected or developed by 
entities and organizations to supplement the data we normally collect 
in determining the PE component. On May 3, 2000, we published the 
interim final rule (65 FR 25664) that set forth the criteria for the 
submission of these supplemental PE survey data. The criteria were 
modified in response to comments received, and published in the Federal 
Register (65 FR 65376) as part of a November 1, 2000 final rule. The 
PFS final rules published in 2001 and 2003, respectively, (66 FR 55246 
and 68 FR 63196) extended the period during which we would accept these 
supplemental data through March 1, 2005.
    In the CY 2007 PFS final rule with comment period (71 FR 69624), we 
revised the methodology for calculating direct PE RVUs from the top-
down to the bottom-up methodology beginning in CY 2007. We adopted a 4-
year transition to the new PE RVUs. This transition was completed for 
CY 2010. In the CY 2010 PFS final rule with comment period, we updated 
the practice expense per hour (PE/HR) data that are used in the 
calculation of PE RVUs for most specialties (74 FR 61749). In CY 2010, 
we began a 4-year transition to the new PE RVUs using the updated PE/HR 
data, which was completed for CY 2013.
c. Malpractice RVUs
    Section 4505(f) of the BBA amended section 1848(c) of the Act to 
require that we implement resource-based MP RVUs for services furnished 
on or after CY 2000. The resource-based MP RVUs were implemented in the 
PFS final rule with comment period published November 2, 1999 (64 FR 
59380). The MP RVUs are based on malpractice insurance premium data 
collected from commercial and physician-owned insurers from all the 
states, the District of Columbia, and Puerto Rico.
d. Refinements to the RVUs
    Section 1848(c)(2)(B)(i) of the Act requires that we review RVUs no 
less often than every 5 years. Prior to CY 2013, we conducted periodic 
reviews of work RVUs and PE RVUs independently. We completed Five-Year 
Reviews of Work RVUs that were effective for calendar years 1997, 2002, 
2007, and 2012.
    While refinements to the direct PE inputs initially relied heavily 
on input from the AMA RUC Practice Expense Advisory Committee (PEAC), 
the shifts to the bottom-up PE methodology in CY 2007 and to the use of 
the updated PE/HR data in CY 2010 have resulted in significant 
refinements to the PE RVUs in recent years.
    In the CY 2012 PFS final rule with comment period (76 FR 73057), we 
finalized a proposal to consolidate reviews of work and PE RVUs under 
section 1848(c)(2)(B) of the Act and reviews of potentially misvalued 
codes

[[Page 74234]]

under section 1848(c)(2)(K) of the Act into one annual process.
    With regard to MP RVUs, we completed Five-Year Reviews of MP that 
were effective in CY 2005 and CY 2010.
    In addition to the Five-Year Reviews, beginning for CY 2009, CMS 
and the AMA RUC have identified and reviewed a number of potentially 
misvalued codes on an annual basis based on various identification 
screens. This annual review of work and PE RVUs for potentially 
misvalued codes was supplemented by the amendments to section 1848 of 
the Act, as enacted by section 3134 of the Affordable Care Act, which 
requires the agency to periodically identify, review and adjust values 
for potentially misvalued codes with an emphasis on seven specific 
categories (see section II.C.2. of this final rule with comment 
period).
e. Application of Budget Neutrality to Adjustments of RVUs
    As described in section VII.C.1. of this final rule with comment 
period, in accordance with section 1848(c)(2)(B)(ii)(II) of the Act, if 
revisions to the RVUs would cause expenditures for the year to change 
by more than $20 million, we make adjustments to ensure that 
expenditures do not increase or decrease by more than $20 million.
2. Calculation of Payments Based on RVUs
    To calculate the payment for each physicians' service, the 
components of the fee schedule (work, PE, and MP RVUs) are adjusted by 
geographic practice cost indices (GPCIs) to reflect the variations in 
the costs of furnishing the services. The GPCIs reflect the relative 
costs of physician work, PE, and MP in an area compared to the national 
average costs for each component. (See section II.F.2 of this final 
rule with comment period for more information about GPCIs.)
    RVUs are converted to dollar amounts through the application of a 
CF, which is calculated based on a statutory formula by CMS's Office of 
the Actuary (OACT). The CF for a given year is calculated using (a) the 
productivity-adjusted increase in the Medicare Economic Index (MEI) and 
(b) the Update Adjustment Factor (UAF), which is calculated by taking 
into account the Medicare Sustainable Growth Rate (SGR), an annual 
growth rate intended to control growth in aggregate Medicare 
expenditures for physicians' services, and the allowed and actual 
expenditures for physicians' services. For a more detailed discussion 
of the calculation of the CF, the SGR, and the MEI, we refer readers to 
section II.G. of this final rule with comment period.
    The formula for calculating the Medicare fee schedule payment 
amount for a given service and fee schedule area can be expressed as:
    Payment = [(RVU work x GPCI work) + (RVU PE x GPCI PE) + (RVU MP x 
GPCI MP)] x CF.
3. Separate Fee Schedule Methodology for Anesthesia Services
    Section 1848(b)(2)(B) of the Act specifies that the fee schedule 
amounts for anesthesia services are to be based on a uniform relative 
value guide, with appropriate adjustment of an anesthesia conversion 
factor, in a manner to assure that fee schedule amounts for anesthesia 
services are consistent with those for other services of comparable 
value. Therefore, there is a separate fee schedule methodology for 
anesthesia services. Specifically, we establish a separate conversion 
factor for anesthesia services and we utilize the uniform relative 
value guide, or base units, as well as time units, to calculate the fee 
schedule amounts for anesthesia services. Since anesthesia services are 
not valued using RVUs, a separate methodology for locality adjustments 
is also necessary. This involves an adjustment to the national 
anesthesia CF for each payment locality.
4. Most Recent Changes to the Fee Schedule
    The CY 2013 PFS final rule with comment period (77 FR 68892) 
implemented changes to the PFS and other Medicare Part B payment 
policies. It also finalized many of the CY 2012 interim final RVUs and 
established interim final RVUs for new and revised codes for CY 2013 to 
ensure that our payment system is updated to reflect changes in medical 
practice, coding changes, and the relative values of services. It also 
implemented certain statutory provisions including provisions of the 
Affordable Care Act (Pub. L. 111-148) and the Middle Class Tax Relief 
and Jobs Creation Act (MCTRJCA) (Pub. L. 112-96), including claims-
based data reporting requirements for therapy services.
    In the CY 2013 PFS final rule with comment period, we announced the 
following for CY 2013: the total PFS update of -26.5 percent; the 
initial estimate for the SGR of -19.7 percent; and the CY 2013 CF of 
$25.0008. These figures were calculated based on the statutory 
provisions in effect on November 1, 2012, when the CY 2013 PFS final 
rule with comment period was issued.
    On January 2, 2013, the American Taxpayer Relief Act (ATRA) of 2012 
(Pub. L. 112-240) was signed into law. Section 601(a) of the ATRA 
specified a zero percent update to the PFS CF for CY 2013. As a result, 
the CY 2013 PFS conversion factor was revised to $34.0320. In addition, 
the ATRA extended and added several provisions affecting Medicare 
services furnished in CY 2013, including:
     Section 602--extending the 1.0 floor on the work 
geographic practice cost index through CY 2013;
     Section 603--extending the exceptions process for 
outpatient therapy caps through CY 2013, extending the application of 
the cap and manual medical review threshold to services furnished in 
the HOPD through CY 2013, and requiring the counting of a proxy amount 
for therapy services furnished in a Critical Access Hospital (CAH) 
toward the cap and threshold during CY 2013.
    In addition to the changes effective for CY 2013, section 635 of 
ATRA revised the equipment utilization rate assumption for advanced 
imaging services furnished on or after January 1, 2014.
    A correction document (78 FR 48996) was issued to correct several 
technical and typographical errors that occurred in the CY 2013 PFS 
final rule with comment period.

II. Provisions of the Final Rule With Comment Period for PFS

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

1. Overview
    Practice expense (PE) is the portion of the resources used in 
furnishing a service that reflects the general categories of physician 
and practitioner expenses, such as office rent and personnel wages, but 
excluding malpractice expenses, as specified in section 1848(c)(1)(B) 
of the Act. Section 121 of the Social Security Amendments of 1994 (Pub. 
L. 103-432), enacted on October 31, 1994, amended section 
1848(c)(2)(C)(ii) of the Act to require us to develop a methodology for 
a resource-based system for determining PE RVUs for each physician's 
service. We develop PE RVUs by looking at the direct and indirect 
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

[[Page 74235]]

detailed information about the methodology for translating the 
resources involved in furnishing each service into service-specific PE 
RVUs. We refer readers to the CY 2010 PFS final rule with comment 
period (74 FR 61743 through 61748) for a more detailed explanation of 
the PE methodology.
    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 
otherwise 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.
2. Practice Expense Methodology
a. Direct Practice Expense
    We determine the direct PE for a specific service by adding the 
costs of the direct resources (that is, the clinical staff, equipment, 
and supplies) typically involved with furnishing that service. The 
costs of the resources are calculated using the refined direct PE 
inputs assigned to each CPT code in our PE database, which are based on 
our review of recommendations received from the AMA RUC and those 
provided in response to public comment periods. For a detailed 
explanation of the direct PE methodology, including examples, we refer 
readers to the Five-Year Review of Work Relative Value Units Under the 
PFS and Proposed Changes to the Practice Expense Methodology proposed 
notice (71 FR 37242) and the CY 2007 PFS final rule with comment period 
(71 FR 69629).
b. Indirect Practice Expense per Hour Data
    We use survey data on indirect PEs incurred per hour worked in 
developing the indirect portion of the PE RVUs. Prior to CY 2010, we 
primarily used the practice expense per hour (PE/HR) by specialty that 
was obtained from the AMA's Socioeconomic Monitoring Surveys (SMS). The 
AMA administered a new survey in CY 2007 and CY 2008, the Physician 
Practice Expense Information Survey (PPIS). The PPIS is a 
multispecialty, nationally representative, PE survey of both physicians 
and nonphysician practitioners (NPPs) paid under the PFS using a survey 
instrument and methods highly consistent with those used for the SMS 
and the supplemental surveys. The PPIS gathered information from 3,656 
respondents across 51 physician specialty and health care professional 
groups. We believe the PPIS is the most comprehensive source of PE 
survey information available. We used the PPIS data to update the PE/HR 
data for the CY 2010 PFS for almost all of the Medicare-recognized 
specialties that participated in the survey.
    When we began using the PPIS data in CY 2010, we did not change the 
PE RVU methodology itself or the manner in which the PE/HR data are 
used in that methodology. We only updated the PE/HR data based on the 
new survey. Furthermore, as we explained in the CY 2010 PFS final rule 
with comment period (74 FR 61751), because of the magnitude of payment 
reductions for some specialties resulting from the use of the PPIS 
data, we transitioned its use over a 4-year period (75 percent old/25 
percent new for CY 2010, 50 percent old/50 percent new for CY 2011, 25 
percent old/75 percent new for CY 2012, and 100 percent new for CY 
2013) from the previous PE RVUs to the PE RVUs developed using the new 
PPIS data. As provided in the CY 2010 PFS final rule with comment 
period (74 FR 61751), the transition to the PPIS data was complete for 
CY 2013. Therefore, the CY 2013 and CY 2014 PE RVUs are developed based 
entirely on the PPIS data, except as noted in this section.
    Section 1848(c)(2)(H)(i) of the Act requires us to use the medical 
oncology supplemental survey data submitted in 2003 for oncology drug 
administration services. Therefore, the PE/HR for medical oncology, 
hematology, and hematology/oncology reflects the continued use of these 
supplemental survey data.
    Supplemental survey data on independent labs from the College of 
American Pathologists were implemented for payments beginning in CY 
2005. Supplemental survey data from the National Coalition of Quality 
Diagnostic Imaging Services (NCQDIS), representing independent 
diagnostic testing facilities (IDTFs), were blended with supplementary 
survey data from the American College of Radiology (ACR) and 
implemented for payments beginning in CY 2007. Neither IDTFs, nor 
independent labs, participated in the PPIS. Therefore, we continue to 
use the PE/HR that was developed from their supplemental survey data.
    Consistent with our past practice, the previous indirect PE/HR 
values from the supplemental surveys for these specialties were updated 
to CY 2006 using the MEI to put them on a comparable basis with the 
PPIS data.
    We also do not use the PPIS data for reproductive endocrinology and 
spine surgery since these specialties currently are not separately 
recognized by Medicare, nor do we have a method to blend the PPIS data 
with Medicare-recognized specialty data.
    We do not use the PPIS data for sleep medicine since there is not a 
full year of Medicare utilization data for that specialty given the 
specialty code was only available beginning in October 1, 2012. We 
anticipate using the PPIS data to create PE/HR for sleep medicine for 
CY 2015 when we will have a full year of data to make the calculations.
    Previously, we established PE/HR values for various specialties 
without SMS or supplemental survey data by crosswalking them to other 
similar specialties to estimate a proxy PE/HR. For specialties that 
were part of the PPIS for which we previously used a crosswalked PE/HR, 
we instead used the PPIS-based PE/HR. We continue previous crosswalks 
for specialties that did not participate in the PPIS. However, 
beginning in CY 2010 we changed the PE/HR crosswalk for portable x-ray 
suppliers from radiology to IDTF, a more appropriate crosswalk because 
these specialties are more similar to each other with respect to 
physician time.
    For registered dietician services, the resource-based PE RVUs have 
been calculated in accordance with the final policy that crosswalks the 
specialty to the ``All Physicians'' PE/HR data, as adopted in the CY 
2010 PFS final rule with comment period (74 FR 61752) and discussed in 
more detail in the CY 2011 PFS final rule with comment period (75 FR 
73183).
c. Allocation of PE to Services
    To establish PE RVUs for specific services, it is necessary to 
establish the direct and indirect PE associated with each service.
(1) Direct Costs
    The relative relationship between the direct cost portions of the 
PE RVUs for any two services is determined by the relative relationship 
between the sum of the direct cost resources (that is, the clinical 
staff, equipment, and supplies) typically involved with furnishing each 
of the services. The costs of these resources are calculated from the 
refined direct PE inputs in our PE database. For example, if one 
service has a direct cost sum of $400 from our PE database and another 
service has a direct cost sum of $200, the direct portion of the PE 
RVUs of the first service would be twice as much as the direct portion 
of the PE RVUs for the second service.

[[Page 74236]]

(2) Indirect Costs
    Section II.B.2.b. of this final rule with comment period describes 
the current data sources for specialty-specific indirect costs used in 
our PE calculations. We allocated the indirect costs to the code level 
on the basis of the direct costs specifically associated with a code 
and the greater of either the clinical labor costs or the physician 
work RVUs. We also incorporated the survey data described earlier in 
the PE/HR discussion. The general approach to developing the indirect 
portion of the PE RVUs is described as follows:
     For a given service, we use the direct portion of the PE 
RVUs calculated as previously described and the average percentage that 
direct costs represent of total costs (based on survey data) across the 
specialties that furnish the service to determine an initial indirect 
allocator. In other words, the initial indirect allocator is calculated 
so that the direct costs equal the average percentage of direct costs 
of those specialties furnishing the service. For example, if the direct 
portion of the PE RVUs for a given service is 2.00 and direct costs, on 
average, represented 25 percent of total costs for the specialties that 
furnished the service, the initial indirect allocator would be 
calculated so that it equals 75 percent of the total PE RVUs. Thus, in 
this example the initial indirect allocator would equal 6.00, resulting 
in a total PE RVUs of 8.00 (2.00 is 25 percent of 8.00 and 6.00 is 75 
percent of 8.00).
     Next, we 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 4.00 (since the 4.00 work RVUs are greater than the 1.50 
clinical labor portion) to the initial indirect allocator of 6.00 to 
get an indirect allocator of 10.00. In the absence of any further use 
of the survey data, the relative relationship between the indirect cost 
portions of the PE RVUs for any two services would be determined by the 
relative relationship between these indirect cost allocators. For 
example, if one service had an indirect cost allocator of 10.00 and 
another service had an indirect cost allocator of 5.00, the indirect 
portion of the PE RVUs of the first service would be twice as great as 
the indirect portion of the PE RVUs for the second service.
     Next, we incorporate the specialty-specific indirect PE/HR 
data into the calculation. In our example, if based on the survey data, 
the average indirect cost of the specialties furnishing the first 
service with an allocator of 10.00 was half of the average indirect 
cost of the specialties furnishing the second service with an indirect 
allocator of 5.00, the indirect portion of the PE RVUs of the first 
service would be equal to that of the second service.
d. Facility and Nonfacility Costs
    For procedures that can be furnished in a physician's office, as 
well as in a hospital or facility setting, we establish two PE RVUs: 
Facility and nonfacility. The methodology for calculating PE RVUs is 
the same for both the facility and nonfacility RVUs, but is applied 
independently to yield two separate PE RVUs. Because in calculating the 
PE RVUs for services furnished in a facility, we do not include 
resources that would generally not be provided by physicians when 
furnishing the service in a facility, the facility PE RVUs are 
generally lower than the nonfacility PE RVUs. Medicare makes a separate 
payment to the facility for its costs of furnishing a service.
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). The PC and 
TC may be furnished independently or by different providers, or they 
may be furnished together as a ``global'' service. When services have 
separately billable PC and TC components, the payment for the global 
service equals the sum of the payment for the TC and PC. To achieve 
this we use a weighted average of the ratio of indirect to direct costs 
across all the specialties that furnish the global service, TCs, and 
PCs; that is, we apply the same weighted average indirect percentage 
factor to allocate indirect expenses to the global service, PCs, and 
TCs for a service. (The direct PE RVUs for the TC and PC sum to the 
global under the bottom-up methodology.)
f. 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).
(1) Setup File
    First, we create a setup file for the PE methodology. The setup 
file contains the direct cost inputs, the utilization for each 
procedure code at the specialty and facility/nonfacility place of 
service level, and the specialty-specific PE/HR data calculated from 
the surveys.
(2) Calculate the Direct Cost PE RVUs
    Sum the costs of each direct input.
    Step 1: Sum the direct costs of the inputs for each service. Apply 
a scaling adjustment to the direct inputs.
    Step 2: Calculate the aggregate pool of direct PE costs for the 
current year. This is the product of the current aggregate PE (direct 
and indirect) RVUs, the CF, and the average direct PE percentage from 
the survey data used for calculating the PE/HR by specialty.
    Step 3: Calculate the aggregate pool of direct PE costs for use in 
ratesetting. This is the product of the aggregated direct costs for all 
services from Step 1 and the utilization data for that service. For CY 
2014, we adjusted the aggregate pool of direct PE costs in proportion 
to the change in the PE share in the revised MEI, as discussed in 
section II.D. of this final rule with comment period.
    Step 4: Using the results of Step 2 and Step 3, calculate a direct 
PE scaling adjustment to ensure that the aggregate pool of direct PE 
costs calculated in Step 3 does not vary from the aggregate pool of 
direct PE costs for the current year. Apply the scaling factor to the 
direct costs for each service (as calculated in Step 1).
    Step 5: Convert the results of Step 4 to an RVU scale for each 
service. To do this, divide the results of Step 4 by the CF. Note that 
the actual value of the CF used in this calculation does not influence 
the final direct cost PE RVUs, as long as the same CF is used in Step 2 
and Step 5. Different CFs will result in different direct PE scaling 
factors, but this has no effect on the final direct cost PE RVUs since 
changes in the CFs and changes in the associated direct scaling factors 
offset one another.
(3) Create the Indirect Cost PE RVUs
    Create indirect allocators.
    Step 6: Based on the survey data, calculate direct and indirect PE 
percentages for each physician specialty.
    Step 7: Calculate direct and indirect PE percentages at the service 
level by taking a weighted average of the results of Step 6 for the 
specialties that furnish the service. Note that for services with TCs 
and PCs, the direct and indirect percentages for a given service do not 
vary by the PC, TC, and global service.
    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 PE percentage 
*

[[Page 74237]]

(direct PE RVUs/direct percentage) + work RVUs.
    There are two situations where this formula is modified:
     If the service is a global service (that is, a service 
with global, professional, and technical components), then the indirect 
PE allocator is: indirect percentage (direct PE RVUs/direct percentage) 
+ clinical PE RVUs + work RVUs.
     If the clinical labor PE RVUs exceed the work RVUs (and 
the service is not a global service), then the indirect allocator is: 
indirect PE percentage (direct PE RVUs/direct percentage) + clinical PE 
RVUs.
    (Note: For global services, the indirect PE allocator is based on 
both the work RVUs and the clinical labor PE RVUs. We do this to 
recognize that, for the PC service, indirect PEs will be allocated 
using the work RVUs, and for the TC service, indirect PEs will be 
allocated using the direct PE RVUs and the clinical labor PE RVUs. This 
also allows the global component RVUs to equal the sum of the PC and TC 
RVUs.)
    For presentation purposes in the examples in Table 1, the formulas 
were divided into two parts for each service.
     The first part does not vary by service and is the 
indirect percentage (direct PE RVUs/direct percentage).
     The second part is either the work RVU, clinical labor PE 
RVU, or both depending on whether the service is a global service and 
whether the clinical PE RVUs exceed the work RVUs (as described earlier 
in this step).
    Apply a scaling adjustment to the indirect allocators.
    Step 9: Calculate the current aggregate pool of indirect PE RVUs by 
multiplying the 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. For CY 
2014, we adjusted the indirect cost pool in proportion to the change in 
the PE share in the revised MEI, as discussed in section II.D. of this 
final rule with comment period.
    Step 11: Using the results of Step 9 and Step 10, calculate an 
indirect PE adjustment so that the aggregate indirect allocation does 
not exceed the available aggregate indirect PE RVUs and apply it to 
indirect allocators calculated in Step 8.
    Calculate the indirect practice cost index.
    Step 12: Using the results of Step 11, calculate aggregate pools of 
specialty-specific adjusted indirect PE allocators for all PFS services 
for a specialty by adding the product of the adjusted indirect PE 
allocator for each service and the utilization data for that service.
    Step 13: Using the specialty-specific indirect PE/HR data, 
calculate specialty-specific aggregate pools of indirect PE for all PFS 
services for that specialty by adding the product of the indirect PE/HR 
for the specialty, the physician time for the service, and the 
specialty's utilization for the service across all services furnished 
by the specialty.
    Step 14: Using the results of Step 12 and Step 13, calculate the 
specialty-specific indirect PE scaling factors.
    Step 15: Using the results of Step 14, calculate an indirect 
practice cost index at the specialty level by dividing each specialty-
specific indirect scaling factor by the average indirect scaling factor 
for the entire PFS.
    Step 16: Calculate the indirect practice cost index at the service 
level to ensure the capture of all indirect costs. Calculate a weighted 
average of the practice cost index values for the specialties that 
furnish the service. (Note: For services with TCs and PCs, we calculate 
the indirect practice cost index across the global service, PCs, and 
TCs. Under this method, the indirect practice cost index for a given 
service (for example, echocardiogram) does not vary by the PC, TC, and 
global service.)
    Step 17: Apply the service level indirect practice cost index 
calculated in Step 16 to the service level adjusted indirect allocators 
calculated in Step 11 to get the indirect PE RVUs.
(4) Calculate the Final PE RVUs
    Step 18: Add the direct PE RVUs from Step 6 to the indirect PE RVUs 
from Step 17 and apply the final PE budget neutrality (BN) adjustment 
and the MEI revision adjustment.
    The final PE BN adjustment is calculated by comparing the results 
of Step 18 to the current pool of PE RVUs (prior to the adjustments 
corresponding with the MEI revision described in section II.D. of this 
final rule with comment period). This final BN adjustment is required 
to redistribute RVUs from step 18 to all PE RVUs in the PFS, and 
because certain specialties are excluded from the PE RVU calculation 
for ratesetting purposes, but we note that all specialties are included 
for purposes of calculating the final BN adjustment. (See ``Specialties 
excluded from ratesetting calculation'' later in this section.)
(5) Setup File Information
     Specialties excluded from ratesetting calculation: For the 
purposes of calculating the PE RVUs, we exclude certain specialties, 
such as certain nonphysician practitioners paid at a percentage of the 
PFS and low-volume specialties, from the calculation. These specialties 
are included for the purposes of calculating the BN adjustment. They 
are displayed in Table 1.

       Table 1--Specialties Excluded From Ratesetting Calculation
------------------------------------------------------------------------
          Specialty code                   Specialty description
------------------------------------------------------------------------
49...............................  Ambulatory surgical center.
50...............................  Nurse practitioner.
51...............................  Medical supply company with certified
                                    orthotist.
52...............................  Medical supply company with certified
                                    prosthetist.
53...............................  Medical supply company with certified
                                    prosthetist[dash]orthotist.
54...............................  Medical supply company not included
                                    in 51, 52, or 53.
55...............................  Individual certified orthotist.
56...............................  Individual certified prosthestist.
57...............................  Individual certified
                                    prosthetist[dash]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.
97...............................  Physician assistant.
A0...............................  Hospital.
A1...............................  SNF.
A2...............................  Intermediate care nursing facility.
A3...............................  Nursing facility, other.
A4...............................  HHA.
A5...............................  Pharmacy.
A6...............................  Medical supply company with
                                    respiratory therapist.
A7...............................  Department store.
1................................  Supplier of oxygen and/or oxygen
                                    related equipment.
2................................  Pedorthic personnel.
3................................  Medical supply company with pedorthic
                                    personnel.
------------------------------------------------------------------------

     Crosswalk certain low volume physician specialties: 
Crosswalk the utilization of certain specialties with relatively low 
PFS utilization to the associated specialties.
     Physical therapy utilization: Crosswalk the utilization 
associated with all physical therapy services to the specialty of 
physical therapy.
     Identify professional and technical services not 
identified under the usual

[[Page 74238]]

TC and 26 modifiers: Flag the services that are PC and TC services, but 
do not use TC and 26 modifiers (for example, electrocardiograms). This 
flag associates the PC and TC with the associated global code for use 
in creating the indirect PE RVUs. For example, the professional 
service, CPT code 93010 (Electrocardiogram, routine ECG with at least 
12 leads; interpretation and report only), is associated with the 
global service, CPT code 93000 (Electrocardiogram, routine ECG with at 
least 12 leads; with interpretation and report).
     Payment modifiers: Payment modifiers are accounted for in 
the creation of the file consistent with current payment policy as 
implemented in claims processing. For example, services billed with the 
assistant at surgery modifier are paid 16 percent of the PFS amount for 
that service; therefore, the utilization file is modified to only 
account for 16 percent of any service that contains the assistant at 
surgery modifier. Similarly, for those services to which volume 
adjustments are made to account for the payment modifiers, time 
adjustments are applied as well. For time adjustments to surgical 
services, the intraoperative portion in the physician time file is 
used; where it is not present, the intraoperative percentage from the 
payment files used by contractors to process Medicare claims is used 
instead. Where neither is available, we use the payment adjustment 
ratio to adjust the time accordingly. Table 2 details the manner in 
which the modifiers are applied.

                         Table 2--Application of Payment Modifiers to Utilization Files
----------------------------------------------------------------------------------------------------------------
               Modifier                      Description           Volume adjustment         Time adjustment
----------------------------------------------------------------------------------------------------------------
80,81,82.............................  Assistant at Surgery...  16%....................  Intraoperative portion.
AS...................................  Assistant at Surgery--   14% (85% * 16%)........  Intraoperative portion.
                                        Physician Assistant.
50 or................................  Bilateral Surgery......  150%...................  150% of physician time.
LT and RT............................
51...................................  Multiple Procedure.....  50%....................  Intraoperative portion.
52...................................  Reduced Services.......  50%....................  50%.
53...................................  Discontinued Procedure.  50%....................  50%.
54...................................  Intraoperative Care      Preoperative +           Preoperative +
                                        only.                    Intraoperative           Intraoperative
                                                                 Percentages on the       portion.
                                                                 payment files used by
                                                                 Medicare contractors
                                                                 to process Medicare
                                                                 claims.
55...................................  Postoperative Care only  Postoperative            Postoperative portion.
                                                                 Percentage on the
                                                                 payment files used by
                                                                 Medicare contractors
                                                                 to process Medicare
                                                                 claims.
62...................................  Co-surgeons............  62.5%..................  50%.
66...................................  Team Surgeons..........  33%....................  33%.
----------------------------------------------------------------------------------------------------------------

    We also make adjustments to volume and time that correspond to 
other payment rules, including special multiple procedure endoscopy 
rules and multiple procedure payment reductions (MPPR). We note that 
section 1848(c)(2)(B)(v) of the Act exempts certain reduced payments 
for multiple imaging procedures and multiple therapy services from the 
BN calculation under section 1848(c)(2)(B)(ii)(II) of the Act. These 
MPPRs are not included in the development of the RVUs.
    For anesthesia services, we do not apply adjustments to volume 
since the average allowed charge is used when simulating RVUs, and 
therefore, includes all adjustments. A time adjustment of 33 percent is 
made only for medical direction of two to four cases since that is the 
only situation where time units are duplicative.
     Work RVUs: The setup file contains the work RVUs from this 
final rule with comment period.
(6) Equipment Cost per Minute
    The equipment cost per minute is calculated as:

(1/(minutes per year * usage)) * price * ((interest rate/(1-(1/((1 + 
interest rate)[caret] life of equipment)))) + maintenance)

Where:

minutes per year = maximum minutes per year if usage were continuous 
(that is, usage = 1); generally 150,000 minutes.
usage = variable, see discussion below.
price = price of the particular piece of equipment.
life of equipment = useful life of the particular piece of 
equipment.
maintenance = factor for maintenance; 0.05.
interest rate = variable, see discussion below.

    Usage: We currently use an equipment utilization rate assumption of 
50 percent for most equipment, with the exception of expensive 
diagnostic imaging equipment. For CY 2013, expensive diagnostic imaging 
equipment, which is equipment priced at over $1 million (for example, 
computed tomography (CT) and magnetic resonance imaging (MRI) 
scanners), we use an equipment utilization rate assumption of 75 
percent. Section 1848(b)(4)(C) of the Act, as modified by section 635 
of the ATRA), requires that for fee schedules established for CY 2014 
and subsequent years, in the methodology for determining PE RVUs for 
expensive diagnostic imaging equipment, the Secretary shall use a 90 
percent assumption. The provision also requires that the reduced 
expenditures attributable to this change in the utilization rate for CY 
2014 and subsequent years shall not be taken into account when applying 
the BN limitation on annual adjustments described in section 
1848(c)(2)(B)(ii)(II) of the Act. We are applying the 90 percent 
utilization rate assumption in CY 2014 to all of the services to which 
the 75 percent equipment utilization rate assumption applied in CY 
2013. These services are listed in a file called ``CY 2014 CPT Codes 
Subject to 90 Percent Usage Rate,'' available on the CMS Web site under 
downloads for the CY 2014 PFS final rule with comment period at http://
www.cms.gov/Medicare/Medicare-Fee-for-Service-Payment/
PhysicianFeeSched/PFS-Federal-Regulation-Notices.html. These codes are 
also displayed in Table 3.

[[Page 74239]]

   Table 3--CPT Codes Subject to 90 Percent Equipment Utilization Rate
                               Assumption
------------------------------------------------------------------------
             CPT code                         Short descriptor
------------------------------------------------------------------------
70336............................  Mri, temporomandibular joint(s).
70450............................  Ct head/brain w/o dye.
70460............................  Ct head/brain w/dye.
70470............................  Ct head/brain w/o & w/dye.
70480............................  Ct orbit/ear/fossa w/o dye.
70481............................  Ct orbit/ear/fossa w/dye.
70482............................  Ct orbit/ear/fossa w/o & w/dye.
70486............................  Ct maxillofacial w/o dye.
70487............................  Ct maxillofacial w/dye.
70488............................  Ct maxillofacial w/o & w/dye.
70490............................  Ct soft tissue neck w/o dye.
70491............................  Ct soft tissue neck w/dye.
70492............................  Ct soft tissue neck w/o & w/dye.
70496............................  Ct angiography, head.
70498............................  Ct angiography, neck.
70540............................  Mri orbit/face/neck w/o dye.
70542............................  Mri orbit/face/neck w/dye.
70543............................  Mri orbit/face/neck w/o & w/dye.
70544............................  Mr angiography head w/o dye.
70545............................  Mr angiography head w/dye.
70546............................  Mr angiography head w/o & w/dye.
70547............................  Mr angiography neck w/o dye.
70548............................  Mr angiography neck w/dye.
70549............................  Mr angiography neck w/o & w/dye.
70551............................  Mri brain w/o dye.
70552............................  Mri brain w/dye.
70553............................  Mri brain w/o & w/dye.
70554............................  Fmri brain by tech.
71250............................  Ct thorax w/o dye.
71260............................  Ct thorax w/dye.
71270............................  Ct thorax w/o & w/dye.
71275............................  Ct angiography, chest.
71550............................  Mri chest w/o dye.
71551............................  Mri chest w/dye.
71552............................  Mri chest w/o & w/dye.
71555............................  Mri angio chest w/ or w/o dye.
72125............................  CT neck spine w/o dye.
72126............................  Ct neck spine w/dye.
72127............................  Ct neck spine w/o & w/dye.
72128............................  Ct chest spine w/o dye.
72129............................  Ct chest spine w/dye.
72130............................  Ct chest spine w/o & w/dye.
72131............................  Ct lumbar spine w/o dye.
72132............................  Ct lumbar spine w/dye.
72133............................  Ct lumbar spine w/o & w/dye.
72141............................  Mri neck spine w/o dye.
72142............................  Mri neck spine w/dye.
72146............................  Mri chest spine w/o dye.
72147............................  Mri chest spine w/dye.
72148............................  Mri lumbar spine w/o dye.
72149............................  Mri lumbar spine w/dye.
72156............................  Mri neck spine w/o & w/dye.
72157............................  Mri chest spine w/o & w/dye.
72158............................  Mri lumbar spine w/o & w/dye.
72159............................  Mr angio spine w/o & w/dye.
72191............................  Ct angiography, pelv w/o & w/dye.
72192............................  Ct pelvis w/o dye.
72193............................  Ct pelvis w/dye.
72194............................  Ct pelvis w/o & w/dye.
72195............................  Mri pelvis w/o dye.
72196............................  Mri pelvis w/dye.
72197............................  Mri pelvis w/o & w/dye.
72198............................  Mri angio pelvis w/or w/o dye.
73200............................  Ct upper extremity w/o dye.
73201............................  Ct upper extremity w/dye.
73202............................  Ct upper extremity w/o & w/dye.
73206............................  Ct angio upper extr w/o & w/dye.
73218............................  Mri upper extr w/o dye.
73219............................  Mri upper extr w/dye.
73220............................  Mri upper extremity w/o & w/dye.
73221............................  Mri joint upper extr w/o dye.
73222............................  Mri joint upper extr w/dye.
73223............................  Mri joint upper extr w/o & w/dye.
73225............................  Mr angio upr extr w/o & w/dye.
73700............................  Ct lower extremity w/o dye.
73701............................  Ct lower extremity w/dye.
73702............................  Ct lower extremity w/o & w/dye.
73706............................  Ct angio lower ext w/o & w/dye.
73718............................  Mri lower extremity w/o dye.
73719............................  Mri lower extremity w/dye.
73720............................  Mri lower ext w/& w/o dye.
73721............................  Mri joint of lwr extre w/o dye.
73722............................  Mri joint of lwr extr w/dye.
73723............................  Mri joint of lwr extr w/o & w/dye.
73725............................  Mr angio lower ext w or w/o dye.
74150............................  Ct abdomen w/o dye.
74160............................  Ct abdomen w/dye.
74170............................  Ct abdomen w/o & w/dye.
74174............................  Ct angiography, abdomen and pelvis w/
                                    o & w/dye.
74175............................  Ct angiography, abdom w/o & w/dye.
74176............................  Ct abdomen and pelvis w/o dye.
74177............................  Ct abdomen and pelvis w/dye.
74178............................  Ct abdomen and pelvis w/ and w/o dye.
74181............................  Mri abdomen w/o dye.
74182............................  Mri abdomen w/dye.
74183............................  Mri abdomen w/o and w/dye.
74185............................  Mri angio, abdom w/or w/o dye.
74261............................  Ct colonography, w/o dye.
74262............................  Ct colonography, w/dye.
75557............................  Cardiac mri for morph.
75559............................  Cardiac mri w/stress img.
75561............................  Cardiac mri for morph w/dye.
75563............................  Cardiac mri w/stress img & dye.
75565............................  Card mri vel flw map add-on.
75571............................  Ct hrt w/o dye w/ca test.
75572............................  Ct hrt w/3d image.
75573............................  Ct hrt w/3d image, congen.
75574............................  Ct angio hrt w/3d image.
75635............................  Ct angio abdominal arteries.
76380............................  CAT scan follow up study.
77058............................  Mri, one breast.
77059............................  Mri, broth breasts.
77078............................  Ct bone density, axial.
77084............................  Magnetic image, bone marrow.
------------------------------------------------------------------------

    Comment: Several commenters objected to the statutorily-mandated 
change in equipment utilization rate assumptions, but none provided 
evidence that CMS has authority to use a different equipment 
utilization assumption for these services.
    Response: As mandated by statute, we are finalizing our proposed 
change in the equipment utilization rate for these services.
    Interest Rate: In the CY 2013 final rule with comment period (77 FR 
68902), we updated the interest rates used in developing an equipment 
cost per minute calculation. The interest rate was based on the Small 
Business Administration (SBA) maximum interest rates for different 
categories of loan size (equipment cost) and maturity (useful life). 
The interest rates are listed in Table 4. (See 77 FR 68902 for a 
thorough discussion of this issue.)

                   Table 4--SBA Maximum Interest Rates
------------------------------------------------------------------------
                                                               Interest
               Price                       Useful life           rate
                                                              (percent)
------------------------------------------------------------------------
$50K..............................  $50K..............................  7+ Years..............         6.00
------------------------------------------------------------------------
See 77 FR 68902 for a thorough discussion of this issue.

[[Page 74240]]

                                                              Table 5--Calculation of PE RVUs Under Methodology for Selected Codes
------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------
                                                                                                     99213       33533
                                                                                                    Office       CABG,       71020     71020-TC    71020-26   93000 ECG,  93005 ECG,  93010 ECG,
                                           Step                Source              Formula        visit, est   arterial,   Chest x-    Chest x-    Chest x-    complete,    tracing   report Non-
                                                                                                     Non-       single     ray Non-    ray, Non-   ray, Non-     Non-        Non-      facility
                                                                                                   facility    Facility    facility    facility    facility    facility    facility
------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------
(1) Labor cost (Lab).............  Step 1.............  AMA................  ...................       13.32       77.52        5.74        5.74        0.00        5.10        5.10        0.00
(2) Supply cost (Sup)............  Step 1.............  AMA................  ...................        2.98        7.34        3.39        3.39        0.00        1.19        1.19        0.00
(3) Equipment cost (Eqp).........  Step 1.............  AMA................  ...................        0.17        0.58        7.24        7.24        0.00        0.09        0.09        0.00
(4) Direct cost (Dir)............  Step 1.............  ...................  =(1)+(2)+(3).......       16.48       85.45       16.38       16.38        0.00        6.38        6.38        0.00
(5) Direct adjustment (Dir. Adj.)  Steps 2-4..........  See footnote *.....  ...................      0.5511      0.5511      0.5511      0.5511      0.5511      0.5511      0.5511      0.5511
(6) Adjusted Labor...............  Steps 2-4..........  =Lab * Dir Adj.....  =(1)*(5)...........        7.34       42.72        3.16        3.16        0.00        2.81        2.81        0.00
(7) Adjusted Supplies............  Steps 2-4..........  =Eqp * Dir Adj.....  =(2)*(5)...........        1.64        4.05        1.87        1.87        0.00        0.66        0.66        0.00
(8) Adjusted Equipment...........  Steps 2-4..........  =Sup * Dir Adj.....  =(3)*(5)...........        0.10        0.32        3.99        3.99        0.00        0.05        0.05        0.00
(9) Adjusted Direct..............  Steps 2-4..........  ...................  =(6)+(7)+(8).......        9.08       47.09        9.03        9.03        0.00        3.52        3.52        0.00
(10) Conversion Factor (CF)......  Step 5.............  PFS................  ...................     34.0230     34.0230     34.0230     34.0230     34.0230     34.0230     34.0230     34.0230
(11) Adj. labor cost converted...  Step 5.............  =(Lab * Dir Adj)/CF  =(6)/(10)..........        0.22        1.26        0.09        0.09        0.00        0.08        0.08        0.00
(12) Adj. supply cost converted..  Step 5.............  =(Sup * Dir Adj)/CF  =(7)/(10)..........        0.05        0.12        0.05        0.05        0.00        0.02        0.02        0.00
(13) Adj. equipment cost           Step 5.............  =(Eqp * Dir Adj)/CF  =(8)/(10)..........        0.00        0.01        0.12        0.12        0.00        0.00        0.00        0.00
 converted.
(14) Adj. direct cost converted..  Step 5.............  ...................  =(11)+(12)+(13)....        0.27        1.38        0.27        0.27        0.00        0.10        0.10        0.00
(15) Work RVU....................  Setup File.........  PFS................  ...................        0.97       33.75        0.22        0.00        0.22        0.17        0.00        0.17
(16) Dir--pct....................  Steps 6,7..........  Surveys............  ...................        0.31        0.18        0.31        0.31        0.31        0.31        0.31        0.31
(17) Ind--pct....................  Steps 6,7..........  Surveys............  ...................        0.69        0.82        0.69        0.69        0.69        0.69        0.69        0.69
(18) Ind. Alloc. Formula (1st      Step 8.............  See Step 8.........  ...................      ((14)/      ((14)/      ((14)/      ((14)/      ((14)/      ((14)/      ((14)/      ((14)/
 part).                                                                                           (16))*(17)  (16))*(17)  (16))*(17)  (16))*(17)  (16))*(17)  (16))*(17)  (16))*(17)  (16))*(17)
(19) Ind. Alloc.(1st part).......  Step 8.............  ...................  See 18.............        0.81        6.51        0.65        0.65           0        0.26        0.26           0
(20) Ind. Alloc. Formula (2nd      Step 8.............  See Step 8.........  ...................        (15)        (15)     (15+11)        (11)        (15)     (15+11)        (11)        (15)
 part).
(21) Ind. Alloc.(2nd part).......  Step 8.............  ...................  See 20.............        0.97       33.75        0.31        0.09        0.22        0.25        0.08        0.17
(22) Indirect Allocator (1st +     Step 8.............  ...................  =(19)+(21).........        1.78       40.26        0.96        0.74        0.22        0.51        0.34        0.17
 2nd).
(23) Indirect Adjustment (Ind.     Steps 9-11.........  See Footnote **....  ...................      0.3848      0.3848      0.3848      0.3848      0.3848      0.3848      0.3848      0.3848
 Adj.).
(24) Adjusted Indirect Allocator.  Steps 9-11.........  =Ind Alloc * Ind     ...................        0.68       15.49        0.37        0.29        0.08        0.20        0.13        0.07
                                                         Adj.
(25) Ind. Practice Cost Index      Steps 12-16........  ...................  ...................        1.07        0.76        0.95        0.95        0.95        0.91        0.91        0.91
 (IPCI).
(26) Adjusted Indirect...........  Step 17............  = Adj.Ind Alloc *    =(24)*(25).........        0.73       11.74        0.35        0.27        0.08        0.18        0.12        0.06
                                                         PCI.
(27) PE RVU......................  Step 18............  =(Adj Dir + Adj      =((14)+(26)) *             1.00       13.08        0.63        0.55        0.08        0.28        0.22        0.06
                                                         Ind) * Other Adj.    Other Adj).
------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------
Note: PE RVUs in Table 5, row 27, may not match Addendum B due to rounding.
* The direct adj = [current pe rvus * CF * avg dir pct]/[sum direct inputs] = [step2]/[step3]
** The indirect adj = [current pe rvus * avg ind pct]/[sum of ind allocators] = [step9]/[step10]
Note: The use of any particular conversion factor (CF) in Table 5 to illustrate the PE Calculation has no effect on the resulting RVUs.
Note: The Other Adjustment includes an adjustment for the equipment utilization change.

[[Page 74241]]

3. Adjusting RVUs To Match PE Share of the Medicare Economic Index 
(MEI)
    For CY 2014, as explained in detail in section II.D of this final 
rule with comment period, we are finalizing revisions to the MEI based 
on the recommendations of the MEI Technical Advisory Panel (TAP). The 
MEI is an index that measures the price change of the inputs used to 
furnish physician services. This measure was authorized by statute and 
is developed by the CMS Office of the Actuary. We believe that the MEI 
is the best measure available of the relative weights of the three 
components in payments under the PFS--work, PE and malpractice. 
Accordingly, we believe that to assure that the PFS payments reflect 
the resources in each of these components as required by section 
1848(c)(3) of the Act, the RVUs used in developing rates should reflect 
the same weights in each component as the MEI. We proposed to 
accomplish this by holding the work RVUs constant and adjusting the PE 
RVUs, the MP RVUs and the CF to produce the appropriate balance in RVUs 
among components and payments. In the proposed rule and above, we 
detailed the steps necessary to accomplish this result (see steps 3, 
10, and 18).
    This proposed adjustment is consistent with our longstanding 
practice to make adjustments to match the RVUs for the PFS components 
with the MEI cost share weights for the components, including the 
adjustments described in the CY 1999 PFS Final Rule (63 FR 58829), CY 
2004 PFS Final Rule 68 FR 63246-63247, and CY 2011 PFS Final Rule (75 
FR 73275). We note that the revisions to the MEI finalized in section 
II.D of this final rule are made to the MEI as rebased for CY 2011, and 
that the RVUs we proposed for CY 2014 reflect the weights of the MEI as 
rebased for CY 2011 and revised for CY 2014. As such, the relationships 
among the work, PE, and malpractice RVUs under the PFS are aligned with 
those under the revised 2006-based MEI.
    Comment: Several commenters requested explanation regarding the 
relationship between the proposed MEI revision and the proposed RVUs. 
One commenter suggested that it would be better to scale the work RVUs 
upward instead of scaling the PE RVUs downward to achieve the weighting 
adjustment.
    Response: The change in the relationship among work, PE, and 
malpractice RVUs could be accomplished by applying adjustments directly 
to the work, PE, and malpractice RVUs or by holding the RVUs constant 
for one component, scaling the other two components and applying a 
budget neutrality adjustment to the conversion factor. We proposed to 
make the adjustment by holding work RVUs constant consistent with prior 
adjustments and in response to many public comments made during 
previous rulemaking (see, for example, 75 FR 73275) indicating a strong 
preference and persuasive arguments in favor of keeping the work RVUs 
stable over time since work RVUs generally only change based on reviews 
of particular services. In contrast, PE RVUs are developed annually, 
irrespective of changes in the direct PE inputs for particular 
services, so that scaling of PE RVUs is less disruptive to the public 
review of values that determine PFS payment rates. We took this 
approach for the CY 2014 adjustment because we believe the methodology 
and reasons for making the adjustment in this way are settled and 
remain valid. For these reasons, we are finalizing the proposed 
rebasing of the relationship among RVU components by holding the work 
RVUs constant, decreasing the PE RVUs and the MP RVUs, and applying a 
budget neutrality adjustment to the CF.
    Comment: Several commenters argued that the RVU components should 
not be weighted consistent with the revised MEI as it was it was 
entirely appropriate to include nurse practitioner and physician 
assistant wages in the physician practice expense calculation because 
physicians often employ nurse practitioners, physician assistants and 
other non[hyphen]physicians.
    Response: We refer commenters to section II.D. of the final rule 
with comment period regarding the appropriate classification of wages 
in the MEI. Regarding classification of labor inputs in the RVU 
components, the decision as to whether something should be considered a 
practice expense or work under the PFS does not depend on the 
employment status of the health care professional furnishing the 
service. Resource inputs are classified based on whether they relate to 
the ``work'' or ``practice expense'' portion of a service. The clinical 
labor portion of the direct PE input database includes the portion of 
services provided by practitioners who do not bill Medicare directly, 
such as registered nurses and other clinical labor. We do not include 
in this category the costs of nurse practitioners and others who can 
bill Medicare directly. Under the PFS, the work component of a service 
is valued based on the work involved in furnishing the typical service. 
The value is the same whether the service is billed by a physician or 
another practitioner (such as a nurse practitioner or physician 
assistant) who is permitted to bill Medicare directly for the service. 
We acknowledge that these practitioners may perform a variety of 
services in a physician office--some of which would be included in the 
work portion and others that would be included in the PE portion as 
clinical labor. Similarly, it is not unusual for physicians to hire 
other physicians to work in their practices, but we likewise do not 
consider those costs to be part of the clinical labor that is included 
as a practice expense. Since values for services under the PFS are 
based upon the typical case rather than the type of practitioner that 
performs the service in a particular situation, we continue to believe 
it is appropriate to include the work performed by professionals 
eligible to bill Medicare directly in the work component of PFS 
payments, even in cases when they are employed by physicians.
    Additionally, we note that none of the commenters who questioned 
the appropriate accounting for the work of these nonphysician 
practitioners addressed how it would be appropriate to treat the costs 
for these nonphysician practitioners differently for purposes of 
calculating RVUs and the MEI. The labor of nonphysician practitioners 
who can bill independently for their services under the PFS is 
considered as work under the physician fee schedule since these 
services are also furnished by physicians and the RVUs for these PFS 
services do not vary based on whether furnished by a physician or 
nonphysician. As such, we believe that the change in the MEI to shift 
these costs from the PE to the work category as described in section 
II.D. of this final rule with comment period is entirely consistent 
with the PFS in this regard.
    We would also note that the change in the MEI was recommended by 
the MEI TAP that identified a discrepancy between how the work of non-
physician practitioners is captured in the RVUs, how billing works 
under the PFS, and how costs are accounted for in the MEI. With the 
change in the MEI being finalized in this final rule with comment 
period, we continue to believe that the MEI weights are the best 
reflection of the PFS component weights, and we believe it is 
appropriate to finalize this adjustment in the RVUs as well.
    Comment: Several commenters strongly urged the agency, in adjusting 
weights among the PFS components to reflect the MEI cost weight 
changes, to consider alternative methodologies that would mitigate the 
redistribution of RVUs from the PE to the work category. These 
commenters pointed out that the

[[Page 74242]]

practitioners who furnish services with a higher proportion of PE RVUs 
are hit hardest by these changes. These comments also suggested that 
CMS should consider postponing this adjustment of the RVUs until such a 
methodology can be vetted.
    Several commenters suggested that, given the magnitude of the 
reductions, CMS should consider a phase-in of this change. These 
commenters pointed out that CMS has used a phase-in approach in the 
past to mitigate the effects of methodological changes to the 
calculation of payment rates under the MPFS, including a four-year 
phase-in of the transition from the top-down to the bottom-up 
methodology of calculating direct PE RVUs.
    Response: We appreciate that the increase in the work RVUs relative 
to PE RVUs will generally result in lower payments for practitioners 
who furnish more services with a higher proportion of PE RVUs. However, 
we continue to believe that the MEI cost share weights are the best 
reflection of the PFS component weights. The CY 2014 revisions to the 
MEI, following the rebasing for 2011 and consideration by the MEI TAP, 
reflect the best available information. As such, we believe that the 
relationship among the RVU components should conform to the revised 
cost weights adopted for the MEI.
    While we understand and recognize the general preference to avoid 
significant year-to-year reductions in Medicare payment, including 
practitioners' interests in phasing in any reduction, and we 
acknowledge that this revision of the PFS component weights results in 
an increase in work RVUs relative to PE RVUs, we note that the 2011 
rebasing of the MEI resulted in a change of greater magnitude that 
increased the PE RVUs relative to work RVUs. That change was not phased 
in. Based on consideration of these comments, we are finalizing as 
proposed the adjustment to the relationship among the work, PE, and 
malpractice component RVUs to reflect the MEI cost share being 
finalized in this final rule with comment period, with the necessary 
adjustment to the conversion factor and to PE and MP RVUs to maintain 
budget neutrality.
4. Changes to Direct PE Inputs for Specific Services
    In this section, we discuss other CY 2014 proposals and revisions 
related to direct PE inputs for specific services. The final direct PE 
inputs are included in the final rule with comment period CY 2014 
direct PE input database, which is available on the CMS Web site under 
under downloads for the CY 2014 PFS final rule with comment period at 
http://www.cms.gov/Medicare/Medicare-Fee-for-Service-Payment/
PhysicianFeeSched/PFS-Federal-Regulation-Notices.html.
a. Anomalous Supply Inputs
    In the CY 2013 PFS final rule with comment period, we established 
interim final direct PE inputs based on acceptance, with refinement, of 
recommendations submitted by the AMA RUC. Although we generally address 
public comments on the current year's interim final direct PE inputs in 
the following year's final rule with comment period, several commenters 
raised an issue regarding anomalous supply items for codes that were 
not subject to comment in the CY 2013 final rule with comment period. 
Since changes were being suggested to codes not subject to comment, we 
believed these comments were best addressed through proposed revisions 
to the direct PE inputs in the proposed rule allowing the opportunity 
for public comment before implementation.
    For the CY 2013 interim final direct PE inputs for a series of 
codes that describe six levels of surgical pathology services (CPT 
codes 88300, 88302, 88304, 88305, 88307, 88309), we did not accept the 
AMA RUC recommendation to create two new direct PE supply inputs 
because we did not consider these items to be disposable supplies (77 
FR 69074) and thus they did not meet the criteria for direct PE inputs. 
These items were called ``specimen, solvent, and formalin disposal 
cost,'' and ``courier transportation costs.'' In the CY 2013 PFS final 
rule with comment period, we explained that neither the specimen and 
supply disposal nor courier costs for transporting specimens are 
appropriately considered disposable medical supplies. Instead, we 
stated these costs are incorporated into the PE RVUs for these services 
through the indirect PE allocation. We also noted that the current 
direct PE inputs for these and similar services across the PFS do not 
include these kinds of costs as disposable supplies.
    Several commenters noted that, contrary to our assertion in the CY 
2013 final rule with comment period, there are items incorporated in 
the direct PE input database as ``supplies'' that are no more 
disposable supplies than the new items recommended by the AMA RUC for 
the surgical pathology codes. These commenters identified seven supply 
inputs in particular that they believe are analogous to the items that 
we did not accept in establishing CY 2013 interim final direct PE 
inputs. These items and their associated HCPCS codes are listed in 
Table 6.

                 Table 6--Items Identified by Commenters
------------------------------------------------------------------------
    CMS supply code          Item description       Affected CPT codes
------------------------------------------------------------------------
SK106..................  device shipping cost...  93271, 93229, 93268.
SK112..................  Federal Express cost     64650, 88363, 64653.
                          (average across all
                          zones).
SK113..................  communication, wireless  93229.
                          per service.
SK107..................  fee, usage, cycletron/   77423, 77422.
                          accelerator,
                          gammaknife, Lincac SRS
                          System.
SK110..................  fee, image analysis....  96102, 96101, 99174.
SK111..................  fee, licensing,          96102, 96101, 96103,
                          computer, psychology.    96120.
SD140..................  bag system, 1000ml (for  93451, 93452, 93453,
                          angiographywaste         93454, 93455, 93456,
                          fluids).                 93457, 93458, 93459,
                                                   93460, 93461.
------------------------------------------------------------------------

    We reviewed each of these items for consistency with the general 
principles of the PE methodology regarding the categorization of all 
costs. Within the PE methodology, all costs other than clinical labor, 
disposable supplies, and medical equipment are considered indirect 
costs. For six of the items contained in Table 6, we agreed with the 
commenters that the items should not be considered disposable supplies. 
We believed that these items are more appropriately categorized as 
indirect PE costs, which are reflected in the allocation of indirect PE 
RVUs rather than through direct PE inputs. Therefore, we proposed to 
remove the following six items from the direct PE

[[Page 74243]]

input database for CY 2014: ``device shipping cost'' (SK106); ``Federal 
Express cost (average across all zones)'' (SK112); ``communication, 
wireless per service'' (SK113); ``fee, usage, cycletron/accelerator, 
gammaknife, Lincac SRS System'' (SK107); ``fee, image analysis'' 
(SK110); and ``fee, licensing, computer, psychology'' (SK111).
    In the case of the supply item called ``bag system, 1000ml (for 
angiography waste fluids)'' (SD140), we did not agree with the 
commenters that this item is analogous to the specimen disposal costs 
recommended for the surgical pathology codes. This supply input 
represents only the costs of the disposable material items associated 
with the removal of waste fluids that typically result from a 
particular procedure. In contrast, the item recommended by the AMA RUC 
for surgical pathology consisted of an amortized portion of a specimen 
disposal contract that includes costs for resources such as labor and 
transportation. Furthermore, we did not believe that the specimen 
disposal contract is attributable to individual procedures within the 
established PE methodology. We believe that a disposable supply is one 
that is attributable, in its entirety, to an individual patient for a 
particular service. An amortized portion of a specimen disposal 
contract does not meet these criteria. Accordingly, as stated in the CY 
2013 final rule with comment period, we did not accept the AMA RUC 
recommendation to create a new supply item related to specimen disposal 
costs. We believe that many physician offices and other nonfacility 
settings where Medicare beneficiaries receive services incur costs 
related to waste management or other service contracts, but none of 
these costs are currently incorporated into the PE methodology as 
disposable supplies. Instead, these costs are appropriately categorized 
as indirect costs, which are reflected in the PE RVUs through the 
allocation of indirect PE. We clarified that we believe that supply 
costs related to specimen disposal attributable to individual services 
may be appropriately categorized as disposable supplies, but that 
specimen disposal costs related to an allocated portion of service 
contracts cannot be attributed to individual services and should not be 
incorporated into the direct PE input database as disposable supplies.
    Moreover, because we do not agree with commenters that the ``bag 
system, 1000ml (for angiography waste fluids)'' (SD140) is analogous to 
a specimen disposal contract for the reasons state above, we continued 
to believe that SD140 is a direct expense. Accordingly, we did not 
propose to remove SD140 from the direct PE input database.
    Comment: One commenter objected to CMS's proposal to remove the 
``device shipping cost'' (SK106) and ``communication, wireless per 
service'' (SK113) from the direct PE input database as they are more 
analogous to the angiography waste fluid bag system than the other 
items since both items represent costs associated with a specific 
procedure rather than an amortization of costs associated with a 
service contract.
    Response: We agree with the commenter that both of these items may 
represent costs associated with a specific procedure. However, as we 
articulated in making the proposal to remove these items, we do not 
believe these items are disposable supplies and we believe all costs 
other than clinical labor, disposable supplies, and medical equipment 
should be considered indirect costs in order to maintain consistency 
and relativity within the PE methodology. We believe that there are a 
variety of costs allocable to individual services that are 
appropriately considered part of indirect cost categories for purposes 
of the PE methodology. Were all these included as direct PE inputs for 
services across the PFS, regardless of whether or not the items were 
reasonably described as clinical labor, disposable supplies, or medical 
equipment, then the relationship between direct and indirect costs 
would be significantly skewed. This skewing could be compounded since 
the amount of indirect PE allocated to particular codes is partly 
determined by the amount of direct costs associated with the codes. 
Therefore, the inaccurate inclusion of indirect costs as direct costs 
would not only result in duplicative accounting for the items (as both 
indirect and direct PE costs) but also an additional allocation of 
indirect PE based on the item's inclusion as a direct cost. Therefore, 
we are finalizing removal of these items from the direct PE input 
database as proposed.
    Comment: Several commenters suggested that CMS should change its 
understanding of direct and indirect practice expense items. One 
commenter suggested that all variable costs proportional to the number 
of services furnished per day be considered direct. Another commenter 
suggested that the only costs that can be considered indirect costs are 
those that are required by all services, those that do not vary from 
one service type to the next; and those that are not based on service 
volume. Therefore CMS should allow all other recommended direct PE 
inputs to be allowed as direct PE inputs.
    Response: We note that there is a longstanding PE methodology, 
established through notice and comment rulemaking that includes 
principles for determining whether an expense is direct or indirect. 
Under the established PE methodology, whether or not a particular cost 
is variable has little bearing on the appropriate classification of a 
particular item as a direct or indirect cost. Although we have 
previously pointed out that the current methodology does not 
accommodate costs that cannot be allocated to particular services as 
direct costs, this does not mean that all costs that can be allocated 
to particular services are necessarily direct costs. Instead, a 
significant number of costs considered to be indirect for purposes of 
the PE methodology are variable costs proportional to the kind and 
number of services furnished each day. For example, administrative and 
clerical resource costs associated with medical billing are likely to 
be incurred with each service furnished. Presumably, practitioners 
incur greater resource cost associated with administrative and clerical 
labor and supplies based on the volume of services furnished. 
Similarly, some kinds of services may require more administrative 
resources than others. Some complex services, for example, may require 
advance or follow-up administrative work that is not required for less 
complex services. General office expenses may also vary depending on 
the number and kind of services furnished. For example, practices that 
furnish a greater number of services to a greater number of patients 
generally require larger waiting rooms and additional waiting room 
furniture. Other services such as those that are furnished without 
having the patient present may not require patient waiting rooms at 
all. We note that some services require a different amount of 
electricity than others and some require more space than others. We 
believe that the PE methodology accounts for these costs in the 
allocation of indirect PE RVUs included in the payment rate for each 
service furnished to Medicare beneficiaries. We do not believe it would 
appropriate in the current methodology to include all such variable 
costs as direct PE inputs. Therefore, we do not agree with commenters' 
assertions regarding the appropriateness of these items as direct 
costs. Instead, we continue to believe that these costs represent 
indirect costs that are incorporated in the PE RVUs for these services 
through the allocation of

[[Page 74244]]

indirect PE RVUs. We also direct readers to section II.E.2.b. of this 
final rule for a discussion of comments received regarding the CY 2013 
interim final direct PE inputs for surgical pathology services.
    After consideration of these comments, we are finalizing our 
proposal to remove the specified anomalous supply items from the direct 
PE input database. The CY 2014 direct PE input database and the PE RVUs 
displayed in Addendum B of this final rule with comment period reflect 
the finalization of this proposal.
b. Direct PE Input Refinements Based on Routine Data Review
    In reviewing the direct PE input database, we identified several 
discrepancies that we proposed to address for CY 2014. In the following 
paragraphs, we identify the nature of these discrepancies, the affected 
codes, and the adjustments proposed in the CY 2014 proposed rule direct 
PE input database. As part of our internal review of information in the 
direct PE input database, we identified supply items that appeared 
without quantities for CPT code 51710 (Change of cystostomy tube; 
complicated). Upon reviewing these items we believed that the code 
should include the items at the quantities listed in Table 7.

         Table 7--Supply Items and Quantities for CPT Code 51710
------------------------------------------------------------------------
                                                                   NF
        Supply code              Description of supply item     quantity
------------------------------------------------------------------------
SA069......................  tray, suturing...................       1.0
SB007......................  drape, sterile barrier 16in x           1.0
                              29in.
SC029......................  needle, 18-27g...................       1.0
SC051......................  syringe 10-12ml..................       1.0
SD024......................  catheter, Foley..................       1.0
SD088......................  Guidewire........................       1.0
SF036......................  suture, nylon, 3-0 to 6-0, c.....       1.0
SG055......................  gauze, sterile 4in x 4in.........       1.0
SG079......................  tape, surgical paper 1in                6.0
                              (Micropore).
SH075......................  water, sterile inj...............       3.0
SJ032......................  lubricating jelly (K-Y) (5gm uou)       1.0
SJ041......................  povidone soln (Betadine).........      20.0
------------------------------------------------------------------------

    Upon reviewing the direct PE inputs for CPT code 51710 and the 
related code 51705 (Change of cystostomy tube; simple), we also noted 
that the direct PE input database includes an anomalous 0.5 minutes of 
clinical labor time in the post-service period. We believe that this 
small portion of clinical labor time is the result of a rounding error 
in our data and should be removed from the direct PE input database.
    Comment: One commenter supported the inclusion of the supply items 
for CPT code 51710. We received no comments regarding the change in 
clinical labor time for codes 51710 and 51705.
    Response: Based on these comments and for the reasons stated, we 
are finalizing the removal of these items in the CY 2014 final direct 
PE input database.
    During our review of the data, we noted an invalid supply code 
(SM037) that appears in the direct PE input database for CPT codes 
88312 and 88313. Upon review of the code, we believe that the supply 
item called ``wipes, lens cleaning (per wipe) (Kimwipe)'' (SM027) 
should be included for these codes instead of the invalid supply code. 
We did not receive any comments regarding this proposed revision. 
Therefore, we are finalizing this revision as proposed for CY 2014.
    Additionally, we conducted a routine review of the codes valued in 
the nonfacility setting for which moderate sedation is inherent in the 
procedure. Consistent with the standard moderate sedation package 
finalized in the CY 2012 PFS final rule with comment period (76 FR 
73043), we have made minor adjustments to the nurse time and equipment 
time for 18 of these codes. These codes appear in Table 8.
    Comment: One commenter agreed with this proposal to standardize 
moderate sedation inputs for codes valued in the nonfacility setting. 
We received no comments on the correction on the invalid supply item.
    Response: After considering this comment, we are finalizing the 
minor adjustments to the moderate sedation inputs as proposed. The CY 
2014 direct PE database reflects these adjustments.

    Table 8--Codes With Minor Adjustments to Moderate Sedation Inputs
------------------------------------------------------------------------
             CPT Code                            Descriptor
------------------------------------------------------------------------
31629............................  Bronchoscopy/needle bx each.
31645............................  Bronchoscopy clear airways.
31646............................  Bronchoscopy reclear airway.
32405............................  Percut bx lung/mediastinum.
32550............................  Insert pleural cath.
35471............................  Repair arterial blockage.
37183............................  Remove hepatic shunt (tips).
37210............................  Embolization uterine fibroid.
43453............................  Dilate esophagus.
43458............................  Dilate esophagus.
44394............................  Colonoscopy w/snare.
45340............................  Sig w/balloon dilation.
47000............................  Needle biopsy of liver.
47525............................  Change bile duct catheter.
49411............................  Ins mark abd/pel for rt perq.
50385............................  Change stent via transureth.
50386............................  Remove stent via transureth.
57155............................  Insert uteri tandem/ovoids.
93312............................  Echo transesophageal.
93314............................  Echo transesophageal.
G0341............................  Percutaneous islet celltrans.
------------------------------------------------------------------------

c. Adjustments to Pre-Service Clinical Labor Minutes
    As we noted in the CY 2014 PFS proposed rule, we had recently 
received a recommendation from the AMA RUC regarding appropriate pre-
service clinical labor minutes in the facility setting for codes with 
000-day global periods. In general, the AMA RUC recommended that codes 
with 000-day global period include a maximum of 30 minutes of clinical 
labor time in the pre-service period in the facility setting. The AMA 
RUC identified 48 codes that currently include more clinical labor time 
than this recommended maximum and provided us with recommended pre-
service clinical labor minutes in the facility setting of 30 minutes or 
fewer for these 48 codes. We reviewed the AMA RUC's recommendation and 
agree that the recommended reductions would be appropriate to maintain 
relativity with other 000-day global codes. Therefore, we proposed to 
amend the pre-service clinical labor minutes for the codes listed in 
Table 9, consistent with the AMA RUC recommendation.
    Comment: One commenter supported this proposal based on the AMA 
RUC's recommendation.
    Response: After considering the supporting comment, we are 
finalizing these changes as proposed. The CY 2014 direct PE input 
database reflects these changes.

[[Page 74245]]

    Table 9--000-Day Global Codes With Changes to Pre-Service CL Time
------------------------------------------------------------------------
                                                         CL Pre- Service
                                           Existing CL       facility
      CPT code        Short descriptor    Pre- Service     minutes (AMA
                                            facility           RUC
                                             minutes     recommendation)
------------------------------------------------------------------------
20900..............  Removal of bone                 60               30
                      for graft.
20902..............  Removal of bone                 60               30
                      for graft.
33224..............  Insert pacing lead              35               30
                      & connect.
33226..............  Reposition l                    35               30
                      ventric lead.
36800..............  Insertion of                    60                0
                      cannula.
36861..............  Cannula declotting              37                0
37202..............  Transcatheter                   45                0
                      therapy infuse.
50953..............  Endoscopy of                    60               30
                      ureter.
50955..............  Ureter endoscopy &              60               30
                      biopsy.
51726..............  Complex                         41               30
                      cystometrogram.
51785..............  Anal/urinary                    34               30
                      muscle study.
52250..............  Cystoscopy and                  37               30
                      radiotracer.
52276..............  Cystoscopy and                  32               30
                      treatment.
52277..............  Cystoscopy and                  37               30
                      treatment.
52282..............  Cystoscopy implant              31               30
                      stent.
52290..............  Cystoscopy and                  31               30
                      treatment.
52300..............  Cystoscopy and                  36               30
                      treatment.
52301..............  Cystoscopy and                  36               30
                      treatment.
52334..............  Create passage to               31               30
                      kidney.
52341..............  Cysto w/ureter                  42               30
                      stricture tx.
52342..............  Cysto w/up                      42               30
                      stricture tx.
52343..............  Cysto w/renal                   42               30
                      stricture tx.
52344..............  Cysto/uretero                   55               30
                      stricture tx.
52345..............  Cysto/uretero w/up              55               30
                      stricture.
52346..............  Cystouretero w/                 55               30
                      renal strict.
52351..............  Cystouretero & or               45               30
                      pyeloscope.
52352..............  Cystouretero w/                 50               30
                      stone remove.
52353..............  Cystouretero w/                 50               30
                      lithotripsy.
52354..............  Cystouretero w/                 50               30
                      biopsy.
52355..............  Cystouretero w/                 50               30
                      excise tumor.
54100..............  Biopsy of penis...              33               30
61000..............  Remove cranial                  60               15
                      cavity fluid.
61001..............  Remove cranial                  60               15
                      cavity fluid.
61020..............  Remove brain                    60               15
                      cavity fluid.
61026..............  Injection into                  60               15
                      brain canal.
61050..............  Remove brain canal              60               15
                      fluid.
61055..............  Injection into                  60               15
                      brain canal.
61070..............  Brain canal shunt               60               15
                      procedure.
62268..............  Drain spinal cord               36               30
                      cyst.
67346..............  Biopsy eye muscle.              42               30
68100..............  Biopsy of eyelid                32               30
                      lining.
93530..............  Rt heart cath                   35               30
                      congenital.
93531..............  R & l heart cath                35               30
                      congenital.
93532..............  R & l heart cath                35               30
                      congenital.
93533..............  R & l heart cath                35               30
                      congenital.
93580..............  Transcath closure               35               30
                      of asd.
93581..............  Transcath closure               35               30
                      of vsd.
------------------------------------------------------------------------

d. Price Adjustment for Laser Diode
    As we noted in the CY 2013 PFS proposed rule, it has come to our 
attention that the price associated with the equipment item called 
``laser, diode, for patient positioning (Probe)'' (ER040) in the direct 
PE input database is $7,678 instead of $18,160 as listed in the CY 2013 
PFS final rule with comment period (77 FR 68922). We proposed to revise 
the direct PE input database to reflect the corrected price.
    Comment: Several commenters expressed support for this proposal.
    Response: We appreciate the commenters' support and have revised 
the CY 2014 final direct PE input database as proposed.
e. Direct PE Inputs for Stereotactic Radiosurgery (SRS) Services (CPT 
Codes 77372 and 77373)
    Since 2001, Medicare has used HCPCS G-codes, in addition to the CPT 
codes, for stereotactic radiosurgery (SRS) to distinguish robotic and 
non-robotic methods of delivery. Based on our review of the current SRS 
technology, it is our understanding that most services currently 
furnished with linac-based SRS technology, including services currently 
billed using the non-robotic codes, incorporate some type of robotic 
feature. Therefore, we believe that it is no longer necessary to 
continue to distinguish robotic versus non-robotic linac-based SRS 
through the HCPCS G-codes. For purposes of the hospital outpatient 
prospective payment system (OPPS), we proposed to replace the existing 
four SRS HCPCS G-codes G0173 (Linear accelerator based stereotactic 
radiosurgery, complete course of therapy in one session),

[[Page 74246]]

G0251(Linear accelerator based stereotactic radiosurgery, delivery 
including collimator changes and custom plugging, fractionated 
treatment, all lesions, per session, maximum five sessions per course 
of treatment), G0339 (Image-guided robotic linear accelerator-based 
stereotactic radiosurgery, complete course of therapy in one session or 
first session of fractionated treatment), and G0340 (Image-guided 
robotic linear accelerator-based stereotactic radiosurgery, delivery 
including collimator changes and custom plugging, fractionated 
treatment, all lesions, per session, second through fifth sessions, 
maximum five sessions per course of treatment), with the SRS CPT codes 
77372 (Radiation treatment delivery, stereotactic radiosurgery (SRS), 
complete course of treatment of cranial lesion(s) consisting of 1 
session; linear accelerator based) and 77373 (Stereotactic body 
radiation therapy, treatment delivery, per fraction to 1 or more 
lesions, including image guidance, entire course not to exceed 5 
fractions) that do not distinguish between robotic and non-robotic 
methods of delivery. We refer readers to section II.C.3 of the CY 2014 
OPPS proposed rule for more discussion of that proposal. We also refer 
readers to the CY 2007 OPPS final rule (71 FR 68023 through 68026) for 
a detailed discussion of the history of the SRS codes.
    Two of the four current SRS G-codes are paid in the nonfacility 
setting through the PFS. These two codes, G0339 and G0340, describe 
robotic SRS treatment delivery and are contractor-priced. CPT codes 
77372 and 77373, which describe SRS treatment delivery without regard 
to the method of delivery, are currently paid in the nonfacility 
setting based on resource-based RVUs developed through the standard PE 
methodology. We noted in the proposed rule that if the CY 2014 OPPS 
proposal were finalized, it would appear that there would no longer be 
a need for G-codes to describe robotic SRS treatment and delivery. We 
did not propose to replace the contractor-priced G-codes for PFS 
payment but did seek comment from the public and stakeholders, 
including the AMA RUC, regarding whether or not the direct PE inputs 
for CPT codes 77372 and 77373 would continue to accurately estimate the 
resources used in furnishing typical SRS delivery were there no coding 
distinction between robotic and non-robotic methods of delivery.
    Comment: Several commenters, including the AMA RUC, responded to 
our request for information regarding whether the direct PE inputs for 
CPT codes 77372 and 77373 would continue to accurately estimate the 
resources used in furnishing typical SRS delivery were there no coding 
distinction between robotic and non-robotic methods of delivery. Most 
commenters, including the AMA RUC, stated that the most recently 
recommended direct PE inputs for these services would accurately 
estimate the resources. One commenter suggested this was not the case 
and that CMS should maintain the G-codes for purposes of PFS payment.
    Response: We appreciate stakeholders' responsiveness to our request 
for information. We will consider the information submitted in public 
comments as we consider future rulemaking for these codes.
2. Using OPPS and ASC Rates in Developing PE RVUs
    We typically establish two separate PE RVUs for services that can 
be furnished in either a nonfacility setting, like a physician's 
office, or a facility setting, like a hospital. The nonfacility PE RVUs 
reflect all of the direct and indirect practice expenses involved in 
furnishing a particular service when the entire service is furnished in 
a nonfacility setting. The facility PE RVUs reflect the direct and 
indirect practice expenses associated with furnishing a particular 
service in a setting such as a hospital or ASC where those facilities 
incur a portion or all of the costs and receive a separate Medicare 
payment for the service.
    When services are furnished in the facility setting, such as a HOPD 
or an ASC, the total combined Medicare payment (made to the facility 
and the professional) typically exceeds the Medicare payment made for 
the same service when furnished in the physician office or other 
nonfacility setting. We believe that this payment difference generally 
reflects the greater costs that facilities incur than those incurred by 
practitioners furnishing services in offices and other nonfacility 
settings. For example, hospitals incur higher overhead costs because 
they maintain the capability to furnish services 24 hours a day and 7 
days per week, generally furnish services to higher acuity patients 
than those who receive services in physicians' offices, and have 
additional legal obligations such as complying with the Emergency 
Medical Treatment and Labor Act (EMTALA). Additionally, hospitals must 
meet conditions of participation and ASCs must meet conditions for 
coverage in order to participate in Medicare.
    However, we have found that for some services, the total Medicare 
payment when the service is furnished in the physician office setting 
exceeds the total Medicare payment when the service is furnished in an 
HOPD or an ASC. When this occurs, we believe it is not the result of 
appropriate payment differentials between the services furnished in 
different settings. Rather, we believe it is due to anomalies in the 
data we use under the PFS and in the application of our resource-based 
PE methodology to the particular services.
    The PFS PE RVUs rely heavily on the voluntary submission of 
information by individuals furnishing the service and who are paid at 
least in part based on the data provided. Currently, we have little 
means to validate whether the information is accurate or reflects 
typical resource costs. Furthermore, in the case of certain direct 
costs, like the price of high-cost disposable supplies and expensive 
capital equipment, even voluntary information has been very difficult 
to obtain. In some cases the PE RVUs are based upon single price quotes 
or one paid invoice. We have addressed these issues extensively in 
previous rulemaking (for example, 75 FR 73252). Such incomplete, small 
sample, potentially biased or inaccurate resource input costs may 
distort the resources used to develop nonfacility PE RVUs used in 
calculating PFS payment rates for individual services.
    In addition to the accuracy issues with some of the physician PE 
resource inputs, the data used in the PFS PE methodology can often be 
outdated. As we have previously noted (77 FR 68921) there is no 
practical means for CMS or stakeholders to engage in a complete 
simultaneous review of the input resource costs for all HCPCS codes 
paid under the PFS on an annual or even regular basis. Thus, the 
information used to estimate PE resource costs for PFS services is not 
routinely updated. Instead, we strive to maintain relativity by 
reviewing at the same time the work RVUs, physician time, and direct PE 
inputs for a code, and reviewing all codes within families of codes 
where appropriate. Nonetheless, outdated resource input costs may 
distort RVUs used to develop nonfacility PFS payment rates for 
individual services. In the case of new medical devices for which a 
high growth in the volume of a service as it diffuses into clinical 
practice may lead to a decrease in the cost of expensive items, 
outdated price inputs can result in significant overestimation of 
resource costs.
    Such inaccurate resource input costs may distort the nonfacility PE 
RVUs used to calculate PFS payment rates for individual services. As we 
have previously noted, OPPS payment rates are based on auditable 
hospital data and are updated annually. Given the

[[Page 74247]]

differences in the validity of the data used to calculate payments 
under the PFS and OPPS, we believe that the nonfacility PFS payment 
rates for procedures that exceed those for the same procedure when 
furnished in a facility result from inadequate or inaccurate direct PE 
inputs, especially in price or time assumptions, as compared to the 
more accurate OPPS data. On these bases, we proposed a change in the PE 
methodology beginning in CY 2014. To improve the accuracy of PFS 
nonfacility payment rates for each calendar year, we proposed to use 
the current year OPPS or ASC rates as a point of comparison in 
establishing PE RVUs for services under the PFS. In setting PFS rates, 
we proposed to compare the PFS payment rate for a service furnished in 
an office setting to the total combined Medicare payment to 
practitioners and facilities for the same service when furnished in a 
hospital outpatient setting. For services on the ASC list, we proposed 
to make the same comparison except we would use the ASC rate as the 
point of comparison instead of the OPPS rate.
    We proposed to limit the nonfacility PE RVUs for individual codes 
so that the total nonfacility PFS payment amount would not exceed the 
total combined amount that Medicare would pay for the same code in the 
facility setting. That is, if the nonfacility PE RVUs for a code would 
result in a higher payment than the corresponding combined OPPS or ASC 
payment rate and PFS facility PE RVUs (when applicable) for the same 
code, we would reduce the nonfacility PE RVU rate so that the total 
nonfacility payment does not exceed the total Medicare payment made for 
the service in the facility setting. To maintain the greatest 
consistency and transparency possible, we proposed to use the current 
year PFS conversion factor. Similarly, we proposed to use current year 
OPPS or ASC rates in the comparison. For services with no work RVUs, we 
proposed to compare the total nonfacility PFS payment to the OPPS 
payment rates directly since no PFS payment is made for these services 
when furnished in the facility setting.
    We proposed to exempt the following services from this policy:
     Services Without Separate OPPS Payment Rates: We proposed 
to exclude services without separately payable OPPS rates from this 
methodical change since there would be no OPPS rate to which we could 
compare the PFS nonfacility PE RVUs. We note that there would also be 
no ASC rate for these services since ASCs are only approved to furnish 
a subset of OPPS services.
     Codes Subject to the DRA Imaging Cap: We proposed to 
exclude from this policy services capped at the OPPS payment rate in 
accordance with the Deficit Reduction Act of 2005 (DRA) (Pub. L. 109-
171). The DRA provision limits PFS payment for most imaging procedures 
to the amount paid under the OPPS system. This policy applies to the 
technical component of imaging services, including X-ray, ultrasound, 
nuclear medicine, MRI, CT, and fluoroscopy services. Screening and 
diagnostic mammograms are exempt. Since payment for these procedures is 
capped by statute we proposed to exclude them from this policy.
     Codes with Low Volume in the OPPS or ASC: We proposed to 
exclude any service for which 5 percent or less of the total number of 
services are furnished in the OPPS setting relative to the total number 
of PFS/OPPS allowed services.
     Codes with ASC Rates Based on PFS Payment Rates: To avoid 
issues of circularity, we proposed to exclude ASC services that are 
subject to the ``office-based'' procedure payment policies for which 
payment rates are based on the PFS nonfacility PE RVUs. We directed 
interested readers to the CY 2013 OPPS final rule (77 FR 68444) for 
additional information regarding this payment policy.
     Codes Paid in the Facility at Nonfacility PFS Rates: To 
avoid issues of circularity, we also proposed to exclude services that 
are paid in the facility setting at nonfacility payment rates.
    This would include certain professional-only services where the 
resource costs for practitioners are assumed to be similar in both 
settings.
     Codes with PE RVUs Developed Outside the PE Methodology: 
We also proposed to exclude services with PE RVUs established through 
notice and comment rulemaking outside the PE Methodology.
    Addendum B of the proposed rule displayed the PE RVUs that would 
result from implementation of the proposed change in the PE 
methodology.
    In discussing resource input issues, some stakeholders have 
previously suggested that the direct costs (for example, clinical 
labor, disposable supplies and medical equipment) involved in 
furnishing a service are similar in both the nonfacility and facility 
settings. Others have suggested that facilities, like hospitals, have 
greater purchasing power for medical equipment and disposable supplies 
so that the direct costs for a facility to furnish a service can be 
lower than costs for a physician practice furnishing the same service. 
Our proposed policy did not assume that the direct costs to furnish a 
service in the nonfacility setting are always lower than in the 
facility setting. Medicare payment methodologies, including both OPPS 
and the PFS PE methodology, incorporate both direct and indirect costs 
(administrative labor, office expenses, and all other expenses). Our 
proposed policy was premised on the idea that there are significantly 
greater indirect resource costs that are carried by facilities even in 
the event that the direct costs involved in furnishing a service in the 
office and facility settings are comparable.
    We stated our belief that our proposal provides a reliable means 
for Medicare to set upper payment limits for office-based procedures 
based on relatively more reliable cost information available for the 
same procedures when furnished in a facility setting where the cost 
structure would be expected to be somewhat, if not significantly, 
higher than the office setting. We believe that the current basis for 
estimating the resource costs involved in furnishing a PFS service is 
significantly encumbered by our current inability to obtain accurate 
information regarding supply and equipment prices, as well as procedure 
time assumptions. We believe that our proposed policy would mitigate 
the negative impact of these difficulties on both the appropriate 
relativity of PFS services and overall Medicare spending. A wide range 
of stakeholders and public commenters have pointed to the nonfacility 
setting as the most cost-effective location for services. Given the 
significantly higher cost structure of facilities (as discussed above) 
we believe that this presumption is accurate. In its March 2012 report 
to Congress, MedPAC recommended that Medicare should seek to pay 
similar amounts for similar services across payment settings, taking 
into account differences in the definitions of services and patient 
severity. (MedPAC March 2012 Report to Congress, page 46) We believe 
that the proposed change to our PFS PE methodology would more 
appropriately reflect resource costs in the nonfacility setting.
    Comment: One commenter representing primary care physicians 
supported the proposal and indicated a belief that the proposed policy 
would help to correct misvaluation between primary care services and 
the services affected by the policy. Another commenter supported the 
policy as an interim step until an expedited review of the services 
could be conducted. Other commenters, while not

[[Page 74248]]

supporting the proposal due to the financial impact on certain 
services, stated that hospitals and ASCs do typically incur higher 
overhead costs in delivering services than physician offices.
    The overwhelmingly majority of commenters objected to the proposed 
policy. Several commenters believed the services impacted by the policy 
were potentially misvalued, but still opposed our policy. Many 
commenters questioned whether facilities' costs for providing all 
services are necessarily higher than the costs of physicians or other 
practitioners. Commenters stated that the resources required to furnish 
services in nonfacility physician settings cannot be accurately 
measured using the OPPS methodology and that our proposal would result 
in rank order anomalies. Commenters indicated that it was inappropriate 
to base PFS payment on OPPS payment since a single APC contains 
multiple services that can involve a wide a range of costs that are 
averaged under the OPPS methodology. Many commenters also stated that 
since OPPS payment rates rely on the accuracy of APC payments, 
developed through hospitals accurately allocating their costs and 
charges to particular departments/APCs. These commenters stated that 
hospitals may have little incentive to accurately allocate their costs 
and charges to particular departments/APCs since they typically provide 
a broad range of services and therefore have the ability to make up for 
losses on one service with profits on another. The argument is that 
this ability makes the precise pricing of individual services less 
important in the OPPS system than it is in the physician setting. Also, 
the argument is that if physicians are going to be paid based upon the 
OPPS system it should be for all services so that like the hospitals 
they benefit from those overpaid in the hospital. Many commenters also 
questioned CMS' authority to use payment rates from other Medicare 
payment methodologies to cap PFS rates since they asserted the policy 
violated the statutory requirement that the PFS PE relative values be 
based on the resources used in furnishing the service. Some commenters 
also cited the financial impact of our proposed policy on the PFS rates 
as a further reason that the policy was inappropriate.
    For all of these reasons, these commenters recommended that we not 
adopt the proposed policy. Many of these commenters also suggested 
modifications to the policy if CMS did decide to move forward. 
Commenters suggested that since the ASC rates reflect the OPPS relative 
weights to determine payment rates under the ASC payment system, and 
are not based on cost information collected from ASCs, the ASC rates 
should not be used in the proposed policy.
    Commenters also stated a strong preference to use prospective year 
OPPS rates instead of current year OPPS rates as the point of 
comparison to prospective year PFS rates. The CY 2014 OPPS proposed 
rule proposed significant packaging that raised payment for many APCs, 
and therefore, raised the associated PFS cap rate.
    Some commenters stated that they believed that CMS does not have 
authority to use any conversion factor in the policy other than the one 
calculated under existing law for CY 2014.
    Commenters stated that the low-volume threshold (a minimum of 5 
percent in the hospital outpatient setting) was proposed with 
insufficient rationale and recommended either a 50 percent threshold or 
an absolute volume threshold. Commenters also argued that there should 
be an ASC low-volume threshold for using ASC rates.
    Commenters urged CMS to establish a means for stakeholders to 
demonstrate the validity of office costs relative to OPPS payments 
prior to implementing a cap for any particular code. Commenters also 
suggested that the AMA RUC should examine each code prior to the 
implementation of the policy for that code.
    Commenters suggested excluding codes recently revalued, such as 
certain surgical pathology codes, from the cap as their resource inputs 
and costs are more accurate than those less recently revalued.
    Commenters suggested that CMS should make the cap more transparent 
by identifying all affected codes and displaying the data used in 
establishing the capped values.
    Several commenters suggested using the individual OPPS HCPCS code 
costs that are used to calculate the APC payment, rather than the APC 
payment rate itself, as a way of avoiding the problems caused by the 
averaging that goes on in calculating the APC rates. These commenters 
argued that individual code costs are a more appropriate comparison 
than APC payment rates.
    Response: As we stated in the proposed rule, when services are 
furnished in the facility setting, such as an HOPD or ASC, the total 
Medicare payment (made to the facility and the professional combined) 
typically exceeds the Medicare payment made for the same service when 
furnished in the physician office or other nonfacility setting. We 
continue to believe that this payment difference generally reflects the 
greater costs that facilities incur compared to those incurred by 
practitioners furnishing services in offices and other non-facility 
settings. We also continue to believe that if the total Medicare 
payment when a service is furnished in the physician office setting 
exceeds the total Medicare payment when a service is furnished in an 
HOPD or an ASC, this is generally not the result of appropriate payment 
differentials between the services furnished in different settings. 
Rather, we continue to believe that it is primarily due to anomalies in 
the data we use under the PFS and in the application of our resource-
based PE methodology to the particular services.
    We greatly appreciate all of the comments that we received on our 
proposal. Given the many thoughtful and detailed technical comments 
that we received, we are not finalizing our proposed policy in this 
final rule with comment period. We will consider more fully all the 
comments received, including those suggesting technical improvements to 
our proposed methodology. After further consideration of the comments, 
we expect to develop a revised proposal for using OPPS and ASC rates in 
developing PE RVUs which we will propose through future notice and 
comment rulemaking.
    At this time, we do not believe that our standard process for 
evaluating potentially misvalued codes, including the use of the AMA 
RUC is an effective means of addressing these codes. As we stated in 
the proposed rule, we do not believe that the direct practice expense 
information we currently use to value these codes is accurate or 
reflects typical resource costs. We have addressed these issues 
extensively in previous rulemaking (for example, 75 FR 73252) and again 
in section II.B.4. of this final rule with comment period. We believe 
the current review process for direct PE inputs only accommodates 
incomplete, small sample, and potentially biased or inaccurate resource 
input costs that may distort the resources used to develop nonfacility 
PE RVUs used in calculating PFS payment rates for individual services.
3. Ultrasound Equipment Recommendations
    In the CY 2012 PFS proposed rule (76 FR 42796), we asked the AMA 
RUC to review the ultrasound equipment described in the direct PE input 
database. We specifically asked for review of the ultrasound equipment 
items described in the direct PE input database and whether the 
ultrasound

[[Page 74249]]

equipment listed for specific procedure codes is clinically necessary.
    In response, the AMA RUC recommended creating several new equipment 
inputs in addition to the revision of current equipment inputs for 
ultrasound services. The AMA RUC also forwarded pricing information for 
new and existing equipment items from certain medical specialty 
societies that represent the practitioners who furnish these services. 
In the following paragraphs, we summarize the AMA RUC recommendations, 
address our review of the provided information, and describe a series 
of changes we proposed to the direct PE inputs used in developing PE 
RVUs for these services for CY 2014.
(1) Equipment Rooms
    The AMA RUC made a series of recommendations regarding the 
ultrasound equipment items included in direct PE input equipment 
packages called ``rooms.'' Specifically, the AMA RUC recommended adding 
several new equipment items to the equipment packages called ``room, 
ultrasound, general'' (EL015) and ``room, ultrasound, vascular'' 
(EL016). The AMA RUC also recommended creating a similar direct PE 
input equipment package called ``room, ultrasound, cardiovascular.'' In 
considering these recommendations, we identified a series of new 
concerns regarding the makeup of these equipment packages and because 
there are several different ways to handle these concerns. In the CY 
2014 PFS proposed rule we sought public comment from stakeholders prior 
to proposing to implement any of these recommended changes through 
future rulemaking.
    We noted that the existing ``rooms'' for ultrasound technology 
include a greater number of individual items than the ``rooms'' for 
other kinds of procedures. For example, the equipment package for the 
``room, basic radiology'' (EL012) contains only two items: an x-ray 
machine and a camera. Ordinarily under the PFS, direct PE input 
packages for ``rooms'' include only equipment items that are typically 
used in furnishing every service in that room. When equipment items 
beyond those included in a ``room'' are typically used in furnishing a 
particular procedure, the additional equipment items for that procedure 
are separately reflected in the direct PE input database in addition to 
the ``room'' rather than being included in the room. When handled in 
this way, the room includes only those inputs that are common to all 
services furnished in that room type, and thus the direct PE inputs are 
appropriate for the typical case of each particular service. When 
additional equipment items are involved in furnishing a particular 
service, they are included as an individual PE input only for that 
particular service.
    In contrast, the equipment items currently included in the ``room, 
ultrasound, general'' are: the ultrasound system, five different 
transducers, two probe starter kits, two printers, a table, and various 
other items. In the proposed rule, we stated that we do not believe 
that it is likely that all of these items would be typically used in 
furnishing each service. For example, we do not believe that the 
typical ultrasound study would require the use of five different 
ultrasound transducers. However, the costs of all of these items are 
incorporated into the resource inputs for every service for which the 
ultrasound room is a direct PE input, regardless of whether each of 
those items is typically used in furnishing the particular service. 
This increases the resource cost for every service that uses the room 
regardless of whether or not each of the individual items is typically 
used in furnishing a particular procedure.
    Instead of proposing to incorporate the AMA RUC's recommendation to 
add more equipment items to these ultrasound equipment ``room'' 
packages, we stated our intention to continue to consider the 
appropriateness of the full number of items in the ultrasound ``rooms'' 
in the context of maintaining appropriate relativity with other 
services across the PFS. We sought comment from stakeholders, including 
the AMA RUC, on the items included in the ultrasound rooms, especially 
as compared to the items included in other equipment ``rooms.'' We 
stated that we thought that it would be appropriate to consider these 
comments in future rulemaking instead of proposing to alter the 
existing ``rooms'' just for ultrasound equipment items for CY 2014. 
Specifically we sought comment on whether equipment packages called 
``rooms'' should include all of the items that might be included in an 
actual room, just the items typically used for every service in such a 
room, or all of the items typically used in typical services furnished 
in the room. We stated that we believed that it would be most 
appropriate to propose changes to the ``room, ultrasound, general'' 
(EL015) and ``room, ultrasound, vascular'' (EL016) in the context of 
considering comments on this broader issue. We also stated that we 
believed that consideration of the broader issue will help determine 
whether it would be appropriate to create a ``room, ultrasound, 
cardiovascular,'' and if so, what items would be included in this 
equipment package.
    Comment: Several commenters, including the AMA RUC, suggested that 
equipment room packages should include all items that are typically in 
the room and cannot be used for another patient, in order to furnish 
all typical services performed in that room. In its comment letter, the 
AMA RUC urged CMS to adopt its previous recommendations and pointed out 
that CMS has previously stated that equipment time is comprised of any 
time that clinical labor is using the piece of equipment, plus any 
additional time the piece of equipment is not available for use with 
another patient due to its use during the procedure in question. 
Therefore, any time a piece of equipment is not available for use with 
another patient, the equipment should be allocated minutes. The AMA RUC 
also pointed out, as an example, that the equipment item called 
``otoscope-ophthalmoscope (wall unit)'' (EQ189) is a standard equipment 
input for all E/M codes even though it may not be typically used for 
each E/M service. Therefore, items included in the room but not 
necessarily typically used in furnishing particular services should be 
included as equipment minutes for all codes that typically use the 
room.
    Response: We appreciate the responses of the AMA RUC and others 
regarding our questions regarding equipment packages. We remain 
concerned about the appropriate estimate of resources regarding 
equipment items, especially those in room packages. We note that in our 
previous statements regarding allocation of equipment minutes, we have 
articulated that equipment minutes should be allocated to particular 
items when those items are unavailable for use with another patient 
``due to its use during the procedure in question.'' Based on the 
recommended equipment room packages, we are concerned that this 
definition may not apply consistently in the direct PE input database. 
While we understand the example of the ``otoscope-ophthalmoscope (wall 
unit)'' (EQ189) for E/M services, we believe that there may be other 
medical equipment items in a typical evaluation room in addition to the 
otoscope-ophthalmoscope (wall unit) and an exam table.
    These comments reinforce our belief that, for the sake of 
relativity and accuracy, changes to particular equipment room packages 
should be made in the context of a broader examination of all equipment 
packages, as well as assumed equipment utilization rates for these 
packages.

[[Page 74250]]

    In addition to the concerns regarding the contents of the 
ultrasound ``room'' packages, we also expressed concerned about the 
pricing information submitted through the AMA RUC to support its 
recommendation to add equipment to the ultrasound room packages. The 
highest-price item used in pricing the existing equipment input called 
``room, ultrasound, general'' (EL015), is a ``GE Logic 9 ultrasound 
system,'' currently priced at $220,000. As part of the AMA RUC 
recommendation described in the proposal, a medical specialty society 
recommended increasing the price of that item to $314,500. However, 
that recommendation did not include documentation to support the 
pricing level, such as a copy of a paid invoice for the equipment. 
Furthermore, the recommended price conflicts with certain publicly 
available information. For example, the Milwaukee Sentinel-Journal 
reported in a February 9, 2013 article that the price for GE ultrasound 
equipment ranges from ``$7,900 for a hand-held ultrasound to $200,000 
for its most advanced model.'' The same article points to an item 
called the ``Logiq E9'' as the ultrasound machine most used by 
radiologists and priced from $150,000 to $200,000. http://
www.jsonline.com/business/ge-sees-strong-future-with-its-ultrasound-
business-uj8mn79-190533061.html.
    In the proposed rule, we noted that we were unsure how to best 
reconcile the information disclosed by the manufacturer to the press 
and the prices submitted by the medical specialty society for use in 
updating the direct PE input prices. We believe discrepancies, such as 
these, exemplify the potential problem with updating prices for 
particular items based solely on price quotes or information other than 
copies of paid invoices. However, copies of paid invoices must also be 
evaluated carefully. The information presented in the article regarding 
the price for hand-held ultrasound devices raises questions about the 
adequacy of paid invoices, too, in determining appropriate input costs. 
The direct PE input described in the database as ``ultrasound unit, 
portable'' (EQ250) is currently priced at $29,999 based on a submitted 
invoice, while the article cites that GE sells a portable unit for as 
low as $7,900. We sought comment on the appropriate price to use as the 
typical for portable ultrasound units.
    Comment: We received several comments regarding the appropriate 
means to price the direct PE inputs. The AMA RUC and several specialty 
expressed concern that it is difficult for medical specialty societies 
to obtain paid invoices for equipment and supplies, especially for 
large equipment items that are bought infrequently.
    Several medical specialty societies suggested that their members 
are often uncomfortable sending invoices for expensive items since the 
prices are often proprietary and even though identifying information is 
redacted, the invoices are sometimes distributed to all AMA RUC meeting 
participants and available to the public once submitted to CMS. The 
specialty society suggested that certain stakeholders in the 
marketplace are often able to identify the individual practice 
submitting the invoice through this process and that such public 
revelation of the propriety pricing information may have major 
implications for the provider in future price negotiations and service 
lines in local markets for any practitioner volunteering such 
information.
    The AMA RUC expressed a shared concern with CMS about pricing 
information submitted as supporting documentation for the ultrasound 
room packages and stated that it will work with medical specialty 
societies to provide paid invoices as soon as possible. The AMA RUC 
also noted that it will work with the specialties to ensure that paid 
invoices, rather than quotes, are submitted to CMS. Several commenters 
objected to CMS' suggestion that a newspaper article might more 
accurately reflect typical resource costs than an invoice.
    Response: We appreciate the response of the AMA RUC to these 
concerns. We also appreciate that in many cases the staff of medical 
specialty societies may have difficulty obtaining paid invoices. 
However, we believe the difficulty in obtaining invoices due to market 
sensitivity does not negate or lessen the critical importance of using 
accurate pricing information in establishing direct PE inputs. We 
believe it is likely that the pricing information would be less market 
sensitive if the information served to confirm the assumptions we 
already display in the direct PE input database. We appreciate the 
concerns shared by the AMA RUC's and we continue to seek the best means 
to identify typical resource costs associated with disposable supplies 
and medical equipment. While we believe that a copy of a paid invoice 
is the minimal amount of necessary information for pricing a disposable 
supply or medical equipment input, we reiterate our concerns that, even 
when proffered, a sole paid invoice is not necessarily the optimal 
source for identifying typical resource costs. We agree with commenters 
that information a manufacturer provides the news media is not 
necessarily accurate. However, when such information stands in stark 
contrast to single invoices, we believe it is imperative to attempt to 
reconcile that information to identify the best available information 
regarding the typical cost. We will continue to consider the 
perspectives offered by these commenters in developing future proposals 
regarding the pricing of individual items and equipment packages.
(2) New Equipment Inputs and Price Updates
    Ultrasound Unit, portable, breast procedures. The AMA RUC 
recommended that a new direct PE input, ``ultrasound unit, portable, 
breast procedures,'' be created for breast procedures that are 
performed in a surgeon's office and where ultrasound imaging is 
included in the code descriptor. These services are described by CPT 
codes 19105 (Ablation, cryosurgical, of fibroadenoma, including 
ultrasound guidance, each fibroadenoma), 19296 (Placement of 
radiotherapy afterloading expandable catheter (single or multichannel) 
into the breast for interstitial radioelement application following 
partial mastectomy, includes imaging guidance; on date separate from 
partial mastectomy), and 19298 (Placement of radiotherapy afterloading 
brachytherapy catheters (multiple tube and button type) into the breast 
for interstitial radioelement application following (at the time of or 
subsequent to) partial mastectomy, includes imaging guidance). As we 
noted in the proposed rule, we are creating this input. The pricing 
information submitted for this item is a paid invoice and two price 
quotes. As we have previously stated, we believe that copies of paid 
invoices are more likely to reflect actual resource costs associated 
with equipment and supply items than quotes or other information. 
Therefore, we proposed a price of $33,930, which reflects the price 
displayed on the submitted copy of the paid invoice. We are not using 
the quotes as we do not believe that quotes provide reliable 
information about the prices that are actually paid for medical 
equipment. We did not receive any additional information regarding the 
price for this equipment item. Therefore the CY 2014 direct PE input 
database reflects the price as proposed.
    Endoscopic Ultrasound Processor. The AMA RUC recommended creating a 
new direct PE input called ``endoscopic ultrasound processor,'' for use 
in furnishing the service described by CPT code 31620 (Endobronchial 
ultrasound (EBUS) during bronchoscopic diagnostic or therapeutic 
intervention(s) (List

[[Page 74251]]

separately in addition to code for primary procedure[s])). We created 
this equipment item to use as an input in the direct PE input database. 
The price associated with the ``endoscopic ultrasound processor'' is 
$59,925, which reflects the price documented on the copy of the paid 
invoice submitted with the recommendation. We did not receive any 
additional information regarding the price for this equipment item. 
Therefore the CY 2014 direct PE input database reflects the price as 
proposed.
    Bronchofibervideoscope. The AMA RUC recommended creating a new 
direct PE input called ``Bronchofibervideoscope,'' for use in 
furnishing the service described by CPT code 31620 (Endobronchial 
ultrasound (EBUS) during bronchoscopic diagnostic or therapeutic 
intervention(s) (List separately in addition to code for primary 
procedure[s])). We created this new equipment item to use as an input 
in the direct PE input database. However, this item had no price 
associated with it in the proposed direct PE input database because we 
did not receive any information that would allow us to price the item 
accurately. Consequently, we sought copies of paid invoices for this 
equipment item in the CY 2014 proposed rule so that we could price the 
item accurately in the future.
    Comment: One commenter reported that the current sales price for 
the bronchofibervideoscope ranges from $30,000-$50,000. The commenter 
provided an invoice for the equipment that reflected a price of 
$35,200.
    Response: Based on the submission of the invoice information, we 
have updated the direct PE input database to reflect a price of $35,200 
for the Bronchofibervideoscope (ER093).
    Endoscope, ultrasound probe, drive (ES015). The AMA RUC forwarded 
pricing information to us regarding the existing input called 
``endoscope, ultrasound probe, drive'' (ES015), including a copy of a 
paid invoice. Based on this information, we proposed to change the 
price associated with ES015 to $13,256.25, which reflects the price 
documented on the submitted copy of the paid invoice. We did not 
receive any additional information regarding the price for this 
equipment item. Therefore, we the CY 2014 direct PE input database 
reflects the price as proposed.
(2) Ultrasound Equipment Input Recommendations for Particular Services
    The AMA RUC made recommendations regarding the typical ultrasound 
items used in furnishing particular services. In general, the AMA RUC 
recommended that the existing equipment items accurately described the 
typical equipment used in furnishing particular services. However, for 
some CPT codes the AMA RUC recommended changing the associated 
equipment inputs that appear in the direct PE input database. Based on 
our review of these recommendations, we generally agreed with the AMA 
RUC regarding these recommended changes, and the recommended changes 
are reflected in the direct PE input database. Table 10 displays the 
codes with changes to ultrasound equipment. However, for certain codes 
we did not agree with the recommendations of the AMA RUC. The following 
paragraphs address the changes we proposed that differ from the 
recommendations of the AMA RUC.
    For a series of cardiovascular services that include ultrasound 
technology, the AMA RUC recommended removing certain equipment items 
and replacing those items with a new item called ``room, ultrasound, 
cardiovascular.'' As we described in the preceding paragraphs, we did 
not propose to create the ``room, ultrasound, cardiovascular'' and 
therefore did not propose to add this ``room'' as an input for these 
services. However, we noted that the newly recommended equipment 
package incorporates many of the same kinds of items as the currently 
existing ``room, ultrasound, vascular'' (EL016). We agreed with the AMA 
RUC's suggestion that the existing equipment inputs for the relevant 
services listed in Table 10 do not reflect typical resource costs of 
furnishing the services. We believed that, pending our further 
consideration of the ultrasound ``room'' equipment packages, it would 
be appropriate to use the existing ``room, ultrasound, vascular'' 
(EL016) as a proxy for resource costs for these services.
    Comment: Several commenters urged CMS to accept the AMA RUC's 
recommendations. Most of these commenters suggested that if CMS were 
not to accept the AMA RUC's recommendation to create the new 
``cardiovascular ultrasound room'' for CY 2014, then the inputs for the 
existing ``room, ultrasound, vascular'' (EL016) should be used. A few 
commenters representing some of the practitioners who furnish some of 
these services objected to the change in equipment inputs based on 
their assertion that the members of their specialty societies typically 
use more resource intensive equipment than reflected in the AMA RUC 
recommendations. One of these commenters suggested that the CPT codes 
for fetal echocardiography (CPT codes 76825, 76826, 78627, and 78628) 
previously included the same equipment items as the other 
echocardiography codes with equipment updates. This commenter suggested 
that the equipment for these codes should be updated to correspond with 
the equipment for other, similar services.
    Response: As we noted in the proposed rule, we believe that the 
issue of equipment room packages should be addressed in future 
rulemaking. Based on these comments, we are finalizing the use of the 
existing ``room, ultrasound, vascular'' (EL016) as a proxy for resource 
costs for these services pending future consideration of equipment room 
packages. We note that the AMA RUC based its recommendation on 
information obtained from the medical specialty societies that 
represent the specialty of the practitioners who furnish the majority 
of allowed services for each of these codes using recent Medicare 
claims data. We examined the comments we received objecting to the 
finalization of the AMA RUC-recommended equipment recommendations and, 
in each case, confirmed that the commenters did not represent the 
practitioners who typically furnish each service according to the 
Medicare claims data. In the case of the fetal echocardiography codes, 
we agree with the commenter's suggestion that the equipment for these 
codes should correspond with the equipment for the similar services, 
especially since the AMA RUC recommended replacing these items for all 
other codes in the direct PE inputs database. Based on that review, we 
remain confident that our proposal is appropriate and we are finalizing 
the changes in the ultrasound equipment items as proposed, with the 
exception of updating the equipment items for fetal echocardiography to 
be consistent with other echocardiography services. These changes are 
displayed in Table 10 and incorporated in the CY 2014 direct PE input 
database.
    In the case of CPT code 76942 (Ultrasonic guidance for needle 
placement (for example, biopsy, aspiration, injection, localization 
device), imaging supervision and interpretation), we agreed with the 
AMA RUC's recommendation to replace the current equipment input of the 
``room, ultrasound, general'' (EL015) with ``ultrasound unit, 
portable'' (EQ250). We note that this service is typically reported 
with other codes that describe the needle placement procedures and that 
the recommended change in equipment from a room to a

[[Page 74252]]

portable device reflects a change in the typical kinds of procedures 
reported with this image guidance service. Given this change, we 
believe that it is appropriate to reconsider the procedure time 
assumption currently used in establishing the direct PE inputs for this 
code, which is 45 minutes. We reviewed the services reported with CPT 
code 76942 to identify the most common procedures furnished with this 
image guidance. The code most frequently reported with CPT code 76942 
is CPT 20610 (Arthrocentesis, aspiration and/or injection; major joint 
or bursa (for example, shoulder, hip, knee joint, subacromial bursa). 
The assumed procedure time for this service is five minutes. The 
procedure time assumptions for the vast majority of other procedures 
frequently reported with CPT code 76942 range from 5 to 20 minutes. 
Therefore, in addition to proposing the recommended change in equipment 
inputs associated with the code, we proposed to change the procedure 
time assumption used in establishing direct PE inputs for the service 
from 45 to 10 minutes, based on our analysis of 30 needle placement 
procedures most frequently reported with CPT code 76942. We noted that 
this reduced the clinical labor and equipment minutes associated with 
the code from 58 to 23 minutes.
    Comment: Several commenters noted that the AMA RUC is planning to 
conduct surveys and review the assumptions regarding the code and that 
CMS will be in a better position to make more accurate determinations 
if it waits for that data from the AMA RUC. One commenter stated that 
CMS should not make a change in the direct PE input database based on 
information in the Medicare claims data without input from the medical 
specialty societies whose members furnish and report the ultrasound 
guidance as described with CPT code 76942 and that a recommendation 
from the AMA RUC may provide better data than the information contained 
on Medicare claims.
    Response: We appreciate the partnership of the AMA RUC in the 
misvalued code initiative, but as a general principle, we do not 
believe that we should refrain from making appropriate changes to code 
values solely because the AMA RUC is planning to review a service in 
the future. In some cases, we believe that we should examine claims 
information and other sources of data and make proposals regarding the 
appropriate inputs used to develop the amount Medicare pays for PFS 
services. We believe that notice and comment rulemaking itself provides 
a means for the public, including medical specialty societies and the 
AMA RUC, to respond substantively to proposed changes in resource 
inputs for particular services. Furthermore, in cases like this one, we 
do not believe that the information reflected in the Medicare claims 
data is subjective or open to differing interpretations.
    Comment: Several commenters, including the AMA RUC, pointed out 
that CPT code 76942 includes supervision and interpretation, which 
represents both time and work that is separate from the surgical code 
and that the additional time included in the direct PE inputs may 
reflect time in addition to the base procedure.
    Response: We appreciate the response of the AMA RUC and others in 
pointing out concerns with our assumptions. We note that the proposed 
clinical labor service period of 23 minutes includes the 10 minutes of 
intra-service time in addition to 2 minutes for preparing the room, 
equipment, and supplies, 3 minutes for preparing and positioning the 
patient, 3 minutes for cleaning the room, and 5 minutes for processing 
images, completing data sheet, and presenting images and data to the 
interpreting physician. We did not receive information from any 
commenters suggesting that the time allocated for these tasks was 
inadequate. Therefore, we are finalizing our adjustment to the clinical 
labor minutes associated with this code, as proposed.

                        Table 10--Codes With Changes to Ultrasound Equipment for CY 2014
----------------------------------------------------------------------------------------------------------------
                                                                                 CY 2014
    CPT code          Descriptor         CY 2013 CMS     CY 2013 equipment    equipment CMS    CY 2014 equipment
                                       equipment code       description           code            description
----------------------------------------------------------------------------------------------------------------
19105...........  Cryosurg ablate fa  EQ250             ultrasound unit,    NEW               ultrasound unit,
                   each.                                 portable.                             portable, breast
                                                                                               procedures.
19296...........  Place po breast     EL015             room, ultrasound,   NEW               ultrasound unit,
                   cath for rad.                         general.                              portable, breast
                                                                                               procedures.
19298...........  Place breast rad    EL015             room, ultrasound,   NEW               ultrasound unit,
                   tube/caths.                           general.                              portable, breast
                                                                                               procedures.
                                     --------------------------------------
31620...........  Endobronchial us                     n/a                  NEW               Bronchofibervideos
                   add-on.                                                                     cope.
                                                       n/a                  NEW               Endoscopic
                                                                                               ultrasound
                                                                                               processor.
                                     --------------------------------------
52649...........  Prostate laser      EQ255             ultrasound,         EQ250             ultrasound unit,
                   enucleation.                          noninvasive                           portable.
                                                         bladder scanner w-
                                                         cart.
76376...........  3d render w/o       EL015             room, ultrasound,               Remove input.
                   postprocess.                          general.
76775...........  Us exam abdo back   EL015             room, ultrasound,   EQ250             ultrasound unit,
                   wall lim.                             general.                              portable.
76820...........  Umbilical artery    EQ249             ultrasound color    EL015             room, ultrasound,
                   echo.                                 doppler,                              general.
                                                         transducers and
                                                         vaginal probe.
76825...........  Echo exam of fetal  EQ254             ultrasound,         EL016             room, ultrasound,
                   heart.                                echocardiography                      vascular.
                                                         w-4 transducers
                                                         (Sequoia C256).
                                      EQ252             ultrasound,
                                                         echocardiography
                                                         analyzer software
                                                         (ProSolv).
76826...........  Echo exam of fetal  EQ254             ultrasound,         EL016             room, ultrasound,
                   heart.                                echocardiography                      vascular.
                                                         w-4 transducers
                                                         (Sequoia C256).
                                      EQ252             ultrasound,
                                                         echocardiography
                                                         analyzer software
                                                         (ProSolv).
76827...........  Echo exam of fetal  EQ254             ultrasound,         EL016             room, ultrasound,
                   heart.                                echocardiography                      vascular.
                                                         w-4 transducers
                                                         (Sequoia C256).

[[Page 74253]]

 
76828...........  Echo exam of fetal  EQ254             ultrasound,         EL016             room, ultrasound,
                   heart.                                echocardiography                      vascular.
                                                         w-4 transducers
                                                         (Sequoia C256).
76857...........  Us exam pelvic      EL015             room, ultrasound,   EQ250             ultrasound unit,
                   limited.                              general.                              portable.
76870...........  Us exam scrotum...  EL015             room, ultrasound,   EQ250             ultrasound unit,
                                                         general.                              portable.
76872...........  Us transrectal....  EL015             room, ultrasound,   EQ250             ultrasound unit,
                                                         general.                              portable.
76942...........  Echo guide for      EL015             room, ultrasound,   EQ250             ultrasound unit,
                   biopsy.                               general.                              portable.
93303...........  Echo guide for      EQ253             ultrasound,         EL016             room, ultrasound,
                   biopsy.                               echocardiography                      vascular.
                                                         digital
                                                         acquisition (Novo
                                                         Microsonics,
                                                         TomTec).
                                      EQ254             ultrasound,
                                                         echocardiography
                                                         w-4 transducers
                                                         (Sequoia C256).
                                      EQ252             ultrasound,
                                                         echocardiography
                                                         analyzer software
                                                         (ProSolv).
93304...........  Echo transthoracic  EQ252             ultrasound,         EL016             room, ultrasound,
                                                         echocardiography                      vascular.
                                                         analyzer software
                                                         (ProSolv).
                                      EQ253             ultrasound,
                                                         echocardiography
                                                         digital
                                                         acquisition (Novo
                                                         Microsonics,
                                                         TomTec).
                                      EQ254             ultrasound,
                                                         echocardiography
                                                         w-4 transducers
                                                         (Sequoia C256).
93306...........  Tte w/doppler       EQ253             ultrasound,         EL016             room, ultrasound,
                   complete.                             echocardiography                      vascular.
                                                         digital
                                                         acquisition (Novo
                                                         Microsonics,
                                                         TomTec).
                                      EQ254             ultrasound,
                                                         echocardiography
                                                         w-4 transducers
                                                         (Sequoia C256).
                                      EQ252             ultrasound,
                                                         echocardiography
                                                         analyzer software
                                                         (ProSolv).
93307...........  Tte w/o doppler     EQ252             ultrasound,         EL016             room, ultrasound,
                   complete.                             echocardiography                      vascular.
                                                         analyzer software
                                                         (ProSolv).
                                      EQ253             ultrasound,
                                                         echocardiography
                                                         digital
                                                         acquisition (Novo
                                                         Microsonics,
                                                         TomTec).
                                      EQ254             ultrasound,
                                                         echocardiography
                                                         w-4 transducers
                                                         (Sequoia C256).
93308...........  Tte f-up or lmtd..  EQ252             ultrasound,         EL016             room, ultrasound,
                                                         echocardiography                      vascular.
                                                         analyzer software
                                                         (ProSolv).
                                      EQ253             ultrasound,
                                                         echocardiography
                                                         digital
                                                         acquisition (Novo
                                                         Microsonics,
                                                         TomTec).
                                      EQ254             ultrasound,
                                                         echocardiography
                                                         w-4 transducers
                                                         (Sequoia C256).
93312...........  Echo                EQ253             ultrasound,         EL016             room, ultrasound,
                   transesophageal.                      echocardiography                      vascular.
                                                         digital
                                                         acquisition (Novo
                                                         Microsonics,
                                                         TomTec).
                                      EQ252             ultrasound,
                                                         echocardiography
                                                         analyzer software
                                                         (ProSolv).
                                      EQ256             ultrasound,
                                                         transducer (TEE
                                                         Omniplane II).
                                      EQ254             ultrasound,
                                                         echocardiography
                                                         w-4 transducers
                                                         (Sequoia C256).
93314...........  Echo                EQ254             ultrasound,         EL016             room, ultrasound,
                   transesophageal.                      echocardiography                      vascular.
                                                         w-4 transducers
                                                         (Sequoia C256).
                                      EQ256             ultrasound,
                                                         transducer (TEE
                                                         Omniplane II).
                                      EQ252             ultrasound,
                                                         echocardiography
                                                         analyzer software
                                                         (ProSolv).
                                      EQ253             ultrasound,
                                                         echocardiography
                                                         digital
                                                         acquisition (Novo
                                                         Microsonics,
                                                         TomTec).
93320...........  Doppler echo exam   EQ252             ultrasound,         EL016             room, ultrasound,
                   heart.                                echocardiography                      vascular.
                                                         analyzer software
                                                         (ProSolv).
                                      EQ253             ultrasound,
                                                         echocardiography
                                                         digital
                                                         acquisition (Novo
                                                         Microsonics,
                                                         TomTec).
                                      EQ254             ultrasound,
                                                         echocardiography
                                                         w-4 transducers
                                                         (Sequoia C256).
93321...........  Doppler echo exam   EQ252             ultrasound,         EL016             room, ultrasound,
                   heart.                                echocardiography                      vascular.
                                                         analyzer software
                                                         (ProSolv).

[[Page 74254]]

 
                                      EQ254             ultrasound,
                                                         echocardiography
                                                         w-4 transducers
                                                         (Sequoia C256).
93325...........  Doppler color flow  EQ252             ultrasound,         EL016             room, ultrasound,
                   add-on.                               echocardiography                      vascular.
                                                         analyzer software
                                                         (ProSolv).
                                      EQ253             ultrasound,
                                                         echocardiography
                                                         digital
                                                         acquisition (Novo
                                                         Microsonics,
                                                         TomTec).
                                      EQ254             ultrasound,
                                                         echocardiography
                                                         w-4 transducers
                                                         (Sequoia C256).
93350...........  Stress tte only...  EQ252             ultrasound,         EL016             room, ultrasound,
                                                         echocardiography                      vascular.
                                                         analyzer software
                                                         (ProSolv).
                                      EQ253             ultrasound,
                                                         echocardiography
                                                         digital
                                                         acquisition (Novo
                                                         Microsonics,
                                                         TomTec).
                                      EQ254             ultrasound,
                                                         echocardiography
                                                         w-4 transducers
                                                         (Sequoia C256).
93351...........  Stress tte          EQ254             ultrasound,         EL016             room, ultrasound,
                   complete.                             echocardiography                      vascular.
                                                         w-4 transducers
                                                         (Sequoia C256).
93980...........  Penile vascular     EL015             room, ultrasound,   EQ249             ultrasound color
                   study.                                general.                              doppler,
                                                                                               transducers and
                                                                                               vaginal probe.
93981...........  Penile vascular     EL015             room, ultrasound,   EQ249             ultrasound color
                   study.                                general.                              doppler,
                                                                                               transducers and
                                                                                               vaginal probe.
----------------------------------------------------------------------------------------------------------------

B. Misvalued Services

1. Valuing Services Under the PFS
    Section 1848(c) of the Act requires the Secretary to determine 
relative values for physicians' services based on three components: 
work, PE, and malpractice. 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.'' 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.'' 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.'' (See section I.B.1.b. for more detail 
on the development of the PE component.) Section 1848(c)(1)(C) of the 
Act defines the malpractice component as ``the portion of the resources 
used in furnishing the service that reflects malpractice expenses in 
furnishing the service.'' Sections 1848 (c)(2)(C)(ii) and (iii) of the 
Act specify that PE and malpractice RVUs shall be determined based on 
the relative PE/malpractice resources involved in furnishing the 
service.
    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. Section 3134(a) of the Affordable Care Act 
added a new section 1848(c)(2)(K) to 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 Affordable 
Care Act also added a new section 1848(c)(2)(L) to the Act, which 
requires the Secretary to develop a process to validate the RVUs of 
certain potentially misvalued codes under the PFS, identified using the 
same criteria used to identify potentially misvalued codes, and to make 
appropriate adjustments.
    As discussed in section II.B.1. of this final rule with comment 
period, each year we develop and propose appropriate adjustments to the 
RVUs, taking into account the recommendations provided by the American 
Medical Association/Specialty Society Relative Value Scale Update 
Committee (AMA RUC), the Medicare Payment Advisory Commission (MedPAC), 
and others. For many years, the AMA RUC has provided us with 
recommendations on the appropriate relative values for new, revised, 
and potentially misvalued PFS services. We review these recommendations 
on a code-by-code basis and consider these recommendations in 
conjunction with analyses of other data, such as claims data, to inform 
the decision-making process as authorized by the law. We may also 
consider analyses of physician time, work RVUs, or direct PE inputs 
using other data sources, such as Department of Veteran Affairs (VA), 
National Surgical Quality Improvement Program (NSQIP), the Society for 
Thoracic Surgeons (STS) National Database, and the Physician Quality 
Reporting System (PQRS) databases. In addition to considering the most 
recently available data, we also assess the results of physician 
surveys and specialty recommendations submitted to us by the AMA RUC. 
We conduct a clinical review to assess the appropriate RVUs in the 
context of contemporary medical practice. 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. In accordance with section 1848(c) of the Act, we determine 
appropriate adjustments to the RVUs, explain the basis of these 
adjustments, and respond to public comments in the PFS proposed and 
final rules.

[[Page 74255]]

2. Identifying, Reviewing, and Validating the RVUs of Potentially 
Misvalued Services
a. Background
    In its March 2006 Report to the 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. MedPAC stated, ``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 
often required to furnish that service. Over time, the work required 
for certain services would be expected to decline as physicians become 
more familiar with the service and more efficient in furnishing it.'' 
We believe services can also become overvalued when PEs decline. This 
can happen when the costs of equipment and supplies fall, or when 
equipment is used more frequently than is estimated in the PE 
methodology, reducing its cost per use. Likewise, services can become 
undervalued when physician work increases or PEs rise. In the ensuing 
years since MedPAC's 2006 report, additional groups of potentially 
misvalued services have been identified by the Congress, CMS, MedPAC, 
the AMA RUC, and other stakeholders.
    In recent years, CMS and the AMA RUC have taken increasingly 
significant steps to identify and 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(a) of the Affordable Care Act) directed the 
Secretary to specifically examine, as determined appropriate, 
potentially misvalued services in the following seven categories:
     Codes and families of codes for which there has been the 
fastest growth;
     Codes and families of codes that have experienced 
substantial changes in PEs;
     Codes that are recently established for new technologies 
or services;
     Multiple codes that are frequently billed in conjunction 
with furnishing a single service;
     Codes with low relative values, particularly those that 
are often billed multiple times for a single treatment;
     Codes which have not been subject to review since the 
implementation of the RBRVS (the so-called `Harvard-valued codes'); and
     Other codes determined to be appropriate by the Secretary.
    Section 1848(c)(2)(K)(iii) of the Act 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 also 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. 
Additionally, this section provides that the Secretary may coordinate 
the review and adjustment of any RVU with the periodic review described 
in section 1848(c)(2)(B) of the Act. Finally, section 
1848(c)(2)(K)(iii)(V) of the Act specifies that the Secretary may make 
appropriate coding revisions (including using existing processes for 
consideration of coding changes) that 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
    To fulfill our statutory mandate, we have identified and reviewed 
numerous potentially misvalued codes in all seven of the categories 
specified in section 1848(c)(2)(K)(ii) of the Act, and we plan to 
continue our work examining potentially misvalued codes in these areas 
over the upcoming years. In the current process, we identify 
potentially misvalued codes for review, and request recommendations 
from the AMA RUC and other public commenters on revised work RVUs and 
direct PE inputs for those codes. The AMA RUC, through its own 
processes, also identifies potentially misvalued codes for review. 
Through our public nomination process for potentially misvalued codes 
established in the CY 2012 PFS final rule with comment period, other 
individuals and stakeholder groups submit nominations for review of 
potentially misvalued codes as well.
    Since CY 2009, as a part of the annual potentially misvalued code 
review and Five-Year Review process, we have reviewed more than 1,000 
potentially misvalued codes to refine work RVUs and direct PE inputs. 
We have adopted appropriate work RVUs and direct PE inputs for these 
services as a result of these reviews. A more detailed discussion of 
the extensive prior reviews of potentially misvalued codes is included 
in the CY 2012 PFS final rule with comment period (76 FR 73052 through 
73055). In the CY 2012 PFS proposed rule, we proposed to identify and 
review potentially misvalued codes in the category of ``Other codes 
determined to be appropriate by the Secretary,'' referring to a list of 
the highest PFS expenditure services, by specialty, that had not been 
recently reviewed (76 FR 73059 through 73068).
    In the CY 2012 final rule with comment period, we finalized our 
policy to consolidate the review of physician work and PE at the same 
time (76 FR 73055 through 73958), and established a process for the 
annual public nomination of potentially misvalued services.
    One of the priority categories for review of potentially misvalued 
codes is services that have not been subject to review since the 
implementation of the PFS (the so-called ``Harvard-valued codes''). In 
the CY 2009 PFS proposed rule, 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). 
For the Fourth Five-Year Review (76 FR 32410), we requested that the 
AMA RUC review services that have not been reviewed since the original 
implementation of the PFS with annual utilization greater than 30,000 
(Harvard-valued--Utilization > 30,000). In the CY 2013 final rule with 
comment period, we identified for review the potentially misvalued 
codes for Harvard-valued services with annual allowed charges that 
total at least $10,000,000 (Harvard-valued--Allowed charges 
>=$10,000,000).
    In addition to the Harvard-valued codes, in the same rule we 
finalized for review a list of potentially misvalued codes that have 
stand-alone PE (these are codes with clinical labor procedure time 
assumptions not connected or dependent on physician time assumptions; 
see 77 FR 68918 for detailed information).
c. Validating RVUs of Potentially Misvalued Codes
    In addition to identifying and reviewing potentially misvalued 
codes, section 3134(a) of the Affordable Care Act added section 
1848(c)(2)(L) of the Act, which specifies that the Secretary shall 
establish a formal process to validate RVUs under the PFS. The 
validation process may include

[[Page 74256]]

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, as part of the validation, 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) of the Act. 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.
    In the CY 2011 PFS proposed rule (75 FR 40068) and CY 2012 PFS 
proposed rule (76 FR 42790), we solicited public comments on possible 
approaches, methodologies, and data sources that we should consider for 
a validation process. A summary of the comments along with our 
responses are included in the CY 2011 PFS final rule with comment 
period (75 FR 73217) and the CY 2012 PFS final rule with comment period 
(73054 through 73055).
    As we indicated in the CY 2014 PFS proposed rule (78 FR 43304), we 
have entered into two contracts with outside entities to develop 
validation models for RVUs. During a 2-year project, the RAND 
Corporation will use available data to build a validation model to 
predict work RVUs and the individual components of work RVUs, time and 
intensity. The model design will be informed by the statistical 
methodologies and approach used to develop the initial work RVUs and to 
identify potentially misvalued procedures under current CMS and AMA RUC 
processes. RAND will use a representative set of CMS-provided codes to 
test the model. RAND will consult with a technical expert panel on 
model design issues and the test results.
    The second contract is with the Urban Institute. Given the central 
role of time in establishing work RVUs and the concerns that have been 
raised about the current time values, a key focus of the project is 
collecting data from several practices for selected services. The data 
will be used to develop time estimates. Urban Institute will use a 
variety of approaches to develop objective time estimates, depending on 
the type of service, which will be a very resource-intensive part of 
the project. Objective time estimates will be compared to the current 
time values used in the fee schedule. The project team will then 
convene groups of physicians from a range of specialties to review the 
new time data and their potential implications for work and the ratio 
of work to time.
    The research being performed under these two contracts continues. 
For additional information, please visit our Web site (http://
www.cms.gov/Medicare/Medicare-Fee-for-Service-Payment/
PhysicianFeeSched/Downloads/RVUs-Validation-Model.pdf).
3. CY 2014 Identification and Review of Potentially Misvalued Services
a. Public Nomination of Potentially Misvalued Codes
    The public and stakeholders may nominate potentially misvalued 
codes for review by submitting the code with supporting documentation 
during the 60-day public comment period following the release of the 
annual PFS final rule with comment period under a process we finalized 
in the CY 2012 PFS final rule with comment period (76 FR 73058). 
Supporting documentation for codes nominated for the annual review of 
potentially misvalued codes may include the following:
     Documentation in the peer-reviewed medical literature or 
other reliable data that there have been changes in physician work due 
to one or more of the following: technique; knowledge and technology; 
patient population; site-of-service; length of hospital stay; and 
physician time.
     An anomalous relationship between the code being proposed 
for review and other codes.
     Evidence that technology has changed physician work, that 
is, diffusion of technology.
     Analysis of other data on time and effort measures, such 
as operating room logs or national and other representative databases.
     Evidence that incorrect assumptions were made in the 
previous valuation of the service, such as a misleading vignette, 
survey, or flawed crosswalk assumptions in a previous evaluation.
     Prices for certain high cost supplies or other direct PE 
inputs that are used to determine PE RVUs are inaccurate and do not 
reflect current information.
     Analyses of physician time, work RVU, or direct PE inputs 
using other data sources (for example, Department of Veteran Affairs 
(VA) National Surgical Quality Improvement Program (NSQIP), the Society 
for Thoracic Surgeons (STS) National Database, and the Physician 
Quality Reporting System (PQRS) databases).
     National surveys of physician time and intensity from 
professional and management societies and organizations, such as 
hospital associations.
    After we receive the nominated codes during the 60-day comment 
period following the release of the annual PFS final rule with comment 
period, we evaluate the supporting documentation and assess whether the 
nominated codes appear to be potentially misvalued codes appropriate 
for review under the annual process. In the following year's PFS 
proposed rule, we publish the list of nominated codes and indicate 
whether we are proposing each nominated code as a potentially misvalued 
code. We encourage the public to submit nominations for potentially 
misvalued codes during the comment period for this CY 2014 PFS final 
rule with comment period.
    We did not receive any public nominations of codes for 
consideration as potentially misvalued codes in response to the CY 2013 
final rule with comment period. As a result, we did not propose any 
publicly nominated potentially misvalued codes in the CY 2014 proposed 
rule.
b. Potentially Misvalued Codes
i. Contractor Medical Director Identified Potentially Misvalued Codes
    We began considering additional ways to broaden participation in 
the process of identifying potentially misvalued codes; we solicited 
the input of Medicare Administrative Contractor medical directors 
(CMDs) in making suggestions for codes to consider proposing as 
potentially misvalued codes.
    In the proposed rule, we noted several reasons why we believed that 
CMD input would be valuable in developing our proposal. As a group, 
CMDs represent a variety of medical specialties, which makes them a 
diverse group of physicians capable of providing opinions across the 
vast scope of services covered under the PFS. They are on the front 
line of administering the Medicare program, with their offices often 
serving as the first point of contact for practitioners with questions 
regarding coverage, coding and claims processing. CMDs spend a 
significant amount of time communicating directly with practitioners 
and the health care industry discussing more than just the broad 
aspects of the Medicare program but also engaging in and facilitating 
specific discussions around individual services. Through their 
development of evidence-based local coverage determinations (LCDs), 
CMDs also have

[[Page 74257]]

experience developing policy based on research.
    Comment: Many commenters supported our seeking input from the CMDs 
in developing our proposal for codes to be considered as potentially 
misvalued codes, while others expressed concern about using input from 
CMDs. Some asked for details on the process that the CMDs used to 
identify codes and some questioned whether CMDs possess the specialty-
related expertise to determine if a service is misvalued when that 
service is not generally performed by a CMD's designated specialty. In 
addition, several commenters believe that the identification of 
misvalued codes (in addition to review and revision of those codes) 
should be carried out through the AMA RUC process with input from the 
medical community. These commenters oppose any effort by CMS to 
unilaterally change code values.
    Response: The commenters are correct in noting that CMDs do not 
represent all specialties. We would note that in their role as CMDs, 
they do work on issues involving all specialties. Moreover, their role 
in this process was simply to assist us in identifying codes that we 
could consider proposing as potentially misvalued codes. After our 
evaluation, we proposed them as potentially misvalued codes in the CY 
2014 proposed rule and sought public comment. Thus the affected 
specialties and other stakeholders had the opportunity to provide us 
with public comments as to whether or not these codes should be 
evaluated as potentially misvalued. If, following our consideration of 
public comments, we determine that these codes are potentially 
misvalued, the AMA RUC and others will have further opportunity to 
submit information and public comment about the appropriate value of 
the codes before we would determine the codes are in fact misvalued and 
make changes to the values.
    Given the importance of ensuring that codes are appropriately 
valued, we believe it is appropriate to call upon the experience of 
CMDs in developing our proposal. Accordingly, we will proceed as we 
proposed in the CY 2014 proposed rule to consider the codes identified 
by CMDs as potentially misvalued codes.
    In consultation with our CMDs, the following lists of codes in 
Tables 11 and 12 were identified as potentially misvalued in the CY 
2014 proposed rule.

     Table 11--Codes Proposed as Potentially Misvalued Identified in
                         Consultation With CMDs
------------------------------------------------------------------------
             CPT code                         Short descriptor
------------------------------------------------------------------------
17311............................  Mohs 1 stage h/n/hf/g.
17313............................  Mohs 1 stage t/a/l.
21800............................  Treatment of rib fracture.
22305............................  Closed tx spine process fx.
27193............................  Treat pelvic ring fracture.
33960............................  External circulation assist.
33961............................  External circulation assist, each
                                    subsequent day.
47560............................  Laparoscopy w/cholangio.
47562............................  Laparoscopic cholecystectomy.
47563............................  Laparo cholecystectomy/graph.
55845............................  Extensive prostate surgery.
55866............................  Laparo radical prostatectomy.
64566............................  Neuroeltrd stim post tibial.
76942............................  Echo guide for biopsy.
------------------------------------------------------------------------

    CPT codes 17311 (Mohs micrographic technique, including removal of 
all gross tumor, surgical excision of tissue specimens, mapping, color 
coding of specimens, microscopic examination of specimens by the 
surgeon, and histpathologic preparation including routine stain(s) (for 
example, hematoxylin and eosin, toluidine blue), head, neck, hands, 
feet genitalia, or any location with surgery directly involving muscle, 
cartilage, bone, tendon, major nerves, or vessels; first stage, up to 5 
tissue blocks) and 17313 (Mohs micrographic technique, including 
removal of all gross tumor, surgical excision of tissue specimens, 
mapping, color coding of specimens, microscopic examination of 
specimens by the surgeon, and histopathologic preparation including 
routine stains(s) (for example, hematoxylin and eosin, toluidine blue), 
of the trunk, arms, or legs; first stage, up to 5 tissue blocks) were 
proposed as potentially misvalued codes because we believe that these 
codes may be overvalued based on CMD comments suggesting excessive 
utilization.
    Comment: All commenting on CPT codes 17311 and 17313 stated that 
these codes were being reviewed by the AMA RUC in 2013, and two 
suggested that we accept the AMA RUC recommended work values (6.2 and 
5.56 respectively) in the 2014 PFS final rule with comment period. One 
commenter asserted that these codes were not misvalued and should be 
removed from consideration as potentially misvalued but did not supply 
any information to support this view.
    Response: The commenters are correct that the codes were under 
review by the AMA RUC. Since the publication of the proposed rule, we 
have received recommendations from the AMA RUC for these codes. Rather 
than finalizing them as potentially misvalued codes, since we have the 
AMA RUC recommendations we are proposing interim final values for these 
codes per our usual process. (See section II.E.3.a.i.) These values are 
open for comment during the comment period for this final rule.
    CPT codes 21800 (Closed treatment of rib fracture, uncomplicated, 
each), 22305 (Closed treatment of vertebral process fracture(s)) and 
27193 (Closed treatment of pelvic ring fracture, dislocation, diastasis 
or subluxation, without manipulation) were proposed for review as 
potentially misvalued codes.
    Comment: We received no comments on these codes.
    Response: We are finalizing our proposal to review these codes as 
potentially misvalued codes.
    CPT codes 33960 (Prolonged extracorporeal circulation for 
cardiopulmonary insufficiency; initial day) and 33961 (Prolonged 
extracorporeal circulation for cardiopulmonary insufficiency; each 
subsequent day) were proposed for review because the service was 
originally valued when it was used primarily in premature neonates; but 
the service is now being furnished to adults with severe influenza, 
pneumonia and respiratory distress syndrome. We also noted in the 
proposed rule that, while the code currently includes 523 minutes of 
total physician time with 133 minutes of intraservice time, physicians 
are not typically furnishing the service over that entire time 
interval; rather, hospital-employed pump technicians are furnishing 
much of the work.
    Comment: We received no comments on these codes.
    Response: We are finalizing our proposal to review these codes as 
potentially misvalued codes.
    CPT codes 47560 (Laparoscopy, surgical; with guided transhepatic 
cholangiography, without biopsy), 47562 (Laparoscopy, surgical; 
cholecystectomy) and 47563 (Laparoscopy, surgical; cholecystectomy with 
cholangiography) were proposed as potentially misvalued because the 
more extensive code (CPT 47560) has lower work RVUs than the less 
extensive codes (CPT 47562 and CPT 47563).
    Comment: We received a comment suggesting that these codes were not 
potentially misvalued and urging us not to finalize our proposal, 
stating that 47562 and 47563 describe more complex surgical procedures 
and both have a 090-day global period while 47560 has a 000-day global 
period.

[[Page 74258]]

    Response: We acknowledge that the codes have different global 
periods, but believe that questions remain about how these codes should 
be valued. Therefore, we are finalizing our proposal to review these 
codes as potentially misvalued codes.
    CPT codes 55845 (Prostatectomy, retropubic radical, with or without 
nerve sparing; with bilateral pelvic lymphadenectomy, including 
external iliac, hypogastric, and obturator nodes) and 55866 
(Laparoscopy, surgical prostatectomy, retropubic radial, including 
nerve sparing, includes robotic assistance, when performed) were 
proposed as potentially misvalued because the RVUs for the laparoscopic 
procedure (CPT 55866) are higher than those for the open procedure (CPT 
55845) and we believe that, in general, a laparoscopic procedure would 
not require greater resources than the open procedure.
    Comment: A few comments suggested that these codes were not 
potentially misvalued because the laparoscopic code (CPT 55866) does 
require a higher level of work than the open procedure (CPT 55845) so 
the codes are in the appropriate rank order. One commenter stated that 
they had submitted an action plan for the review of these codes at the 
October 2013 AMA RUC meeting, and suggested that we defer any action on 
these codes until the AMA RUC review process is complete. Another 
commenter agreed that they were potentially misvalued saying that we 
should pay the same rate for both codes.
    Response: Although most of the commenters indicated that it was 
appropriate that RVUs be higher for CPT code 55866 (laparoscopic 
procedure) than for CPT code 55845 (open procedure), we believe that 
there is enough question about how these codes should be valued that we 
are finalizing the proposal to review these codes as potentially 
misvalued codes. We note that we consider AMA RUC recommendations 
through our usual review of potentially misvalued codes.
    We proposed CPT 64566 (Posterior tibial neurostimulation, 
percutaneous needle electrode, single treatment, includes programming) 
as a potentially misvalued code because the current valuation is based 
on the procedure being furnished by a physician, but we think that the 
procedure typically is furnished by auxiliary personnel with physician 
supervision (rather than by a physician).
    Comment: We received a few comments stating that this code is not 
misvalued and urged us not to finalize our proposal. One commenter 
disagrees that CPT code 64566 is potentially misvalued and stated that 
the current work RVU of 0.60 is appropriate and should be maintained.
    Response: We believe that further review is needed to determine if 
this procedure is typically performed by the physician, or the 
auxiliary personnel with physician supervision. Therefore, we are 
finalizing our proposal to review the codes described above as 
potentially misvalued codes.
    We proposed CPT code 76942 (Ultrasonic guidance for needle 
placement (for example, biopsy, aspiration, injection, localization 
device), imaging supervision and interpretation) as a potentially 
misvalued code because of the high frequency with which it is billed 
with CPT code 20610 (Arthrocentesis, aspiration and/or injection; major 
joint or bursa (for example, shoulder, hip, knee joint, subacromial 
bursa). As we noted in the proposed rule, we are concerned about 
potential overutilization of these codes and it was suggested that the 
payment for CPT code 76942 and CPT code 20610 should be bundled to 
reduce the incentive for providers to always provide and bill 
separately for ultrasound guidance.
    We also noted in the proposed rule that we were proposing to revise 
the direct PE inputs for CPT code 76942 because claims data shows that 
the procedure time assumption for CPT code 76942 is longer than that 
for the typical procedure with which the code is billed (CPT code 
20610). The direct PE inputs and procedure time for CPT code 76942 are 
addressed in detail in section II.B.4.f. of this final rule with 
comment period. We further explained in the proposed rule that the 
discrepancy in procedure times and the resulting potentially inaccurate 
payment raises a fundamental concern regarding the incentive to furnish 
ultrasound guidance.
    Comment: We received a comment saying that this code is 
undervalued, several comments indicating that the reduction of time and 
other inputs would be inappropriate and some comments suggesting that 
we should delay action until the AMA RUC can review and provide its 
recommendation.
    Response: Based on the diversity of the comments received about the 
valuation of this code, we are finalizing our proposal to review it as 
a potentially misvalued code. This action is consistent with the 
comment recommending that we delay action until the AMA RUC acts 
because we routinely consider AMA RUC recommendations through our usual 
review of potentially misvalued codes. Thus, we would seek the AMA RUC 
recommendation before re-valuing.
    As we noted in the proposed rule that given our concerns with CPT 
code 76942, we have similar concerns with other codes for ultrasound 
guidance. Accordingly, we proposed the following additional ultrasound 
guidance codes as potentially misvalued.

  Table 12--Ultrasound Guidance Codes Proposed as Potentially Misvalued
------------------------------------------------------------------------
             CPT code                         Short descriptor
------------------------------------------------------------------------
76930............................  Echo guide cardiocentesis.
76932............................  Echo guide for heart biopsy.
76936............................  Echo guide for artery repair.
76940............................  US guide tissue ablation.
76948............................  Echo guide ova aspiration.
76950............................  Echo guidance radiotherapy.
76965............................  Echo guidance radiotherapy.
------------------------------------------------------------------------

    Comment: We received some comments asking us not to treat 76930, 
76932, and 76936 as potentially misvalued codes stating that these 
codes are not misvalued but without providing information to support 
the contention. One commenter stated that 76936 should be removed from 
the list because it is not an image guidance technique used to 
supplement a surgical procedure.
    Response: We agree that code 76936 is not a code used to supplement 
a surgical procedure and therefore does not raise the concerns we 
discussed in the proposed rule. Accordingly, it will not be included on 
the list of potentially misvalued codes. The comments on codes 76930 
and 76932 provided insufficient information to persuade us that these 
codes should not be considered potentially misvalued. Given that the 
identification of a code as potentially misvalued merely assures that 
the current values are evaluated to determine whether changes are 
warranted, we are finalizing our proposal to consider codes 76930 and 
76932 as potentially misvalued.
    In summary, the following codes are finalized as potentially 
misvalued codes.

                Table 13--Potentially Misvalued CPT Codes
------------------------------------------------------------------------
             CPT code                         Short descriptor
------------------------------------------------------------------------
21800............................  Treatment of rib fracture.
22305............................  Closed tx spine process fx.
27193............................  Treat pelvic ring fracture.
33960............................  External circulation assist.
33961............................  External circulation assist, each
                                    subsequent day.
47560............................  Laparoscopy w/cholangio.

[[Page 74259]]

 
47562............................  Laparoscopic cholecystectomy.
47563............................  Laparo cholecystectomy/graph.
55845............................  Extensive prostate surgery.
55866............................  Laparo radical prostatectomy.
64566............................  Neuroeltrd stim post tibial.
76930............................  Echo guide cardiocentesis.
76932............................  Echo guide for heart biopsy.
76940............................  US guide tissue ablation.
76942............................  Echo guide for biopsy.
76948............................  Echo guide ova aspiration.
76950............................  Echo guidance radiotherapy.
76965............................  Echo guidance radiotherapy.
------------------------------------------------------------------------

    We will accept public nominations of potentially misvalued codes 
with supporting documentation as described in section II.C.3.a. of this 
final rule with comment period in the CY 2015 proposed rule.
ii. Number of Visits and Physician Time in Selected Global Surgical 
Packages
    In the CY 2013 proposed rule, we sought comments on methods of 
obtaining accurate and current data on E/M services furnished as part 
of a global surgical package. Commenters provided a variety of 
suggestions including setting the all surgical services to a 0-day 
global period, requiring all E/M services to be separately billed, 
validating the global surgical packages with the hospital Diagnosis-
Related Group length of stay data, and setting auditable documentation 
standards for post-operative E/M services. In addition to the broader 
comments, the AMA RUC noted that many surgical procedures did not have 
the correct hospital and discharge day management services in the 
global period, resulting in incorrect times in the time file. The AMA 
RUC submitted post-operative visits and times for the services that we 
had displayed with zero visits in the CMS time file with the CY 2013 
proposed rule. The AMA RUC suggested that the errors may have resulted 
from the inadvertent removal of the visits from the time file in 2007. 
We responded to this comment in the CY 2013 final rule with comment 
period by saying that we would review this file and, if appropriate, 
propose modifications. We noted in the CY 2013 final rule with comment 
period that if time had been removed from the physician time file 
inadvertently, it would have resulted in a small impact on the indirect 
allocation of PE at the specialty level, but it would not have affected 
the physician work RVUs or direct PE inputs for these services. It 
would have a small impact on the indirect allocation of PE at the 
specialty level, which we would review when we explore this potential 
time file change.
    After extensive review, we believe that the data were deleted from 
the time file due to an inadvertent error as noted by the AMA RUC. To 
correct this inadvertent error, in the CY2014 proposed rule, we 
proposed to replace the missing post-operative hospital E/M visit 
information and time for the 117 codes that were identified by the AMA 
RUC and displayed in Table 14. Thus, we believe this correction will 
populate the physician time file with data that, absent the inadvertent 
error, would have been present in the time file.

                       Table 14--Global Surgical Package Visits and Physician Time Changes
----------------------------------------------------------------------------------------------------------------
                                               Visits included in Global Package \1\        CY 2013     CY 2014
      CPT code         Short descriptor  ------------------------------------------------  physician   physician
                                             99231       99232       99238       99291       time        time
----------------------------------------------------------------------------------------------------------------
19368...............  Breast                    4.00  ..........        1.00  ..........      712.00      770.00
                       reconstruction.
19369...............  Breast                    3.00  ..........        1.00  ..........      657.00      690.00
                       reconstruction.
20100...............  Explore wound neck        2.00  ..........        1.00  ..........      218.00      266.00
20816...............  Replantation digit        5.00  ..........        1.00  ..........      671.00      697.00
                       complete.
20822...............  Replantation digit        3.00  ..........        1.00  ..........      587.00      590.00
                       complete.
20824...............  Replantation thumb        5.00  ..........        1.00  ..........      646.00      690.00
                       complete.
20827...............  Replantation thumb        4.00  ..........        1.00  ..........      610.00      625.00
                       complete.
20838...............  Replantation foot         8.00  ..........        1.00  ..........      887.00      986.00
                       complete.
20955...............  Fibula bone graft         6.00  ..........        1.00        1.00      867.00      957.00
                       microvasc.
20969...............  Bone/skin graft           8.00  ..........        1.00  ..........     1018.00     1048.00
                       microvasc.
20970...............  Bone/skin graft           8.00  ..........        1.00  ..........      958.00      988.00
                       iliac crest.
20973...............  Bone/skin graft           5.00  ..........        1.00  ..........     1018.00      988.00
                       great toe.
21139...............  Reduction of              1.00  ..........        1.00  ..........      400.00      466.00
                       forehead.
21151...............  Reconstruct               2.00  ..........        1.00        1.00      567.00      686.00
                       midface lefort.
21154...............  Reconstruct               2.50  ..........        1.00        1.50      664.00      853.00
                       midface lefort.
21155...............  Reconstruct               2.00  ..........        1.00        2.00      754.00      939.00
                       midface lefort.
21175...............  Reconstruct orbit/  ..........        1.00        1.00        2.00      549.00      767.00
                       forehead.
21182...............  Reconstruct         ..........        1.00        1.00        2.00      619.00      856.00
                       cranial bone.
21188...............  Reconstruction of         1.00  ..........        1.00  ..........      512.00      572.00
                       midface.
22100...............  Remove part of            2.00  ..........        1.00  ..........      397.00      372.00
                       neck vertebra.
22101...............  Remove part thorax        3.00  ..........        1.00  ..........      392.00      387.00
                       vertebra.
22110...............  Remove part of            6.00  ..........        1.00  ..........      437.00      479.00
                       neck vertebra.
22112...............  Remove part thorax        6.50  ..........        1.00  ..........      507.00      530.00
                       vertebra.
22114...............  Remove part lumbar        6.50  ..........        1.00  ..........      517.00      530.00
                       vertebra.
22210...............  Revision of neck          7.00  ..........        1.00  ..........      585.00      609.00
                       spine.
22212...............  Revision of thorax        7.00  ..........        1.00  ..........      610.00      640.00
                       spine.
22214...............  Revision of lumbar        7.00  ..........        1.00  ..........      585.00      624.00
                       spine.
22220...............  Revision of neck          6.50  ..........        1.00  ..........      565.00      585.00
                       spine.
22222...............  Revision of thorax        7.50  ..........        1.00  ..........      630.00      651.00
                       spine.
22224...............  Revision of lumbar        7.50  ..........        1.00  ..........      620.00      666.00
                       spine.
22315...............  Treat spine               1.00  ..........        1.00  ..........      257.00      252.00
                       fracture.
22325...............  Treat spine               5.50  ..........        1.00  ..........      504.00      528.00
                       fracture.
22326...............  Treat neck spine          5.50  ..........        1.00  ..........      452.00      480.00
                       fracture.
22327...............  Treat thorax spine        9.00  ..........        1.00  ..........      505.00      604.00
                       fracture.
22548...............  Neck spine fusion.        8.00  ..........        1.00        1.00      532.00      673.00
22556...............  Thorax spine              3.00  ..........        1.00        1.00      525.00      557.00
                       fusion.
22558...............  Lumbar spine              2.00  ..........        1.00        1.00      502.00      525.00
                       fusion.

[[Page 74260]]

 
22590...............  Spine & skull             3.00  ..........        1.00  ..........      532.00      501.00
                       spinal fusion.
22595...............  Neck spinal fusion        6.00  ..........        1.00  ..........      492.00      521.00
22600...............  Neck spine fusion.        6.00  ..........        1.00  ..........      437.00      490.00
22610...............  Thorax spine              7.50  ..........        1.00  ..........      468.00      549.00
                       fusion.
22630...............  Lumbar spine              3.00  ..........        1.00  ..........      501.00      487.00
                       fusion.
22800...............  Fusion of spine...        7.00  ..........        1.00  ..........      517.00      571.00
22802...............  Fusion of spine...        4.00  ..........        1.00  ..........      552.00      538.00
22804...............  Fusion of spine...        5.00  ..........        1.00  ..........      630.00      595.00
22808...............  Fusion of spine...        5.00  ..........        1.00  ..........      553.00      530.00
22810...............  Fusion of spine...        5.00  ..........        1.00  ..........      613.00      595.00
22812...............  Fusion of spine...        7.50  ..........        1.00  ..........      666.00      700.00
31582...............  Revision of larynx        8.00  ..........        1.00  ..........      489.00      654.00
32650...............  Thoracoscopy w/           2.00  ..........        1.00  ..........      322.00      290.00
                       pleurodesis.
32656...............  Thoracoscopy w/           3.00  ..........        1.00  ..........      419.00      377.00
                       pleurectomy.
32658...............  Thoracoscopy w/sac        1.00  ..........        1.00  ..........      362.00      330.00
                       fb remove.
32659...............  Thoracoscopy w/sac        2.00  ..........        1.00  ..........      414.00      357.00
                       drainage.
32661...............  Thoracoscopy w/           1.00  ..........        1.00  ..........      342.00      300.00
                       pericard exc.
32664...............  Thoracoscopy w/th         1.00  ..........        1.00  ..........      362.00      330.00
                       nrv exc.
32820...............  Reconstruct               3.50  ..........        1.00        4.50      631.00      854.00
                       injured chest.
33236...............  Remove electrode/         4.00  ..........        1.00  ..........      258.00      346.00
                       thoracotomy.
33237...............  Remove electrode/         5.00  ..........        1.00  ..........      378.00      456.00
                       thoracotomy.
33238...............  Remove electrode/         5.00  ..........        1.00  ..........      379.00      472.00
                       thoracotomy.
33243...............  Remove eltrd/             5.00  ..........        1.00  ..........      504.00      537.00
                       thoracotomy.
33321...............  Repair major              8.00  ..........        1.00  ..........      751.00      754.00
                       vessel.
33332...............  Insert major              8.00  ..........        1.00  ..........      601.00      604.00
                       vessel graft.
33401...............  Valvuloplasty open        8.00  ..........        1.00  ..........      830.00      661.00
33403...............  Valvuloplasty w/cp        8.00  ..........        1.00  ..........      890.00      638.00
                       bypass.
33417...............  Repair of aortic          2.50  ..........        1.00        2.50      740.00      750.00
                       valve.
33472...............  Revision of               0.50  ..........        1.00        4.50      665.00      780.00
                       pulmonary valve.
33502...............  Coronary artery           2.50  ..........        1.00        2.50      710.00      688.00
                       correction.
33503...............  Coronary artery           5.50  ..........        1.00        2.50      890.00      838.00
                       graft.
33504...............  Coronary artery           4.50  ..........        1.00        2.50      740.00      789.00
                       graft.
33600...............  Closure of valve..        6.00  ..........        1.00  ..........      800.00      628.00
33602...............  Closure of valve..        6.00  ..........        1.00  ..........      770.00      628.00
33606...............  Anastomosis/artery-       8.00  ..........        1.00  ..........      860.00      728.00
                       aorta.
33608...............  Repair anomaly w/         5.00  ..........        1.00  ..........      800.00      668.00
                       conduit.
33690...............  Reinforce                 2.50  ..........        1.00        2.50      620.00      636.00
                       pulmonary artery.
33702...............  Repair of heart           0.50  ..........        1.00        3.50      663.00      751.00
                       defects.
33722...............  Repair of heart           5.00  ..........        1.00  ..........      770.00      608.00
                       defect.
33732...............  Repair heart-vein         5.00  ..........        1.00  ..........      710.00      578.00
                       defect.
33735...............  Revision of heart         2.50  ..........        1.00        3.50      740.00      770.00
                       chamber.
33736...............  Revision of heart         5.00  ..........        1.00  ..........      710.00      548.00
                       chamber.
33750...............  Major vessel shunt        2.00  ..........        1.00        3.00      680.00      722.00
33764...............  Major vessel shunt        1.50  ..........        1.00        3.50      710.00      750.00
                       & graft.
33767...............  Major vessel shunt        5.00  ..........        1.00  ..........      800.00      608.00
33774...............  Repair great              0.50  ..........        1.00        6.50      845.00      998.00
                       vessels defect.
33788...............  Revision of               2.50  ..........        1.00        2.50      770.00      736.00
                       pulmonary artery.
33802...............  Repair vessel             2.50  ..........        1.00        1.50      558.00      556.00
                       defect.
33803...............  Repair vessel             2.50  ..........        1.00        1.50      618.00      586.00
                       defect.
33820...............  Revise major              1.00  ..........        1.00        1.00      430.00      414.00
                       vessel.
33824...............  Revise major              0.50  ..........        1.00        2.50      588.00      615.00
                       vessel.
33840...............  Remove aorta              1.50  ..........        1.00        2.50      588.00      639.00
                       constriction.
33845...............  Remove aorta              1.00  ..........        1.00        3.00      710.00      726.00
                       constriction.
33851...............  Remove aorta              2.00  ..........        1.00        3.00      603.00      700.00
                       constriction.
33852...............  Repair septal             2.00  ..........        1.00        3.00      663.00      719.00
                       defect.
33853...............  Repair septal             8.00  ..........        1.00  ..........      800.00      668.00
                       defect.
33917...............  Repair pulmonary          5.00  ..........        1.00  ..........      740.00      608.00
                       artery.
33920...............  Repair pulmonary          6.00  ..........        1.00  ..........      800.00      658.00
                       atresia.
33922...............  Transect pulmonary        5.00  ..........        1.00  ..........      618.00      546.00
                       artery.
33974...............  Remove intra-             1.00  ..........        1.00  ..........      406.00      314.00
                       aortic balloon.
34502...............  Reconstruct vena          6.00  ..........        1.00  ..........      793.00      741.00
                       cava.
35091...............  Repair defect of         11.00  ..........        1.00        2.00      597.00      790.00
                       artery.
35694...............  Arterial                  2.00  ..........        1.00  ..........      468.00      456.00
                       transposition.
35901...............  Excision graft            4.00  ..........        1.00  ..........      484.00      482.00
                       neck.
35903...............  Excision graft            3.00  ..........        1.00  ..........      408.00      416.00
                       extremity.
47135...............  Transplantation of       23.00  ..........        1.00  ..........     1501.00     1345.00
                       liver.
47136...............  Transplantation of       28.00  ..........        1.00  ..........     1301.00     1329.00
                       liver.
49422...............  Remove tunneled ip        1.00  ..........        1.00  ..........      154.00      182.00
                       cath.
49429...............  Removal of shunt..        6.00  ..........        1.00  ..........      249.00      317.00
50320...............  Remove kidney             4.00  ..........        1.00  ..........      480.00      524.00
                       living donor.

[[Page 74261]]

 
50845...............  Appendico-                5.00  ..........        1.00  ..........      685.00      613.00
                       vesicostomy.
56632...............  Extensive vulva           7.00  ..........        1.00  ..........      835.00      683.00
                       surgery.
60520...............  Removal of thymus         2.00  ..........        1.00        2.00      406.00      474.00
                       gland.
60521...............  Removal of thymus         5.00  ..........        1.00  ..........      457.00      445.00
                       gland.
60522...............  Removal of thymus         7.00  ..........        1.00  ..........      525.00      533.00
                       gland.
61557...............  Incise skull/             3.00  ..........        1.00  ..........      529.00      510.00
                       sutures.
63700...............  Repair of spinal          3.00  ..........        1.00  ..........      399.00      401.00
                       herniation.
63702...............  Repair of spinal          3.00  ..........        1.00  ..........      469.00      463.00
                       herniation.
63704...............  Repair of spinal          8.00  ..........        1.00  ..........      534.00      609.00
                       herniation.
63706...............  Repair of spinal          8.00  ..........        1.00  ..........      602.00      679.00
                       herniation.
----------------------------------------------------------------------------------------------------------------
\1\ We note that in the CY 2014 proposed rule, this table displayed only whole numbers of visits, although the
  actual time file and our ratesetting calculations use data to two places beyond the decimal point.

iii. Codes With Higher Total Medicare Payments in Office Than in 
Hospital or ASC
    In the CY 2014 proposed rule with comment period, we proposed to 
address nearly 200 codes that we believe to have misvalued resource 
inputs. These are codes for which the total PFS payment when furnished 
in an office or other nonfacility setting would exceed the total 
Medicare payment (the combined payment to the facility and the 
professional) when the service is furnished in a facility, either a 
hospital outpatient department or an ASC.
    For services furnished in a facility setting we would generally 
expect the combined payment to the facility and the practitioner to 
exceed the PFS payment made to the professional when the service is 
furnished in the nonfacility setting. This payment differential is 
expected because it reflects the greater costs we would expect to be 
incurred by facilities relative to physicians furnishing services in 
offices and other non-facility settings. These greater costs are due to 
higher overhead resulting from differences in regulatory requirements 
and for facilities, such as hospitals, maintaining the capacity to 
furnish services 24 hours per day and 7 days per week. However, when we 
analyzed such payments, we identified nearly 300 codes that would 
result in greater Medicare payment in the nonfacility setting than in 
the facility setting. We believe these anomalous site-of-service 
payment differentials are the result of inaccurate resource input data 
used to establish rates under the PFS.
    We proposed to address these misvalued codes by refining the PE 
methodology to limit the nonfacility PE RVUs for individual codes so 
that the total nonfacility PFS payment amount would not exceed the 
total combined payment under the PFS and the OPPS (or the ASC payment 
system) when the service is furnished in the facility setting.
    Section II.B.3 discusses the comment received on this misvalued 
code proposal and our response to these comments.
4. Multiple Procedure Payment Reduction Policy
    Medicare has long employed multiple procedure payment reduction 
(MPPR) policies to adjust payment to more appropriately reflect reduced 
resources involved with furnishing services that are frequently 
furnished together. Under these policies, we reduce payment for the 
second and subsequent services within the same MPPR category furnished 
in the same session or same day. These payment reductions reflect 
efficiencies that typically occur in either the PE or professional work 
or both when services are furnished together. With the exception of a 
few codes that are always reported with another code, the PFS values 
services independently to recognize relative resources involved when 
the service is the only one furnished in a session. Although some of 
our MPPR policies precede the Affordable Care Act, MPPRs can address 
the fourth category of potentially misvalued codes identified in 
section 1848(c)(2)(K) of the Act, as added by the Affordable Care Act, 
which is ``multiple codes that are frequently billed in conjunction 
with furnishing a single service'' (see 75 FR 73216). The following 
sections describe the history of MPPRs and the services currently 
covered by MPPRs.
a. Background
    Medicare has a longstanding policy to reduce payment by 50 percent 
for the second and subsequent surgical procedures furnished to the same 
beneficiary by a single physician or physicians in the same group 
practice 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 MPPR policy, with this 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 the Congress on Medicare Payment Policy, for CY 2006 PFS, we 
extended the MPPR policy to the TC of certain diagnostic imaging 
procedures furnished on contiguous areas of the body in a single 
session (70 FR 70261). This MPPR policy recognizes that for the second 
and subsequent imaging procedures furnished in the same session, there 
are some efficiencies in clinical labor, supplies, and equipment time. 
In particular, certain clinical labor activities and supplies are not 
duplicated for subsequent imaging services in the same session and, 
because equipment time and indirect costs are allocated based on 
clinical labor time, adjustment to those figures is appropriate as 
well.
    The imaging MPPR policy originally applied 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, and only applied to procedures furnished in a single session 
involving contiguous body areas within a family of codes. Additionally, 
this MPPR policy originally applied to TC-only services and to the TC 
of global services, but not to professional component (PC) services.

[[Page 74262]]

    There have been several revisions to this policy since it was 
originally adopted. Under the current imaging MPPR policy, full payment 
is made for the TC of the highest paid procedure, and payment for the 
TC is reduced by 50 percent for each additional procedure subject to 
this MPPR policy. We originally planned to phase in the imaging 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, section 
5102(b) of the Deficit Reduction Act of 2005 (DRA) (Pub. L. 109-171, 
enacted on December 20, 2006) amended the statute to place a cap on the 
PFS payment amount for most imaging procedures at the amount paid under 
the hospital OPPS. In view of this new OPPS payment cap, we decided in 
the CY 2006 PFS final rule with comment period that it would be prudent 
to retain the imaging 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 imaging MPPR policy from the 
PFS budget neutrality provision. Effective July 1, 2010, section 
1848(b)(4)(C) of the Act 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. Section 1848(c)(2)(B)(v)(IV) 
of the Act exempted the reduced expenditures attributable to this 
further change from the PFS budget neutrality provision.
    In the July 2009 U.S. Government Accountability Office (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 
furnished by the same physician to the same beneficiary on the same 
day. The GAO report recommended the following: (1) Expanding the 
existing imaging MPPR policy for certain services 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 furnished together. The GAO report 
also encouraged us to focus on service pairs that have the most impact 
on Medicare spending.
    In its 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 CY 2009 and CY 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.
    Section 1848(c)(2)(K) of the Act 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, in the CY 2010 final rule 
with comment period, we implemented a limited expansion of the imaging 
MPPR policy to additional combinations of imaging services.
    Effective January 1, 2011, the imaging MPPR applies regardless of 
code family; that is, the policy applies to multiple imaging services 
furnished within the same family of codes or across families. This 
policy is consistent with the standard PFS MPPR policy for surgical 
procedures that does not group procedures by body region. The current 
imaging MPPR policy applies to CT and CTA, MRI and MRA, and ultrasound 
procedures furnished to the same beneficiary in the same session, 
regardless of the imaging modality, and is not limited to contiguous 
body areas.
    As we noted in the CY 2011 PFS final rule with comment period (75 
FR 73228), although section 1848(c)(2)(B)(v)(VI) of the Act specifies 
that reduced expenditures attributable to the increase in the imaging 
MPPR from 25 to 50 percent (effective for fee schedules established 
beginning with 2010 and for services furnished on or after July 1, 
2010) are excluded from the PFS budget neutrality adjustment, it does 
not apply to reduced expenditures attributable to our policy change 
regarding additional code combinations across code families 
(noncontiguous body areas) that are subject to budget neutrality under 
the PFS. The complete list of codes subject to the CY 2011 MPPR policy 
for diagnostic imaging services is included in Addendum F.
    As a further step in applying the provisions of section 
1848(c)(2)(K) of the Act, on January 1, 2011, we implemented an MPPR 
for therapy services. The MPPR applies to separately payable ``always 
therapy'' services, that is, services that are only paid by Medicare 
when furnished under a therapy plan of care. As we explained in the CY 
2011 PFS final rule with comment period (75 FR 73232), the therapy MPPR 
does not apply to contractor-priced codes, bundled codes, or add-on 
codes.
    This MPPR for therapy services was first proposed in the CY 2011 
proposed rule (75 FR 44075) as 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 beneficiary in a 
single day. It applies to services furnished by an individual or group 
practice or ``incident to'' a physician's service. However, in response 
to public comments, in the CY 2011 PFS final rule with comment period 
(75 FR 73232), we adopted a 25 percent payment reduction to the PE 
component of the second and subsequent therapy services for multiple 
``always therapy'' services furnished to a single beneficiary in a 
single day.
    Subsequent to publication of the CY 2011 PFS final rule with 
comment period, section 3 of the Physician Payment and Therapy Relief 
Act of 2010 (PPTRA) (Pub. L. 111-286) revised the payment reduction 
percentage from 25 percent to 20 percent for therapy services for which 
payment is made under a fee schedule under section 1848 of the Act 
(which are services furnished in office settings, or non-institutional 
services). The payment reduction percentage remained at 25 percent for 
therapy services furnished in institutional settings. Section 4 of the 
PPTRA exempted the reduced expenditures attributable to the therapy 
MPPR policy from the PFS budget neutrality provision. Section 633 of 
the ATRA revised the reduction to 50 percent of the PE component for 
all settings, effective April 1, 2013. Therefore, full payment is made 
for the service or unit with the highest PE and payment for the PE 
component for the second and subsequent procedures or additional units 
of the same service is reduced by 50 percent for both institutional and 
non-institutional services.
    This MPPR policy applies to multiple units of the same therapy 
service, as well as to multiple different ``always therapy'' services, 
when furnished to the same beneficiary on the same day. The MPPR 
applies when multiple therapy services are billed on the same date of 
service for one beneficiary by the same practitioner or facility under 
the same National Provider Identifier (NPI), regardless of whether the 
services are furnished in one therapy discipline or multiple 
disciplines, including physical

[[Page 74263]]

therapy, occupational therapy, or speech-language pathology.
    The MPPR policy applies in all settings where outpatient therapy 
services are paid under Part B. This includes both services that are 
furnished in the office setting and paid under the PFS, as well as 
institutional services that are furnished by outpatient hospitals, home 
health agencies, comprehensive outpatient rehabilitation facilities 
(CORFs), and other entities that are paid for outpatient therapy 
services at rates based on the PFS.
    In its June 2011 Report to Congress, MedPAC highlighted continued 
growth in ancillary services subject to the in-office ancillary 
services exception. The in-office ancillary exception to the physician 
self-referral prohibition in section 1877 of the Act, also known as the 
Stark law, allows physicians to refer Medicare beneficiaries to their 
own group practices for designated health services, including imaging, 
radiation therapy, home health care, clinical laboratory tests, and 
physical therapy, if certain conditions are met. MedPAC recommended 
that we curb overutilization by applying a MPPR to the PC of diagnostic 
imaging services furnished by the same practitioner in the same 
session. As noted above, the GAO already had made a similar 
recommendation in its July 2009 report.
    In continuing to apply the provisions of section 1848(c)(2)(K) of 
the Act regarding potentially misvalued codes that result from 
``multiple codes that are frequently billed in conjunction with 
furnishing a single service,'' in the CY 2012 final rule (76 FR 73071), 
we expanded the MPPR to the PC of Advanced Imaging Services (CT, MRI, 
and Ultrasound), that is, the same list of codes to which the MPPR on 
the TC of advanced imaging already applied. Thus, this MPPR policy now 
applies to the PC and the TC of certain diagnostic imaging codes. 
Specifically, we expanded the payment reduction currently applied to 
the TC to apply also to the PC of the second and subsequent advanced 
imaging services furnished by the same physician (or by two or more 
physicians in the same group practice) to the same beneficiary in the 
same session on the same day. However, in response to public comments, 
in the CY 2012 PFS final rule with comment period, we adopted a 25 
percent payment reduction to the PC component of the second and 
subsequent imaging services.
    Under this policy, full payment is made for the PC of the highest 
paid advanced imaging service, and payment is reduced by 25 percent for 
the PC for each additional advanced imaging service furnished to the 
same beneficiary in the same session. This policy was based on the 
expected efficiencies in furnishing multiple services in the same 
session due to duplication of physician work, primarily in the pre- and 
post-service periods, but with some efficiencies in the intraservice 
period.
    This policy 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 
1848(c)(2)(K) of the Act. This policy is also consistent with our 
longstanding policies on surgical and nuclear medicine diagnostic 
procedures, under which we apply a 50 percent payment reduction to 
second and subsequent procedures. Furthermore, it was responsive to 
continued concerns about significant growth in imaging spending, and to 
MedPAC (March 2010 and June 2011) and GAO (July 2009) recommendations 
regarding the expansion of MPPR policies under the PFS to account for 
additional efficiencies.
    In the CY 2013 final rule (77 FR 68933), we expanded the MPPR to 
the TC of certain cardiovascular and ophthalmology diagnostic tests. 
Although we proposed a 25 percent reduction for both diagnostic 
cardiovascular and ophthalmology services, we adopted a 20 percent 
reduction for ophthalmology services in the final rule with comment 
period (77 FR 68941) in response to public comments. For diagnostic 
cardiovascular services, full payment is made for the procedure with 
the highest TC payment, and payment is reduced by 25 percent for the TC 
for each additional procedure furnished to the same patient on the same 
day. For diagnostic ophthalmology services, full payment is made for 
the procedure with the highest TC payment, and payment is reduced by 20 
percent for the TC for each additional procedure furnished to the same 
patient on the same day.
    We did not propose and are not adopting any new MPPR policies for 
CY 2014. However, we continue to look at expanding the MPPR based on 
efficiencies when multiple procedures are furnished together.
    The complete list of services subject to the MPPRs on diagnostic 
imaging services, therapy services, diagnostic cardiovascular services 
and diagnostic ophthalmology services is shown in Addenda F, H, I, and 
J. We note that Addenda H, which lists services subject to the MPPR on 
therapy services, contains four new CPT codes. Specifically, CPT code 
92521 (Evaluation of speech fluency), 92522 (Evaluate speech sound 
production), 92523 (Speech sound language comprehension) and 92524 
(Behavioral and qualitative analysis of voice and resonance) are being 
added to the list. These codes replace CPT code 92506 (Speech/hearing 
evaluation) for CY 2014. Accordingly, CPT 92506 has been deleted from 
Addenda H. Like CPT 92506, these new codes are ``always therapy'' 
services that are only paid by Medicare when furnished under a therapy 
plan of care. Thus, like CPT 92506, they are subject to the MPPR for 
therapy services. They have been added to the list of services subject 
to the MPPR on therapy services on an interim final basis, and are open 
to public comment on this final rule with comment period.

C. Malpractice RVUs

    Section 1848(c) of the Act requires that each service paid under 
the PFS be composed 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, which amended 
section 1848(c) of the Act, 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. The first review and 
corresponding update of resource-based 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 
corresponding 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).
    As explained in the CY 2011 PFS final rule with comment period (75 
FR 73208), malpractice RVUs for new codes, revised codes and codes with 
revised work RVUs (new/revised codes) effective before the next five-
year review of malpractice RVUs (for example, effective CY 2011 through 
CY 2014,

[[Page 74264]]

assuming that the next review of malpractice RVUs occurs for CY 2015) 
are determined either by a direct crosswalk from a similar source code 
or by 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 (or ``scale'') the malpractice RVU for 
the new/revised code to reflect the difference in work RVU between the 
source code and the new/revised work value (or, if greater, the 
clinical labor portion of the PE RVU) for the new code. For example, if 
the proposed work RVU for a revised code is 10 percent higher than the 
work RVU for its source code, the malpractice RVU for the revised code 
would be increased by 10 percent over the source code malpractice RVU. 
This approach presumes the same risk factor for the new/revised code 
and source code but uses the work RVU for the new/revised code to 
adjust for the difference in risk attributable to the variation in work 
between the two services.
    For CY 2014, we use this approach for determining malpractice RVUs 
for new/revised codes. A list of new/revised codes and the malpractice 
crosswalks used to determine their malpractice RVUs are in Sections 
II.E.2.c and 3.c in this final rule with comment period. The CY 2014 
malpractice RVUs for interim final codes are being implemented in the 
CY 2014 PFS final rule with comment period. These RVUs are subject to 
public comment. After considering public comments, they will then be 
finalized in the CY 2015 PFS final rule with comment period.

D. Medicare Economic Index (MEI)

1. Revising of the Medicare Economic Index (MEI)
a. Background
    The Medicare Economic Index (MEI) is authorized under 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, that such a higher level is 
justified by year-to-year 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 
involved in furnishing 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) physicians' own time; and (2) 
physicians' practice expense (PE).
    The current general form of the MEI was described 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 MEI has been updated or revised on 
four instances. 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 with comment period (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. Fourth, the MEI was rebased in 2011 
(75 FR 73262), which moved the cost structure of the index from 2000 
data to 2006 data.
    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 a price index, 
while revising relates to other types of changes such as changing data 
sources, cost categories, or price proxies used in the price index. For 
CY 2014, we proposed to revise the MEI based on the recommendations of 
the MEI Technical Advisory Panel (TAP). We did not propose to rebase 
the MEI and will continue to use the data from 2006 to estimate the 
cost weights, since these are the most recently available, relevant, 
and complete data we have available to develop these weights.
b. MEI Technical Advisory Panel (TAP) Recommendations
    The MEI-TAP was convened to conduct a technical review of the MEI, 
including the inputs, input weights, price-measurement proxies, and 
productivity adjustment. After considering these issues, the MEI-TAP 
was asked to assess the relevance and accuracy of inputs relative to 
current physician practices. The MEI-TAP's analysis and recommendations 
were to be considered in future rulemaking to ensure that the MEI 
accurately and appropriately meets its intended statutory purpose.
    The MEI-TAP consisted of five members and held three meetings in 
2012: May 21; June 25; and July 11. It produced eight findings and 13 
recommendations for consideration by CMS. Background on the MEI-TAP 
members, meeting transcripts for all three meetings, and the MEI-TAP's 
final report, including all findings and recommendations, are available 
at http://www.cms.gov/Regulations-and-Guidance/Guidance/FACA/
MEITAP.html. We have determined, as noted in the proposed rule, that it 
is possible to implement some of the recommendations immediately, while 
more in-depth research is required to address several of the other 
recommendations.
    For CY 2014, we proposed to implement 10 of the 13 recommendations 
made by the MEI-TAP. The remaining recommendations require more in-
depth research, and we will continue evaluating these three 
recommendations and will propose any further changes to the MEI in 
future rulemaking. The CY 2014 changes only involve revising the MEI 
categories, cost shares, and price proxies. Again, we did not propose 
to rebase the MEI for CY 2014 since the MEI-TAP concluded that there is 
not a newer, reliable, or ongoing source of data to maintain the MEI.
c. Overview of Revisions
    The MEI was last rebased and revised in the CY 2011 PFS final rule 
with comment period (75 FR 73262--73275). The current base year for the 
MEI is 2006, which means that the cost weights in the index reflect 
physicians' expenses in 2006. The details of the methodology used to 
determine the 2006 cost shares were provided in the CY 2011 PFS 
proposed rule and finalized in the CY 2011 PFS final rule with comment 
period (75 FR 40087 and 75 FR 73262, respectively). For CY 2014 we 
proposed to make the following revisions to the 2006-based MEI:
    (1) Reclassify and revise certain cost categories:
     Reclassify expenses for non-physician clinical personnel 
that can bill independently from non-physician compensation to 
physician compensation.
     Revise the physician wage and benefit split so that the 
cost weights are more in line with the definitions of the price proxies 
used for each category.
     Add an additional subcategory under non-physician 
compensation for health-related workers.
     Create a new cost category called ``All Other Professional 
Services'' that includes expenses covered in the current MEI 
categories: ``All Other Services'' and ``Other Professional Expenses.'' 
The ``All Other Professional Services'' category would be further 
disaggregated into appropriate occupational subcategories.
     Create an aggregate cost category called ``Miscellaneous 
Office Expenses''

[[Page 74265]]

that would include the expenses for ``Rubber and Plastics,'' 
``Chemicals,'' ``All Other Products,'' and ``Paper.''
    (2) Revise price proxies:
     Revise the price proxy for physician wages and salaries 
from the Average Hourly Earnings (AHE) for the Total Private Nonfarm 
Economy for Production and Nonsupervisory Workers to the ECI for Wages 
and Salaries, Professional and Related Occupations, Private Industry.
     Revise the price proxy for physician benefits from the ECI 
for Benefits for the Total Private Industry to the ECI for Benefits, 
Professional and Related Occupations, Private Industry.
     Use the ECI for Wages and Salaries and the ECI for 
Benefits of Hospital, Civilian workers (private industry) as the price 
proxies for the new category of non-physician health-related workers.
     Use ECIs to proxy the Professional Services occupational 
subcategories that reflect the type of professional services purchased 
by physicians' offices.
     Revise the price proxy for the fixed capital category from 
the CPI for Owners' Equivalent Rent of Residences to the PPI for 
Lessors of Nonresidential Buildings (NAICS 53112).
d. Revising Expense Categories in the MEI
    We did not propose any changes in the methodology for estimating 
the cost shares as finalized in the CY 2011 PFS final rule with comment 
period (75 FR 73263-73267). For CY 2014, we proposed to revise the 
classification of certain expenses within the 2006-based MEI. The 
details of the proposed revisions and the MEI-TAP recommendation that 
is the impetus for each of the revisions can be found in the CY 2014 
PFS proposed rule (78 FR 43312-43316). The following sections summarize 
the proposed revisions to the cost weights for CY 2014.
    (1) Overall MEI Cost Weights.
    Table 15 lists the set of mutually exclusive and exhaustive cost 
categories and weights that were proposed for CY 2014. A comparison of 
the proposed revised MEI cost categories and cost shares to the 2006-
based MEI cost categories and cost shares as finalized in the CY 2011 
PFS final rule can be found at 78 FR 43312-43313.
    Based on the proposed revisions to the MEI for CY 2014, the 
proposed physician compensation cost weight under the revised MEI is 
2.600 percentage points higher than the physician compensation weight 
in the current MEI. This change occurs because of the reclassification 
of expenses for non-physician clinical staff that can bill 
independently from non-physician compensation to physician 
compensation. This change lowers the PE cost weight by 2.600 percent as 
well, all of which comes from a lower weight for non-physician 
compensation. The remaining MEI cost weights are unchanged.
    The proposed revised MEI includes four new detailed cost categories 
and two new sub-aggregate cost categories. The new detailed cost 
categories are:
     Health-related, non-physician wages and salaries.
     Professional, scientific, and technical services.
     Administrative support and waste management services.
     All other services.
    The new sub-aggregate categories are:
     Non-health, non-physician wages.
     Miscellaneous office expenses.
    The proposed revised MEI excludes two sub-aggregate categories that 
were included in the current 2006-based MEI. The sub-aggregate 
categories removed are:
     Office expenses.
     Drugs & supplies.

         Table 15--Revised 2006 MEI Cost Categories and, Weights
                    [Revised MEI (2006=100), CY2014]
------------------------------------------------------------------------
                                                              Revised
                  Revised cost category                       weights
                                                             (percent)
------------------------------------------------------------------------
Physician Compensation..................................          50.866
    Wages and Salaries..................................          43.641
    Benefits............................................           7.225
Practice Expense........................................          49.134
    Non-physician compensation..........................          16.553
    Non-physician wages.................................          11.885
        Non-health, non-physician wages.................           7.249
            Professional and Related....................           0.800
            Management..................................           1.529
            Clerical....................................           4.720
            Services....................................           0.200
        Health related, non-physician wages.............           4.636
    Non-physician benefits..............................           4.668
    Other Practice Expense..............................          32.581
        Utilities.......................................           1.266
        Miscellaneous Office Expenses...................           2.478
            Chemicals...................................           0.723
            Paper.......................................           0.656
            Rubber & Plastics...........................           0.598
            All other products..........................           0.500
        Telephone.......................................           1.501
        Postage.........................................           0.898
        All Other professional services.................           8.095
            Professional, scientific, & technical                  2.592
             services...................................
            Administrative support & waste management...           3.052
            All other services..........................           2.451
        Capital.........................................          10.310
            Fixed Capital...............................           8.957
            Moveable Capital............................           1.353
        Professional Liability Insurance................           4.295
        Medical Equipment...............................           1.978

[[Page 74266]]

 
        Medical supplies................................           1.760
    Total MEI...........................................         100.000
------------------------------------------------------------------------
* The term (2006=100) refers to the base year of the MEI.

(2) Physician Compensation (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 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-employed physicians and for the selected self-
employed specialties. Expenses for employed physician compensation are 
combined with expenses for self-employed physician compensation to 
obtain an aggregate Physician Compensation cost weight. Based on this 
methodology, the Physician Compensation cost weight in the current MEI 
is 48.266 percent. For CY 2014, we proposed to reclassify the expenses 
for non-physician practitioners that can bill independently from the 
non-physician cost category in the MEI to the physician compensation 
cost category for several reasons:
     These types of practitioners furnish services that are 
similar to those furnished by physicians.
     If billing independently, these practitioners would be 
paid at a percentage of the physicians' services or in certain cases at 
the same rate as physicians.
     The expenses related to the work components for the RVUs 
would include work from clinical staff that can bill independently. 
Therefore, it would improve consistency with the RVU payments to 
include these expenses as physician compensation in the MEI.
    The effect of moving the expenses related to clinical staff that 
can bill independently is to increase the physician compensation cost 
share by 2.600 percentage points and to reduce the non-physician 
compensation cost share by the same amount. The physician compensation 
cost share for the proposed revised MEI is 50.866 percent compared to 
the physician compensation cost share of 48.266 percent in the current 
MEI.
    Within the physician compensation cost weight, the MEI includes a 
separate weight for wages and salaries and a separate weight for 
benefits. Under the current 2006-based MEI, the ratio for wages and 
salaries, and benefits was calculated using data from the PPIS.
    Based on MEI-TAP recommendation 3.1 we proposed to revise the wage 
and benefit split used for physician compensation. Specifically, we 
proposed to apply the distribution from the Statistics of Income (SOI) 
data to both self-employed and employed physician compensation. In 
reviewing the detailed AMA PPIS survey questions, it was clear that 
self-employed physician benefits were mainly comprised of insurance 
costs while other benefits such as physician retirement, paid leave, 
and payroll taxes were likely included in physician wages and salaries.
    By definition, the price proxy used for physician benefits, which 
is an Employment Cost Index (ECI) concept, includes retirement savings. 
Thus, using the AMA PPIS data produced a definitional inconsistency 
between the cost weight and the price proxy. Therefore, we proposed to 
use the data on wages and salaries, and employee benefits from the SOI 
data for Offices of Physicians and Dentists for partnerships and 
corporations for both self-employed and employed physicians. From the 
SOI data, benefit expenses were estimated by summing the partnership 
data for retirement plans and employee benefit programs with 
corporation data for pension, profit-sharing plans and employee benefit 
programs. For 2006, the split between wages and salaries, and benefits 
was 85.8 percent and 14.2 percent, respectively. Retirement/pension 
plans account for about 60 percent of total benefits. The SOI data do 
not classify paid leave and supplemental pay as a benefit.
    Combining the impact of classifying compensation for non-physicians 
that can bill independently as physician compensation with the use of 
the SOI data, the physician wages and salary cost share in the revised 
MEI is lower than the current MEI by 0.240 percentage points. These two 
methodological changes result in an increase in the physician benefit 
cost share in the revised MEI of 2.839 percentage points. As a result, 
the proposed physician wages and salary cost share for the revised MEI 
is 43.641 percent and the proposed physician benefit cost share for the 
revised MEI is 7.225 percent.
(3) Physician's Practice Expenses
    To determine the PE cost weights, we use mean expense data from the 
2006 PPIS survey. The derivation of the weights and categories for 
practice expenses is the same as finalized in the CY 2011 PFS final 
rule with comment period (75 FR 73264-73267), except where noted below.
(a) Non-Physician Employee Compensation
    For CY 2014 we proposed to exclude the expenses related to non-
physician clinical staff that can bill independently from this cost 
category. Moving the expenses related to the clinical staff that can 
bill independently out of non-physician compensation costs decreases 
the share by 2.600 percentage points. The non-physician compensation 
cost share for the revised MEI is 16.553 percent compared to the 
current physician compensation cost share of 19.153 percent.
    We are further proposed to use the same method as finalized in the 
CY 2011 PFS final rule to split the non-physician compensation between 
wages and benefits. For reference, we use 2006 BLS Employer Costs for 
Employee Compensation (ECEC) data for the Health Care and Social 
Assistance (private industry). 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 non-
physician wage and benefit cost shares for the revised MEI are 11.885 
percent and 4.668 percent, respectively.
    The current 2006-based MEI further disaggregated the non-physician 
wages into four occupational subcategories, the details of this method 
can be found in the CY 2011 PFS final rule with comment period (75 FR 
73264-73265). Based on the MEI-TAP

[[Page 74267]]

Recommendation 4.4, the Panel recommended the disaggregation of the 
non-physician compensation costs to include an additional category for 
health-related workers. The exact recommendation can be found at 78 FR 
43314.
    We proposed to implement this recommendation using expenses 
reported on the AMA PPIS for non-physician, non-health-related workers. 
The survey question asks for the expenses for: ``non-clinical personnel 
involved primarily in administrative, secretarial or clerical 
activities (Including transcriptionists, medical records personnel, 
receptionists, schedulers and billing staff, coding staff, information 
technology staff, and custodial personnel).'' Using this method, the 
proposed non-physician, non-health-related wage cost share for the 
revised MEI is 7.249 percent.
    For wage costs of non-physician, health-related workers, the survey 
question asks for the expenses for: ``other clinical staff, including 
RNs, LPNs, physicists, lab technicians, x-ray technicians, medical 
assistants, and other clinical personnel who cannot independently 
bill.'' Using this method, the proposed non-physician, health-related 
wage cost share for the revised MEI is 4.636 percent. Together the non-
health and health-related, non-physician wage costs sum to be equal to 
the total non-physician wage share in the revised MEI of 11.885 
percent.
    We further proposed to disaggregate the non-physician, non-health-
related wage cost weight of 7.249 percent into four occupational 
subcategories. The methodology is similar to that finalized in the CY 
2011 PFS final rule with comment period (75 FR 73264), in that we are 
using 2006 Current Population Survey (CPS) data and 2006 BLS 
Occupational Employment Statistics (OES) data to develop cost weights 
for wages for non-physician, non-health-related 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 occupational categories 
(Professional & Related (P&R) workers, Managers, Clerical workers, and 
Service workers), we determined annual earnings for each using the 
Standard Occupational Classification (SOC) system. We then determined 
the overall share of the total for each. The proposed occupational 
distribution in the revised MEI is presented in Table 16. The 
comparison between the proposed revised distribution of non-physician 
payroll expense by occupational group to the prior comparison can be 
found in the CY 2014 PFS proposed rule at 78 FR43315.

   Table 16--Percent Distribution of Non-Physician Payroll Expense by
               Occupational Group: Revised 2006-Based MEI
                        [Revised MEI (2006=100)]
------------------------------------------------------------------------
     Revised weight (percent)              Revised Cost Category
------------------------------------------------------------------------
16.553...........................  Non-physician compensation.
11.885...........................  Non-physician wages.
7.249............................  Non-health, non-phys. wages.
0.800............................  Professional and Related.
1.529............................  Management.
4.720............................  Clerical.
0.200............................  Services.
4.636............................  Health related, non-phys. wages.
4.668............................  Non-physician benefits.
------------------------------------------------------------------------

    The health-related workers were previously included mainly in the 
Professional and Technical and Service Categories. The proposed 
reclassifications allow for health-related workers to be proxied by a 
health-specific ECI rather than an ECI for more general occupations.
(b) Other Practice Expense
    The remaining expenses in the MEI are categorized as Other Practice 
Expenses. In the current 2006-based MEI we had classified other PEs in 
one of the following subcategories: Office Expenses; Drugs and 
Supplies; and All Other Professional Expenses. For CY 2014, we proposed 
to disaggregate these expenses in a way consistent with the MEI-TAP's 
recommendations, as detailed below.
    We rely on the 2006 AMA PPIS data to determine the cost share for 
Other Practice Expenses. These expenses are the total of office 
expenses, medical supplies, medical equipment, Professional Liability 
Insurance (PLI), and all other professional expenses.
    For the revised 2006-based MEI, we disaggregate Other Practice 
Expenses into 15 detailed subcategories as shown in Table 17.

      Table 17--Revised Cost Categories for Other Practice Expense
------------------------------------------------------------------------
                                                          Revised weight
                  Revised cost category                      (percent)
------------------------------------------------------------------------
Other Practice Expense..................................          32.581
    Utilities...........................................           1.266
    Miscellaneous Office Expenses.......................           2.478
        Chemicals.......................................           0.723
        Paper...........................................           0.656
        Rubber & Plastics...............................           0.598
        All other products..............................           0.500
    Telephone...........................................           1.501
    Postage.............................................           0.898
    All Other professional services.....................           8.095
        Professional, Scientific, and Tech. Services....           2.592
        Administrative support & waste mgmt.............           3.052
        All Other Services..............................           2.451
    Capital.............................................          10.310
        Fixed...........................................           8.957
        Moveable........................................           1.353
    Professional Liability Insurance....................           4.295
    Medical Equipment...................................           1.978
    Medical supplies....................................          1.760%
------------------------------------------------------------------------

[[Page 74268]]

    For most of these categories, we use the same method as finalized 
in the CY 2011 PFS final rule with comment period to estimate the cost 
shares. In particular, the cost shares for the following categories are 
derived directly from expense data reported on the 2006 AMA PPIS: PLI; 
Medical Equipment; and Medical Supplies. In each case, the cost shares 
remain the same as in the current MEI. Additionally, we continue to use 
the Bureau of Economic Analysis (BEA) 2002-Benchmark I/O data aged to 
2006 to determine the cost weights for other expenses not collected 
directly from the AMA PPIS. The BEA 2002-Benchmark I/O data can be 
accessed at the following link: http://www.bea.gov/industry/io_
benchmark.htm#2002data
    The derivation of the cost weight for each of the detailed 
categories under Other Practice Expenses is provided in 78 FR 43315-
43316. The following categories had no revisions proposed to the cost 
share weight and therefore reflect the same cost share weight as 
finalized in the CY 2011 final rule: Utilities, Telephone, Postage, 
Fixed Capital, Moveable Capital, PLI, Medical Equipment, and Medical 
Supplies. The following section provides a review of the categories for 
which we proposed revisions to the cost categories and cost share 
weights (Miscellaneous Office Expenses, and All Other Services).
     Miscellaneous Office Expenses: Based on MEI-TAP 
recommendation 3.4 we proposed to include an aggregate category of 
detailed office expenses that were stand-alone categories in the 
current 2006-based MEI. During the CY 2011 PFS proposed rule comment 
period, several commenters expressed confusion as to the relevance of 
these categories to their practice costs. The MEI-TAP discussed the 
degree of granularity needed in both the calculation and reporting of 
the MEI. The MEI-TAP concluded that it might be prudent to collapse 
some of the non-labor PE categories with other categories for 
presentation purposes.
     All Other Professional Services: Based on MEI-
TAP recommendation 3.3, we proposed to combine the All Other Services 
cost weight and All Other Professional Expenses into a single cost 
category. The proposed weight for the All Other Professional Services 
category is 8.095 percent, which is the sum of the current MEI weight 
for All Other Services (3.581 percent) and All Other Professional 
Expenses (4.513 percent), and is more in line with the GPCI Purchased 
Services index as finalized in the CY2012 PFS final rule with comment 
period (76 FR 73085).--
    We then proposed to further disaggregate the 8.095 percent of 
expenses into more detail based on the BEA I-O data, allowing for 
specific cost weights for services such as contract billing services, 
accounting, and legal services. We considered various levels of 
aggregation; however, in considering the level of aggregation, the 
available corresponding price proxies had to be considered. Given the 
price proxies that are available from the BLS Employment Cost Indexes 
(ECI), we proposed to disaggregate these expenses into three 
categories:
     NAICS 54 (Professional, Scientific, and Technical 
Services): The Professional, Scientific, and Technical Services sector 
comprises establishments that specialize in performing professional, 
scientific, and technical activities for others. These activities 
require a high degree of expertise and training. The establishments in 
this sector specialize according to expertise and provide these 
services to clients in a variety of industries, including but not 
limited to: legal advice and representation; accounting, and payroll 
services; computer services; management consulting services; and 
advertising services and have a 2.592 percent weight.
     NAICS 56 (Administrative and Support and Waste Management 
and Remediation Services): The Administrative and Support and Waste 
Management and Remediation Services sector comprises establishments 
performing routine support activities for the day-to-day operations of 
other organizations. The establishments in this sector specialize in 
one or more of these support activities and provide these services to 
clients in a variety of industries including but not limited to: office 
administration; temporary help services; security services; cleaning 
and janitorial services; and trash collection services. These services 
have a 3.052 percent weight.
     All Other Services, a residual category of these expenses: 
The residual All Other Services cost category is mostly comprised of 
expenses associated with service occupations, including but not limited 
to: lab and blood specimen transport; catering and food services; 
collection company services; and dry cleaning services and have a 2.451 
percent weight.
2. Selection of Price Proxies for Use in the MEI
    After developing the cost category weights for the revised 2006-
based MEI, we reviewed all the price proxies based on the 
recommendations from the MEI-TAP. As was the case in the development of 
the current 2006-based MEI, most of the proxy measures we considered 
are based on BLS data and are grouped into one of the following four 
categories:
     Producer Price Indices (PPIs): PPIs measure 
price changes for goods sold in markets other than retail markets. 
These fixed-weight indexes are measures 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 by consumers. 
Like the PPIs, they are fixed weight 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.
     Employment Cost Indices (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.
     Employment Cost Indices (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.
    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

[[Page 74269]]

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 price proxy selection for every category in the proposed 
revised MEI is detailed in 78 FR 43316-43319. Below we discuss the 
price and wage proxies for each cost category in the proposed revised 
MEI.
a. Physician Compensation (Physician's Own Time)
(1) Physician Wages and Salaries
    Based on recommendations from the MEI-TAP, we proposed to use the 
ECI for Wages and Salaries for Professional and Related Occupations 
(Private Industry) (BLS series code CIU2020000120000I) to measure price 
growth of this category in the revised 2006-based MEI. The current 
2006-based MEI used Average Hourly Earnings (AHE) for Production and 
Non-Supervisory Employees for the Private Nonfarm Economy.
    The MEI-TAP had two recommendations concerning the price proxy for 
physician Wages and Salaries. The first recommendation from the MEI-TAP 
was Recommendation 4.1, which stated that: ``. . . OACT revise the 
price proxy associated with Physician Wages and Salaries from an 
Average Hourly Earnings concept to an Employment Cost Index concept.'' 
AHEs are calculated by dividing gross payrolls for wages and salaries 
by total hours. The AHE proxy was representative of actual changes in 
hourly earnings for the nonfarm business economy, including shifts in 
employment mix. The recommended alternative, the ECI concept, measures 
the rate of change in employee wage rates per hour worked. ECIs measure 
the pure rate of change in wages by industry and/or occupation and are 
not affected by shifts in employment mix across industries and 
occupations. The MEI-TAP believed that the ECI concept better reflected 
physician wage trends compared to the AHE concept.
    The second recommendation related to the price proxy for physician 
wages and salaries was Recommendation 4.2, which stated that:
    ``CMS revise the price proxy associated with changes in Physician 
Wages and Salaries to use the Employment Cost Index for Wages and 
Salaries, Professional and Related, Private Industry. The Panel 
believes this change would maintain consistency with the guidance 
provided in the 1972 Senate Finance Committee report titled `Social 
Security Amendments of 1972,' which stated that the index should 
reflect changes in practice expenses and `general earnings.' In the 
event this change would be determined not to meet the legal requirement 
that the index reflect ``general earnings,'' the Panel recommended 
replacing the current proxy with the Employment Cost Index for Wages 
and Salaries, All Workers, Private Industry.'' The Panel believed this 
change would maintain consistency with the guidance provided in the 
1972 Senate Finance Committee report titled ``Social Security 
Amendments of 1972,'' which stated that the index should reflect 
changes in practice expenses and ``general earnings.'' \2\
---------------------------------------------------------------------------

    \2\ U.S. Senate, Committee on Finance, Social Security 
Amendments of 1972. ``Report of the Committee on Finance United 
States Senate to Accompany H.R. 1,'' September 26, 1972, p. 191.
---------------------------------------------------------------------------

    We agree that switching the proxy to the ECI for Wages and Salaries 
for Professional and Related Occupations would be consistent with the 
authority provided in the statute and reflect a wage trend more 
consistent with other professionals that receive advanced training. 
Additionally, we believe the ECI is a more appropriate concept than the 
AHE because it can isolate wage trends without being impacted by the 
change in the mix of employment.
(2) Physician Benefits
    The MEI-TAP states in Recommendation 4.3 that, ``. . . any change 
in the price proxy for Physician Wages and Salaries be accompanied by 
the selection and incorporation of a Physician Benefits price proxy 
that is consistent with the Physician Wages and Salaries price proxy.'' 
We proposed to use the ECI for Benefits for Professional and Related 
Occupations (Private Industry) to measure price growth of this category 
in the revised 2006-based MEI. The ECI for Benefits for Professional 
and Related Occupations is derived using BLS's Total Compensation for 
Professional and Related Occupations (BLS series ID CIU2010000120000I) 
and the relative importance of wages and salaries within total 
compensation. We believe this series is technically appropriate because 
it better reflects the benefit trends for professionals requiring 
advanced training. The current 2006-based MEI market basket used the 
ECI for Total Benefits for the Total Private Industry.
b. Practice Expense
(1) Non-Physician Employee Compensation
(a) Non-Physician Wages and Salaries
(i) Non-Physician, Non-Health-Related Wages and Salaries
     Professional and Related: We proposed to continue using 
the ECI for Wages and Salaries for Professional and Related Occupation 
(Private Industry) (BLS series code CIU2020000120000I) to measure the 
price growth of this cost category.
     Management: We proposed to continue using the ECI for 
Wages and Salaries for Management, Business, and Financial (Private 
Industry) (BLS series code CIU2020000110000I) to measure the price 
growth of this cost category.
     Clerical: We proposed to continue using the ECI for Wages 
and Salaries for Office and Administrative Support (Private Industry) 
(BLS series code CIU2020000220000I) to measure the price growth of this 
cost category. This is the same proxy used in the current 2006-based 
MEI.
     Services: We proposed to continue using the ECI for Wages 
and Salaries for Service Occupations (Private Industry) (BLS series 
code CIU2020000300000I) to measure the price growth of this cost 
category.
(ii) Non-Physician, Health-Related Wages and Salaries
    In Recommendation 4.4, the MEI-TAP ``. . . recommend[ed] the 
disaggregation of the Non-Physician Compensation costs to include an 
additional category for health-related workers. This disaggregation 
would allow for health-related workers to be separated from non-health-
related workers. CMS should rely directly on PPIS data to estimate the 
health-related non-physician compensation cost weights. The non-health, 
non-physician wages should be further disaggregated based on the 
Current Population Survey and Occupational Employment Statistics data. 
The new health-related cost category should be proxied by the ECI, 
Wages and Salaries, Hospital (NAICS 622), which has an occupational mix 
that is reasonably close to that in physicians' offices. The Non-
Physician Benefit category should be proxied by a composite benefit 
index reflecting the same relative occupation weights as the non-
physician wages.'' We proposed to use the ECI for Wages and Salaries 
for Hospital Workers (Private Industry) (BLS series code 
CIU2026220000000I) to measure the price growth of this cost category in 
the final revised 2006-based MEI. The ECI for Hospital workers has

[[Page 74270]]

an occupational mix that approximates that in physicians' offices. This 
cost category was not broken out separately in the current 2006-based 
MEI.
(b) Non-Physician Benefits
    We proposed to continue using a composite ECI for non-physician 
employee benefits in the revised 2006-based MEI. However, we also 
proposed to expand the number of occupations from four to five by 
adding detail on Non-Physician Health-Related Benefits. The weights and 
price proxies for the composite benefits index will be revised to 
reflect the addition of the new category. Table 18 lists the five ECI 
series and corresponding weights used to construct the revised 
composite benefit index for non-physician employees in the revised 
2006-based MEI.

 Table 18--CMS Composite Price Index for Non-Physician Employee Benefits
                      in the Revised 2006-Based MEI
------------------------------------------------------------------------
                                                            2006 Weight
                       ECI Series                               (%)
------------------------------------------------------------------------
Benefits for Professional and Related Occupation                       7
 (Private Industry).....................................
Benefits for Management, Business, and Financial                      12
 (Private Industry).....................................
Benefits for Office and Administrative Support (Private               40
 Industry)..............................................
Benefits for Service Occupations (Private Industry).....               2
Benefits for Hospital Workers (Private Industry)........              39
------------------------------------------------------------------------

(3) Other Practice Expense
(a) All Other Professional Services
    As discussed previously, MEI-TAP Recommendation 3.3 was that:
    ``. . . OACT create a new cost category entitled Professional 
Services that should consist of the All Other Services cost category 
(and its respective weight) and the Other Professional Expenses cost 
category (and its respective weight). The Panel further recommends that 
this category be disaggregated into appropriate occupational categories 
consistent with the relevant price proxies.'' We are proposed to 
implement this recommendation in the revised 2006-based MEI using a 
cost category titled ``All Other Professional Services.'' Likewise, the 
MEI-TAP stated in Recommendation 4.7 that ``. . . price changes 
associated with the Professional Services category be proxied by an 
appropriate blend of Employment Cost Indexes that reflect the types of 
professional services purchased by physician offices.'' We agree with 
this recommendation and proposed to use the following price proxies for 
each of the new occupational categories:
     Professional, Scientific, and Technical Services: We 
proposed to use the ECI for Total Compensation for Professional, 
Scientific, and Technical Services (Private Industry) (BLS series code 
CIU2015400000000I) to measure the price growth of this cost category. 
This cost category was not broken out separately in the current 2006-
based MEI.
     Administrative and Support Services: We proposed to use 
the ECI for Total Compensation for Administrative, Support, Waste 
Management, and Remediation Services (Private Industry) (BLS series 
code CIU2015600000000I) to measure the price growth of this cost 
category. This cost category was not broken out separately in the 
current 2006-based MEI.
     All Other Services: We proposed to use the ECI for 
Compensation for Service Occupations (Private Industry) (BLS series 
code CIU2010000300000I) to measure the price growth of this cost 
category.
(b) Miscellaneous Office Expenses
     Chemicals: We proposed to continue using the PPI for Other 
Basic Organic Chemical Manufacturing (BLS series code 
PCU32519-32519) to measure the price growth of this cost 
category.
     Paper: We proposed to continue using the PPI for Converted 
Paper and Paperboard (BLS series code WPU0915) to measure the 
price growth of this cost category.
     Rubber & Plastics: We proposed to continue using the PPI 
for Rubber and Plastic Products (BLS series code WPU07) to 
measure the price growth of this cost category.
     All Other Products: We proposed to continue using the CPI-
U for All Products less Food and Energy (BLS series code 
CUUR0000SA0L1E) to measure the price growth of this cost category.
     Utilities: We proposed to continue using the CPI for Fuel 
and Utilities (BLS series code CUUR0000SAH2) to measure the price 
growth of this cost category.
     Telephone: We proposed to continue using the CPI for 
Telephone Services (BLS series code CUUR0000SEED) to measure the price 
growth of this cost category.
     Postage: We proposed to continue using the CPI for Postage 
(BLS series code CUUR0000SEEC01) to measure the price growth of this 
cost category.
     Fixed Capital: In Recommendation 4.5, ``The Panel 
recommends using the Producer Price Index for Lessors of Nonresidential 
Buildings (NAICS 53112) for the MEI Fixed Capital cost category as it 
represents the types of fixed capital expenses most likely faced by 
physicians. The MEI-TAP noted the volatility in the index, which is 
greater than the Consumer Price Index for Owners' Equivalent Rent of 
Residences. This relative volatility merits ongoing monitoring and 
evaluation of alternatives.'' We are proposed to use the PPI for 
Lessors of Nonresidential Buildings (BLS series code PCU531120531120) 
to measure the price growth of this cost category in the revised 2006-
based MEI. The current 2006-based MEI used the CPI for Owner's 
Equivalent Rent. We believe the PPI for Lessors of Nonresidential 
Buildings is more appropriate as fixed capital expenses in physician 
offices should be more congruent with trends in business office space 
costs than residential costs.
     Moveable Capital: In Recommendation 4.6, the MEI-TAP 
states that ``. . . CMS conduct research into and identify a more 
appropriate price proxy for Moveable Capital expenses. In particular, 
the MEI-TAP believes it is important that a proxy reflect price changes 
in the types of non-medical equipment purchased in the production of 
physicians' services, as well as the price changes associated with 
Information and Communication Technology expenses (including both 
hardware and software).'' We intend to continue to investigate possible 
data sources that could be used to proxy the physician expenses related 
to moveable capital in more detail. However, we proposed to continue 
using the PPI for Machinery and Equipment (series code WPU11) to 
measure the price growth of this cost category in the revised 2006-
based MEI.

[[Page 74271]]

     Professional Liability Insurance: Unlike the other price 
proxies based on data from BLS and other public sources, the proxy for 
PLI is based on data collected directly by CMS from a sample of 
commercial insurance carriers. The MEI-TAP discussed the methodology of 
the CMS PLI index, as well as considered alternative data sources for 
the PLI price proxy, including information available from BLS and 
through state insurance commissioners. MEI-TAP Finding 4.3 states:
    ``The Panel finds the CMS-constructed professional liability 
insurance price index used to proxy changes in professional liability 
insurance premiums in the MEI represents the best currently available 
method for its intended purpose. The Panel also believes the pricing 
patterns of commercial carriers, as measured by the CMS PLI index, are 
influenced by the same driving forces as those observable in policies 
underwritten by physician-owned insurance entities; thus, the Panel 
believes the current index appropriately reflects the price changes in 
premiums throughout the industry.'' Given this MEI-TAP finding, we 
proposed to continue using the CMS Physician PLI index to measure the 
price growth of this cost category in the revised 2006-based MEI.
     Medical Equipment: We proposed to continue using the PPI 
for Medical Instruments and Equipment (BLS series code WPU1562) as the 
price proxy for this category.
     Medical Materials and Supplies: We proposed to continue 
using a blended index comprised of a 50/50 blend of the PPI for 
Surgical Appliances (BLS series code WPU156301) and the CPI-U for 
Medical Equipment and Supplies (BLS series code CUUR0000SEMG).

  Table 19--Revised 2006-Based MEI Cost Categories, Weights, and Price
                                 Proxies
------------------------------------------------------------------------
                                 2006 weight
        Cost category             (percent)           Price proxy
------------------------------------------------------------------------
Total MEI....................         100.000  .........................
Physician Compensation.......          50.866  .........................
    Wages and Salaries.......          43.641  ECI--Wages and salaries--
                                                Professional and Related
                                                (Private).
    Benefits.................           7.225  ECI--Benefits--Profession
                                                al and Related
                                                (Private).
Practice Expense.............          49.134  .........................
    Non-physician                      16.553  .........................
     Compensation.
    Non-physician Wages......          11.885  .........................
        Non-health, non-                7.249  .........................
         physician wages.
        Professional and                0.800  ECI--Wages And Salaries--
         Related.                               Professional and Related
                                                (Private).
        Management...........           1.529  ECI--Wages And Salaries--
                                                Management, Business,
                                                and Financial (Private).
        Clerical.............           4.720  ECI--Wages And Salaries--
                                                Office and Admin.
                                                Support (Private).
        Services.............           0.200  ECI--Wages And Salaries--
                                                Service Occupations
                                                (Private).
        Health related, non-            4.636  ECI--Wages and Salaries--
         phys. Wages.                           Hospital (Private).
    Non-physician Benefits...           4.668  Composite Benefit Index.
Other Practice Expense.......          32.581  .........................
    Miscellaneous Office                2.478  .........................
     Expenses.
        Chemicals............           0.723  PPI--Other Basic Organic
                                                Chemical Manufacturing.
        Paper................           0.656  PPI--Converted Paper and
                                                Paperboard.
        Rubber and Plastics..           0.598  PPI--Rubber and Plastic
                                                Products.
        All other products...           0.500  CPI--All Items Less Food
                                                And Energy.
    Telephone................           1.501  CPI--Telephone.
    Postage..................           0.898  CPI--Postage.
        All Other                       8.095  .........................
         Professional
         Services.
        Prof., Scientific,              2.592  ECI--Compensation--Prof.,
         and Tech. Svcs.                        Scientific, and
                                                Technical (Private).
        Admin. and Support              3.052  ECI--Compensation--Admin.
         Services.                              , Support, Waste
                                                Management (Private).
        All Other Services...           2.451  ECI--Compensation--Servic
                                                e Occupations (Private).
        Capital..............  ..............  .........................
        Fixed Capital........           8.957  PPI--Lessors of
                                                Nonresidential
                                                Buildings.
        Moveable Capital.....           1.353  PPI--Machinery and
                                                Equipment.
    Professional Liability              4.295  CMS--Professional
     Insurance.                                 Liability Phys. Prem.
                                                Survey.
    Medical Equipment........           1.978  PPI--Medical Instruments
                                                and Equipment.
    Medical Supplies.........           1.760  Composite--PPI Surgical
                                                Appliances & CPI-U
                                                Medical Supplies.
------------------------------------------------------------------------

3. Productivity Adjustment to the MEI
    The MEI has been adjusted for changes in productivity since its 
inception. In the CY 2003 PFS final rule with comment period (67 FR 
80019), we implemented a change in the way the MEI was adjusted to 
account for changes in productivity. The MEI used for the 2003 
physician payment update incorporated changes in the 10-year moving 
average of private nonfarm business (economy-wide) 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.
    The MEI-TAP was asked to review this approach. In Finding 5.1, 
``[t]he Panel reviewed the basis for the current economy-wide 
multifactor productivity adjustment (Private Nonfarm Business 
Multifactor Productivity) in the MEI and finds such an adjustment 
continues to be appropriate. This adjustment prevents `double counting' 
of the effects of productivity improvements, which would otherwise be 
reflected in both (i) the increase in compensation and other input 
price proxies underlying the MEI, and (ii) the growth in the number of 
physician services performed per unit of input resources, which results 
from advances in productivity by individual physician practices.''
    Based on the MEI-TAP's finding, we proposed to continue to use the 
current method for adjusting the full MEI for multifactor productivity 
in the revised 2006-based MEI. As described in the CY 2003 PFS final 
rule with comment period, we believe this adjustment is appropriate 
because it explicitly reflects the productivity gains associated with 
all inputs (both labor and non-labor).

[[Page 74272]]

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.
4. Results of Revisions on the MEI Update
    Table 20 shows the average calendar year percent change from CY 
2005 to CY 2013 for both the revised 2006-based MEI and the current 
2006-based MEI, both excluding the productivity adjustment. The average 
annual percent change in the revised 2006-based MEI is 0.1 percent 
lower than the current 2006-based MEI over the 2005-2013 period. On an 
annual basis over this period, the differences vary by up to plus or 
minus 0.7 percentage point. In the two most recent years (CY 2012 and 
CY 2013), the annual percent change in the revised 2006-based MEI was 
within 0.1 percentage point of the percent change in the current 2006-
based MEI. The majority of these differences over the historical period 
can be attributed to the revised price proxy for physician wages and 
salaries and benefits and the revised price proxy for fixed capital.

   Table 20--Annual Percent Change in the Revised 2006-Based MEI, Not
  Including Productivity Adjustment and the Current 2006-Based MEI, Not
                   Including Productivity Adjustment *
------------------------------------------------------------------------
                                                  Revised      Current
                                                 2006-based   2006-based
                  Update year                    MEI excl.    MEI, excl.
                                                    MFP          MFP
------------------------------------------------------------------------
CY 2005.......................................          3.8          3.1
CY 2006.......................................          4.0          3.3
CY 2007.......................................          3.2          3.2
CY 2008.......................................          3.2          3.4
CY 2009.......................................          2.9          3.1
CY 2010.......................................          2.4          2.8
CY 2011.......................................          0.9          1.6
CY 2012.......................................          1.7          1.8
CY 2013.......................................          1.7          1.8
Avg. Change for CYs 2005-2013.................          2.6          2.7
------------------------------------------------------------------------
* Update year based on historical data through the second quarter of the
  prior calendar year. For example, the 2014 update is based on
  historical data through the second quarter 2013, prior to the MFP
  adjustment.

5. Summary of Comments and the Associated Responses
    Comment: Many commenters appreciate the efforts of CMS to implement 
the recommendations of the MEI-TAP. They agree with the MEI-TAP's 
analysis and recommendations and believe these changes successfully 
bring the ``market basket'' of MEI inputs up to date and improve the 
accuracy of the index going forward. Nearly all commenters supported 
the following proposals:
     The increase in the physician benefits cost weight in 
order to ensure consistency with the benefits price proxy.
     The use of professional workers' earnings as the price 
proxy for the physician compensation portion of the index. 
Specifically, the price proxies for physician wages would change from 
general economy-wide earnings to a wages index for ``Professional and 
related occupations'' and the price proxy for physician benefits would 
be changed from general economy-wide benefits to a benefit index for 
``Professional and related occupations.''
     The use of commercial rent data for the fixed capital 
price proxy, replacing the CPI residential rent proxy.
     The creation of a health sector wage category within the 
index.
     The creation of an ``all other professional services'' 
category, encompassing purchased services such as contract billing, 
legal, and accounting services.
    Response: We agree with the commenters that implementing the TAP 
recommendations identified above improve the accuracy of the index.
    Comment: Several commenters concur with the proposal to reclassify 
expenses for non-physician clinical personnel that can bill 
independently from non-physician compensation to physician 
compensation. They agree with the proposal based on the reasons CMS 
outlines and because this policy is more consistent with how services 
by non-physician practitioners are treated in the resource-based 
relative value scale (RBRVS).
    Response: We appreciate the commenters support for the decision to 
reclassify expenses related to non-physician clinical personnel that 
can bill independently from non-physician compensation to physician 
compensation. We also agree with the commenter that classifying the 
expenses with physician compensation is more consistent with how 
services by non-physician practitioners are treated in the RBRVS since 
services related to direct patient care from non-physician 
practitioners are reported with the work component in the RBRVS 
methodology. We also believe that non-physician practitioners will 
continue to perform services that are direct substitutes for services 
furnished by physicians, such as office visits.
    Comment: Many commenters believe that it is not technically 
appropriate to reclassify all expenses for non-physician clinical 
personnel that can bill independently from non-physician compensation 
to physician compensation. They note that the MEI-TAP recommended that 
the OACT consider ``the extent to which those who can bill 
independently actually do so.'' They also note that non-physician 
clinical personnel often spend much of their time on activities other 
than providing services that are billed independently. They suggested 
that only the portion of the time the non-physician clinical personnel 
spend providing services that are billed independently should be 
reclassified to physician compensation. They believe that the increase 
in the physician compensation cost share by 2.600 percentage points, 
and the reduction in non-physician compensation by the same amount, is 
too high. The commenters encourage CMS to conduct real analysis of the 
time spent on activities that are billed independently prior to 
implementing this re-allocation of costs.
    Response: We understand that non-physician clinical personnel may 
spend some of their time on activities other than providing services 
that are billed independently. We would note that physicians also spend 
some of their time on work that is not direct patient care. We proposed 
to only reclassify the expenses related to the non-physician clinical 
personnel that can bill independently; that is, we are not 
reclassifying the expenses for non-physician clinical personnel that 
cannot bill independently. We believe that the increase in physician 
compensation is technically correct.
    The commenters suggested that the non-physician clinical staff that 
can bill independently spend much of their time on activities other 
than providing services that are billed separately; however, the 
commenters did not provide any evidence to support this claim. Based on 
part B claims data we have found that nurse practitioners and physician 
assistants bill Medicare for the same top HCPCS codes as other primary 
care specialties, including office/outpatient visits, subsequent 
hospital care, emergency department visits, and nursing facility care 
subsequent visits. Based on this, we do

[[Page 74273]]

not believe further analysis is needed to conclude that the non-
physician practitioners that can bill independently are furnishing 
services that are substitutes for services furnished by physicians. As 
such, we continue to believe that it is appropriate to classify their 
costs in the physician compensation category.
    Comment: A few commenters suggested that multiple states preclude 
non-physicians from practicing and billing independently and therefore 
the reclassification of expenses for these services would affect those 
states differently than the states where non-physician practitioners 
are allowed to practice and bill independently.
    Response: We understand that state laws governing the practice 
rules for non-physician practitioners can vary by State; however, we do 
not believe that this is relevant to the decision to include in the 
physician compensation cost category the expenses for non-physician 
practitioners that can independently bill under Medicare. These 
expenses were collected on the AMA PPIS where we expect that physicians 
would have reported the expenses that coincided with the state laws for 
non-physician clinical staff for the state in which they practiced. For 
a state in which the laws do not permit non-physician practitioners to 
bill independently, the expenses would have been allocated to the 
category for clinical staff that cannot bill independently.
    Comment: Several commenters questioned the implementation of the 
MEI-TAP recommendation concerning payroll for non-physician personnel. 
The commenters stated that the recommendation was more nuanced than we 
had conveyed and that it only directed CMS to evaluate making the 
change. The commenters suggested that the recommendation required CMS 
to consider several factors including but not limited to, the statutory 
definition of ``physician'' as it relates to the recommended change; 
how time for non-physician practitioners is currently treated in the 
PFS RVU methodology; whether there is evidence these non-physician 
practitioners do not spend the majority of their time providing 
``physicians' services;'' and the extent to which these practitioners 
actually do bill independently for the services they furnish.
    Response: When evaluating the MEI-TAP recommendation 3.2 and 
formulating our proposal, we did consider the specific factors that the 
MEI-TAP included in the recommendation to reclassify the expenses 
related to non-physician clinical staff that can bill Medicare 
independently. However, we disagree with the commenters' interpretation 
that the recommendation intended CMS to only evaluate making the 
change. We believe that the intent of all of the recommendations of the 
MEI-TAP was for CMS to evaluate the recommendations and propose and 
implement those changes as soon as possible.
    As we indicated in the proposed rule, there are several reasons for 
our proposal to reclassify these expenses which were: (1) These types 
of practitioners furnish services that are similar to those furnished 
by physicians; (2) if billing independently, these practitioners would 
be paid at a percentage of the physicians' services or in certain cases 
at the same rate as physicians; and (3) the expenses related to the 
work components for the RVUs would include work from clinical staff 
that can bill independently. Therefore, it would improve consistency 
with the RVU payments to include these expenses as physician 
compensation in the MEI.
    In response to this comment, we explain further our consideration 
of each of the factors as follows:
    First, we do not believe the definition of physician under current 
law limits CMS' ability to make the proposed change in the MEI. No 
provisions of the Social Security Act address the classification of 
costs in the MEI. The goal of the MEI is to appropriately estimate the 
change in the input prices of the goods and services used to furnish 
physician services over time. Therefore, we believe that classifying 
costs for those non-physician practitioners that can bill independently 
with physician compensation is the most technically appropriate 
classification, given their role in the healthcare delivery system 
today. We believe that since non-physician practitioners (NPPs) who 
bill independently furnish services that substitute for physician work 
and that the salary costs for these types of providers would grow at a 
similar rate to those of physicians, it is appropriate to classify 
these expenses within the physician compensation component of the MEI.
    Second, the expenses for non-physician practitioners that can 
independently bill are reflected in the physician work component in the 
PFS RVU methodology since their services are substituting for physician 
work. Expenses for other clinical staff, including RNs, LPNs, 
physicists, lab technicians, x-ray technicians, medical assistants, and 
other clinical personnel who cannot independently bill are reported in 
the PE component in the RVU methodology.
    Third, we have found no evidence that these types of providers do 
not spend the majority of their time performing ``physicians' 
services,'' as defined under the PFS. We looked at 2012 claims data for 
the nurse practitioners (NPs) (specialty code 50) and physician 
assistants (PAs) (specialty code 97) and compared their top Part B 
HCPCS codes reported on claims to the top Part B HCPCS codes reported 
on claims of the following three physician specialties: General 
Practice (specialty code 01), Family Practice (specialty code 08), and 
Internal Medicine (specialty code 11). We found that 7 out of the 10 
top HCPCS codes for PAs and NPs are the same as those reported for 
physicians in General Practice, Family Practice, and/or Internal 
Medicine. HCPCS code 99213 and 99214 (both codes for office/outpatient 
visits) were the top two HCPCS codes for all five specialties listed. 
Approximately 40 percent of claims for PAs and 50 percent of claims for 
NPs were for HCPCS codes that were also submitted by one of the three 
primary care specialties (general practice, family practice, and 
internal medicine). Based on this Medicare claims analysis, we believe 
that these types of non-physician practitioners do spend the majority 
of their time performing ``physicians' services.''
    Fourth, we believe that non-physician practitioners who are able to 
bill independently actually do so in the majority of circumstances 
where it is financially beneficial for the practice as a whole. We 
understand that different states may have different rules on how non-
physician practitioners are permitted to furnish physician services; 
but, in general, if the non-physician practitioner can independently 
bill, particularly if the reimbursement for the service is similar to 
or the same as that provided to a physician, they usually do so. We 
reviewed data on mean annual wages published in the May 2012 
Occupational Employment Survey (OES) (http://www.bls.gov/oes/current/
oes_stru.htm), and found that wages for PAs and NPs are significantly 
higher than RNs and LPNs/LVNs. Specifically, the mean annual wages for 
OES Category 29-1071 ``Physician Assistants'' is $92,460 and for OES 
Category 29-1171 ``Nurse Practitioners'' it is $91,450 whereas for OES 
Category 29-1141 ``Registered Nurses'' it is $67,930 and for OES 
Category 29-2061 ``Licensed Practical and Licensed Vocational Nurses'' 
it is $42,400. In addition, wages for PAs and NPs are also 
significantly higher than

[[Page 74274]]

technologist and technician wages. Select technologist and technician 
wages are OES Category 29-2051 ``Dietetic Technicians'' at $28,680, OES 
Category 29-2052 ``Pharmacy Technicians'' at $30,430, OES Category 29-
2053 ``Psychiatric Technicians'' at $33,140, OES Category 29-2054 
``Respiratory Therapy Technicians'' $47,510, and OES Category 29-2055 
``Surgical Technologists'' at $43,480. Given the significantly higher 
wages for PAs and NPs, we believe it makes economic sense for PAs and 
NPs to furnish and bill for ``physicians' services'' to the extent 
permitted by law rather than to serve as clinical staff members who 
only furnish services incident to a physician's services.
    Comment: One commenter believes that the MEI is intended to be a 
reflection of physician compensation and physician expenses, and that 
it must conform to the definitions of ``physician'' and ``physicians' 
services,'' which includes affirmation of the distinct definitions of 
physician and nurse practitioner. The commenter claims the reasons for 
our proposal fail to account for this foundational distinction between 
physicians and ``physicians' services'' as opposed to other types of 
practitioners and their services. The commenter believes that to lump 
the two definitions together, which is what we are doing, is not 
justifiable and in excess of authority.
    Response: We disagree with the commenter that classifying the non-
physician independent billers' expenses in the same category as the 
physician expenses ``is not justifiable and in excess of authority.'' 
The definition of physician that exists under current law does not 
limit CMS' ability to make this change in the MEI. As mentioned 
previously, no provisions of the Social Security Act address the 
classification of costs in the MEI. We believe that since non-physician 
practitioners that bill independently serve as substitutes for 
physician work, and the growth in the salary costs for these types of 
providers would grow at a similar rate to physicians, then classifying 
the expenses related to non-physician practitioners that bill 
independently with physician compensation is the most technically 
appropriate classification, given their role in the healthcare delivery 
system today.
    Comment: It is unclear to several commenters why the productivity 
assumptions for physicians are twice that used for the hospital 
outpatient department and ambulatory surgery centers. Although they 
understood that these are two different calculations, they found it 
hard to imagine that individual physicians would have twice the 
capability of increasing productivity than would facilities. They note 
that all of the productivity adjustments should be based on 10-year 
averages of private non-farm business multifactor productivity growth, 
but the OPPS and ASC adjustments, are about half the MEI adjustment for 
CY 2014.
    Response: The productivity adjustments included in the MEI and 
those that apply to ASCs and HOPDs are based on the 10-year moving 
average of economy-wide private nonfarm business multifactor 
productivity (MFP). The differences in the MFP adjustments between the 
ASC and HOPD payment systems and the PFS are the result of differences 
between the applicable statutes and the time period for which the 
adjustment is calculated.
    MEI updates have been based on the latest historical data at the 
time of rulemaking since its inception. For the CY 2014 rule, the 
proposed MEI update of 0.7 percent includes an MFP adjustment of 0.9 
percent, which is based on BLS data through 2011 that represents the 
latest historical data available at the time of rulemaking. The 
proposed MFP adjustment is based on the 10-year moving average of 
annual MFP growth from 2002-2011; and we would note that the annual MFP 
growth over the 2002-2004 time period was historically high.
    The ASC and HOPD MFP adjustments, on the other hand, are required 
by law to be based on forecasts for the appropriate payment period, in 
this case through CY 2014. The forecasts of the MFP are completed by 
IHS Global Insight, Inc. (IGI). Accordingly, the MFP adjustment 
applicable to ASCs and HOPDs is based on the 10-year moving average of 
annual MFP growth from 2005-2014. A complete description of the 
methodology used to calculate the MFP for the MEI can be found in the 
CY 2012 PFS final rule with comment period (76 FR 73300).
    Comment: One commenter disagrees with CMS' assessment that there is 
not a reliable, ongoing source of data from which to index cost data. 
CMS is currently basing the MEI on 2006 data yet it accepted and has 
now fully transitioned the results of the Physician Practice 
Information Survey (PPIS) as of 2013. The data from PPIS was developed 
based on practice costs in 2008. They questioned why the data currently 
available would be any less reliable than was used the previous three 
times that CMS rebased the MEI. In fact, they claim that the PPIS data 
should be more reliable. The commenter acknowledges that data developed 
by the MGMA are derived primarily from large urban and suburban 
practices and do not adequately capture costs from small and solo 
practitioners who do not enjoy the same economies of scale and practice 
efficiencies afforded to larger groups. However, the commenter would 
support another updated survey of practice costs similar to PPIS that 
would also include any elements included within the MEI that were not 
previously captured. The commenter suggests that if the time and 
resources are going to go into such a study, the survey should include 
and be used to update all physician practice expenses.
    Response: We believe the commenter misunderstood our statement. We 
do believe the AMA PPIS is a reliable data source; however, the PPIS is 
not an ongoing data source that is published regularly, such as the 
IPPS, SNF, and HHA cost reports. The 2006 AMA PPIS data were used to 
determine nine expenditure weights in the 2006-based MEI: physicians' 
earnings, physicians' benefits, employed physician payroll, non-
physician compensation, office expenses, PLI, medical equipment, 
medical supplies, and other professional expenses. It continues to be 
the data source used in the CY 2014 proposed revisions to the MEI. At 
this time, the AMA is no longer conducting the PPIS survey.
    We concur with the commenter's points regarding the issues 
pertaining to the MGMA data and also appreciate the commenter's support 
of conducting another practice cost survey similar to the PPIS. We will 
be looking into viable options for updating the MEI cost weights going 
forward.
    Comment: Several commenters appreciated the efforts by CMS to 
convene the MEI-TAP, and urged the agency to continue work on the 
remaining issues the MEI-TAP identified including consideration of 
whether: (1) using self-employed physician data for the MEI cost 
weights continues to be the most appropriate approach; (2) additional 
data sources could allow more frequent updates to the MEI's cost 
categories and their respective weights; and (3) there is a more 
appropriate price proxy for Moveable Capital expenses. The commenter 
noted that CMS plans to continue to investigate these three issues and 
the commenter looks forward to working with CMS in that effort.
    Response: We will continue to investigate possible options for the 
three remaining MEI-TAP recommendations as they require additional 
research regarding possible data sources. Any further changes to the 
MEI, in response to MEI-TAP recommendations, will be

[[Page 74275]]

made through future notice and comment rulemaking.
    Comment: One commenter noted that although the MEI-TAP recommended 
a number of data sources that could be considered to rebase the MEI, it 
was unable to identify a reliable, ongoing source of data to do so. The 
commenter recommended that CMS consider a sample cost reporting method 
rather than a survey similar to the American Medical Association's 
(AMA) Physician Practice Information Survey (PPIS) that took place 
between 2007 and 2008. The commenter noted that the PPIS was 
extraordinarily expensive for the AMA and was plagued by low response 
rates. In addition, the commenter noted that the disputed PPIS results 
led to significant payment reductions for cardiology. The commenter 
notes that CMS is already considering efforts to establish a cost 
report for provider-based clinics. The commenter suggests that this 
effort could be coupled with a sample of private practice clinics in 
order to better measure the MEI.
    Response: We thank the commenter for the suggestion. We will be 
investigating possible data sources to use for the purpose of rebasing 
the MEI in the future. Our research will include the evaluation of 
multiple potential data sources including a sampling of clinics and/or 
physicians subject to agency resources. If reliable cost report data is 
collected for provider-based clinics in the future then we will analyze 
and consider its possible use at that time. We remind the commenter 
that any new study or survey we conduct would require approval through 
OMB's standard survey and auditing process (see ``Standards and 
Guidelines for Statistical Surveys'' http://www.whitehouse.gov/sites/
default/files/omb/assets/omb/inforeg/statpolicy/standards_stat_
surveys.pdf and ``Guidance on Agency Survey and Statistical Information 
Collections'' http://www.whitehouse.gov/sites/default/files/omb/assets/
omb/inforeg/pmc_survey_guidance_2006.pdf).
    Comment: One commenter strongly supports the continued monitoring 
of physician productivity growth as it compares to economy-wide growth. 
The commenter notes that medical practices have been subjected to a 
number of regulatory requirements in recent years that likely impacted 
their productivity. To ensure compliance with these regulatory 
requirements, physicians often must take actions that reduce practice 
productivity, including hiring additional office staff, retaining 
attorneys for legal and regulatory compliance, and contracting with 
accountants and billing companies to ensure proper processing of 
claims. Monitoring of physician productivity growth is necessary to 
determine if the continued use of economy-wide productivity growth in 
the MEI is appropriate.
    Response: At the June 25, 2012 MEI-TAP meeting, we presented 
estimates of physician-specific productivity from 1983 to 2010. These 
estimates used a resource-based methodology similar to that used by 
Charles Fisher to estimate physician office productivity from 1983-2004 
as published in the Winter 2007 Health Care Financing Review. The MEI-
TAP had the following finding regarding the physician-specific 
productivity estimates:
    Finding 5.2: The Panel finds the measures of growth in physician-
specific productivity are of interest for the purpose of comparing the 
structure of price increases for physician services versus other 
sectors of the economy. The Panel does not recommend using a physician-
specific measure, but does believe that continued monitoring is 
appropriate. Use of physician-specific productivity growth to adjust 
economy-wide compensation growth in the MEI could introduce 
inconsistencies in the calculation of the MEI that could distort the 
results. The Panel concludes it is appropriate to continue to require 
that the accounting identity between input price growth, output price 
growth, and the productivity adjustment be maintained (as is 
approximated by the current version of the index).
    Per the MEI-TAP's recommendation, we will continue to monitor 
trends in physician productivity on a periodic basis and how those 
trends move relative to economy-wide productivity.
    Comment: A few commenters noted that it will remain difficult for 
practicing clinicians to reconcile changes in the MEI with their own 
practice cost increases. The projected increase in the proposed MEI for 
2014 is just 0.7 percent, but this amount has been reduced by economy-
wide productivity growth of 0.9 percent. Excluding the productivity 
adjustment, inflation for medical practices is projected to be 1.6 
percent for 2014. In addition, as is the case with any price index, 
this amount does not take into account any change in the quantity of 
inputs (for example, changes in the number of staff that practices 
employ).
    Response: We believe the MEI is the most technically appropriate 
index available to measure the price growth of inputs involved in 
furnishing physician services. We agree that the updates of the MEI do 
not take into account any change in the quantity of inputs, since it is 
not a cost index. The MEI-TAP was asked to consider whether the index 
should continue to be a fixed-weight, Laspeyres-type index. The MEI-TAP 
concluded that there is not sufficient evidence that the proportions of 
costs represented by the index's inputs vary enough over short periods 
of time, nor was there a consistently updated data source available, to 
warrant or support a change from using the Laspeyres formulation.
    Comment: One commenter believes that a driving flaw in the PE GPCI 
is the rent input and its weighting. The commenter indicates the 
proposed rule's CY 2014 cost share weight of 10.223 percent is not 
representative of the office rent cost share weights of other 
physicians. It is also not representative of what the MGMA's cost 
survey data seems to indicate is the national office rent cost weight.
    Response: As stated in the proposed rule, the PE GPCI office rent 
portion (10.223 percent) includes the revised 2006-based MEI cost 
weights for fixed capital (reflecting the expenses for rent, 
depreciation on medical buildings and mortgage interest) and utilities. 
The methodology for determining the fixed capital cost weight (8.957 
percent) and utilities cost weight (1.266) is described in the CY 2011 
PFS final rule (75 FR 73265).
    We believe the weights produced from the methodology are 
technically appropriate as it is based on the 2006 AMA PPIS data and 
other government data for NAICS 621A00 (Offices of physicians, 
dentists, and other health practitioners). We realize that although 
individual practice experience may vary, the MEI cost shares must 
reflect the cost structure of the average physician office.
    Comment: One commenter supported the AMA's call for MEI recognition 
of the cost/staffing implications of ever-increasing private and 
governmental regulations upon medical practices.
    Response: We believe the commenter is expressing that during the 
course of our future research into alternative data sources on 
physician expenses that we should try to find a data source that would 
measure the increased costs that regulations compliance imposes on 
physicians practice expenses (for example, additional staffing or costs 
associated with moving to more technically advanced record-keeping such 
as electronic health records (EHRs)). If we are able to identify an 
appropriate data source for physician expenses that is updated and 
published on a regular basis, then the associated costs will be 
reflected in the relative shares of the various cost categories. In 
order to determine cost shares for a year

[[Page 74276]]

later than 2006 we would need an alternative data source that is 
reliable, representative, and collected on a more consistent, regular 
basis.
    Comment: One commenter claimed that the BEA Input-Output (I-O) 
tables categorize cost components differently than do medical 
practices; that CMS' actuarial conclusions are difficult to follow; and 
the industry wide I-O tables do not appear to comport with MGMA cost 
survey findings for medical practices. The commenter also stated that 
BEA I-O tables seem more focused on and designed to address how the 
offices of healthcare professionals utilize products in various 
national industries for purposes of assessing the productivity of those 
industries rather than to measure cost components of a medical 
practice. In that regard, the commenter asserts that the use of the I-O 
tables in developing GPCI cost share weights seems not to be an apples-
to-apples relationship.
    Response: We disagree with the commenter's claim that the BEA I-O 
tables are only to be used for purposes of assessing productivity of 
those industries rather than to measure cost components. As stated on 
the BEA Web site (http://www.bea.gov/scb/pdf/2007/10%20October/1007_
benchmark_io.pdf), the BEA I-O data are based on the highest quality 
source data available. They provide an accurate and comprehensive 
picture of the inner workings of the economy, showing relationships 
among more than 400 industries and commodities. They facilitate the 
study of economic activity by providing a highly-detailed look at 
inter-industry activity. They also provide the detail that is essential 
in determining the quantity weights for price indexes such as the 
producer price index that is compiled by the Bureau of Labor Statistics 
(BLS). Therefore, our use of the BEA I-O data to derive the detailed 
cost weights for the MEI (and by extension the GPCI weights) is 
consistent with definition of and uses of the I-O data, as stated by 
BEA.
    We would also note that CMS' examination of the MGMA cost data 
requested by the MEI-TAP found that the data: (1) reflected only group 
practice data (practices with greater than three physicians) rather 
than data for self-employed physician practices; (2) reflected more IDS 
and hospital-owned practices than physician-owned practices; (3) are 
not geographically representative; they are underrepresented in high-
cost areas (NY, NJ, CA) and overrepresented in lower cost areas, such 
as the southern U.S.; and (4) are skewed toward primary care 
specialties relative to the universe of physician specialties. 
Additionally, the MGMA data are not publicly available. The BEA I-O 
data, on the other hand are based on detailed data from the 
quinquennial economic censuses that are conducted by the Bureau of the 
Census and show how industries interact at the detailed level; 
specifically, they show how approximately 500 industries provide input 
to, and use output from, each other to produce gross domestic product. 
The data we used in the construction of the MEI are representative of 
the entire broader industry as defined by NAICS 621A00, Offices of 
Physicians, Dentists and Other Health Professionals; and therefore we 
believe it is the most technically appropriate data source available to 
use to further disaggregate practice expenses within the MEI.
    Comment: One commenter is concerned with CMS' proposal to use the 
Employment Cost Index (ECI) for Wages and Salaries for Hospital Workers 
(Private Industry) as a price proxy for Non-physician, Health-related 
staff compensation. The commenter does not agree with CMS' reasoning 
that the ECI for Hospital Workers has an occupational mix that is 
reasonably close to the occupational mix in physicians' offices. The 
commenter stated that they do not currently have an alternative price 
proxy suggestion.
    Response: The purpose of the disaggregation of the Non-Physician 
Compensation costs to include an additional category for health-related 
workers was to be able to more accurately reflect the price inflation 
associated with these workers. There are limited health-related ECIs 
available. During the MEI-TAP discussions on July 11, 2012, this 
limitation was discussed (http://www.cms.gov/Regulations-and-Guidance/
Guidance/FACA/MEITAP.html ).
    We continue to believe that the ECI for Wages and Salaries for 
Hospital Workers (Private Industry) is the most technically appropriate 
proxy for the compensation price inflation faced by non-physician, 
health related staff in physician offices as this ECI reflects the 
highest proportion of health-related staff (as measured by the 
Occupational Employment Statistics data) compared to other ECIs. Should 
the commenter have alternative price proxy suggestions, we will 
consider them in future rulemaking.
    Comment: Several commenters agree with the proposed change in the 
price proxy for Fixed Capital, since it represents the types of fixed 
capital expenses most likely faced by physicians.
    Response: We agree with the commenters that the price proxy 
proposed for Fixed Capital is more representative of the types of fixed 
capital expenses faced by physicians.
6. Final CY 2014 Revisions to the MEI
    In general, most commenters supported all of the proposed changes 
to the index. The one area where there was concern from commenters was 
with the proposal to reclassify expenses for non-physician 
practitioners that can independently bill from non-physician 
compensation to physician compensation. Based on the public comments, 
we did not find any reason to reconsider our proposal, nor did we find 
any compelling technical reason that we should not implement this 
revision to the MEI. Therefore, we are finalizing our proposal to 
reclassify these expenses from non-physician compensation to physician 
compensation in the MEI. The effect of moving the expenses related to 
clinical staff that can bill independently to physician compensation 
category is to increase the physician compensation cost share by 2.600 
percentage points and reduce non-physician compensation costs by the 
same amount. The revisions we are finalizing include:
     Reclassifying expenses for non-physician clinical 
personnel that can bill independently from non-physician compensation 
to physician compensation.
     Revising the physician wage and benefit split so that the 
cost weights are more in line with the definitions of the price proxies 
used for each category.
     Adding an additional subcategory under non-physician 
compensation for health-related workers.
     Creating a new cost category called ``All Other 
Professional Services'' that includes expenses covered in the current 
MEI categories: ``All Other Services'' and ``Other Professional 
Expenses.'' And further disaggregating the ``All Other Professional 
Services'' category into appropriate occupational subcategories.
     Creating an aggregate cost category called ``Miscellaneous 
Office Expenses'' that would include the expenses for ``Rubber and 
Plastics,'' ``Chemicals,'' ``All Other Products,'' and ``Paper.''
     Revising the price proxy for physician wages and salaries 
from the Average Hourly Earnings (AHE) for the Total Private Nonfarm 
Economy for Production and Nonsupervisory Workers to the ECI for Wages 
and Salaries, Professional and Related Occupations, Private Industry.

[[Page 74277]]

     Revising the price proxy for physician benefits from the 
ECI for Benefits for the Total Private Industry to the ECI for 
Benefits, Professional and Related Occupations, Private Industry.
     Using the ECI for Wages and Salaries and the ECI for 
Benefits of Hospital, Civilian workers (private industry) as the price 
proxies for the new category of non-physician health-related workers.
     Using ECIs to proxy the Professional Services occupational 
subcategories that reflect the type of professional services purchased 
by physicians' offices.
     Revising the price proxy for the fixed capital category 
from the CPI for Owners' Equivalent Rent of Residences to the PPI for 
Lessors of Nonresidential Buildings (NAICS 53112).
    Table 21 shows the final revised 2006-based MEI update for CY 2014 
PFS, which is an increase of 0.8 percent. The CY 2014 MEI update would 
be the same if using the current 2006-based MEI. This update is based 
on historical data through the second quarter of 2013.

  Table 21--Annual Percent Change in the CY 2014 Revised 2006-Based MEI
                    and the Current 2006-Based MEI *
------------------------------------------------------------------------
                                                   Final
                                                  revised      Current
                  Update year                    2006-based   2006-based
                                                    MEI          MEI
------------------------------------------------------------------------
CY 2014.......................................          0.8          0.8
------------------------------------------------------------------------
* Based on historical data through the 2nd quarter 2013.

    For the productivity adjustment, the 10-year moving average percent 
change adjustment for CY 2014 is 0.9 percent, which is based on the 
most historical data available from BLS at the time of the final rule, 
and reflects annual MFP estimates through 2012.
    Table 22 shows the Cost Categories, Price Proxies, Cost Share 
Weights and the CY 2014 percent changes for each category in the 
revised 2006-based MEI. This table summarizes all of the final 
revisions to the MEI for CY 2014.

                         Table 22--Annual Percent Change in the Revised MEI for CY 2014
                                              [All categories] \1\
----------------------------------------------------------------------------------------------------------------
                                                                                    2006 Final
                                                                                   revised cost     CY14 update
             Revised cost category                     Revised price proxy          weight \2\     (percent) \5\
                                                                                     (percent)
----------------------------------------------------------------------------------------------------------------
MEI...........................................  ................................         100.000             0.8
MFP...........................................  10-yr moving average of Private              N/A             0.9
                                                 Nonfarm Business Multifactor
                                                 Productivity.
MEI without productivity adjustment...........                                           100.000             1.7
Physician Compensation \3\....................                                            50.866             1.9
    Wages and Salaries........................  ECI--Wages and salaries--                 43.641             1.9
                                                 Professional and Related
                                                 (private).
    Benefits..................................  ECI--Benefits--Professional and            7.225             2.2
                                                 Related (private).
Practice Expense..............................                                            49.134             1.4
    Non-physician compensation................                                            16.553             1.7
    Non-physician wages.......................                                            11.885             1.7
    Non-health, non-physician wages...........                                             7.249             1.8
    Professional & Related....................  ECI--Wages And Salaries--                  0.800             1.9
                                                 Professional and Related
                                                 (Private).
    Management................................  ECI--Wages And Salaries--                  1.529             1.8
                                                 Management, Business, and
                                                 Financial (Private).
    Clerical..................................  ECI--Wages And Salaries--Office            4.720             1.8
                                                 and Administrative Support
                                                 (Private).
    Services..................................  ECI--Wages And Salaries--Service           0.200             1.5
                                                 Occupations (Private).
    Health related, non-physician wages.......  ECI--Wages and Salaries -                  4.636             1.4
                                                 Hospital (civilian).
    Non-physician benefits....................  Composite Benefit Index.........           4.668             1.9
    Other Practice Expense....................                                            32.581             1.2
    Utilities.................................  CPI Fuels and Utilities.........           1.266             0.7
    Miscellaneous Office Expenses.............                                             2.478             0.3
        Chemicals.............................  Other Basic Organic Chemical               0.723            -1.2
                                                 Manufacturing PPI325190.
        Paper.................................  PPI for converted paper.........           0.656             1.1
        Rubber & Plastics.....................  PPI for rubber and plastics.....           0.598             0.5
        All other products....................  CPI--All Items Less Food And               0.500             1.9
                                                 Energy.
    Telephone.................................  CPI for Telephone...............           1.501             0.0
    Postage...................................  CPI for Postage.................           0.898             4.9
    All Other Professional Services...........                                             8.095             1.8
        Professional, Scientific, and Tech.     ECI--Compensation: Prof.                   2.592             1.7
         Services.                               scientific, tech.
        Administrative and support & waste....  ECI--Compensation Administrative           3.052             1.9
        All Other Services....................  ECI Compensation: Services                 2.451             1.6
                                                 Occupations.
    Capital...................................                                            10.310             0.7
        Fixed.................................  PPI for Lessors of                         8.957             0.7
                                                 nonresidential buildings.
        Moveable..............................  PPI for Machinery and Equipment.           1.353             0.7
    Professional Liability Insurance\4\.......  CMS--Prof. Liability. Phys.                4.295             1.5
                                                 Prem. Survey.
    Medical Equipment.........................  PPI--Med. Inst. & Equip.........           1.978             1.2

[[Page 74278]]

 
    Medical supplies..........................  Composite--PPI Surg. Appl. &               1.760             1.0
                                                 CPIU Med. Supplies. (CY2006).
----------------------------------------------------------------------------------------------------------------
\1\ The estimates are based upon the latest available Bureau of Labor Statistics data on the 10-year moving
  average of BLS private nonfarm business multifactor productivity published on July 19, 2013 http://www.bls.gov/
  news.release/prod3.nr0.htm
\2\ The weights shown for the MEI components are the 2006 base-year weights, which may not sum to subtotals or
  totals because of rounding. The MEI is a fixed-weight, Laspeyres 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) 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 (BLS) Web site at http://
  stats.bls.gov.
\4\ Derived from a CMS survey of several major commercial insurers.
\5\ Based on historical data through the 2nd quarter 2013. N/A Productivity is factored into the MEI as a
  subtraction from the total index growth rate; therefore, no explicit weight exists for productivity in the
  MEI.

E. Establishing RVUs for CY 2014

    Section 1848(c)(2)(B) of the Act requires that we review RVUs for 
physicians' services no less often than every 5 years. Under section 
1848(c)(2)(K) of the Act (as added by section 3134 of the Affordable 
Care Act), we are required to identify and revise RVUs for services 
identified as potentially misvalued. To facilitate the review and 
appropriate adjustment of potentially misvalued services, section 
1848(c)(2)(K)(iii) specifies that the Secretary may use existing 
processes to receive recommendations; conduct surveys, other data 
collection activities, studies, or other analyses as the Secretary 
determined to be appropriate; and use analytic contractors to identify 
and analyze potentially misvalued services, conduct surveys or collect 
data. In accordance with section 1848(c)(2)(K)(iii) of the Act, we 
identify potentially misvalued codes, and develop and propose 
appropriate adjustments to the RVUs, taking into account the 
recommendations provided by the AMA RUC, the Medicare Payment Advisory 
Commission (MedPAC), and other public commenters.
    For many years, the AMA RUC has provided CMS with recommendations 
on the appropriate relative values for PFS services. Over the past 
several years, CMS and the AMA RUC have identified and reviewed a 
number of potentially misvalued codes on an annual basis, based on 
various identification screens for codes at risk for being misvalued. 
This annual review of work RVUs and direct PE inputs for potentially 
misvalued codes was further bolstered by the Affordable Care Act 
mandate to examine potentially misvalued codes, with an emphasis on the 
following categories specified in section 1848(c)(2)(K)(ii) of the Act 
(as added by section 3134 of the Affordable Care Act):
     Codes and families of codes for which there has been the 
fastest growth.
     Codes or families of codes that have experienced 
substantial changes in practice expenses.
     Codes that are recently established for new technologies 
or services.
     Multiple codes that are frequently billed in conjunction 
with furnishing a single service.
     Codes with low relative values, particularly those that 
are often billed multiple times for a single treatment.
     Codes which have not been subject to review since the 
implementation of the RBRVS (the ``Harvard-valued'' codes).
     Other codes determined to be appropriate by the Secretary.
    In addition to providing recommendations to CMS for work RVUs, the 
AMA RUC's Practice Expense Subcommittee reviews, and then the AMA RUC 
recommends, direct PE inputs (clinical labor, disposable supplies, and 
medical equipment) for individual services. To guide the establishment 
of malpractice RVUs for new and revised codes before each Five-Year 
Review of Malpractice, the AMA RUC also provides malpractice crosswalk 
recommendations, that is, ``source'' codes with a similar specialty mix 
of practitioners furnishing the source code and the new/revised code.
    CMS reviews the AMA RUC recommendations on a code-by-code basis. 
For AMA RUC recommendations regarding physician work RVUs, after 
conducting a clinical review of the codes, we determine whether we 
agree with the recommended work RVUs for a service (that is, whether we 
agree the AMA RUC recommended valuation is accurate). If we disagree, 
we determine an alternative value that better reflects our estimate of 
the physician work for the service.
    Because of the timing of the CPT Editorial Panel decisions, the AMA 
RUC recommendations, and our rulemaking cycle, we publish these work 
RVUs in the PFS final rule with comment period as interim final values, 
subject to public comment. Similarly, we assess the AMA RUC's 
recommendations for direct PE inputs and malpractice crosswalks, and 
establish interim final direct PE inputs and malpractice RVUs, which 
are also subject to comment. We note that the main aspect of our PE 
valuation that is open for public comment for a new, revised, or 
potentially misvalued code is the direct PE inputs and not the other 
elements of the PE valuation methodology, such as the indirect cost 
allocation methodology, that also contribute to establishing the PE 
RVUs for a code. The public comment period on the PFS final rule with 
comment period remains open for 60 days after the rule is issued.
    In the interval between closure of the comment period and the 
subsequent year's PFS final rule with comment period, we consider all 
of the public comments on the interim final work, PE, and malpractice 
RVUs for the new, revised, and potentially misvalued codes and the 
results of the refinement panel, if applicable. Finally, we address the 
interim final work and malpractice RVUs and interim final direct PE 
inputs by providing a summary of the public comments and our responses 
to those comments, including a discussion of any changes to the interim 
final work or malpractice RVUs or direct PE inputs, in the following 
year's PFS final rule with comment period. We then typically finalize 
the direct PE inputs and the

[[Page 74279]]

work, PE, and malpractice RVUs for the service in that year's PFS final 
rule with comment period, unless we determine it would be more 
appropriate to continue their interim final status for another year and 
solicit further public comment.
1. Methodology
    We conducted a review of each code identified in this section and 
reviewed the current work RVU, if one exists, the AMA RUC-recommended 
work RVUs, intensity, and time to furnish the preservice, intraservice, 
and postservice activities, as well as other components of the service 
that contribute to the value. Our review generally includes, but is not 
limited to, a review of information provided by the AMA RUC, Health 
Care Professionals Advisory Committee (HCPAC), and other public 
commenters, medical literature, and comparative databases, as well as a 
comparison with other codes within the Medicare PFS, consultation with 
other physicians and health care professionals within CMS and the 
federal government. We also assessed the methodology and data used to 
develop the recommendations submitted to us by the AMA RUC and other 
public commenters and the rationale for the recommendations. As we 
noted in the CY 2011 PFS final rule with comment period (75 FR 73328 
through 73329), there are a variety of methodologies and approaches 
used to develop work RVUs, including survey data, building blocks, 
crosswalk to key reference or similar codes, and magnitude estimation. 
When referring to a survey, unless otherwise noted, we mean the surveys 
conducted by specialty societies as part of the formal AMA RUC process. 
The building block methodology is used to construct, or deconstruct, 
the work RVU for a CPT code based on component pieces of the code. 
Components used in the building block approach may include preservice, 
intraservice, or postservice time and post-procedure visits. When 
referring to a bundled CPT code, the components could be the CPT codes 
that make up the bundled code. Magnitude estimation refers to a 
methodology for valuing physician work that determines the appropriate 
work RVU for a service by gauging the total amount of physician work 
for that service relative to the physician work for similar service 
across the physician fee schedule without explicitly valuing the 
components of that work.
    The PFS incorporates cross-specialty and cross-organ system 
relativity. Valuing services requires an assessment of relative value 
and takes into account the clinical intensity and time required to 
furnish a service. In selecting which methodological approach will best 
determine the appropriate value for a service, we consider the current 
and recommended work and time values, as well as the intensity of the 
service, all relative to other services.
    Several years ago, to aid in the development of preservice time 
recommendations for new and revised CPT codes, the AMA RUC created 
standardized preservice time packages. The packages include preservice 
evaluation time, preservice positioning time, and preservice scrub, 
dress and wait time. Currently there are six preservice time packages 
for services typically furnished in the facility setting, reflecting 
the different combinations of straightforward or difficult procedure, 
straightforward or difficult patient, and without or with sedation/
anesthesia. Currently there are two preservice time packages for 
services typically furnished in the nonfacility setting, reflecting 
procedures without and with sedation/anesthesia care.
    We have developed several standard building block methodologies to 
appropriately value services when they have common billing patterns. In 
cases where a service is typically furnished to a beneficiary on the 
same day as an evaluation and management (E/M) service, we believe that 
there is overlap between the two services in some of the activities 
furnished during the preservice evaluation and postservice time. We 
believe that at least one-third of the physician time in both the 
preservice evaluation and postservice period is duplicative of work 
furnished during the E/M visit. Accordingly, in cases where we believe 
that the AMA RUC has not adequately accounted for the overlapping 
activities in the recommended work RVU and/or times, we adjust the work 
RVU and/or times to account for the overlap. The work RVU for a service 
is the product of the time involved in furnishing the service times the 
intensity of the work. Preservice evaluation time and postservice time 
both have a long-established intensity of work per unit of time (IWPUT) 
of 0.0224, which means that 1 minute of preservice evaluation or 
postservice time equates to 0.0224 of a work RVU. Therefore, in many 
cases when we remove 2 minutes of preservice time and 2 minutes of 
postservice time from a procedure to account for the overlap with the 
same day E/M service, we also remove a work RVU of 0.09 (4 minutes x 
0.0224 IWPUT) if we do not believe the overlap in time has already been 
accounted for in the work RVU. We continue to believe this adjustment 
is appropriate. The AMA RUC has recognized this valuation policy and, 
in many cases, addresses the overlap in time and work when a service is 
typically provided on the same day as an E/M service.
2. Responding to CY 2013 Interim Final RVUs and CY 2014 Proposed RVUs
    In this section, we address the interim final values published in 
the CY 2013 PFS final rule with comment period, as subsequently 
corrected in the correction notice (78 FR 48996), and the proposed 
values published in the CY 2014 PFS proposed rule. We discuss the 
results of the CY 2013 refinement panel for CY 2013 interim final codes 
the panel reviewed, respond to public comments received on specific 
interim final and proposed RVUs and direct PE inputs, and address the 
other new, revised, or potentially misvalued codes with interim final 
or proposed values. The direct PE inputs are listed in a file called 
``CY 2014 PFS Direct PE Inputs,'' available on the CMS Web site under 
downloads for the CY 2014 PFS final rule with comment period at http://
www.cms.gov/Medicare/Medicare-Fee-for-Service-Payment/
PhysicianFeeSched/PFS-Federal-Regulation-Notices.html. The final CY 
2014 work, PE, and malpractice RVUs are in Addendum B of a file called 
``CY 2014 PFS Addenda,'' available on the CMS Web site under downloads 
for the CY 2014 PFS final rule with comment period at http://
www.cms.gov/Medicare/Medicare-Fee-for-Service-Payment/
PhysicianFeeSched/PFS-Federal-Regulation-Notices.html.
    (a) Finalizing CY 2013 Interim Final Work RVUs for CY 2014
(i) Refinement Panel
(1) Refinement Panel Process
    As discussed in the 1993 PFS final rule with comment period (57 FR 
55938), we adopted a refinement panel process to assist us in reviewing 
the public comments on CPT codes with interim final work RVUs for a 
year and in developing final work values for the subsequent year. We 
decided the panel would be comprised of a multispecialty group of 
physicians who would review and discuss the work involved in each 
procedure under review, and then each panel member would individually 
rate the work of the procedure. We believed establishing the panel with 
a multispecialty group would balance the interests of the specialty 
societies who commented on the work RVUs with the budgetary and 
redistributive effects that could occur if we accepted extensive 
increases in work RVUs across a broad range of services. Depending on 
the

[[Page 74280]]

number and range of codes that are subject to refinement in a given 
year, we establish refinement panels with representatives from four 
groups of physicians: Clinicians representing the specialty identified 
with the procedures in question; physicians with practices in related 
specialties; primary care physicians; and contractor medical directors 
(CMDs). Typical panels have included 8 to 10 physicians across the four 
groups.
    Following the addition of section 1848(c)(2)(K) to the Act by 
Section 3134 of the Affordable Care Act, which required the Secretary 
periodically to review potentially misvalued codes and make appropriate 
adjustments to the RVUs, we reassessed the refinement panel process. As 
detailed in the CY 2011 PFS final rule with comment period (75 FR 
73306), we believed that the refinement panel process may provide an 
opportunity to review and discuss the proposed and interim final work 
RVUs with a clinically diverse group of experts, who then provide 
informed recommendations. Therefore, we indicated that we would 
continue the refinement process, but with administrative modification 
and clarification. We also noted that we would continue using the 
established composition that includes representatives from the four 
groups of physicians--clinicians representing the specialty identified 
with the procedures in question, physicians with practices in related 
specialties, primary care physicians, and CMDs.
    At that time, we made a change in how we calculated refinement 
panel results. The basis of the refinement panel process is that, 
following discussion of the information but without an attempt to reach 
a consensus, each member of the panel submits an independent rating to 
CMS. Historically, the refinement panel's recommendation to change a 
work value or to retain the interim final value had hinged solely on 
the outcome of a statistical test on the ratings (an F-test of panel 
ratings among the groups of participants). Over time, we found the 
statistical test used to evaluate the RVU ratings of individual panel 
members became less reliable as the physicians in each group tended to 
select a previously discussed value, rather than developing a unique 
value, thereby reducing the observed variability needed to conduct a 
robust statistical test. In addition, reliance on values developed 
using the F-test also occasionally resulted in rank order anomalies 
among services (that is, a more complex procedure is assigned lower 
RVUs than a less complex procedure). As a result, we eliminated the use 
of the statistical F-test and instead used the median work value of the 
individual panel members' ratings. We said that this approach would 
simplify the refinement process administratively, while providing a 
result 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.
    At the same time, we clarified that we have the final authority to 
set the work RVUs, including making adjustments to the work RVUs 
resulting from the refinement process, and that we will make such 
adjustments if warranted by policy concerns (75 FR 73307).
    As we continue to strive to make the refinement panel process as 
effective and efficient as possible, we would like to remind readers 
that the refinement panels are not intended to review every code for 
which we did not accept the AMA RUC-recommended work RVUs. Rather, the 
refinement panels are designed for situations where there is new 
information available that might provide a reason for a change in work 
values and for which a multispecialty panel of physicians might provide 
input that would assist us in making work RVU decisions. To facilitate 
the selection of services for the refinement panels, we would like to 
remind specialty societies seeking reconsideration of interim final 
work RVUs, including consideration by a refinement panel, to 
specifically state in their public comments that they are requesting 
refinement panel review. Furthermore, we have asked commenters 
requesting refinement panel review to submit sufficient new information 
concerning the clinical aspects of the work assigned for a service to 
indicate that referral to the refinement panel is warranted (57 FR 
55917).
    We note that most of the information presented during the last 
several refinement panel discussions has been duplicative of the 
information provided to the AMA RUC during its development of 
recommendations. As detailed in section II.E.1. of this final rule with 
comment period, we consider information and recommendations from the 
AMA RUC when assigning proposed and interim final RVUs to services. 
Thus, if the only information that a commenter has to present is 
information already considered by the AMA RUC, referral to a refinement 
panel is not appropriate. To facilitate selection of codes for 
refinement, we request that commenters seeking refinement panel review 
of work RVUs submit supporting information that has not already been 
considered the AMA RUC in creating recommended work RVUs or by CMS in 
assigning proposed and interim final work RVUs. We can make best use of 
our resources as well as those of the specialties involved and 
physician volunteers by avoiding duplicative consideration of 
information by the AMA RUC, CMS, and a refinement panel. To achieve 
this goal, CMS will continue to critically evaluate the need to refer 
codes to refinement panels in future years, specifically considering 
any new information provided by commenters.
(2) CY 2013 Interim Final Work RVUs Considered by the Refinement Panel
    We referred to the CY 2013 refinement panel 12 CPT codes with CY 
2013 interim final work values for which we received a request for 
refinement that met the requirements described above. For these 12 CPT 
codes, all commenters requested increased work RVUs. For ease of 
discussion, we will be referring to these services as ``refinement 
codes.'' Consistent with the process described above, we convened a 
multi-specialty panel of physicians to assist us in the review of the 
information submitted to support increased work RVUs. The panel was 
moderated by our physician advisors, and consisted of the following 
voting members:
     One to two clinicians representing the commenting 
organization.
     One to two primary care clinicians nominated by the 
American Academy of Family Physicians and the American College of 
Physicians.
     Four Contractor Medical Directors (CMDs).
     One to two clinicians with practices in related 
specialties, who were expected to have knowledge of the services under 
review.
    The panel process was designed to capture each participant's 
independent judgment and his or her clinical experience which informed 
and drove the discussion of the refinement code during the refinement 
panel proceedings. Following the discussion, each voting participant 
rated the physician work of the refinement code and submitted those 
ratings to CMS directly and confidentially. We note that not all voting 
participants voted for every CPT code. There was no attempt to achieve 
consensus among the panel members. As finalized in the CY 2011 PFS 
final rule with comment period (75 FR 73307), we calculated the median 
value for each service based upon the individual ratings that were 
submitted to CMS by panel participants.

[[Page 74281]]

    Table 23 presents information on the work RVUs for the codes 
considered by the refinement panel, including the refinement panel 
ratings and the final CY 2014 work RVUs. In section II.E.2.a.ii., we 
discuss each of the individual codes reviewed by the refinement panel.

                      Table 23--Codes Reviewed by the 2013 Multi-Specialty Refinement Panel
----------------------------------------------------------------------------------------------------------------
                                                      CY 2013      AMA RUC/HCPAC    Refinement
      HCPCS code            Short descriptor       interim final    recommended    panel median    CY 2014 work
                                                     work RVU        work RVU         rating            RVU
----------------------------------------------------------------------------------------------------------------
35475.................  Angioplasty, arterial...            5.75            6.60            6.60            6.60
35476.................  Angioplasty, venous.....            4.71            5.10            5.10            5.10
93655.................  Arrhythmia ablation add-            7.50            9.00            9.00            7.50
                         on.
93657.................  Afibablation add-on.....            7.50           10.00           10.00            7.50
95886.................  EMG extremity add-on....            0.70            0.92            0.92            0.86
95887.................  EMG non-extremity add-on            0.47            0.73            0.73            0.71
95908.................  Nerve conduction                    1.25            1.37            1.37            1.25
                         studies; 3-4 studies.
95909.................  Nerve conduction                    1.50            1.77            1.77            1.50
                         studies; 5-6 studies.
95910.................  Nerve conduction                    2.00            2.80            2.80            2.00
                         studies; 7-8 studies.
95911.................  Nerve conduction                    2.50            3.34            3.34            2.50
                         studies; 9-10 studies.
92912.................  Nerve conduction                    3.00            4.00            4.00            3.00
                         studies; 11-12 studies.
95913.................  Nerve conduction                    3.56            4.20            4.20            3.56
                         studies; 13 or more
                         studies.
----------------------------------------------------------------------------------------------------------------

(ii) Code-Specific Issues
    Table 24 of this final rule with comment period lists all codes 
that had a CY 2013 interim final work value. This chart provides the CY 
2013 work RVUs, the CY 2014 work RVUs and indicates whether we are 
finalizing the CY 2014 work RVUs. If there is no work RVUs listed, a 
letter indicates the relevant PFS procedure status indicator. A list of 
the PFS procedure status indicators can be found in Addendum A. If the 
CY 2014 Action column indicates that the CY 2014 values are interim 
final, public comments on these values will be accepted during the 
public comment period on this final rule with comment period. The 
comprehensive list of all CY 2014 RVUs is in Addendum B to this final 
rule with comment period, which is contained in the ``CY 2014 PFS 
Addenda'' available on the CMS Web site under downloads for the CY 2014 
PFS final rule with comment period at http://www.cms.gov/Medicare/
Medicare-Fee-for-Service-Payment/PhysicianFeeSched/PFS-Federal-
Regulation-Notices.html. The comprehensive list of all CY 2013 values 
is in Addendum B to the CY 2013 Correction Notice which is contained in 
the ``CMS-1590-CN Addenda,'' available on the CMS Web site under 
downloads for the CY 2013 correction notice at http://www.cms.gov/
Medicare/Medicare-Fee-for-Service-Payment/PhysicianFeeSched/PFS-
Federal-Regulation-Notices.html. The time values for all codes are 
listed in a file called ``CY 2014 PFS Physician Time,'' available on 
the CMS Web site under downloads for the CY 2014 PFS final rule with 
comment period at http://www.cms.gov/Medicare/Medicare-Fee-for-Service-
Payment/PhysicianFeeSched/PFS-Federal-Regulation-Notices.html.

                             Table 24--Codes With CY 2013 Interim Final Work Values
----------------------------------------------------------------------------------------------------------------
                                                              CY 2013      CY 2014
        HCPCS code                  Long descriptor           work RVU     work RVU         CY 2014  action
----------------------------------------------------------------------------------------------------------------
10120.....................  Incision and removal of                1.22         1.22  Finalize.
                             foreign body, subcutaneous
                             tissues; simple.
11055.....................  Paring or cutting of benign            0.35         0.35  Finalize.
                             hyperkeratotic lesion (eg,
                             corn or callus); single
                             lesion.
11056.....................  Paring or cutting of benign            0.50         0.50  Finalize.
                             hyperkeratotic lesion (eg,
                             corn or callus); 2 to 4
                             lesions.
11057.....................  Paring or cutting of benign            0.65         0.65  Finalize.
                             hyperkeratotic lesion (eg,
                             corn or callus); more than 4
                             lesions.
11300.....................  Shaving of epidermal or dermal         0.60         0.60  Finalize.
                             lesion, single lesion, trunk,
                             arms or legs; lesion diameter
                             0.5 cm or less.
11301.....................  Shaving of epidermal or dermal         0.90         0.90  Finalize.
                             lesion, single lesion, trunk,
                             arms or legs; lesion diameter
                             0.6 to 1.0 cm.
11302.....................  Shaving of epidermal or dermal         1.05         1.05  Finalize.
                             lesion, single lesion, trunk,
                             arms or legs; lesion diameter
                             1.1 to 2.0 cm.
11303.....................  Shaving of epidermal or dermal         1.25         1.25  Finalize.
                             lesion, single lesion, trunk,
                             arms or legs; lesion diameter
                             over 2.0 cm.
11305.....................  Shaving of epidermal or dermal         0.80         0.80  Finalize.
                             lesion, single lesion, scalp,
                             neck, hands, feet, genitalia;
                             lesion diameter 0.5 cm or
                             less.
11306.....................  Shaving of epidermal or dermal         0.96         0.96  Finalize.
                             lesion, single lesion, scalp,
                             neck, hands, feet, genitalia;
                             lesion diameter 0.6 to 1.0 cm.
11307.....................  Shaving of epidermal or dermal         1.20         1.20  Finalize.
                             lesion, single lesion, scalp,
                             neck, hands, feet, genitalia;
                             lesion diameter 1.1 to 2.0 cm.
11308.....................  Shaving of epidermal or dermal         1.46         1.46  Finalize.
                             lesion, single lesion, scalp,
                             neck, hands, feet, genitalia;
                             lesion diameter over 2.0 cm.
11310.....................  Shaving of epidermal or dermal         0.80         0.80  Finalize.
                             lesion, single lesion, face,
                             ears, eyelids, nose, lips,
                             mucous membrane; lesion
                             diameter 0.5 cm or less.
11311.....................  Shaving of epidermal or dermal         1.10         1.10  Finalize.
                             lesion, single lesion, face,
                             ears, eyelids, nose, lips,
                             mucous membrane; lesion
                             diameter 0.6 to 1.0 cm.

[[Page 74282]]

 
11312.....................  Shaving of epidermal or dermal         1.30         1.30  Finalize.
                             lesion, single lesion, face,
                             ears, eyelids, nose, lips,
                             mucous membrane; lesion
                             diameter 1.1 to 2.0 cm.
11313.....................  Shaving of epidermal or dermal         1.68         1.68  Finalize.
                             lesion, single lesion, face,
                             ears, eyelids, nose, lips,
                             mucous membrane; lesion
                             diameter over 2.0 cm.
11719.....................  Trimming of nondystrophic              0.17         0.17  Finalize.
                             nails, any number.
12035.....................  Repair, intermediate, wounds           3.50         3.50  Finalize.
                             of scalp, axillae, trunk and/
                             or extremities (excluding
                             hands and feet); 12.6 cm to
                             20.0 cm.
12036.....................  Repair, intermediate, wounds           4.23         4.23  Finalize.
                             of scalp, axillae, trunk and/
                             or extremities (excluding
                             hands and feet); 20.1 cm to
                             30.0 cm.
12037.....................  Repair, intermediate, wounds           5.00         5.00  Finalize.
                             of scalp, axillae, trunk and/
                             or extremities (excluding
                             hands and feet); over 30.0 cm.
12045.....................  Repair, intermediate, wounds           3.75         3.75  Finalize.
                             of neck, hands, feet and/or
                             external genitalia; 12.6 cm
                             to 20.0 cm.
12046.....................  Repair, intermediate, wounds           4.30         4.30  Finalize.
                             of neck, hands, feet and/or
                             external genitalia; 20.1 cm
                             to 30.0 cm.
12047.....................  Repair, intermediate, wounds           4.95         4.95  Finalize.
                             of neck, hands, feet and/or
                             external genitalia; over 30.0
                             cm.
12055.....................  Repair, intermediate, wounds           4.50         4.50  Finalize.
                             of face, ears, eyelids, nose,
                             lips and/or mucous membranes;
                             12.6 cm to 20.0 cm.
12056.....................  Repair, intermediate, wounds           5.30         5.30  Finalize.
                             of face, ears, eyelids, nose,
                             lips and/or mucous membranes;
                             20.1 cm to 30.0 cm.
12057.....................  Repair, intermediate, wounds           6.00         6.00  Finalize.
                             of face, ears, eyelids, nose,
                             lips and/or mucous membranes;
                             over 30.0 cm.
13100.....................  Repair, complex, trunk; 1.1 cm         3.00         3.00  Finalize.
                             to 2.5 cm.
13101.....................  Repair, complex, trunk; 2.6 cm         3.50         3.50  Finalize.
                             to 7.5 cm.
13102.....................  Repair, complex, trunk; each           1.24         1.24  Finalize.
                             additional 5 cm or less (list
                             separately in addition to
                             code for primary procedure).
13120.....................  Repair, complex, scalp, arms,          3.23         3.23  Finalize.
                             and/or legs; 1.1 cm to 2.5 cm.
13121.....................  Repair, complex, scalp, arms,          4.00         4.00  Finalize.
                             and/or legs; 2.6 cm to 7.5 cm.
13122.....................  Repair, complex, scalp, arms,          1.44         1.44  Finalize.
                             and/or legs; each additional
                             5 cm or less (list separately
                             in addition to code for
                             primary procedure).
13131.....................  Repair, complex, forehead,             3.73         3.73  Finalize.
                             cheeks, chin, mouth, neck,
                             axillae, genitalia, hands and/
                             or feet; 1.1 cm to 2.5 cm.
13132.....................  Repair, complex, forehead,             4.78         4.78  Finalize.
                             cheeks, chin, mouth, neck,
                             axillae, genitalia, hands and/
                             or feet; 2.6 cm to 7.5 cm.
13133.....................  Repair, complex, forehead,             2.19         2.19  Finalize.
                             cheeks, chin, mouth, neck,
                             axillae, genitalia, hands and/
                             or feet; each additional 5 cm
                             or less (list separately in
                             addition to code for primary
                             procedure).
13150.....................  Repair, complex, eyelids,              3.58            D  D.
                             nose, ears and/or lips; 1.0
                             cm or less.
13151.....................  Repair, complex, eyelids,              4.34         4.34  Finalize.
                             nose, ears and/or lips; 1.1
                             cm to 2.5 cm.
13152.....................  Repair, complex, eyelids,              4.90         5.34  Finalize.
                             nose, ears and/or lips; 2.6
                             cm to 7.5 cm.
13153.....................  Repair, complex, eyelids,              2.38         2.38  Finalize.
                             nose, ears and/or lips; each
                             additional 5 cm or less (list
                             separately in addition to
                             code for primary procedure).
20985.....................  Computer-assisted surgical             2.50         2.50  Finalize.
                             navigational procedure for
                             musculoskeletal procedures,
                             image-less (list separately
                             in addition to code for
                             primary procedure).
22586.....................  Arthrodesis, pre-sacral               28.12        28.12  Finalize.
                             interbody technique,
                             including disc space
                             preparation, discectomy, with
                             posterior instrumentation,
                             with image guidance, includes
                             bone graft when performed, l5-
                             s1 interspace.
23350.....................  Injection procedure for                1.00         1.00  Finalize.
                             shoulder arthrography or
                             enhanced ct/mri shoulder
                             arthrography.
23331.....................  Removal of foreign body,               7.63            D  D.
                             shoulder; deep (eg, neer
                             hemiarthroplasty removal).
23332.....................  Removal of foreign body,              12.37            D  D.
                             shoulder; complicated (eg,
                             total shoulder).
23472.....................  Arthroplasty, glenohumeral            22.13        22.13  Finalize.
                             joint; total shoulder
                             (glenoid and proximal humeral
                             replacement (eg, total
                             shoulder)).
23473.....................  Revision of total shoulder            25.00        25.00  Finalize.
                             arthroplasty, including
                             allograft when performed;
                             humeral or glenoid component.
23474.....................  Revision of total shoulder            27.21        27.21  Finalize.
                             arthroplasty, including
                             allograft when performed;
                             humeral and glenoid component.
23600.....................  Closed treatment of proximal           3.00         3.00  Interim Final.
                             humeral (surgical or
                             anatomical neck) fracture;
                             without manipulation.
24160.....................  Implant removal; elbow joint..         8.00        18.63  Interim Final.
24363.....................  Arthroplasty, elbow; with             22.00        22.00  Finalize.
                             distal humerus and proximal
                             ulnar prosthetic replacement
                             (eg, total elbow).
24370.....................  Revision of total elbow               23.55        23.55  Finalize.
                             arthroplasty, including
                             allograft when performed;
                             humeral or ulnar component.
24371.....................  Revision of total elbow               27.50        27.50  Finalize.
                             arthroplasty, including
                             allograft when performed;
                             humeral and ulnar component.
28470.....................  Closed treatment of metatarsal         2.03         2.03  Interim Final.
                             fracture; without
                             manipulation, each.
29075.....................  Application, cast; elbow to            0.77         0.77  Interim Final.
                             finger (short arm).
29581.....................  Application of multi-layer             0.25         0.25  Interim Final.
                             compression system; leg
                             (below knee), including ankle
                             and foot.

[[Page 74283]]

 
29582.....................  Application of multi-layer             0.35         0.35  Interim Final.
                             compression system; thigh and
                             leg, including ankle and
                             foot, when performed.
29583.....................  Application of multi-layer             0.25         0.25  Interim Final.
                             compression system; upper arm
                             and forearm.
29584.....................  Application of multi-layer             0.35         0.35  Interim Final.
                             compression system; upper
                             arm, forearm, hand, and
                             fingers.
29824.....................  Arthroscopy, shoulder,                 8.98         8.98  Interim Final.
                             surgical; distal
                             claviculectomy including
                             distal articular surface
                             (mumford procedure).
29826.....................  Arthroscopy, shoulder,                 3.00         3.00  Interim Final.
                             surgical; decompression of
                             subacromial space with
                             partial acromioplasty, with
                             coracoacromial ligament (ie,
                             arch) release, when performed
                             (list separately in addition
                             to code for primary
                             procedure).
29827.....................  Arthroscopy, shoulder,                15.59        15.59  Finalize.
                             surgical; with rotator cuff
                             repair.
29828.....................  Arthroscopy, shoulder,                13.16        13.16  Finalize.
                             surgical; biceps tenodesis.
31231.....................  Nasal endoscopy, diagnostic,           1.10         1.10  Finalize.
                             unilateral or bilateral
                             (separate procedure).
31647.....................  Bronchoscopy, rigid or                 4.40         4.40  Finalize.
                             flexible, including
                             fluoroscopic guidance, when
                             performed; with balloon
                             occlusion, when performed,
                             assessment of air leak,
                             airway sizing, and insertion
                             of bronchial valve(s),
                             initial lobe.
31648.....................  Bronchoscopy, rigid or                 4.20         4.20  Finalize.
                             flexible, including
                             fluoroscopic guidance, when
                             performed; with removal of
                             bronchial valve(s), initial
                             lobe.
31649.....................  Bronchoscopy, rigid or                 1.44         1.44  Finalize.
                             flexible, including
                             fluoroscopic guidance, when
                             performed; with removal of
                             bronchial valve(s), each
                             additional lobe (list
                             separately in addition to
                             code for primary procedure).
31651.....................  Bronchoscopy, rigid or                 1.58         1.58  Finalize.
                             flexible, including
                             fluoroscopic guidance, when
                             performed; with balloon
                             occlusion, when performed,
                             assessment of air leak,
                             airway sizing, and insertion
                             of bronchial valve(s), each
                             additional lobe (list
                             separately in addition to
                             code for primary
                             procedure[s]).
31660.....................  Bronchoscopy, rigid or                 4.25         4.25  Finalize.
                             flexible, including
                             fluoroscopic guidance, when
                             performed; with bronchial
                             thermoplasty, 1 lobe.
31661.....................  Bronchoscopy, rigid or                 4.50         4.50  Finalize.
                             flexible, including
                             fluoroscopic guidance, when
                             performed; with bronchial
                             thermoplasty, 2 or more lobes.
32440.....................  Removal of lung, pneumonectomy        27.28        27.28  Finalize.
32480.....................  Removal of lung, other than           25.82        25.82  Finalize.
                             pneumonectomy; single lobe
                             (lobectomy).
32482.....................  Removal of lung, other than           27.44        27.44  Finalize.
                             pneumonectomy; 2 lobes
                             (bilobectomy).
32491.....................  Removal of lung, other than           25.24        25.24  Finalize.
                             pneumonectomy; with resection-
                             plication of emphysematous
                             lung(s) (bullous or non-
                             bullous) for lung volume
                             reduction, sternal split or
                             transthoracic approach,
                             includes any pleural
                             procedure, when performed.
32551.....................  Tube thoracostomy, includes            3.29         3.29  Finalize.
                             connection to drainage system
                             (eg, water seal), when
                             performed, open (separate
                             procedure).
32554.....................  Thoracentesis, needle or               1.82         1.82  Finalize.
                             catheter, aspiration of the
                             pleural space; without
                             imaging guidance.
32555.....................  Thoracentesis, needle or               2.27         2.27  Finalize.
                             catheter, aspiration of the
                             pleural space; with imaging
                             guidance.
32556.....................  Pleural drainage,                      2.50         2.50  Finalize.
                             percutaneous, with insertion
                             of indwelling catheter;
                             without imaging guidance.
32557.....................  Pleural drainage,                      3.12         3.12  Finalize.
                             percutaneous, with insertion
                             of indwelling catheter; with
                             imaging guidance.
32663.....................  Thoracoscopy, surgical; with          24.64        24.64  Finalize.
                             lobectomy (single lobe).
32668.....................  Thoracoscopy, surgical; with           3.00         3.00  Finalize.
                             diagnostic wedge resection
                             followed by anatomic lung
                             resection (list separately in
                             addition to code for primary
                             procedure).
32669.....................  Thoracoscopy, surgical; with          23.53        23.53  Finalize.
                             removal of a single lung
                             segment (segmentectomy).
32670.....................  Thoracoscopy, surgical; with          28.52        28.52  Finalize.
                             removal of two lobes
                             (bilobectomy).
32671.....................  Thoracoscopy, surgical; with          31.92        31.92  Finalize.
                             removal of lung
                             (pneumonectomy).
32672.....................  Thoracoscopy, surgical; with          27.00        27.00  Finalize.
                             resection-plication for
                             emphysematous lung (bullous
                             or non-bullous) for lung
                             volume reduction (lvrs),
                             unilateral includes any
                             pleural procedure, when
                             performed.
32673.....................  Thoracoscopy, surgical; with          21.13        21.13  Finalize.
                             resection of thymus,
                             unilateral or bilateral.
32701.....................  Thoracic target(s) delineation         4.18         4.18  Finalize.
                             for stereotactic body
                             radiation therapy (srs/sbrt),
                             (photon or particle beam),
                             entire course of treatment.
33361.....................  Transcatheter aortic valve            25.13        25.13  Finalize.
                             replacement (tavr/tavi) with
                             prosthetic valve;
                             percutaneous femoral artery
                             approach.
33362.....................  Transcatheter aortic valve            27.52        27.52  Finalize.
                             replacement (tavr/tavi) with
                             prosthetic valve; open
                             femoral artery approach.
33363.....................  Transcatheter aortic valve            28.50        28.50  Finalize.
                             replacement (tavr/tavi) with
                             prosthetic valve; open
                             axillary artery approach.
33364.....................  Transcatheter aortic valve            30.00        30.00  Finalize.
                             replacement (tavr/tavi) with
                             prosthetic valve; open iliac
                             artery approach.
33365.....................  Transcatheter aortic valve            33.12        33.12  Finalize.
                             replacement (tavr/tavi) with
                             prosthetic valve; transaortic
                             approach (eg, median
                             sternotomy, mediastinotomy).

[[Page 74284]]

 
33367.....................  Transcatheter aortic valve            11.88        11.88  Finalize.
                             replacement (tavr/tavi) with
                             prosthetic valve;
                             cardiopulmonary bypass
                             support with percutaneous
                             peripheral arterial and
                             venous cannulation (eg,
                             femoral vessels) (list
                             separately in addition to
                             code for primary procedure).
33368.....................  Transcatheter aortic valve            14.39        14.39  Finalize.
                             replacement (tavr/tavi) with
                             prosthetic valve;
                             cardiopulmonary bypass
                             support with open peripheral
                             arterial and venous
                             cannulation (eg, femoral,
                             iliac, axillary vessels)
                             (list separately in addition
                             to code for primary
                             procedure).
33369.....................  Transcatheter aortic valve            19.00        19.00  Finalize.
                             replacement (tavr/tavi) with
                             prosthetic valve;
                             cardiopulmonary bypass
                             support with central arterial
                             and venous cannulation (eg,
                             aorta, right atrium,
                             pulmonary artery) (list
                             separately in addition to
                             code for primary procedure).
33405.....................  Replacement, aortic valve,            41.32        41.32  Finalize.
                             with cardiopulmonary bypass;
                             with prosthetic valve other
                             than homograft or stentless
                             valve.
33430.....................  Replacement, mitral valve,            50.93        50.93  Finalize.
                             with cardiopulmonary bypass.
33533.....................  Coronary artery bypass, using         33.75        33.75  Finalize.
                             arterial graft(s); single
                             arterial graft.
33990.....................  Insertion of ventricular               8.15         8.15  Finalize.
                             assist device, percutaneous
                             including radiological
                             supervision and
                             interpretation; arterial
                             access only.
33991.....................  Insertion of ventricular              11.88        11.88  Finalize.
                             assist device, percutaneous
                             including radiological
                             supervision and
                             interpretation; both arterial
                             and venous access, with
                             transseptal puncture.
33992.....................  Removal of percutaneous                4.00         4.00  Finalize.
                             ventricular assist device at
                             separate and distinct session
                             from insertion.
33993.....................  Repositioning of percutaneous          3.51         3.51  Finalize.
                             ventricular assist device
                             with imaging guidance at
                             separate and distinct session
                             from insertion.
35475.....................  Transluminal balloon                   5.75         6.60  Finalize.
                             angioplasty, percutaneous;
                             brachiocephalic trunk or
                             branches, each vessel.
35476.....................  Transluminal balloon                   4.71         5.10  Finalize.
                             angioplasty, percutaneous;
                             venous.
36221.....................  Non-selective catheter                 4.17         4.17  Finalize.
                             placement, thoracic aorta,
                             with angiography of the
                             extracranial carotid,
                             vertebral, and/or
                             intracranial vessels,
                             unilateral or bilateral, and
                             all associated radiological
                             supervision and
                             interpretation, includes
                             angiography of the
                             cervicocerebral arch, when
                             performed.
36222.....................  Selective catheter placement,          5.53         5.53  Finalize.
                             common carotid or innominate
                             artery, unilateral, any
                             approach, with angiography of
                             the ipsilateral extracranial
                             carotid circulation and all
                             associated radiological
                             supervision and
                             interpretation, includes
                             angiography of the
                             cervicocerebral arch, when
                             performed.
36223.....................  Selective catheter placement,          6.00         6.00  Finalize.
                             common carotid or innominate
                             artery, unilateral, any
                             approach, with angiography of
                             the ipsilateral intracranial
                             carotid circulation and all
                             associated radiological
                             supervision and
                             interpretation, includes
                             angiography of the
                             extracranial carotid and
                             cervicocerebral arch, when
                             performed.
36224.....................  Selective catheter placement,          6.50         6.50  Finalize.
                             internal carotid artery,
                             unilateral, with angiography
                             of the ipsilateral
                             intracranial carotid
                             circulation and all
                             associated radiological
                             supervision and
                             interpretation, includes
                             angiography of the
                             extracranial carotid and
                             cervicocerebral arch, when
                             performed.
36225.....................  Selective catheter placement,          6.00         6.00  Finalize.
                             subclavian or innominate
                             artery, unilateral, with
                             angiography of the
                             ipsilateral vertebral
                             circulation and all
                             associated radiological
                             supervision and
                             interpretation, includes
                             angiography of the
                             cervicocerebral arch, when
                             performed.
36226.....................  Selective catheter placement,          6.50         6.50  Finalize.
                             vertebral artery, unilateral,
                             with angiography of the
                             ipsilateral vertebral
                             circulation and all
                             associated radiological
                             supervision and
                             interpretation, includes
                             angiography of the
                             cervicocerebral arch, when
                             performed.
36227.....................  Selective catheter placement,          2.09         2.09  Finalize.
                             external carotid artery,
                             unilateral, with angiography
                             of the ipsilateral external
                             carotid circulation and all
                             associated radiological
                             supervision and
                             interpretation (list
                             separately in addition to
                             code for primary procedure).
36228.....................  Selective catheter placement,          4.25         4.25  Finalize.
                             each intracranial branch of
                             the internal carotid or
                             vertebral arteries,
                             unilateral, with angiography
                             of the selected vessel
                             circulation and all
                             associated radiological
                             supervision and
                             interpretation (eg, middle
                             cerebral artery, posterior
                             inferior cerebellar artery)
                             (list separately in addition
                             to code for primary
                             procedure).
37197.....................  Transcatheter retrieval,               6.29         6.29  Finalize.
                             percutaneous, of
                             intravascular foreign body
                             (eg, fractured venous or
                             arterial catheter), includes
                             radiological supervision and
                             interpretation, and imaging
                             guidance (ultrasound or
                             fluoroscopy), when performed.
37211.....................  Transcatheter therapy,                 8.00         8.00  Finalize.
                             arterial infusion for
                             thrombolysis other than
                             coronary, any method,
                             including radiological
                             supervision and
                             interpretation, initial
                             treatment day.
37212.....................  Transcatheter therapy, venous          7.06         7.06  Finalize.
                             infusion for thrombolysis,
                             any method, including
                             radiological supervision and
                             interpretation, initial
                             treatment day.
37213.....................  Transcatheter therapy,                 5.00         5.00  Finalize.
                             arterial or venous infusion
                             for thrombolysis other than
                             coronary, any method,
                             including radiological
                             supervision and
                             interpretation, continued
                             treatment on subsequent day
                             during course of thrombolytic
                             therapy, including follow-up
                             catheter contrast injection,
                             position change, or exchange,
                             when performed.

[[Page 74285]]

 
37214.....................  Transcatheter therapy,                 2.74         2.74  Finalize.
                             arterial or venous infusion
                             for thrombolysis other than
                             coronary, any method,
                             including radiological
                             supervision and
                             interpretation, continued
                             treatment on subsequent day
                             during course of thrombolytic
                             therapy, including follow-up
                             catheter contrast injection,
                             position change, or exchange,
                             when performed.
38240.....................  Hematopoietic progenitor cell          3.00         4.00  Finalize.
                             (hpc); allogeneic
                             transplantation per donor.
38241.....................  Hematopoietic progenitor cell          3.00         3.00  Finalize.
                             (hpc); autologous
                             transplantation.
38242.....................  Allogeneic lymphocyte                  2.11         2.11  Finalize.
                             infusions.
38243.....................  Hematopoietic progenitor cell          2.13         2.13  Finalize.
                             (hpc); hpc boost.
40490.....................  Biopsy of lip.................         1.22         1.22  Finalize.
43206.....................  Esophagoscopy, rigid or                   C         2.39  Interim Final.
                             flexible; with optical
                             endomicroscopy.
43252.....................  Upper gastrointestinal                    C         3.06  Interim Final.
                             endoscopy including
                             esophagus, stomach, and
                             either the duodenum and/or
                             jejunum as appropriate; with
                             optical endomicroscopy.
44705.....................  Preparation of fecal                      I            I  Finalize.
                             microbiota for instillation,
                             including assessment of donor
                             specimen.
45330.....................  Sigmoidoscopy, flexible;               0.96         0.96  Finalize.
                             diagnostic, with or without
                             collection of specimen(s) by
                             brushing or washing (separate
                             procedure).
47562.....................  Laparoscopy, surgical;                10.47        10.47  Finalize.
                             cholecystectomy.
47563.....................  Laparoscopy, surgical;                11.47        11.47  Finalize.
                             cholecystectomy with
                             cholangiography.
47600.....................  Cholecystectomy...............        17.48        17.48  Finalize.
47605.....................  Cholecystectomy; with                 18.48        18.48  Finalize.
                             cholangiography.
49505.....................  Repair initial inguinal                7.96         7.96  Finalize.
                             hernia, age 5 years or older;
                             reducible.
50590.....................  Lithotripsy, extracorporeal            9.77         9.77  Finalize.
                             shock wave.
52214.....................  Cystourethroscopy, with                3.50         3.50  Finalize.
                             fulguration (including
                             cryosurgery or laser surgery)
                             of trigone, bladder neck,
                             prostatic fossa, urethra, or
                             periurethral glands.
52224.....................  Cystourethroscopy, with                4.05         4.05  Finalize.
                             fulguration (including
                             cryosurgery or laser surgery)
                             or treatment of minor (less
                             than 0.5 cm) lesion(s) with
                             or without biopsy.
52234.....................  Cystourethroscopy, with                4.62         4.62  Finalize.
                             fulguration (including
                             cryosurgery or laser surgery)
                             and/or resection of; small
                             bladder tumor(s) (0.5 up to
                             2.0 cm).
52235.....................  Cystourethroscopy, with                5.44         5.44  Finalize.
                             fulguration (including
                             cryosurgery or laser surgery)
                             and/or resection of; medium
                             bladder tumor(s) (2.0 to 5.0
                             cm).
52240.....................  Cystourethroscopy, with                7.50         7.50  Finalize.
                             fulguration (including
                             cryosurgery or laser surgery)
                             and/or resection of; large
                             bladder tumor(s).
52287.....................  Cystourethroscopy, with                3.20         3.20  Finalize.
                             injection(s) for
                             chemodenervation of the
                             bladder.
52351.....................  Cystourethroscopy, with                5.75         5.75  Finalize.
                             ureteroscopy and/or
                             pyeloscopy; diagnostic.
52352.....................  Cystourethroscopy, with                6.75         6.75  Finalize.
                             ureteroscopy and/or
                             pyeloscopy; with removal or
                             manipulation of calculus
                             (ureteral catheterization is
                             included).
52353.....................  Cystourethroscopy, with                7.50         7.50  Finalize.
                             ureteroscopy and/or
                             pyeloscopy; with lithotripsy
                             (ureteral catheterization is
                             included).
52354.....................  Cystourethroscopy, with                8.00         8.00  Finalize.
                             ureteroscopy and/or
                             pyeloscopy; with biopsy and/
                             or fulguration of ureteral or
                             renal pelvic lesion.
52355.....................  Cystourethroscopy, with                9.00         9.00  Finalize.
                             ureteroscopy and/or
                             pyeloscopy; with resection of
                             ureteral or renal pelvic
                             tumor.
53850.....................  Transurethral destruction of          10.08        10.08  Finalize.
                             prostate tissue; by microwave
                             thermotherapy.
60520.....................  Thymectomy, partial or total;         17.16        17.16  Finalize.
                             transcervical approach
                             (separate procedure).
60521.....................  Thymectomy, partial or total;         19.18        19.18  Finalize.
                             sternal split or
                             transthoracic approach,
                             without radical mediastinal
                             dissection (separate
                             procedure).
60522.....................  Thymectomy, partial or total;         23.48        23.48  Finalize.
                             sternal split or
                             transthoracic approach, with
                             radical mediastinal
                             dissection (separate
                             procedure).
64450.....................  Injection, anesthetic agent;           0.75         0.75  Finalize.
                             other peripheral nerve or
                             branch.
64612.....................  Chemodenervation of muscle(s);         1.41         1.41  Finalize.
                             muscle(s) innervated by
                             facial nerve, unilateral (eg,
                             for blepharospasm, hemifacial
                             spasm).
64613.....................  Chemodenervation of muscle(s);         2.01            D  D.
                             neck muscle(s) (eg, for
                             spasmodic torticollis,
                             spasmodic dysphonia).
64614.....................  Chemodenervation of muscle(s);         2.20            D  D.
                             extremity and/or trunk
                             muscle(s) (eg, for dystonia,
                             cerebral palsy, multiple
                             sclerosis).
64615.....................  Chemodenervation of muscle(s);         1.85         1.85  Finalize.
                             muscle(s) innervated by
                             facial, trigeminal, cervical
                             spinal and accessory nerves,
                             bilateral (eg, for chronic
                             migraine).
64640.....................  Destruction by neurolytic              1.23         1.23  Finalize.
                             agent; other peripheral nerve
                             or branch.
65222.....................  Removal of foreign body,               0.84         0.84  Finalize.
                             external eye; corneal, with
                             slit lamp.
65800.....................  Paracentesis of anterior               1.53         1.53  Finalize.
                             chamber of eye (separate
                             procedure); with removal of
                             aqueous.
66982.....................  Extracapsular cataract removal        11.08        11.08  Finalize.
                             with insertion of intraocular
                             lens prosthesis (1-stage
                             procedure), manual or
                             mechanical technique (eg,
                             irrigation and aspiration or
                             phacoemulsification),
                             complex, requiring devices or
                             techniques not generally used
                             in routine cataract surgery
                             (eg, iris expansion device,
                             suture support for
                             intraocular lens, or primary
                             posterior capsulorrhexis) or
                             performed on patients in the
                             amblyogenic developmental
                             stage.
66984.....................  Extracapsular cataract removal         8.52         8.52  Finalize.
                             with insertion of intraocular
                             lens prosthesis (1 stage
                             procedure), manual or
                             mechanical technique (eg,
                             irrigation and aspiration or
                             phacoemulsification).
67028.....................  Intravitreal injection of a            1.44         1.44  Finalize.
                             pharmacologic agent (separate
                             procedure).

[[Page 74286]]

 
67810.....................  Incisional biopsy of eyelid            1.18         1.18  Finalize.
                             skin including lid margin.
68200.....................  Subconjunctival injection.....         0.49         0.49  Finalize.
69200.....................  Removal foreign body from              0.77         0.77  Finalize.
                             external auditory canal;
                             without general anesthesia.
69433.....................  Tympanostomy (requiring                1.57         1.57  Finalize.
                             insertion of ventilating
                             tube), local or topical
                             anesthesia.
72040.....................  Radiologic examination, spine,         0.22         0.22  Finalize.
                             cervical; 3 views or less.
72050.....................  Radiologic examination, spine,         0.31         0.31  Finalize.
                             cervical; 4 or 5 views.
72052.....................  Radiologic examination, spine,         0.36         0.36  Finalize.
                             cervical; 6 or more views.
72191.....................  Computed tomographic                   1.81         1.81  Interim Final.
                             angiography, pelvis, with
                             contrast material(s),
                             including noncontrast images,
                             if performed, and image
                             postprocessing.
73221.....................  Magnetic resonance (eg,                1.35         1.35  Finalize.
                             proton) imaging, any joint of
                             upper extremity; without
                             contrast material(s).
73721.....................  Magnetic resonance (eg,                1.35         1.35  Finalize.
                             proton) imaging, any joint of
                             lower extremity; without
                             contrast material.
74170.....................  Computed tomography, abdomen;          1.40         1.40  Finalize.
                             without contrast material,
                             followed by contrast
                             material(s) and further
                             sections.
74174.....................  Computed tomographic                   2.20         2.20  Finalize.
                             angiography, abdomen and
                             pelvis, with contrast
                             material(s), including
                             noncontrast images, if
                             performed, and image
                             postprocessing.
74175.....................  Computed tomographic                   1.90         1.90  Finalize.
                             angiography, abdomen, with
                             contrast material(s),
                             including noncontrast images,
                             if performed, and image
                             postprocessing.
74247.....................  Radiological examination,              0.69         0.69  Finalize.
                             gastrointestinal tract,
                             upper, air contrast, with
                             specific high density barium,
                             effervescent agent, with or
                             without glucagon; with or
                             without delayed films, with
                             kub.
74280.....................  Radiologic examination, colon;         0.99         0.99  Finalize.
                             air contrast with specific
                             high density barium, with or
                             without glucagon.
74400.....................  Urography (pyelography),               0.49         0.49  Finalize.
                             intravenous, with or without
                             kub, with or without
                             tomography.
75896-26..................  Transcatheter therapy,                 1.31         1.31  Interim Final.
                             infusion, other than for
                             thrombolysis, radiological
                             supervision and
                             interpretation.
75896-TC..................  Transcatheter therapy,                    C            C  Interim Final.
                             infusion, other than for
                             thrombolysis, radiological
                             supervision and
                             interpretation.
75898-26..................  Angiography through existing           1.65         1.65  Interim Final.
                             catheter for follow-up study
                             for transcatheter therapy,
                             embolization or infusion,
                             other than for thrombolysis.
75898-TC..................  Angiography through existing              C            C  Interim Final.
                             catheter for follow-up study
                             for transcatheter therapy,
                             embolization or infusion,
                             other than for thrombolysis.
76830.....................  Ultrasound, transvaginal......         0.69         0.69  Finalize.
76872.....................  Ultrasound, transrectal.......         0.69         0.69  Finalize.
77001.....................  Fluoroscopic guidance for              0.38         0.38  Interim Final.
                             central venous access device
                             placement, replacement
                             (catheter only or complete),
                             or removal (includes
                             fluoroscopic guidance for
                             vascular access and catheter
                             manipulation, any necessary
                             contrast injections through
                             access site or catheter with
                             related venography radiologic
                             supervision and
                             interpretation, and
                             radiographic documentation of
                             final catheter position)
                             (list separately in addition
                             to code for primary
                             procedure).
77002.....................  Fluoroscopic guidance for              0.54         0.54  Interim Final.
                             needle placement (eg, biopsy,
                             aspiration, injection,
                             localization device).
77003.....................  Fluoroscopic guidance and              0.60         0.60  Interim Final.
                             localization of needle or
                             catheter tip for spine or
                             paraspinous diagnostic or
                             therapeutic injection
                             procedures (epidural or
                             subarachnoid).
77080.....................  Dual-energy x-ray                      0.20         0.20  Finalize.
                             absorptiometry (dxa), bone
                             density study, 1 or more
                             sites; axial skeleton (eg,
                             hips, pelvis, spine).
77082.....................  Dual-energy x-ray                      0.17         0.17  Finalize.
                             absorptiometry (dxa), bone
                             density study, 1 or more
                             sites; vertebral fracture
                             assessment.
77301.....................  Intensity modulated                    7.99         7.99  Finalize.
                             radiotherapy plan, including
                             dose-volume histograms for
                             target and critical structure
                             partial tolerance
                             specifications.
78012.....................  Thyroid uptake, single or              0.19         0.19  Finalize.
                             multiple quantitative
                             measurement(s) (including
                             stimulation, suppression, or
                             discharge, when performed).
78013.....................  Thyroid imaging (including             0.37         0.37  Finalize.
                             vascular flow, when
                             performed).
78014.....................  Thyroid imaging (including             0.50         0.50  Finalize.
                             vascular flow, when
                             performed); with single or
                             multiple uptake(s)
                             quantitative measurement(s)
                             (including stimulation,
                             suppression, or discharge,
                             when performed).
78070.....................  Parathyroid planar imaging             0.80         0.80  Finalize.
                             (including subtraction, when
                             performed).
78071.....................  Parathyroid planar imaging             1.20         1.20  Finalize.
                             (including subtraction, when
                             performed); with tomographic
                             (spect).
78072.....................  Parathyroid planar imaging             1.60         1.60  Finalize.
                             (including subtraction, when
                             performed); with tomographic
                             (spect), and concurrently
                             acquired computed tomography
                             (ct) for anatomical
                             localization.
78278.....................  Acute gastrointestinal blood           0.99         0.99  Finalize.
                             loss imaging.
78472.....................  Cardiac blood pool imaging,            0.98         0.98  Finalize.
                             gated equilibrium; planar,
                             single study at rest or
                             stress (exercise and/or
                             pharmacologic), wall motion
                             study plus ejection fraction,
                             with or without additional
                             quantitative processing.

[[Page 74287]]

 
86153.....................  Cell enumeration using                 0.69         0.69  Finalize.
                             immunologic selection and
                             identification in fluid
                             specimen (eg, circulating
                             tumor cells in blood);
                             physician interpretation and
                             report, when required.
88120.....................  Cytopathology, in situ                 1.20         1.20  Interim Final.
                             hybridization (eg, fish),
                             urinary tract specimen with
                             morphometric analysis, 3-5
                             molecular probes, each
                             specimen; manual.
88121.....................  Cytopathology, in situ                 1.00         1.00  Interim Final.
                             hybridization (eg, fish),
                             urinary tract specimen with
                             morphometric analysis, 3-5
                             molecular probes, each
                             specimen; using computer-
                             assisted technology.
88312.....................  Special stain including                0.54         0.54  Finalize.
                             interpretation and report;
                             group i for microorganisms
                             (eg, acid fast, methenamine
                             silver).
88365.....................  In situ hybridization (eg,             1.20         1.20  Interim Final.
                             fish), each probe.
88367.....................  Morphometric analysis, in situ         1.30         1.30  Interim Final.
                             hybridization (quantitative
                             or semi-quantitative) each
                             probe; using computer-
                             assisted technology.
88368.....................  Morphometric analysis, in situ         1.40         1.40  Interim Final.
                             hybridization (quantitative
                             or semi-quantitative) each
                             probe; manual.
88375.....................  Optical endomicroscopic                   C            I  Interim Final.
                             image(s), interpretation and
                             report, real-time or
                             referred, each endoscopic
                             session.
90785.....................  Interactive complexity (list           0.11         0.33  Interim Final.
                             separately in addition to the
                             code for primary procedure).
90791.....................  Psychiatric diagnostic                 2.80         3.00  Interim Final.
                             evaluation.
90792.....................  Psychiatric diagnostic                 2.96         3.25  Interim Final.
                             evaluation with medical
                             services.
90832.....................  Psychotherapy, 30 minutes with         1.25         1.50  Interim Final.
                             patient and/or family member.
90833.....................  Psychotherapy, 30 minutes with         0.98         1.50  Interim Final.
                             patient and/or family member
                             when performed with an
                             evaluation and management
                             service (list separately in
                             addition to the code for
                             primary procedure).
90834.....................  Psychotherapy, 45 minutes with         1.89         2.00  Interim Final.
                             patient and/or family member.
90836.....................  Psychotherapy, 45 minutes with         1.60         1.90  Interim Final.
                             patient and/or family member
                             when performed with an
                             evaluation and management
                             service (list separately in
                             addition to the code for
                             primary procedure).
90837.....................  Psychotherapy, 60 minutes with         2.83         3.00  Interim Final.
                             patient and/or family member.
90838.....................  Psychotherapy, 60 minutes with         2.56         2.50  Interim Final.
                             patient and/or family member
                             when performed with an
                             evaluation and management
                             service (list separately in
                             addition to the code for
                             primary procedure).
90839.....................  Psychotherapy for crisis;                 C         3.13  Interim Final.
                             first 60 minutes.
90840.....................  Psychotherapy for crisis; each            C         1.50  Interim Final.
                             additional 30 minutes (list
                             separately in addition to
                             code for primary service).
90845.....................  Psychoanalysis................         1.79         2.10  Interim Final.
90846.....................  Family psychotherapy (without          1.83         2.40  Interim Final.
                             the patient present).
90847.....................  Family psychotherapy (conjoint         2.21         2.50  Interim Final.
                             psychotherapy) (with patient
                             present).
90853.....................  Group psychotherapy (other             0.59         0.59  Interim Final.
                             than of a multiple-family
                             group).
90863.....................  Pharmacologic management,                 I            I  Interim Final.
                             including prescription and
                             review of medication, when
                             performed with psychotherapy
                             services (list separately in
                             addition to the code for
                             primary procedure).
91112.....................  Gastrointestinal transit and           2.10         2.10  Finalize.
                             pressure measurement, stomach
                             through colon, wireless
                             capsule, with interpretation
                             and report.
92083.....................  Visual field examination,              0.50         0.50  Finalize.
                             unilateral or bilateral, with
                             interpretation and report;
                             extended examination (eg,
                             goldmann visual fields with
                             at least 3 isopters plotted
                             and static determination
                             within the central 30[iexcl],
                             or quantitative, automated
                             threshold perimetry, octopus
                             program g-1, 32 or 42,
                             humphrey visual field
                             analyzer full threshold
                             programs 30-2, 24-2, or 30/60-
                             2).
92100.....................  Serial tonometry (separate             0.61         0.61  Finalize.
                             procedure) with multiple
                             measurements of intraocular
                             pressure over an extended
                             time period with
                             interpretation and report,
                             same day (eg, diurnal curve
                             or medical treatment of acute
                             elevation of intraocular
                             pressure).
92235.....................  Fluorescein angiography                0.81         0.81  Finalize.
                             (includes multiframe imaging)
                             with interpretation and
                             report.
92286.....................  Anterior segment imaging with          0.40         0.40  Finalize.
                             interpretation and report;
                             with specular microscopy and
                             endothelial cell analysis.
92920.....................  Percutaneous transluminal             10.10        10.10  Finalize.
                             coronary angioplasty; single
                             major coronary artery or
                             branch.
92921.....................  Percutaneous transluminal                 B            B  Finalize.
                             coronary angioplasty; each
                             additional branch of a major
                             coronary artery (list
                             separately in addition to
                             code for primary procedure).
92924.....................  Percutaneous transluminal             11.99        11.99  Finalize.
                             coronary atherectomy, with
                             coronary angioplasty when
                             performed; single major
                             coronary artery or branch.
92925.....................  Percutaneous transluminal                 B            B  Finalize.
                             coronary atherectomy, with
                             coronary angioplasty when
                             performed; each additional
                             branch of a major coronary
                             artery (list separately in
                             addition to code for primary
                             procedure).
92928.....................  Percutaneous transcatheter            11.21        11.21  Finalize.
                             placement of intracoronary
                             stent(s), with coronary
                             angioplasty when performed;
                             single major coronary artery
                             or branch.
92929.....................  Percutaneous transcatheter                B            B  Finalize.
                             placement of intracoronary
                             stent(s), with coronary
                             angioplasty when performed;
                             each additional branch of a
                             major coronary artery (list
                             separately in addition to
                             code for primary procedure).

[[Page 74288]]

 
92933.....................  Percutaneous transluminal             12.54        12.54  Finalize.
                             coronary atherectomy, with
                             intracoronary stent, with
                             coronary angioplasty when
                             performed; single major
                             coronary artery or branch.
92934.....................  Percutaneous transluminal                 B            B  Finalize.
                             coronary atherectomy, with
                             intracoronary stent, with
                             coronary angioplasty when
                             performed; each additional
                             branch of a major coronary
                             artery (list separately in
                             addition to code for primary
                             procedure).
92937.....................  Percutaneous transluminal             11.20        11.20  Finalize.
                             revascularization of or
                             through coronary artery
                             bypass graft (internal
                             mammary, free arterial,
                             venous), any combination of
                             intracoronary stent,
                             atherectomy and angioplasty,
                             including distal protection
                             when performed; single vessel.
92938.....................  Percutaneous transluminal                 B            B  Finalize.
                             revascularization of or
                             through coronary artery
                             bypass graft (internal
                             mammary, free arterial,
                             venous), any combination of
                             intracoronary stent,
                             atherectomy and angioplasty,
                             including distal protection
                             when performed; each
                             additional branch subtended
                             by the bypass graft (list
                             separately in addition to
                             code for primary procedure).
92941.....................  Percutaneous transluminal             12.56        12.56  Finalize.
                             revascularization of acute
                             total/subtotal occlusion
                             during acute myocardial
                             infarction, coronary artery
                             or coronary artery bypass
                             graft, any combination of
                             intracoronary stent,
                             atherectomy and angioplasty,
                             including aspiration
                             thrombectomy when performed,
                             single vessel.
92943.....................  Percutaneous transluminal             12.56        12.56  Finalize.
                             revascularization of chronic
                             total occlusion, coronary
                             artery, coronary artery
                             branch, or coronary artery
                             bypass graft, any combination
                             of intracoronary stent,
                             atherectomy and angioplasty;
                             single vessel.
92944.....................  Percutaneous transluminal                 B            B  Finalize.
                             revascularization of chronic
                             total occlusion, coronary
                             artery, coronary artery
                             branch, or coronary artery
                             bypass graft, any combination
                             of intracoronary stent,
                             atherectomy and angioplasty;
                             each additional coronary
                             artery, coronary artery
                             branch, or bypass graft (list
                             separately in addition to
                             code for primary procedure).
93015.....................  Cardiovascular stress test             0.75         0.75  Finalize.
                             using maximal or submaximal
                             treadmill or bicycle
                             exercise, continuous
                             electrocardiographic
                             monitoring, and/or
                             pharmacological stress; with
                             supervision, interpretation
                             and report.
93016.....................  Cardiovascular stress test             0.45         0.45  Finalize.
                             using maximal or submaximal
                             treadmill or bicycle
                             exercise, continuous
                             electrocardiographic
                             monitoring, and/or
                             pharmacological stress;
                             supervision only, without
                             interpretation and report.
93018.....................  Cardiovascular stress test             0.30         0.30  Finalize.
                             using maximal or submaximal
                             treadmill or bicycle
                             exercise, continuous
                             electrocardiographic
                             monitoring, and/or
                             pharmacological stress;
                             interpretation and report
                             only.
93308.....................  Echocardiography,                      0.53         0.53  Finalize.
                             transthoracic, real-time with
                             image documentation (2d),
                             includes m-mode recording,
                             when performed, follow-up or
                             limited study.
93653.....................  Comprehensive                         15.00        15.00  Finalize.
                             electrophysiologic evaluation
                             including insertion and
                             repositioning of multiple
                             electrode catheters with
                             induction or attempted
                             induction of an arrhythmia
                             with right atrial pacing and
                             recording, right ventricular
                             pacing and recording, his
                             recording with intracardiac
                             catheter ablation of
                             arrhythmogenic focus; with
                             treatment of supraventricular
                             tachycardia by ablation of
                             fast or slow atrioventricular
                             pathway, accessory
                             atrioventricular connection,
                             cavo-tricuspid isthmus or
                             other single atrial focus or
                             source of atrial re-entry.
93654.....................  Comprehensive                         20.00        20.00  Finalize.
                             electrophysiologic evaluation
                             including insertion and
                             repositioning of multiple
                             electrode catheters with
                             induction or attempted
                             induction of an arrhythmia
                             with right atrial pacing and
                             recording, right ventricular
                             pacing and recording, his
                             recording with intracardiac
                             catheter ablation of
                             arrhythmogenic focus; with
                             treatment of ventricular
                             tachycardia or focus of
                             ventricular ectopy including
                             intracardiac
                             electrophysiologic 3d
                             mapping, when performed, and
                             left ventricular pacing and
                             recording, when performed.
93655.....................  Intracardiac catheter ablation         7.50         7.50  Finalize.
                             of a discrete mechanism of
                             arrhythmia which is distinct
                             from the primary ablated
                             mechanism, including repeat
                             diagnostic maneuvers, to
                             treat a spontaneous or
                             induced arrhythmia (list
                             separately in addition to
                             code for primary procedure).
93656.....................  Comprehensive                         20.02        20.02  Finalize.
                             electrophysiologic evaluation
                             including transseptal
                             catheterizations, insertion
                             and repositioning of multiple
                             electrode catheters with
                             induction or attempted
                             induction of an arrhythmia
                             with atrial recording and
                             pacing, when possible, right
                             ventricular pacing and
                             recording, his bundle
                             recording with intracardiac
                             catheter ablation of
                             arrhythmogenic focus, with
                             treatment of atrial
                             fibrillation by ablation by
                             pulmonary vein isolation.
93657.....................  Additional linear or focal             7.50         7.50  Finalize.
                             intracardiac catheter
                             ablation of the left or right
                             atrium for treatment of
                             atrial fibrillation remaining
                             after completion of pulmonary
                             vein isolation (list
                             separately in addition to
                             code for primary procedure).
93925.....................  Duplex scan of lower extremity         0.80         0.80  Finalize.
                             arteries or arterial bypass
                             grafts; complete bilateral
                             study.
93926.....................  Duplex scan of lower extremity         0.50         0.50  Finalize.
                             arteries or arterial bypass
                             grafts; unilateral or limited
                             study.
93970.....................  Duplex scan of extremity veins         0.70         0.70  Finalize.
                             including responses to
                             compression and other
                             maneuvers; complete bilateral
                             study.

[[Page 74289]]

 
93971.....................  Duplex scan of extremity veins         0.45         0.45  Finalize.
                             including responses to
                             compression and other
                             maneuvers; unilateral or
                             limited study.
95017.....................  Allergy testing, any                   0.07         0.07  Finalize.
                             combination of percutaneous
                             (scratch, puncture, prick)
                             and intracutaneous
                             (intradermal), sequential and
                             incremental, with venoms,
                             immediate type reaction,
                             including test interpretation
                             and report, specify number of
                             tests.
95018.....................  Allergy testing, any                   0.14         0.14  Finalize.
                             combination of percutaneous
                             (scratch, puncture, prick)
                             and intracutaneous
                             (intradermal), sequential and
                             incremental, with drugs or
                             biologicals, immediate type
                             reaction, including test
                             interpretation and report,
                             specify number of tests.
95076.....................  Ingestion challenge test               1.50         1.50  Finalize.
                             (sequential and incremental
                             ingestion of test items, eg,
                             food, drug or other
                             substance); initial 120
                             minutes of testing.
95079.....................  Ingestion challenge test               1.38         1.38  Finalize.
                             (sequential and incremental
                             ingestion of test items, eg,
                             food, drug or other
                             substance); each additional
                             60 minutes of testing (list
                             separately in addition to
                             code for primary procedure).
95782.....................  Polysomnography; younger than          2.60         2.60  Finalize.
                             6 years, sleep staging with 4
                             or more additional parameters
                             of sleep, attended by a
                             technologist.
95783.....................  Polysomnography; younger than          2.83         2.83  Finalize.
                             6 years, sleep staging with 4
                             or more additional parameters
                             of sleep, with initiation of
                             continuous positive airway
                             pressure therapy or bi-level
                             ventilation, attended by a
                             technologist.
95860.....................  Needle electromyography; 1             0.96         0.96  Finalize.
                             extremity with or without
                             related paraspinal areas.
95861.....................  Needle electromyography; 2             1.54         1.54  Finalize.
                             extremities with or without
                             related paraspinal areas.
95863.....................  Needle electromyography; 3             1.87         1.87  Finalize.
                             extremities with or without
                             related paraspinal areas.
95864.....................  Needle electromyography; 4             1.99         1.99  Finalize.
                             extremities with or without
                             related paraspinal areas.
95865.....................  Needle electromyography;               1.57         1.57  Finalize.
                             larynx.
95866.....................  Needle electromyography;               1.25         1.25  Finalize.
                             hemidiaphragm.
95867.....................  Needle electromyography;               0.79         0.79  Finalize.
                             cranial nerve supplied
                             muscle(s), unilateral.
95868.....................  Needle electromyography;               1.18         1.18  Finalize.
                             cranial nerve supplied
                             muscles, bilateral.
95869.....................  Needle electromyography;               0.37         0.37  Finalize.
                             thoracic paraspinal muscles
                             (excluding t1 or t12).
95870.....................  Needle electromyography;               0.37         0.37  Finalize.
                             limited study of muscles in 1
                             extremity or non-limb (axial)
                             muscles (unilateral or
                             bilateral), other than
                             thoracic paraspinal, cranial
                             nerve supplied muscles, or
                             sphincters.
95885.....................  Needle electromyography, each          0.35         0.35  Finalize.
                             extremity, with related
                             paraspinal areas, when
                             performed, done with nerve
                             conduction, amplitude and
                             latency/velocity study;
                             limited (list separately in
                             addition to code for primary
                             procedure).
95886.....................  Needle electromyography, each          0.70         0.86  Finalize.
                             extremity, with related
                             paraspinal areas, when
                             performed, done with nerve
                             conduction, amplitude and
                             latency/velocity study;
                             complete, five or more
                             muscles studied, innervated
                             by three or more nerves or
                             four or more spinal levels
                             (list separately in addition
                             to code for primary
                             procedure).
95887.....................  Needle electromyography, non-          0.47         0.71  Finalize.
                             extremity (cranial nerve
                             supplied or axial) muscle(s)
                             done with nerve conduction,
                             amplitude and latency/
                             velocity study (list
                             separately in addition to
                             code for primary procedure).
95905.....................  Motor and/or sensory nerve             0.05         0.05  Finalize.
                             conduction, using
                             preconfigured electrode
                             array(s), amplitude and
                             latency/velocity study, each
                             limb, includes f-wave study
                             when performed, with
                             interpretation and report.
95907.....................  Nerve conduction studies; 1-2          1.00         1.00  Finalize.
                             studies.
95908.....................  Nerve conduction studies; 3-4          1.25         1.25  Finalize.
                             studies.
95909.....................  Nerve conduction studies; 5-6          1.50         1.50  Finalize.
                             studies.
95910.....................  Nerve conduction studies; 7-8          2.00         2.00  Finalize.
                             studies.
95911.....................  Nerve conduction studies; 9-10         2.50         2.50  Finalize.
                             studies.
95912.....................  Nerve conduction studies; 11-          3.00         3.00  Finalize.
                             12 studies.
95913.....................  Nerve conduction studies; 13           3.56         3.56  Finalize.
                             or more studies.
95921.....................  Testing of autonomic nervous           0.90         0.90  Finalize.
                             system function; cardiovagal
                             innervation (parasympathetic
                             function), including 2 or
                             more of the following: Heart
                             rate response to deep
                             breathing with recorded r-r
                             interval, valsalva ratio, and
                             30:15 ratio.
95922.....................  Testing of autonomic nervous           0.96         0.96  Finalize.
                             system function; vasomotor
                             adrenergic innervation
                             (sympathetic adrenergic
                             function), including beat-to-
                             beat blood pressure and r-r
                             interval changes during
                             valsalva maneuver and at
                             least 5 minutes of passive
                             tilt.
95923.....................  Testing of autonomic nervous           0.90         0.90  Finalize.
                             system function; sudomotor,
                             including 1 or more of the
                             following: Quantitative
                             sudomotor axon reflex test
                             (qsart), silastic sweat
                             imprint, thermoregulatory
                             sweat test, and changes in
                             sympathetic skin potential.
95924.....................  Testing of autonomic nervous           1.73         1.73  Finalize.
                             system function; combined
                             parasympathetic and
                             sympathetic adrenergic
                             function testing with at
                             least 5 minutes of passive
                             tilt.
95925.....................  Short-latency somatosensory            0.54         0.54  Finalize.
                             evoked potential study,
                             stimulation of any/all
                             peripheral nerves or skin
                             sites, recording from the
                             central nervous system; in
                             upper limbs.
95926.....................  Short-latency somatosensory            0.54         0.54  Finalize.
                             evoked potential study,
                             stimulation of any/all
                             peripheral nerves or skin
                             sites, recording from the
                             central nervous system; in
                             lower limbs.
95928.....................  Central motor evoked potential         1.50         1.50  Interim Final.
                             study (transcranial motor
                             stimulation); upper limbs.
95929.....................  Central motor evoked potential         1.50         1.50  Interim Final.
                             study (transcranial motor
                             stimulation); lower limbs.

[[Page 74290]]

 
95938.....................  Short-latency somatosensory            0.86         0.86  Finalize.
                             evoked potential study,
                             stimulation of any/all
                             peripheral nerves or skin
                             sites, recording from the
                             central nervous system; in
                             upper and lower limbs.
95939.....................  Central motor evoked potential         2.25         2.25  Finalize.
                             study (transcranial motor
                             stimulation); in upper and
                             lower limbs.
95940.....................  Continuous intraoperative              0.60         0.60  Finalize.
                             neurophysiology monitoring in
                             the operating room, one on
                             one monitoring requiring
                             personal attendance, each 15
                             minutes (list separately in
                             addition to code for primary
                             procedure).
95941.....................  Continuous intraoperative                 I            I  Finalize.
                             neurophysiology monitoring,
                             from outside the operating
                             room (remote or nearby) or
                             for monitoring of more than
                             one case while in the
                             operating room, per hour
                             (list separately in addition
                             to code for primary
                             procedure).
95943.....................  Simultaneous, independent,                C            C  Finalize.
                             quantitative measures of both
                             parasympathetic function and
                             sympathetic function, based
                             on time-frequency analysis of
                             heart rate variability
                             concurrent with time-
                             frequency analysis of
                             continuous respiratory
                             activity, with mean heart
                             rate and blood pressure
                             measures, during rest, paced
                             (deep) breathing, valsalva
                             maneuvers, and head-up
                             postural change.
96920.....................  Laser treatment for                    1.15         1.15  Finalize.
                             inflammatory skin disease
                             (psoriasis); total area less
                             than 250 sq cm.
96921.....................  Laser treatment for                    1.30         1.30  Finalize.
                             inflammatory skin disease
                             (psoriasis); 250 sq cm to 500
                             sq cm..
96922.....................  Laser treatment for                    2.10         2.10  Finalize.
                             inflammatory skin disease
                             (psoriasis); over 500 sq cm.
97150.....................  Therapeutic procedure(s),              0.65         0.29  Finalize.
                             group (2 or more individuals).
99485.....................  Supervision by a control                  B            B  Finalize.
                             physician of interfacility
                             transport care of the
                             critically ill or critically
                             injured pediatric patient, 24
                             months of age or younger,
                             includes two-way
                             communication with transport
                             team before transport, at the
                             referring facility and during
                             the transport, including data
                             interpretation and report;
                             first 30 minutes.
99486.....................  Supervision by a control                  B            B  Finalize.
                             physician of interfacility
                             transport care of the
                             critically ill or critically
                             injured pediatric patient, 24
                             months of age or younger,
                             includes two-way
                             communication with transport
                             team before transport, at the
                             referring facility and during
                             the transport, including data
                             interpretation and report;
                             each additional 30 minutes
                             (list separately in addition
                             to code for primary
                             procedure).
99487.....................  Complex chronic care                      B            B  Finalize.
                             coordination services; first
                             hour of clinical staff time
                             directed by a physician or
                             other qualified health care
                             professional with no face-to-
                             face visit, per calendar
                             month.
99488.....................  Complex chronic care                      B            B  Finalize.
                             coordination services; first
                             hour of clinical staff time
                             directed by a physician or
                             other qualified health care
                             professional with one face-to-
                             face visit, per calendar
                             month.
99489.....................  Complex chronic care                      B            B  Finalize.
                             coordination services; each
                             additional 30 minutes of
                             clinical staff time directed
                             by a physician or other
                             qualified health care
                             professional, per calendar
                             month (list separately in
                             addition to code for primary
                             procedure).
99495.....................  Transitional care management           2.11         2.11  Finalize.
                             services with the following
                             required elements:
                             Communication (direct
                             contact, telephone,
                             electronic) with the patient
                             and/or caregiver within 2
                             business days of discharge
                             medical decision making of at
                             least moderate complexity
                             during the service period
                             face-to-face visit, within 14
                             calendar days of discharge.
99496.....................  Transitional care management           3.05         3.05  Finalize.
                             services with the following
                             required elements:
                             Communication (direct
                             contact, telephone,
                             electronic) with the patient
                             and/or caregiver within 2
                             business days of discharge
                             medical decision making of
                             high complexity during the
                             service period face-to-face
                             visit, within 7 calendar days
                             of discharge (do not report
                             90951-90970, 98960-98962,
                             98966-98969, 99071, 99078,
                             99080, 99090, 99091, 99339,
                             99340, 99358, 99359, 99363,
                             99364, 99366-99368, 99374-
                             99380, 99441-99444, 99487-
                             99489, 99605-99607 when
                             performed during the service
                             time of codes 99495 or 99496).
G0127.....................  Trimming of dystrophic nails,          0.17         0.17  Finalize.
                             any number.
G0416.....................  Surgical pathology, gross and          3.09         3.09  Finalize.
                             microscopic examinations for
                             prostate needle biopsy, any
                             method, 10-20 specimens.
G0452.....................  Molecular pathology procedure;         0.37         0.37  Finalize.
                             physician interpretation and
                             report.
G0453.....................  Continuous intraoperative               0.5          0.6  Finalize.
                             neurophysiology monitoring,
                             from outside the operating
                             room (remote or nearby), per
                             patient, (attention directed
                             exclusively to one patient)
                             each 15 minutes (list in
                             addition to primary
                             procedure).
G0455.....................  Preparation with instillation          0.97         1.34  Finalize.
                             of fecal microbiota by any
                             method, including assessment
                             of donor specimen.
G0456.....................  Negative pressure wound                   C            C  Finalize.
                             therapy, (e.g. vacuum
                             assisted drainage collection)
                             using a mechanically-powered
                             device, not durable medical
                             equipment, including
                             provision of cartridge and
                             dressing(s), topical
                             application(s), wound
                             assessment, and instructions
                             for ongoing care, per
                             session; total wounds(s)
                             surface area less than or
                             equal to 50 square
                             centimeters.

[[Page 74291]]

 
G0457.....................  Negative pressure wound                   C            C  Finalize.
                             therapy, (e.g. vacuum
                             assisted drainage collection)
                             using a mechanically-powered
                             device, not durable medical
                             equipment, including
                             provision of cartridge and
                             dressing(s), topical
                             application(s), wound
                             assessment, and instructions
                             for ongoing care, per
                             session; total wounds(s)
                             surface area greater than 50
                             square centimeters.
----------------------------------------------------------------------------------------------------------------

    In the following section, we discuss all codes for which we 
received a comment on the CY 2013 interim final work value or time 
during the comment period for the CY 2013 final rule with comment 
period or codes for which we are modifying the work RVU or time. If a 
code in Table 24 is not discussed in this section, we did not receive 
any comments on that code and are finalizing the CY 2013 interim final 
value.
(1) Integumentary System: Skin, Subcutaneous, and Accessory Structures 
(CPT Code 10120)
    As detailed in the CY 2013 final rule with comment period, CPT code 
10120 had previously been identified as potentially misvalued using the 
Harvard-valued utilization over 30,000 screen. We assigned an interim 
final work RVU of 1.22 for CY 2013, which was slightly less than the 
AMA RUC-recommended value of 1.25. The AMA RUC recommendation was based 
upon survey results; however, we believed an RVU of 1.25 overstated the 
work of this procedure because some of the activities furnished during 
the postservice period of the procedure code overlapped with the E/M 
visit. The AMA RUC appropriately accounted for the overlap with the E/M 
visit in its recommendation of preservice time, but we believed the 
recommendation failed to account for the overlap in the postservice 
time. To account for this overlap, we used our standard methodology as 
described above. As noted in the CY 2013 final rule with comment 
period, we refined the time to equal 3 minutes in the postservice 
physician time for CPT code 10120 for CY 2013.
    Comment: Commenters urged us to use the AMA RUC-recommended work 
value of 1.25 RVUs and postservice physician time of 5 minutes for CPT 
code 10120. Commenters stated that the AMA RUC conducted extensive 
review of Medicare claims data for services billed together and after 
discussing the potential overlap and explicitly determined physician 
time recommendations that did not include overlap with an E/M service. 
Since in their view, there was no overlap between the physician time 
and the E/M service, they recommended that we value the code as 
recommended by the AMA RUC.
    Response: After re-review, we maintain that some of the activities 
conducted during the postservice time of the procedure code and the E/M 
visit overlap and, therefore, should not be counted twice in developing 
the procedure's work value. We continue to believe that the recommended 
postservice time should be reduced by one-third to account for this 
overlap. To calculate the time, we reduced the survey's median 
postservice time of 5 minutes by one-third, resulting in a reduction 
from 5 minutes to 3 minutes. As such, we also continue to believe that 
a work RVU of 1.22 accurately reflects the work of the service relative 
to similar services. Therefore, we are finalizing a work RVU of 1.22 
for CPT code 10120 and the time refinement as established for CY 2014.
(2) Integumentary System: Skin, Subcutaneous, and Accessory Structures 
(CPT Codes 11302, 11306, 11310, 11311, 11312, and 11313)
    For these codes, as we discussed in the CY 2013 final rule with 
comment period, we set the work RVUs at the survey's 25th percentile 
work RVUs as we believed this reflected the appropriate relativity of 
the services both within this family as well as relative to other PFS 
services. As noted in the CY 2013 final rule with comment period, our 
interim final values differed from the AMA RUC recommendation for CPT 
codes 11302, 11306, 11310, 11311, 11312 and11313.
    Comment: Commenters expressed disappointment with our CY 2013 
interim final values for CPT codes 11302, 11306, 11310, 11311, 11312, 
and 11313, but without providing reasons to support a higher value.
    Response: We continue to believe that the survey's 25th percentile 
RVUs accurately reflect the work of these procedures relative to each 
other and relative to other procedures. Therefore, for CY 2014 we are 
finalizing the CY 2013 interim final work RVU values for CPT codes 
11302, 11306, 11310, 11311, 11312 and 11313.
(3) Integumentary System: Repair (Closure) (CPT Codes 13132, 13150, 
11351, and 13152)
    For CY 2013, we received new recommendations from the AMA RUC for 
the complex wound repair family, including CPT codes 13132, 13150, 
13151, and 13152. As we described in the CY 2013 final rule with 
comment period, we assigned CY 2013 interim final work RVUs consistent 
with AMA RUC recommendations for all the codes in this complex wound 
repair family, except CPT codes 13150 and 13152, as discussed below. We 
assigned the following CY 2013 interim final work RVUs: 4.78 for CPT 
code 13132, 3.58 for CPT code 13150, 4.34 for CPT code 13151 and 2.38 
for CPT code 13153.
    Comment: Commenters agreed with our interim final work RVUs of 4.78 
for CPT code 13132 and 4.34 for CPT code 13151 and thanked us for 
accepting the AMA RUC-recommendations.
    Response: We are finalizing work RVUs for CY 2014 of 4.78 for CPT 
code 13132 and 4.34 for CPT code 13151.
    The AMA RUC did not provide a recommendation for CPT code 13150 for 
CY 2013 with the other codes in the family because it was expecting 
that code to be deleted for CY 2014. As we noted in the CY 2013 final 
rule with comment period, we believed it was appropriate to reduce the 
work RVU of CPT code 13150 proportionate to the reductions in work RVUs 
that the AMA RUC recommended and we adopted for other services in the 
family, so that we maintained appropriate proportionate rank order for 
CY 2013. For the 12 other CPT codes in the family, their CY 2012 work 
RVUs were reduced, on average, by 7 percent for CY 2013. Applying that 
reduction to the work RVU of CPT code 13150 resulted in a CY 2013 work 
RVU of 3.58. We believed that value appropriately reflected the work 
associated with the procedure and we assigned a CY 2013 interim final 
work RVU of 3.58 to CPT code 13150. This code will be deleted effective 
January 1, 2014.

[[Page 74292]]

    As we noted in the CY 2013 final rule with comment period, after 
reviewing CPT code 13152, we believed that the AMA RUC-recommended work 
RVU of 5.34 was too high relative to similar CPT code 13132, which had 
an AMA RUC-recommended work RVU of 4.78, and CPT code 13151, which had 
an AMA RUC-recommended work RVU of 4.34. We believed that the survey's 
25th percentile work RVU of 4.90 more appropriately reflected the 
relative work involved in furnishing the service. Therefore, we 
assigned a CY 2013 interim final work RVU of 4.90 for CPT code 13152.
    Comment: Commenters disagreed with our relative comparison of CPT 
code 13152 to CPT codes 13132 and 13151. Commenters stated that the AMA 
RUC determined that the survey's 25th percentile work RVU of 4.90 was 
too low for CPT code 13152 and would cause a rank order anomaly when 
compared to the less intense CPT code 13132. One commenter cited the 
detailed rationale that they presented to the AMA RUC explaining how 
CPT code 13152 was more intense and complex to perform than CPT code 
13132. Furthermore, commenters supported the AMA RUC-recommended direct 
crosswalk of CPT code 13152 to CPT code 36571, which has a work RVU of 
5.34. Commenters requested that we use the AMA RUC-recommended work RVU 
of 5.34 for CPT code 13152.
    Response: Based on comments received, we re-reviewed CPT code 13152 
and agree based on the complexity and intensity of the service that CPT 
code 13152 is more appropriately directly crosswalked to CPT code 36571 
which has a work RVU of 5.34. Therefore, we are finalizing the AMA RUC-
recommended work RVU of 5.34 to CPT code 13152 for CY 2014.
(4) Arthrocentesis (CPT Code 20605)
    In the CY 2013 final rule with comment period, we revised the 
direct PE inputs for CPT code 20605 (Arthrocentesis, aspiration and/or 
injection; intermediate joint or bursa (eg, temporomandibular, 
acromioclavicular, wrist, elbow or ankle, olecranon bursa)) and valued 
the code on an interim final basis for CY 2013. We had revised the work 
RVU for this code in CY 2012. In CY 2012, when we revised the work RVU, 
we established a value of 0.68 (76 FR 73209). However, in CY 2013 due 
to a data entry error, a work RVU of 0.98 was used for CPT 20605. 
Subsequent to the publication of the proposed rule, a stakeholder 
alerted us to a work RVU discrepancy for this code. The values 
displayed in Addenda B and C of the CY 2013 final rule with comment 
period reflect this error. In this final rule with comment period we 
are making a technical correction to the work RVU, revising it to 0.68, 
which is the work value we established in CY 2012.
(5) Musculoskeletal System: Spine (Vertebral Column) (CPT Code 22586)
    CPT code 22586 was created by the CPT Editorial Panel effective 
January 1, CY 2013. As we noted in the CY 2013 final rule with comment 
period, after clinical review of CPT code 22586, we believed that a 
work RVU of 28.12 accurately accounted for the work associated with the 
service and assigned this as the CY 2013 interim final value. The AMA 
RUC did not provide a recommendation on this service because the 
specialty societies that would have needed to conduct a survey as part 
of the AMA RUC process declined to do so. We also noted that a 
specialty society that does not participate in the AMA RUC conducted a 
survey of its members, who furnish this service, regarding the work and 
time associated with this procedure and submitted a work RVU 
recommendation to CMS.
    In the CY 2013 final rule with comment period we noted that in 
determining the appropriate value for this new CPT code, we reviewed 
the survey results and recommendations submitted to us, literature on 
the procedure, and Medicare claims data. Ultimately, we used a building 
block approach to value CPT code 22586. As we stated in the CY 2013 
final rule with comment period, we valued CPT 22586 using CPT code 
22558 as a reference service. CPT code 22558 is a similar procedure 
except that it does not include additional grafting, instrumentation, 
and fixation that are included in CPT code 22586. To assess the 
appropriate relative work increase from unbundled CPT code 22558 to the 
new bundled CPT code 22586, we used Medicare claims data to assess 
which grafting, instrumentation, and fixation services were commonly 
billed with CPT code 22558. Using these data we created a utilization-
weighted work RVU for the grafting component of CPT code 22586, the 
instrumentation component of the 22586, and the fixation component of 
22586. Adding these work RVUs to those of CPT code 22558 created a work 
RVU of 28.12, which we assigned as the CY 2013 interim final work RVU 
for CPT code 22586.
    Additionally, as detailed in the CY 2013 final rule with comment 
period, after reviewing the physician time and post-operative visits 
for similar services, we concluded that this service includes 40 
minutes of preservice evaluation time, 20 minutes of preservice 
positioning time, 20 minutes of preservice scrub, dress and wait time, 
180 minutes of intraservice time, and 30 minutes of immediate 
postservice time. In the post-operative period, we believed that this 
service typically includes 2 CPT code 99231 visits, 1 CPT code 99323 
visit, 1 CPT code 99238 visit, and 4 CPT code 99213 visits.
    Comment: A commenter opposed our use of the building block 
methodology to value CPT code 22586, noting that we had used a 
methodology that digressed from our current standards for valuing 
procedures. Additionally, the commenter disagreed with our use of data 
from a specialty society that does not participate in the AMA RUC.
    Response: To properly value this service without an AMA RUC 
recommendation, we believe that our evaluation of survey results, 
recommendations, literature, and Medicare claims data is crucial. 
Additionally, as we stated in the methodology section above and in 
previous final rules with comment periods, we believe the building 
block methodology is an appropriate approach to develop RVUs. We 
continue to believe the methodology used to develop the CY 2013 interim 
final work RVU using CPT code 22588 as the base reference is suitable 
for this code. Furthermore, we believe that the interim final work RVU 
accurately reflects the work of the typical case and reflects the 
appropriate incremental difference in work between CPT code 22588 and 
new CPT code 22586. Therefore, we are finalizing a work RVU of 28.12 
for CPT code 22586 for CY 2014.
(6) Elbow Implant Removal (CPT Code 24160)
    As detailed in the CY 2013 final rule with comment period, we 
maintained the current work value for CPT code 24160 based upon the AMA 
RUC recommendation. We received an AMA RUC recommendation for a work 
RVU of 18.63 based upon a revised CPT code description for this code. 
We agree with the AMA RUC recommendation and are assigning a CY 2014 
interim final work RVU of 18.63 to CPT code 24160.
    As detailed in the CY 2013 final rule with comment period, in 
response to comments we received in response to the CY 2012 final rule 
with comment period, we referred CPT code 29581 to the CY 2012 multi-
specialty refinement panel for further review. The refinement panel 
median work RVU for CPT code 29581 was 0.50. Typically, we finalize the 
work values for CPT codes after reviewing the results of the refinement

[[Page 74293]]

panel. However, for CY 2012 we assigned interim RVUs for CPT codes 
29581, 29582, 29583, and 29584 and requested additional information, 
with the intention of re-reviewing the services for CY 2013 with the 
new information we had received, and setting interim final values at 
that time. After consideration of the public comments, refinement panel 
median value, and our clinical review, we continued to believe that a 
work RVU of 0.25 was appropriate for CPT code 29581. We recognized that 
CPT code 29581 received only editorial changes in CY 2012; however, we 
continued to believe the HCPAC-reviewed codes 29582, 29583, and 29584 
describe similar services. While the services are performed by 
different specialties, they do involve similar work. Therefore, we 
continued to believe that crosswalking CPT code 29581 to CPT codes 
29582, 29583 and 29584 was appropriate and that the resulting work RVU 
accurately reflected the work associated with the service. Accordingly, 
on an interim final basis for CY 2013, we assigned a work RVU of 0.25 
to CPT code 29581; a work RVU of 0.35 to CPT code 29582; a work RVU of 
0.25 to CPT code 29583; and a work RVU of 0.35 to CPT code 29584.
    Comment: Commenters disagreed with our crosswalk of CPT 29581 to 
CPT codes 29582, 29583, and 29584. Commenters stated that it was 
incorrect to compare CPT code 29581 to the other codes in the family 
because the typical patient for CPT 29581, a patient with a 
recalcitrant venous ulcer, is entirely different and more complex than 
the typical patient for the other codes, and as a result, CPT 29581 is 
a more intense and time-consuming service. Therefore, commenters 
requested that we use the AMA RUC-recommended work RVU of 0.60 for CPT 
code 29581.
    Response: After re-review of CPT code 29581, we maintain that a 
crosswalk to CPT codes 29582, 29583, and 29584 is appropriate because 
the services involve similar work and as such, should be valued 
relative to one another. Even though the typical patient for CPT code 
29581 may be different than CPT codes 29582, 29583, and 29584, the work 
associated with the service is not necessarily different. Accordingly, 
we continue to believe that our recommended value accurately reflects 
the work of the procedure and are finalizing a work RVU of 0.25 for CPT 
code 29581 for CY 2014.
(8) Respiratory System: Accessory Sinuses (CPT Code 31231)
    Previously, CPT code 31231 was identified for review because it was 
on the multispecialty points of comparison list. We assigned a CY 2013 
interim final work RVU of 1.10 to CPT code 31231, which was the 
survey's 25th percentile value and the AMA RUC recommendation. We 
believed that some of the activities furnished during the preservice 
and postservice period of the procedure code and the E/M visit 
overlapped and, therefore, should not be counted twice in developing 
the procedure's work value. Although we believed the AMA RUC 
appropriately accounted for this overlap in its recommendation of 
preservice time, we believed they did not account for the overlap in 
the postservice time. To account for this overlap, we reduced the 
postservice time by one-third. Specifically, we reduced the postservice 
time from 5 minutes to 3 minutes.
    Comment: Although commenters supported the use of the AMA RUC-
recommended work RVU, they overwhelmingly disagreed with lowering the 
postservice time for CPT code 31231. Commenters stated that the AMA RUC 
valued CPT code 31231 through significant review of Medicare claims 
data for services billed together and deliberations on potential 
overlap, and determined physician time recommendations that did not 
include overlap with an E/M service. The commenters stated that none of 
the post-time allocated to this code overlapped with the E/M service. 
Therefore, commenters requested our acceptance of the AMA RUC-
recommended postservice physician time of 5 minutes.
    Response: After re-review, we maintain that some of the activities 
conducted during the postservice time of the procedure code and the E/M 
visit overlap and, therefore, should not be counted twice in developing 
the procedure's work value. To account for this overlap, we used our 
standard methodology as described above. Therefore, we are finalizing a 
refinement of postservice time and a work RVU of 1.10 for CPT code 
31231 for CY 2014.
(9) Respiratory System: Trachea and Bronchi (CPT Codes 31647, 31648, 
31649 and 31651)
    Effective January 1, 2013, the CPT Editorial Panel created CPT 
codes 31647, 31648, 31649, and 31651 to replace 0250T, 0251T; and CPT 
codes 31660 and 31661 to replace 0276T and 0277T. As we noted in the CY 
2013 final rule with comment period when we valued these codes for the 
first time, we assigned a work RVU of 4.40 to CPT code 31647; a work 
RVU of 4.20 to CPT code 31648; and a work RVU of 1.58 to CPT code 31651 
on an interim final basis for CY 2013, based upon the AMA RUC 
recommendations for these codes.
    Comment: Commenters agreed with our interim final work for these 
codes and thanked us for accepting the AMA RUC recommendations.
    Response: We are finalizing work RVUs of 4.40 for CPT code 31647, 
4.20 for CPT code 31648 and 1.58 for CPT code 31651 for CY 2014.
    As we noted in the CY 2013 final rule with comment period, after 
clinical review, we did not agree with the AMA RUC-recommended work RVU 
of 2.00 for CPT code 31649. Since CPT code 31647 had a higher work RVU 
than CPT code 31648, we believed that to maintain the appropriate 
relativity between the services, the add-on code associated with CPT 
code 31647 (CPT code 31651) should have a higher RVU than the add-on 
code associated with CPT code 31648 (CPT code 31649). We believed that 
by valuing CPT code 31649 at the survey's 25th percentile work RVU of 
1.44, the services were placed in the appropriate rank order. 
Therefore, we assigned a CY 2013 interim final work RVU of 1.44 to CPT 
code 31649.
    Comment: Commenters urged us to use the AMA RUC-recommended work 
value of 2.00 for CPT code 31649 and requested that we refer the code 
to the refinement panel. They noted that proper relativity would have 
CPT code 31649 ranked higher than CPT code 31651 due to the fact that 
valve removal requires greater physician intensity and complexity 
compared to insertion.
    Response: After evaluation of the request for refinement, we 
determined that the criteria for the request for refinement were not 
met and, as a result, we did not refer CPT code 31649 to the CY 2013 
multi-specialty refinement panel for further review.
    After re-review of the work RVUs for CPT code 31649 in light of the 
comments submitted, we maintain that our approach in valuing this 
procedure is appropriate. Additionally, during clinical re-review we 
examined in great detail the physician intensity and complexity 
involved in CPT code 31649 and believe that the survey's 25th 
percentile work RVU of 1.44 adequately captures these factors. 
Furthermore, we believe that the CY 2013 interim final work RVU 
accurately reflects the work of the typical case and reflects the 
appropriate incremental difference in work with CPT code 31651. 
Therefore, we are finalizing a work RVU of 1.44 for CPT code 31649 for 
CY 2014.

[[Page 74294]]

(10) Respiratory System: Lungs and Pleura (CPT Codes 32551 and 32557)
    We assigned CPT code 32551 a CY 2013 interim final work RVU of 
3.29. As we noted in the CY 2013 final rule with comment period, we did 
not believe that the 0.21 work RVU increase recommended by the AMA RUC 
based upon the survey's 25th percentile work RVU of 3.50 was warranted 
for this service, especially considering the substantial reduction in 
recommended physician time. Additionally, as we noted in the CY 2013 
interim final rule with comment period, we believed that a work RVU of 
3.29 placed this service in the appropriate rank order with the other 
similar CPT codes reviewed for CY 2013.
    Comment: A commenter stated CPT code 32551 should have been 
assigned a higher work value than we assigned in CY 2013 and requested 
that we use the AMA RUC-recommended work value for the service. The 
commenter also pointed out that the work RVU value for 32551 was 
reduced a few years ago to account for the vast number of percutaneous 
catheter insertions billed with this code. Because the percutaneous 
placed catheters, which involve less work, have since been given their 
own code set, the commenter stated that the open chest tube insertion 
would be the only procedure for which CPT code 32551 could be used. As 
such, the commenter believed that if we accepted the idea that a 
``properly valued code can be split into less complex and intense 
(percutaneous catheter insertion) with lesser value and more complex 
and intense (32551, open thoracostomy) of greater value, [we] would 
have an appropriate rationale for accepting the RUC recommendations 
(25th percentile of the survey, 3.50 RVW) for 32551.''
    Response: After review of the comments, we continue to believe that 
an increase in work RVU for CPT code 32551 is inappropriate, especially 
considering the substantial reduction in the AMA RUC-recommended 
physician time. Moreover, we believe that the work RVU of 3.29 
accurately reflects the work of the typical case of this service. 
Therefore, we are finalizing a work RVU of 3.29 for CPT code 32551 for 
CY 2014.
    As detailed in the CY 2013 final rule with comment period, CPT code 
32557 was created as part of a coding restructure for this family. This 
code was assigned a CY 2013 interim final work RVU of 3.12 because we 
believed the AMA RUC-recommended work RVU of 3.62 overstated the 
difference between this code and CPT code 32556, which had an AMA RUC-
recommended work RVU of 2.50. The specialty societies that surveyed CPT 
code 32556 recommended to the AMA RUC a work RVU of 3.00 for CPT code 
32556 and a work RVU of 3.62 for CPT code 32557. We believed this 
difference of 0.62 in work RVUs between the two codes more accurately 
captured the relative difference between the services. Therefore, since 
we assigned CPT code 32556 a CY 2013 interim final work RVU of 2.50, we 
believed a work RVU of 3.12 reflected the appropriate difference 
between CPT codes 32556 and 32557 and appropriately reflected the work 
of CPT code 32557.
    Additionally, in CY 2013, we refined the AMA RUC-recommended 
preservice evaluation time from 15 minutes to 13 minutes for CPT code 
32557 to match the preservice evaluation time of CPT code 32556.
    Comment: Commenters stated that we did not comprehend the 
relationship between the base code, CPT code 32556, without imaging, 
and CPT code 32557, with imaging, and the significant clinical 
differences in providing the services. Commenters disagreed with the 
way we determined the work RVU for CPT 32557 and stated that a better 
alternative for valuing CPT code 32557 would have been to add the value 
of CT guidance (1.19) to the non-image guided code (CPT code 32556 at 
2.50 RVUs) to achieve the AMA RUC-recommended work RVU of 3.62. 
Therefore, commenters requested our use of the AMA RUC-recommended work 
value of 3.62 for CPT code 32557 and refinement panel review of the 
code.
    Response: After evaluation of the request for refinement, we 
determined that the criteria for the request for refinement were not 
met and, as a result, we did not refer CPT code 32557 to the CY 2013 
multi-specialty refinement panel for further review.
    After re-review of CPT code 32557, we maintain that our approach in 
valuing this procedure is appropriate since the AMA RUC-recommended 
work RVU of 3.62 overstates the difference between CPT codes 32556 and 
32557. We continue to believe that the difference in work RVUs 
presented to the AMA RUC by the specialty societies that surveyed CPT 
code 32557 is more appropriate in order to maintain relativity among 
the codes. Therefore, we are finalizing the refinement to time and the 
work RVU of 3.12 for CPT code 32557 for CY 2014.
(11) Respiratory System: Lungs and Pleura (CPT Codes 32663, 32668, 
32669, 32670, 32671, 32672, and 32673)
    The CPT Editorial Panel reviewed the lung resection family of codes 
and deleted 8 codes, revised 5 codes, and created 18 new codes for CY 
2012. As detailed in the CY 2012 final rule with comment period, during 
our review for the CY 2012 PFS final rule with comment period, we were 
concerned with the varying differentials in the AMA RUC-recommended 
work RVUs and times between some of the open surgery lung resection 
codes and their endoscopic analogs. Rather than assign alternate 
interim final RVUs and times in this large restructured family of 
codes, we accepted the AMA RUC recommendations on an interim basis for 
CY 2012 and requested that the AMA RUC re-review the surgical services 
along with their endoscopic analogs.
    In the CY 2012 PFS final rule with comment period we made this 
request. However, there was an inadvertent typographical error in our 
request, in that we referred to ``open heart surgery analogs'' instead 
of just ``open surgery analogs'' for each code. For example, we stated, 
``For CPT code 32663 (Thoracoscopy, surgical; with lobectomy (single 
lobe)), the AMA RUC recommended a work RVU of 24.64. Upon clinical 
review, we have determined that it is most appropriate to accept the 
AMA RUC-recommended work RVU of 24.64 on a provisional basis, pending 
review of the open heart surgery analogs, in this case CPT code 32480. 
We are requesting the AMA RUC look at the incremental difference in 
RVUs and times between the open and laparoscopic surgeries and 
recommend a consistent valuation of RVUs and time for CPT code 32663 
and other services within this family with this same issue. 
Accordingly, we are assigning a work RVU of 24.64 for CPT code 32663 on 
an interim basis for CY 2012'' (76 FR 73195). During the comment period 
on the CY 2012 final rule with comment period, the affected specialty 
societies and the AMA RUC responded to our request noting that the 
codes were not open heart surgery codes.
    In the CY 2013 final rule with comment period, we acknowledged that 
our request would have been more clear if we had referred to ``open 
surgery codes'' instead of ``open heart surgery codes'' and if we had 
written ``endoscopic procedures'' instead of ``laparoscopic 
surgeries.'' With this clarification, we re-requested public comment on 
the appropriate work RVUs and time values for CPT codes 32663 and 
32668-32673. For CY 2013, we maintained the following CY 2012 interim 
final values for these services as shown in Table 24.
    Comment: A commenter stated that there was no apparent correlation

[[Page 74295]]

between the endoscopic and open variations of the procedures and added 
that no further effort was needed to determine differences between the 
two approaches because ``any such relationship would be spurious at 
best.'' The commenter also stated that additional ``exercises to 
establish consistent differences in work value according to surgical 
approach (when such relationships actually do not exist for clinical 
reasons)'' are unnecessary.
    Response: We continue to believe that our request for additional 
information on the relationship between open and endoscopic procedures 
was warranted. Because we received no additional information on this 
family, as requested, we are finalizing our CY 2013 interim final 
values for this family.
(12) Cardiovascular System: Heart and Pericardium (CPT Codes 33361, 
33362, 33363, 33364, 33365, 33367, 33368, 33405, 33430, and 33533)
    As detailed in the CY 2013 final rule with comment period, the CPT 
Editorial Panel deleted four Category III codes (0256T through 0259T) 
and created nine CPT codes (33361 through 33369) to report 
transcatheter aortic valve replacement (TAVR) procedures for CY 2012.
    Like their predecessor Category III codes (0256T-0259T), the new 
Category I CPT codes 33361 through 33365 require the work of an 
interventional cardiologist and cardiothoracic surgeon to jointly 
participate in the intra-operative technical aspects of TAVR as co-
surgeons. Claims processing instructions for the Coverage with Evidence 
Development (CED) (CR 7897 transmittal 2552) requires each physician to 
bill with modifier -62 indicating that the co-surgery payment applies. 
In this situation, Medicare pays each co-surgeon 62.5 percent of the 
fee schedule amount. The three add-on cardiopulmonary bypass support 
services (CPT codes 33367, 33368, and 33369) are only reported by the 
cardiothoracic surgeon; therefore the AMA RUC-recommended work RVUs for 
those services reflected only the work of one physician. The AMA RUC-
recommended work RVUs for each of the co-surgery CPT codes (33361 
through 33365) reflect the combined work of both physicians without any 
adjustment to reflect the co-surgery payment policy. As we noted in the 
CY 2013 final rule with comment period, we considered whether it was 
appropriate to continue our co-surgery payment policy at 62.5 percent 
of the physician fee schedule amount for each physician for these codes 
if the work value reflected 100 percent of the work for two physicians. 
Ultimately, we decided to set the work RVU values to reflect the total 
work of the procedures, and to continue to follow our co-surgery 
payment policy, which allows the services to be billed by two 
physicians in part because this was part of the payment policy 
established with the CED decision.
    As we noted in the CY 2013 final rule with comment period, after 
clinical review of CPT code 33361, we believed that the survey's 25th 
percentile work RVU of 25.13 appropriately captured the total work of 
the service. The AMA RUC recommended the survey's median work RVU of 
29.50. Regarding physician time, for CPT 33361, as well as CPT codes 
33362 through 33364, we believed 45 minutes of preservice evaluation 
time, which was the survey median time, was more consistent with the 
work of this service than the AMA RUC-recommended preservice evaluation 
time of 50 minutes. Accordingly, we assigned a work RVU of 25.13 to CPT 
code 33361, with a refinement of 45 minutes of preservice evaluation 
time, on an interim final basis for CY 2013.
    As we explained in the CY 2013 interim final rule with comment 
period, after clinical review of CPT code 33362, we believed that the 
survey's 25th percentile work RVU of 27.52 appropriately captured the 
total work of the service and assigned an interim final work RVU of 
27.52. The AMA RUC recommended the survey median work RVU of 32.00. As 
with CPT code 33361, we believed 45 minutes of preservice evaluation 
time was more appropriate for this service than the AMA RUC recommended 
preservice evaluation time of 50 minutes. We therefore refined the 
preservice evaluation time to 45 minutes.
    As we noted in the CY 2013 interim final rule with comment period, 
after clinical review of CPT code 33363, we believed that the survey's 
25th percentile work RVU of 28.50 appropriately captured the total work 
of the service and assigned an interim final work RVU of 28.50. The AMA 
RUC recommended the survey median work RVU of 33.00. As with CPT codes 
33361 and 33362, we believed 45 minutes of preservice evaluation time 
was more appropriate for this service than the AMA RUC recommended time 
of 50 minutes and we therefore refined the preservice evaluation time 
to 45 minutes.
    As we noted in the CY 2013 final rule with comment period, after 
clinical review of CPT code 33364, we believed that the survey's 25th 
percentile work RVU of 30.00 more appropriately captured the total work 
of the service than the AMA RUC-recommended survey median work RVU of 
34.87, and therefore, we established an interim final work RVU of 
30.00. As with CPT codes 33361-33363, we also believed 45 minutes of 
preservice evaluation time was more appropriate for this service than 
the AMA RUC-recommended time of 50 minutes, and therefore, we refined 
the preservice evaluation time 45 minutes.
    As we noted in the CY 2013 final rule with comment period, after 
clinical review of CPT code 33365, we believed a work RVU of 33.12 
accurately reflected the work associated with this service rather than 
the survey's median work RVU of 37.50. We determined that the work 
associated with this service was similar to reference CPT code 33410, 
which has a work RVU of 46.41 and has a 90-day global period that 
includes inpatient hospital and office visits. Because CPT code 33365 
had a 0-day global period that does not include post-operative visits, 
we calculated the value of the pre-operative and post-operative visits 
in the global period of CPT code 33410, which totaled 13.29 work RVUs, 
and subtracted that from the total work RVU of 46.41 for CPT code 33410 
to determine the appropriate work RVU for CPT code 33365. With regard 
to time, we used the 50 minutes of preservice evaluation time because 
we believed that the procedure described by CPT code 33365 involves 
more preservice evaluation time than 33410 since it was performed by 
surgically opening the chest via median sternotomy. Accordingly, we 
assigned an interim final work RVU of 33.12 for CPT code 33365 for CY 
2013.
    Comment: Commenters disagreed with our use of the 25th percentile 
survey values for CPT codes 33361-33365 rather than the AMA RUC-
recommended median survey values. Commenters stated that our valuation 
of CPT code 33365 was arbitrary and resulted in considerably 
undervalued work RVUs. They also asserted that our interim final work 
RVUs produced rank order anomalies, were inconsistent with the high 
level of intensity and complexity necessitated by the procedures, and 
undervalued the procedures for each physician. Additionally, commenters 
provided examples comparing the AMA RUC recommendations and the interim 
final work RVUs for CPT codes 33361-33365 to other codes that were 
recently valued. In providing the examples, commenters made an effort 
to demonstrate that, by comparing CPT codes 33361-33365 to active 
comparable CPT codes and through proration of the physician time, it 
was apparent that the work RVUs for

[[Page 74296]]

CPT codes 33361-33365 should be increased. Commenters therefore 
requested we use the AMA RUC-recommended work values of 29.50 for CPT 
code 33361, 32.00 for CPT code 33362, 33.00 for CPT code 33363, 34.87 
for CPT code 33364 and 37.50 for CPT code 33365 and submit the code 
series to the refinement panel for review.
    Response: After evaluation of the request for refinement, we 
determined that the criteria for the request for refinement were not 
met and, as a result, we did not refer CPT codes 33361-33365 to the CY 
2013 multi-specialty refinement panel for further review.
    After consideration of the comments on CPT codes 33361-33365, we 
maintain that our approach in valuing these procedures is appropriate. 
We believe that the AMA RUC-recommended work RVUs overstate the 
intensity and physician time in this family. We also believe that 
setting the work RVU values of these services to reflect the total work 
of the procedures is appropriate. This decision is also consistent with 
our co-surgery payment policy, which allows the services to be billed 
by two physicians. While many commenters objected to this rationale, we 
believe that their comparisons of CPT codes 33361-33365, services that 
require the work of two physicians, to codes where only one physician 
is performing the work are inappropriate. We continue to believe that 
the interim final work RVUs that we established in the CY 2013 final 
rule with comment period accurately reflect the work of the typical 
case of this service. Therefore, for CY 2014, we are finalizing the 
interim final work RVUs for CPT codes 33361-33365. We are also 
finalizing the following refinements to time for CY 2014: 45 minutes of 
preservice evaluation for CPT codes 33361-33364; and 50 minutes of 
preservice evaluation for CPT code 33365.
    Comment: Commenters specifically agreed with our interim final work 
RVUs of 11.88 for CPT code 33367 and 14.39 to CPT code 33368 and 
thanked us for using the AMA RUC recommendations.
    Response: We are finalizing the work RVUs of 11.88 to CPT code 
33367 and 14.39 to CPT code 33368 for CY 2014.
    As detailed in the CY 2013 final rule with comment period, CPT 
codes 33405, 33430, and 33533 were previously identified as potentially 
misvalued through the high expenditure procedure code screen. When 
reviewing the services, the specialty society utilized data from the 
Society of Thoracic Surgeons (STS) National Adult Cardiac Database in 
developing recommended times and work RVUs for CPT codes 33405, 33430 
and 33533 rather than conducting a survey of work and time. After 
reviewing the mean procedure times for the services in the STS database 
alongside other information relating to the value of the services, the 
AMA RUC concluded that CPT codes 33405 and 33430 were appropriately 
valued and, accordingly, the CY 2012 RVUs of 41.32 for CPT code 33405, 
and 50.93 for CPT code 33430 should be maintained, and that the work 
associated with CPT code 33553 had increased since the service was last 
reviewed. The AMA RUC recommended a work RVU of 34.98 for CPT code 
33533, which is a direct crosswalk to CPT code 33510.
    As we noted in the CY 2013 final rule with comment period (77 FR 
69049), we believed the STS database, which captures outcome data in 
addition to time and visit data, is a useful resource in the valuation 
of services. However, we remain interested in additional data from the 
STS database that might help provide context to the reported 
information. The AMA RUC recommendations on the services showed only 
the STS database mean time for CPT codes 33405, 33430, and 33533. We 
noted in the CY 2013 final rule with comment period that we were 
interested in seeing the distribution of times for the 25th percentile, 
median, and 75th percentile values, in addition to any other 
information STS believed would be relevant to the valuation of the 
services. For CY 2013, we assigned interim final work RVUs for the 
services, pending receipt of additional time data. Specifically, we 
maintained the CY 2012 work RVU values of 41.32 for CPT code 33405; 
50.93 for CPT code 33430; and 33.75 for CPT code 33533.
    Comment: STS requested a higher work value of CPT code 33533 and 
also disagreed with the AMA RUC recommendation. In its opinion, ``the 
RUC recommendation is not consistent with the process and alters the 
intensity of 33533 contrary to the RUC rationale.'' In contrast, the 
AMA RUC stated that the AMA RUC work value recommendation was most 
appropriate and asked that we submit the code for refinement panel 
review.
    In response to our request for additional information regarding 
times from the STS database, all commenters declined to provide further 
information, stating that sufficient time data and explanations for the 
methodology associated with utilization of the database were provided 
to both the AMA RUC and CMS. STS further expressed its disinterest in 
providing additional information by noting that the supplementary data 
that we requested, the median or 25th percentile statistical 
descriptors, would ``systematically exclude known physician work from 
consideration in code valuation, and if utilized would result in 
undervaluation relative to the remainder of the Physician Fee 
Schedule.''
    Response: After evaluation of the request for refinement, we 
determined that the criteria for the request for refinement were not 
met and, as a result, we did not refer CPT code 33533 to the CY 2013 
multi-specialty refinement panel for further review.
    After re-review of CPT codes 33405, 33430 and 33533, we maintain 
that our approach in valuing these procedures is appropriate. In the CY 
2013 final rule with comment period, we expressed our concern with the 
data derived from the STS database and our desire to receive additional 
information regarding the distribution of times and varying RVUs, for 
the 25th percentile, median, and 75th percentile values, in order to 
better value the services. We did not receive additional information 
from either STS or the AMA RUC regarding these procedures. In the 
absence of this information, we continue to believe that the CY 2013 
interim final work RVUs for CPT codes 33405, 33430 and 33533 reflect 
the work of the typical case of these services. Therefore, we are 
finalizing the work RVUs of 41.32 for CPT code 33405, 50.93 for CPT 
code 33430 and 33.75 for CPT code 33533 for CY 2014.
(13) Cardiovascular System: Arteries and Veins (CPT Codes 35475, 35476, 
36221-36227)
    In the CY 2013 final rule with comment period, after clinical 
review of CPT code 35475, we established a work RVU of 5.75 to 
appropriately capture the work of the service. The AMA RUC, rather than 
using the survey, used a building block approach based on comparison 
CPT code 37224, which has a work RVU of 9.00, and recommended a work 
RVU of 6.60. The AMA RUC acknowledged that CPT code 35475 was typically 
reported with other services. We determined that the appropriate 
crosswalk for this code was CPT code 37220, which has a work RVU of 
8.15. After accounting for overlap with other services, we determined 
that a work RVU of 5.75 was appropriate for the service. Accordingly, 
we assigned a work RVU of 5.75 to CPT code 35475 on an interim final 
basis for CY 2013.
    After clinical review of CPT code 35476, we assigned a work RVU of 
4.71 to the service in the CY 2013 final rule with comment period. The 
AMA RUC

[[Page 74297]]

had recommended a work RVU of 5.10, based on the survey's 25th 
percentile value. We determined that the work associated with CPT code 
35476 was similar in terms of physician time and intensity to CPT code 
37191, which had a work RVU of 4.71. We believed the work RVU of 4.71 
appropriately captured the relative difference between the service and 
CPT code 35475. Therefore, we assigned a work RVU of 4.71 for CPT code 
35476 on an interim final basis for CY 2013.
    Comment: Commenters universally disagreed with our reference codes 
for CPT codes 35475 and 35476. They stated that our comparison of CPT 
code 35475 to CPT code 37224 did not fully consider intensity or 
complexity of CPT code 35475, such as the need for a physician to 
perform catheter manipulation or traverse multiple vessels. They also 
stated that our comparison of CPT code 35476 to CPT code 37220 was 
inappropriate because the latter procedure was related to a service in 
a lower flow vein and, thus, using this crosswalk did not account for 
the service's work intensity or complexity, including the risk 
associated with angioplasty. Commenters believed that the comparison 
codes utilized by the AMA RUC in its recommended valuation, CPT codes 
37224 and 37220, had a more comparable level of difficulty to CPT codes 
35475 and 35476, respectively, than the codes we used. Additionally, 
commenters were concerned on a broader policy basis that the interim 
final values would compromise both the vascular access care provided to 
chronic kidney disease patients and specialty programs. For those 
reasons, commenters requested our use of the AMA RUC-recommended work 
RVUs of 6.60 for CPT code 35475 and 5.10 for CPT code 35476 and 
refinement panel review of the codes.
    Response: We referred CPT codes 35475 and 35476 to the CY 2013 
multi-specialty refinement panel for further consideration because the 
requirements for refinement panel review were met. The refinement panel 
median work RVU for CPT codes 35475 and 35476 were 6.60 and 5.10, 
respectively. After reevaluation, we are finalizing work RVUs of 6.60 
for CPT code 35475 and 5.10 for CPT code 35476, based upon the 
refinement panel median.
    In the CY 2013 final rule with comment period we assigned CPT code 
36221 an interim final work RVU of 4.17 and refined the postservice to 
30 minutes. The AMA RUC recommended a work RVU of 4.51 and a 
postservice time of 40 minutes using a direct crosswalk to the two 
component codes being bundled, CPT code 32600, which has a work RVU of 
3.02, and CPT code 75650, which has a work RVU of 1.49. As we noted in 
the CY 2013 final rule with comment period, we believed that that there 
were efficiencies gained when services were bundled and that 
crosswalking to the work RVU of CPT code 32550, which had a work RVU of 
4.17, appropriately accounted for the physician time and intensity with 
CPT code 36221. Additionally, we believed that the survey's postservice 
time of 30 minutes more accurately accounted for the time involved in 
furnishing the service than the AMA RUC-recommended postservice time of 
40 minutes.
    In the CY 2013 final rule with comment period we noted that after 
clinical review of CPT code 36222, we believed the survey 25th 
percentile work RVU of 5.53 appropriately captured the work of the 
service, particularly the efficiencies when two services were bundled 
together. The AMA RUC recommended the survey median work RVU of 6.00. 
Like CPT code 36221, we believed the survey's postservice time of 30 
minutes was more appropriate than the AMA RUC-recommended postservice 
time of 40 minutes. We assigned a work RVU of 5.53 with refinement to 
time for CPT code 36222 as interim final for CY 2013.
    In the CY 2013 final rule, we noted that after clinical review of 
CPT code 36223, we assigned an interim final work RVU value of 6.00, 
the survey's 25th percentile value, because we believed it 
appropriately captured the work of the service, particularly 
efficiencies when two services were bundled together. The AMA RUC 
reviewed the survey results, and after a comparison to similar CPT 
codes, recommended a work RVU of 6.50. Like many other codes in the 
family, we believed the survey's postservice time of 30 minutes was 
more appropriate than the AMA RUC-recommended time of 40 minutes and 
refined the time accordingly.
    In the CY 2013 final rule, we noted that after clinical review of 
CPT code 36224, we believed a work RVU of 6.50, the survey's 25th 
percentile value, appropriately captured the work of the service, 
particularly, efficiencies when two services were bundled together. We 
believed 30 minutes of postservice time more appropriately accounted 
for the work of the service. The AMA RUC reviewed the survey results, 
and after a comparison to similar CPT codes, recommended a value of 
7.55 and a postservice time of 40 minutes for CPT code 36224. 
Accordingly, we assigned a work RVU of 6.50 with refinement to time for 
CPT code 36224 as interim final for CY 2013.
    In the CY 2013 final rule, we noted that after clinical review of 
CPT code 36225, we believed it should be valued the same as the CPT 
code 36223, which was assigned an interim final work RVU of 6.00. 
Comparable to CPT code 36223, we also believed 30 minutes of 
postservice time more appropriately accounted for the work of the 
service and refined the time accordingly. The AMA RUC reviewed the 
survey results and recommended the survey's median work RVU of 6.50 and 
a postservice time of 40 minutes for CPT code 36225.
    In the CY 2013 final rule (77 FR 69051), we noted that after 
clinical review of CPT code 36226, we believed it should be valued the 
same as CPT code 36224, which was assigned work RVU of 6.50. Comparable 
to CPT code 36224, we believed 30 minutes of postservice time more 
appropriately accounted for the work of the service. The AMA RUC 
reviewed the survey results, and after a comparison to similar CPT 
codes, recommended a value of 7.55 and a postservice time of 40 minutes 
for CPT code 36226. We assigned a work RVU of 6.50 with refinement to 
time for CPT code 36226 as interim final for CY 2013.
    In the CY 2013 final rule, we noted that after clinical review of 
CPT code 36227, we determined that efficiencies were gained when 
services were bundled, and identified a work RVU of 2.09 for the 
service. A 2.09 work RVU reflected the application of a very 
conservative estimate of 10 percent for the work efficiencies that we 
expected to occur when multiple component codes were bundled together 
to the sum of the work RVUs for the component codes. The AMA RUC 
reviewed the survey results, and after a comparison to similar CPT 
codes, recommended a value of 2.32 for CPT code 36227. The AMA RUC used 
a direct crosswalk to the two component codes being bundled, CPT code 
36218, which has a work RVU of 1.01, and CPT code 75660, which has a 
work RVU of 1.31. We assigned a CY 2013 interim final work RVU of 2.09.
    Comment: Commenters stated that the AMA RUC-recommended work RVUs 
captured all of the efficiencies that were achieved by bundling the 
services and that our conclusion that these codes values should further 
be lowered was unsupported and would produce rank order anomalies among 
intervention services. Some stated that for CPT codes 36222, 36223, 
36224, 36225 and 36226, the AMA RUC-recommended values represented a 
considerable savings to the Medicare system. Commenters

[[Page 74298]]

acknowledged that it may be true that efficiencies occur when surgical 
codes are bundled with other surgical codes or radiologic supervision 
and interpretation (S&I) codes are bundled with other S&I codes. 
However, commenters stated that CPT codes 36221 and 36227 reflects the 
bundling of surgical codes with S&I codes and, that since the 
activities of surgical codes and S&I codes are, by definition, 
separate, they disagreed that efficiencies should be assumed. 
Furthermore, commenters stated that it was incorrect for us to directly 
crosswalk to other procedures, such as CPT codes 32550, 36251 and 
36253, which are easier in nature and entail less risk and less image 
interpretation, when more parallel crosswalks existed. As such, 
commenters supported the direct crosswalks and the following 
recommended work RVUs provided by the AMA RUC: 4.51 for CPT code 36221, 
6.00 for CPT code 36222, 6.50 for CPT code 36223, 7.55 for CPT code 
36224, 6.50 for CPT code 36225, 7.55 for CPT code 36226 and 2.32 for 
CPT code 36227 and requested refinement panel review of the codes.
    Response: After evaluation of the request for refinement, we 
determined that the criteria for the request for refinement were not 
met and, as a result, we did not refer the codes to the CY 2013 multi-
specialty refinement panel for further review.
    After re-review of CPT codes 36221-36227, we maintain that the 
recommended direct crosswalks for these services are appropriate 
because the codes involve similar work and, as such, should be valued 
relative to one another. We also disagree with the commenters that 
efficiencies do not occur when surgical codes and S&I codes are 
bundled. Therefore, we are finalizing the CY 2013 interim final values 
for CY 2014 for CPT codes 36221-36227. We are also finalizing the 
postservice time refinement of 30 minutes to CPT codes 36221-36226 for 
CY 2014.
(14) Cardiovascular System: Arteries and Veins (CPT Codes 37197 and 
37214)
    As we noted in the CY 2013 final rule with comment period, we 
crosswalked the physician time and intensity of CPT code 36247 to CPT 
code 37197, resulting in a CY 2013 interim final work RVU of 6.29 for 
CPT code 37197. The AMA RUC had recommended a work RVU of 6.72 for CPT 
code 37197.
    For the CY 2013 final rule with comment period, we assigned an 
interim final work RVU of 2.74 to CPT code 37214. In making its 
recommendation, the AMA RUC reviewed the survey results, and after a 
comparison to similar CPT codes, recommended a work RVU of 3.04 to CPT 
code 37214. After clinical review, we determined that there were 
efficiencies gained when services were bundled and ultimately used a 
very conservative estimate of 10 percent for the work efficiencies we 
expected to occur when multiple component codes were bundled. 
Specifically, we decreased the AMA RUC-recommended work RVU value of 
3.04 by 10 percent to produce the work RVU value of 2.74, which we 
assigned as the CY 2103 an interim final work RVU for CPT code 37214.
    Comment: Commenters disagreed with these interim final values and 
suggested that we finalize the AMA RUC-recommended work RVUs of 6.72 
for CPT code 37197 and 3.04 for CPT code 37214 because the services are 
more intense and complex than accounted for by the CY 2013 interim 
final values. Additionally, several commenters alerted us to our 
oversight in not providing a written rationale for our work RVU values 
for CPT codes 37197 and 37214 and as result, requested a technical 
correction.
    Response: The commenters are correct that we did not include a 
rationale to explain how we reached the interim final work values for 
these codes in the CY 2013 final rule with comment period. However, 
Table 30 ``Work RVUs for CY 2013 New, Revised and Potentially Misvalued 
Codes'' in the CY 2013 final rule with comment period clearly 
identified the interim final values being assigned to these codes. It 
also included the AMA RUC recommendations, denoted whether we agreed 
with the AMA RUC recommendations, and indicated whether we refined the 
times recommended by the AMA RUC.
    Based upon the comments received, we re-reviewed CPT codes 37197 
and 37214. Based upon our review, we believe that directly crosswalking 
CPT code 37197 to CPT code 36247 and reducing CPT code 37214 by a 
conservative 10 percent to account for efficiencies gained when 
services are bundled are appropriate to establish values for these 
services and produce RVUs that fully reflect the typical work and 
intensity of the procedures. Therefore, we are finalizing the work RVU 
of 6.29 for CPT code 37197 and 2.74 for CPT code 37214 for CY 2014.
(15) Hemic and Lymphatic System: General (CPT Codes 38240 and 38241)
    In the CY 2013 final rule, we noted that after review, we believed 
CPT code 38240 should have the same work RVU as CPT code 38241 because 
the two services involved the same amount of work. The AMA RUC 
recommended a work RVU of 4.00 for CPT code 38240 and 3.00 for CPT code 
38241. On an interim final basis for CY 2013 we assigned CPT code 38240 
a work RVU of 3.00 and agreed with the AMA RUC recommendation of 3.00 
for CPT code 38241.
    Comment: Commenters specifically opposed our comparison of work for 
CPT code 38240 to CPT code 38241, stating that CPT code 38240 was much 
more complicated, intense and time consuming than CPT code 38241 and, 
as a result, should have a higher work RVU. Commenters also indicated 
that CPT 38240 has become more difficult to perform in recent years. 
Therefore, commenters requested that we use the AMA RUC-recommended 
work RVU of 4.00 for CPT code 38240 and maintain the interim final 
value of RVU of 3.00 for CPT code 38241. Commenters asked that both 
codes be referred to the refinement panel.
    Response: After evaluation of the request for refinement, we 
determined that the criteria for the request for refinement were not 
met and, as a result, we did not refer CPT codes 38240 and 38241 to the 
CY 2013 multi-specialty refinement panel for further review.
    Based on comments received, we re-reviewed the codes and agree that 
CPT code 38240 is a more involved and intense procedure than CPT code 
38241 and as a result, should have a higher RVU valuation for work than 
the CY 2013 interim final work RVU. Therefore, we are finalizing the 
AMA RUC-recommended work RVU for 4.00 to CPT code 38240 and 3.00 for 
CPT code 38241 for CY 2014.
(16) Digestive System: Lips (CPT Code 40490)
    As detailed in the CY 2013 final rule with comment period, we 
assigned an interim final work RVU of 1.22 to CPT code 40490, as 
recommended by the AMA RUC.
    Comment: Commenters agreed and expressed appreciation with our use 
of the AMA RUC-recommended value.
    Response: We are finalizing a work RVU of 1.22 for CPT code 40490 
for CY 2014.
(17) Gastrointestinal (GI) Endoscopy (CPT Codes 43206 and 43252)
    As detailed in the CY 2013 final rule with comment period, CPT 
codes 43206 and 43252 were contractor priced on an interim final basis. 
As part of its review of all gastrointestinal endoscopy codes, we 
received recommendations from the

[[Page 74299]]

AMA RUC for a work RVU of 2.39 for CPT code 43206 and 3.06 for CPT code 
43252. Based upon these recommendations we have the data necessary to 
establish RVUs and so are assigning CY 2014 interim final work RVUs of 
2.39 for CPT code 43206 and 3.06 for CPT code 43252.
    As detailed in the CY 2013 final rule with comment period, we 
assigned an interim final work RVU of 3.20 to CPT code 52287 as 
recommended by the AMA RUC.
    Comment: A specialty association disagreed with our use of the AMA 
RUC work RVU recommendation for CPT code 52287. The commenter supported 
the survey's use of CPT code 51715 as the key reference code for this 
service, but stated that CPT code 52287 should have, at a minimum, the 
same RVU as CPT code 51715 because CPT code 52287 requires more 
injections and, as a result, a higher level of technical skill and more 
time. Therefore, the commenter requested that we accept a work RVU 
recommendation of 3.79 for CPT code 52287.
    Response: After re-review of CPT code 52287, we maintain that our 
interim final value based upon the AMA RUC recommendation is 
appropriate. We note that the key reference service CPT code 51715 has 
more intraservice time (45 minutes) than CPT code 52287 (21 minutes), 
contrary to the commenter's assertion. We continue to believe that a 
RVU of 3.20 accurately and fully captures the work required for this 
service. Therefore, we are finalizing a work RVU of 3.20 for CPT code 
52287 for CY 2014.
(19) Urinary System: Bladder (CPT Code 52353)
    We assigned a CY 2013 interim final work RVU of 7.50 for CPT code 
52353. As detailed in the CY 2013 final rule with comment period, after 
clinical review, we determined that the survey's 25th percentile work 
RVU represented a more appropriate incremental difference over the base 
code, CPT code 52351, than the AMA RUC-recommended work RVU of 7.88. 
Additionally, we believed the survey 25th percentile work RVU more 
appropriately accounted for the significant reduction in intraservice 
time from the current value.
    Comment: Commenters objected to our reduction in the work RVU from 
the CY 2012 value and stated that we should use the AMA RUC-recommended 
work RVU of 7.88. Commenters said that the skills, effort, and time of 
CPT 52353 were more intense than those of CPT code 52351 and our value 
did not provide the fully warranted differential between the two codes. 
Additionally, commenters initially requested refinement panel review of 
CPT code 52353, but later withdrew their request.
    Response: Based on comments received, we re-reviewed CPT code 52353 
and continue to believe that our interim final work value is 
appropriate. We maintain that the survey's 25th percentile work RVU 
appropriately accounts for the work of this service, especially given 
the significant reduction in intraservice time and the lack of evidence 
that the intensity of this procedure has increased. We also believe 
that the interim final work value appropriately provides an incremental 
difference over the base CPT code 52351. For these reasons, we are 
finalizing a work RVU of 7.50 to CPT code 52353 for CY 2014.
(20) Nervous System: Extracranial Nerves, Peripheral Nerves, and 
Autonomic Nervous System (CPT Code 64615)
    The CPT Editorial Panel created CPT code 64615 effective January 1, 
2013. The AMA RUC recommended a work RVU of 1.85 and we agreed with the 
recommendation.
    The AMA RUC also requested a decrease in the global period from 10 
days to 0 days. As we noted in the CY 2013 final rule, we assigned CPT 
64615 a global period of 10 days to maintain consistency within the 
family of codes.
    Comment: Commenters stated that the assigned 10-day global period 
was not appropriate because there are no E/M post-operative visits 
related to the service, and accordingly, a 0-day global period would 
correctly reflect the work involved in, and valuation of, the service. 
Additionally, commenters noted that the 10-day global period was 
inconsistent with the 0-day global period we adopted for other services 
within the family. Commenters requested that we accept the AMA RUC-
recommended global period of 0 days.
    Response: Based on comments received, we re-reviewed CPT code 64615 
and continue to believe that a 10-day global period is appropriate. 
Given that most of the other services within this family of CPT codes 
also have 10-day global periods, we continue to believe that a 10-day 
global period is appropriate for CPT code 64615. Furthermore, while 
there are other chemodenerveration codes in other areas of the body 
that do have 0-day global periods, we continue to believe that a 10-day 
global period for CPT code 64615 is appropriate in this anatomical 
region. Therefore, we are finalizing the work RVU of 1.85 for CPT code 
64615, with a 10-day global period, for CY 2014.
(21) Eye and Ocular Adnexa: Eyeball (CPT Code 65222)
    CPT code 65222 was identified as potentially misvalued under the 
Harvard-valued utilization over 30,000 screen. As we noted in the CY 
2013 final rule with comment period, we assigned a work RVU of 0.84 to 
CPT code 65222, as well as a refinement to the AMA RUC-recommended 
time. Medicare claims data from 2011 indicated that CPT code 65222 was 
typically furnished to the beneficiary on the same day as an E/M visit. 
We believed that some of the activities furnished during the preservice 
and postservice period overlapped with the E/M visit. We did not 
believe that the AMA RUC appropriately accounted for this overlap in 
its recommendation of preservice and postservice time. To account for 
this overlap, we reduced the AMA RUC-recommended preservice evaluation 
time by one-third, from 7 minutes to 5 minutes, and the AMA RUC-
recommended postservice time by one-third, from 5 minutes to 3 minutes. 
We believed that 5 minutes of preservice evaluation time and 3 minutes 
of postservice time accurately reflected the time involved in 
furnishing the preservice and postservice work of the procedure, and 
that those times were well-aligned with similar services.
    Comment: Commenters disagreed with our work RVU and time refinement 
for CPT code 65222, stating that they were arbitrary in nature and 
based on an incorrect assumption that the overlap between the E/M visit 
and the preservice and postservice periods were not properly accounted 
for in the AMA RUC recommendation. Commenters stated that the AMA RUC 
did take the overlap into consideration and correctly accounted for it 
through a decrease in the preservice time from the specialty society 
survey determined time of 13 minutes to 7 minutes. Therefore, 
commenters requested that we accept the AMA RUC recommendation of a 
0.93 work RVU with 7 minutes of preservice time and 5 minutes of 
postservice time.
    Response: Based on comments received, we re-reviewed CPT code 65222 
and continue to believe that our interim final work RVU of 0.84 is 
appropriate. We maintain that the AMA RUC did not fully account for the 
fact that some of the activities furnished during the preservice and 
postservice period of the procedure code overlap with those for the E/M 
visit, making the preservice time reductions recommended by the AMA RUC

[[Page 74300]]

insufficient. As such, we continue to believe that 5 minutes of 
preservice evaluation time and 3 minutes of postservice time accurately 
reflect the physician time involved in furnishing the preservice and 
postservice work of this procedure, and that these times are well-
aligned with similar services. Therefore, we are finalizing a work RVU 
of 0.84 to CPT code 65222 with 5 minutes of preservice evaluation time 
and 3 minutes of postservice, for CY 2014.
(22) Eye and Ocular Adnexa: Ocular Adnexa (CPT Code 67810)
    CPT code 67810 was identified as potentially misvalued under the 
Harvard-valued utilization over 30,000 screen. On an interim final 
basis for CY 2013, we assigned the AMA RUC-recommended work RVU of 1.18 
to CPT code 67810, with a refinement to the AMA RUC-recommended time. 
As we noted in the CY 2013 final rule with comment period, Medicare 
claims data from CY 2011 indicated that CPT code 67810 was typically 
furnished to the beneficiary on the same day as an E/M visit. We noted 
that that some of the activities furnished during the preservice and 
postservice period of the procedure code and the E/M visit overlapped 
and that although the AMA RUC appropriately accounted for this overlap 
in its recommendation of preservice time, its recommendation for 
postservice time was high relative to similar services performed on the 
same day as an E/M service. To better account for the overlap in the 
postservice period, and to value the service relative to similar 
services, we reduced the AMA RUC-recommended postservice time for this 
procedure by one-third, from 5 minutes to 3 minutes.
    Comment: Commenters believed that our time refinement for CPT code 
67810 was unsubstantiated and that we were incorrect in assuming that 
the overlap between the E/M visit and the postservice period was not 
appropriately accounted for in the AMA RUC recommendation. Commenters 
suggested that the AMA RUC did take the overlap into consideration and 
appropriately accounted for it by lowering the time recommendations by 
nearly 50 percent. Therefore, commenters requested that we accept the 
AMA RUC-recommended postservice time of 5 minutes for CPT code 67810.
    Response: Based on comments received, we re-reviewed CPT code 67810 
and continue to believe that our interim final work RVU of 1.18 and our 
time refinement is appropriate. We maintain that the AMA RUC did not 
fully account for the fact that some of the activities furnished during 
the postservice period of the procedure code overlap with the E/M visit 
and that the AMA RUC's time refinements were insufficient. As such, we 
continue to believe that 3 minutes of postservice time accurately 
reflects the physician time involved in furnishing the postservice work 
of this procedure, and that this time is well-aligned with that for 
similar services. Therefore, we are finalizing a work RVU of 1.18 to 
CPT code 67810 with 3 minutes of postservice time for CY 2014.
(23) Eye and Ocular Adnexa: Conjunctiva (CPT Code 68200)
    CPT code 68200 was identified as potentially misvalued under the 
Harvard-valued utilization over 30,000 screen. On an interim final 
basis for CY 2013, we assigned a work RVU of 0.49 to CPT code 68200, 
with a refinement to the AMA RUC-recommended time. As we noted in the 
CY 2013 final rule with comment period, Medicare claims data from CY 
2011 indicated that CPT code 68200 was typically furnished to the 
beneficiary on the same day as an E/M visit. We believed that some of 
the activities furnished during the preservice and postservice period 
of the procedure code overlapped with the E/M visit. We believed that 
the AMA RUC appropriately accounted for this overlap in its 
recommendation of preservice time, but did not adequately account for 
the overlap in the postservice time. To better account for the overlap 
in postservice time, we reduced the AMA RUC-recommended postservice 
time for this procedure by one-third, from 5 minutes to 3 minutes. 
After reviewing CPT code 68200 and assessing the overlap in time and 
work, we agreed with the AMA RUC-recommended work RVU of 0.49 for CY 
2013.
    Comment: Commenters believed that our time refinement for CPT code 
68200 was unsupported and that we assumed incorrectly that the overlap 
between the E/M visit and the postservice period was not appropriately 
accounted for in the AMA RUC recommendation. Commenters suggested that 
the AMA RUC did take the overlap into consideration and completely 
accounted for it by lowering the preservice time recommendation. 
Therefore, commenters request that we accept the AMA RUC-recommended 
postservice time of 5 minutes postservice for CPT code 68200.
    Response: After reviewing the comments, we continue to believe that 
our refinement of the recommended time is appropriate. We maintain that 
the AMA RUC did not fully account for the fact that some of the 
activities furnished during the postservice period of the procedure 
code overlap with the E/M visit and that the AMA RUC-recommended time 
refinements were insufficient. As such, we continue to believe that 3 
minutes of postservice time accurately reflects the time involved in 
furnishing the postservice work of this procedure, and that this time 
is well-aligned with similar services. Therefore, we are finalizing a 
work RVU of 0.49 for CPT code 68200 with 3 minutes of postservice time, 
for CY 2014.
(24) Eye and Ocular Adnexa: Conjunctiva (CPT Code 69200)
    CPT code 69200 was identified as potentially misvalued under the 
Harvard-valued utilization over 30,000 screen. On an interim final 
basis for CY 2013, we assigned a work RVU of 0.77 to CPT code 69200, as 
well as refining to the AMA RUC-recommended time. In the CY 2013 final 
rule, we noted that Medicare claims data from 2011 indicated that CPT 
code 69200 was typically furnished to the beneficiary on the same day 
as an E/M visit and that some of the activities furnished during the 
preservice and postservice period of the procedure code overlapped with 
the E/M visit. To account for this overlap, we removed one-third of the 
preservice evaluation time from the preservice time package, reducing 
the preservice evaluation time from 7 minutes to 5 minutes. 
Additionally, we reduced the AMA RUC-recommended postservice time for 
this procedure by one-third, from 5 minutes to 3 minutes. After 
reviewing CPT code 69200 and assessing the overlap in time and work, we 
agreed with the AMA RUC-recommended work RVU of 0.77 for CY 2013.
    Comment: A commenter thanked us for our acceptance of the AMA RUC-
recommended work for CPT code 69200.
    Response: For CY 2014, we are finalizing the interim final work RVU 
and time for this code.
(25) Eye and Ocular Adnexa: Conjunctiva (CPT Code 69433)
    As detailed in the CY 2013 final rule with comment period, we 
assigned an interim final work RVU of 1.57 to CPT code 69433; which the 
AMA RUC had recommended.
    Comment: A commenter thanked us for our acceptance of the AMA RUC 
recommendation.
    Response: We are finalizing our interim final work RVU for CY 2014.

[[Page 74301]]

(26) Computed Tomographic (CT) Angiography (CPT Code 72191)
    As detailed in the CY 2013 final rule with comment period, CPT code 
72191 was assigned a CY 2013 interim final work RVU of 1.81, consistent 
with the AMA RUC recommendation.
    As detailed in this final rule with comment period, based upon the 
AMA RUC recommendations, we are establishing interim final values for 
codes within the CT angiography family. To allow for contemporaneous 
public comment on this entire family of codes, we are maintaining the 
CY 2013 work value for CPT code 72191 as interim final for CY 2014.
(27) Radiologic Guidance: Fluoroscopic Guidance (CPT Codes 77001, 77002 
and 77003)
    As detailed in the CY 2013 final rule with comment period, CPT 
codes 77001, 77002 and 77003 were assigned CY 2013 interim final work 
RVUs of 0.38, 0.54 and 0.60, respectively, based upon AMA RUC 
recommendations. We received AMA RUC recommendations for work RVUs of 
0.38 for CPT code 77001, 0.54 for CPT code 77002 and 0.60 for CPT code 
77003.
    We agree with the AMA RUC-recommended values but are concerned that 
the recommended intraservice times for all three codes are generally 
higher than the procedure codes with which they are typically billed. 
For example, CPT code 77002 has 15 minutes of intraservice time and CPT 
code 20610 (Arthrocentesis, aspiration and/or injection; major joint or 
bursa (eg, shoulder, hip, knee joint, subacromial bursa)) has an 
intraservice time of only 5 minutes. We are requesting additional 
public comment and input from the AMA RUC and other stakeholders 
regarding the appropriate relationship between the intraservice time 
associated with fluoroscopic guidance and the intraservice time of the 
procedure codes with which they are typically billed. Therefore, for CY 
2014 we are assigning CY 2014 interim final work RVUs of 0.38 to CPT 
code 77001, 0.54 to CPT code 77002 and 0.60 to CPT code 77003.
(28) Radiology (CPT Codes 75896 and 75898)
    CPT code 75896 was identified as potentially misvalued through the 
codes reported together 75 percent or more screen. As we noted in the 
CY 2013 final rule with comment period, the AMA RUC intended to survey 
and review CPT codes 75896 and 75898 for CY 2014 as part of their work 
on bundling thrombolysis codes. The AMA RUC recommended contractor 
pricing these two services for CY 2014. However, since we had 
established a national payment rate for the professional component of 
these services and only the technical component of the services was 
contractor priced at that time, we maintained the national price on the 
professional component and continued contractor pricing for the 
technical component for these codes on an interim final basis for CY 
2013.
    We did not receive any comments on these codes nor did we receive 
any recommendations from the AMA RUC. As we anticipate receiving AMA 
RUC recommendations for these codes, we are maintaining the current 
pricing on an interim final basis for CY 2014.
(29) Pathology (CPT Codes 88120, 88121, 88365, 88367, and 88368)
    The CPT Editorial Panel created CPT 88120 and 88121 effective for 
CY 2011. In the CY 2012 PFS final rule with comment period, we assigned 
interim final work RVUs of 1.20 and 1.00 to CPT codes 88120 and 88121, 
respectively. We maintained the 2012 work RVUs for 88120 and 88121 as 
interim final for CY 2013. Additionally, we expressed concern about 
potential payment disparities between these codes and similar codes, 
CPT codes 88365, 88367 and 88368, and asked the AMA RUC to review the 
work and PE for these codes to ensure the appropriate relativity 
between the two sets of services. Since the AMA RUC is reviewing CPT 
codes 88365, 88367, and 88368, we are establishing CY 2014 interim 
final work RVUs of 1.20 for CPT code 88365, 1.30 for CPT code 88367, 
and 1.40 for CPT code 88368 for CY 2014.
    Comment: A commenter stated that it was appropriate to reaffirm the 
values for 88120 and 88121.
    Response: For the reasons stated above, we are assigning CY 2014 
interim final work RVUs of 1.20 and 1.00 to CPT codes 88120 and 88121, 
respectively.
    (30) Optical Endomicroscopy (CPT Code 88375)
    As detailed in the CY 2013 final rule with comment period, CPT code 
88375 was assigned an interim final PFS procedure status of C 
(Contractors price the code. Contractors establish RVUs and payment 
amounts for these services.). We received a recommendation from the AMA 
RUC for a work RVU of 1.08 for CPT code 88375.
    CPT code 88375 provides a code for reporting the pathology service 
when one is required to assist in the procedure. The AMA RUC 
recommended an intraservice time of 25 minutes and a work RVU of 1.08 
for CPT code 88375. Based on our analysis of this recommendation, we 
believe that the typical optical endomicroscopy case will involve only 
the endoscopist, and CPT codes 43206 and 43253 are valued to reflect 
this. Accordingly, we believe a separate payment for CPT code 88375 
would result in double payment for a portion of the overall optical 
endomicroscopy service. Therefore, we are assigning a PFS procedure 
status of I (Not valid for Medicare purposes. Medicare uses another 
code for the reporting of and the payment for these services) to CPT 
code 88375. In the unusual situation that a pathologist is requested to 
assist an endoscopist in optical endomicroscopy, we would expect the 
pathologist to report other codes more appropriate to the service (e.g. 
CPT code 88392 Pathology consultation during surgery).
(31) Psychiatry (CPT Codes 90785, 90791, 90792, 90832, 90833, 90834, 
90836, 90837, 90838, 90839, 90840, 90845, 90846, 90847, 90853 and 
90863)
    For CY 2013, the CPT Editorial Panel restructured the psychiatry/
psychotherapy CPT codes allowing for separate reporting of E/M codes, 
eliminating the site-of-service differential, creating codes for 
crisis, and creating a series of add-on psychotherapy codes to describe 
interactive complexity and medication management. The AMA RUC 
recommended values for all of the codes in this family except CPT codes 
90785 (add-on for interactive complexity), 90839 (psychotherapy for 
crisis, first 60 minutes), 90840 (each additional 30 minutes) and 90863 
(pharmacologic management, when performed with psychotherapy) which 
were the AMA RUC recommended to be contractor priced. In establishing 
CY 2013 values for the psychitry codes, our general approach was to 
maintain the CY 2012 values for the services or adopt values that 
approximated the CY 2012 values after adjusting for differences in code 
structure between CY 2012 and 2013, for all psychiatry/psychotherapy 
services on an interim final basis. We noted in the CY 2013 final rule 
with comment period that we intended to review the values for all the 
codes in the family once the survey process was complete and we had 
recommendations for all the codes. This would allow for a comprehensive 
review of the values for the full code set that would ensure more 
accurate valuation and proper relativity. The CY 2013 interim values 
for this family can be found in Table 24.
    We have now received AMA RUC recommendations for all of the codes 
in the family and are establishing CY 2014

[[Page 74302]]

interim final work RVUs based on these recommendations. The CY 2014 
interim work values displayed in Table 24 correspond with the AMA RUC 
recommended values, with the exception of CPT code 90863, which has 
been assigned a PFS procedure status of I (Not valid for Medicare 
purposes. Medicare uses another code for the reporting of and the 
payment for these services). These recommendations, which are now 
complete, have provided us with a comprehensive set of information 
regarding revisions to the overall relative resource costs for these 
services. This is consistent with the approach we described in the CY 
2013 PFS final rule with comment period (77 FR 69060-69063). Because of 
the changes for this relativity new code set, we are establishing these 
values on an interim final basis.
    Comment: Several commenters urged CMS to use the AMA RUC-
recommended values for CY 2013 and questioned why CMS chose instead to 
adopt a general approach of maintaining the CY 2012 values for the 
services. These commenters noted that CMS has previously adopted 
interim final values for only a portion of new codes in a family, 
pending subsequent valuation of other codes in the family. Other 
commenters questioned the logic of maintaining preexisting values for 
these services since the new set of codes resulted from the 
identification of these services as potentially misvalued several years 
ago. Other commenters pointed out that the general approach to valuing 
the codes resulted in anomalous values. Several other commenters 
suggested alternative work values for the codes with and without 
corresponding AMA RUC recommendations.
    Response: We appreciate commenters' concerns regarding the 
appropriate valuation of this family of codes. We also acknowledge that 
commenters accurately point out that, in some cases, we have previously 
established new interim values for new codes when related codes have 
not been simultaneously reviewed. However, as we explained in the CY 
2013 final rule with comment period (77 FR 69060), the CY 2013 changes 
for this family of codes consisted of a new structure that allowed for 
the separate reporting of E/M codes, the elimination of the site-of-
service differential, the establishment of CPT codes for crisis, and 
the creation of a series of add-on CPT codes to psychotherapy to 
describe interactive complexity and medication management. We believed 
that the unusual complexity of these coding changes and the magnitude 
of their impacts among the affected specialties that furnish these 
services necessitated a comprehensive review of the potential impact of 
the changes prior to adopting significant changes in overall value. We 
also acknowledge that maintaining overall value for services between 
calendar years with coding changes presents extensive challenges that 
often result in anomalous values between individual codes. Since we are 
establishing new interim final work RVUs for the codes in this family 
for CY 2014 based on the recommendations of the AMA RUC, we believe 
that commenters' concerns regarding our approach to CY 2013 have been 
largely been mitigated for CY 2014. We note that the interim final CY 
2014 work RVUs for all of these services are open for comment and we 
will respond to comments regarding these values in the CY 2015 PFS 
final rule with comment period.
    Comment: Several commenters stated that it was difficult for health 
care professionals that furnish these services to implement use of the 
new CPT codes for Medicare payment with only a few months' notice given 
the technology involved in claims systems. Other commenters suggested 
that CMS should revise CPT code descriptors for codes to conform to 
Medicare policies.
    Response: We appreciate the concern regarding insufficient time to 
adopt new codes. Although we would prefer for the new, revised and 
deleted codes to be released in time to appear in PFS proposed 
rulemaking, the timing of the annual release of the new codes set is 
completely under the control of the CPT Editorial Panel. We note that 
CMS does not have the authority to alter CPT code descriptors.
    Comment: Several commenters supported CMS's decision to assign CPT 
code 90863 with a PFS procedure status indicator of I (Not valid for 
Medicare purposes. Medicare uses another code for the reporting of and 
the payment for these services) for CY 2013 and encouraged CMS to 
maintain that status for CY 2014.
    Response: We appreciate commenters' support for this assignment. We 
understand from our past meetings with stakeholders that the ability to 
prescribe medicine is predicated upon first providing evaluation and 
management (E/M) services. Although clinical psychologists have been 
granted prescriptive privileges in Louisiana and New Mexico, we do not 
believe that they are n authorized under their state scope of practice 
to furnish the full range of traditional E/M services. As a result, we 
believe that clinical psychologists continue to be precluded from 
billing Medicare for pharmacologic management services under CPT code 
90863 because pharmacologic management services require some knowledge 
and ability to furnish E/M services, as some stakeholders have 
indicated. Even though clinical psychologists in Louisiana and New 
Mexico have been granted prescriptive privileges, clinical 
psychologists overall remain unlicensed and unauthorized by their state 
to furnish E/M services. Accordingly, on an interim final basis for CY 
2014, for CPT code 90863, we are maintaining a PFS procedure status 
indicator of I (Not valid for Medicare purposes. Medicare uses another 
code for the reporting of and the payment for these services.).
(32) Cardiovascular: Therapeutic Services and Procedures (CPT Codes 
92920, 92921, 92924, 92925, 92928, and 92929)
    The CPT Editorial Panel created 13 new percutaneous coronary 
intervention (PCI) CPT codes for CY 2013 (92920, 92921, 92924, 92925, 
92928, 92929, 92933, 92934, 92937, 92938, 92941, 92943, and 92944) to 
replace the 6 existing codes, which resulted in a greater level of 
granularity.
    As detailed in the CY 2013 final rule with comment period, we 
believed that the CPT-established unbundling of the placement of 
branch-level stents may encourage increased placement of stents. To 
eliminate that incentive, on an interim final basis for CY 2013, we 
rebundled the work associated with the placement of a stent in an 
arterial branch into the base code for the placement of a stent in an 
artery. Accordingly, for CY 2013 we bundled each new add-on code into 
its base code. Specifically, we bundled the work of CPT code 92921 into 
CPT code 92920, the work of CPT code 92925 into CPT code 92924, the 
work of CPT code 92929 into CPT code 92928, the work of CPT code 92934 
into CPT code 92933, the work of CPT code 92938 into CPT code 92937; 
and the work of CPT code 92944 into CPT code 92943.
    In the CY 2013 final rule with comment period we explained how we 
established the work RVUs for the new bundled codes. For each code, we 
used the AMA RUC-recommended utilization crosswalk to determine what 
percentage of the base code utilization would be billed with the add-on 
code, and added that percentage of the AMA RUC-recommended work RVU for 
the add-on code to the AMA RUC-recommended work RVU for the base code. 
Based on this methodology, we assigned the following CY 2013 interim 
final work RVUs: 10.10 to CPT code 92920, 11.99

[[Page 74303]]

to CPT code 92924, 11.21 to CPT code 92928, 12.54 to CPT code 92933, 
11.20 to CPT code 92937, and 12.56 to CPT code 92943.
    On an interim final basis for CY 2013, add-on CPT codes 92921, 
92925, 92929, 92934, 92938, and 92944 were assigned a PFS procedure 
status indicator of B (Bundled code. Payments for covered services are 
always bundled into payment for other services, which are 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 bundled.) Therefore, these 
codes were not separately payable.
    As detailed in the CY 2013 final rule with comment period, we did 
not use this methodology to establish a work RVU for CPT code 92941, 
which did not have a specific corresponding add-on code. After 
reviewing the service alongside the other services in the family, we 
believed CPT code 92941 had the same work as CPT code 92943. As we 
stated above, we assigned a work RVU of 12.56 to CPT code 92943. 
Therefore, on an interim final basis for CY 2013 we assigned a work RVU 
of 12.56 to CPT code 92941 with the AMA RUC-recommended intraservice 
time of 70 minutes.
    Comment: Commenters disagreed with our bundling of codes into their 
respective base codes. Commenters stated that we negated the work of 
the CPT Editorial Panel, specialty societies, and the AMA RUC by 
further bundling already bundled codes for PCI services. They indicated 
that the additional bundling of payment for these codes generated a 
substantial disconnect between the coding guidelines detailed in the 
CPT manual and the use of the codes under the Medicare system, causing 
great uncertainty and confusion. Additionally, commenters stated that 
the decreases in PCI were of serious concern because it would drive 
physicians from private practice. Therefore, commenters requested we 
adopt the CPT Editorial Panel coding construct and the AMA RUC-
recommended values for all of the PCI codes. Furthermore, commenters 
requested that we publish the values for the bundled codes, even though 
they were not recognized for separate payment by Medicare, so that 
third-party carriers who depend on the PFS to determine payment rates 
can develop payment policies that conform to the CPT Editorial Panel's 
coding decisions.
    Response: After re-review, we maintain that our valuation and 
bundling of codes into their respective base codes is appropriate. We 
continue to believe that the revised CPT coding structure represents a 
trend toward creating greater granularity in codes that describe the 
most intense and difficult work. Specifically for this code family, we 
continue to believe that making separate Medicare payment for unbundled 
codes that describe the placement of branch-level stents may encourage 
increased placement of stents in a fee-for-service system. To eliminate 
that incentive while maintaining an appropriate reflection of the 
resources involved in furnishing these services, we continue to believe 
that rebundling the work associated with the placement of a stent in an 
arterial branch into the base code for the placement of a stent in an 
artery is appropriate and consistent with the prior coding structure.
    Therefore, we are finalizing work RVU values of 10.10 for CPT code 
92920, 11.99 for CPT code 92924 and 11.21 for CPT 92928 and a PFS 
procedure status indicator of B (Bundled code. Payments for covered 
services are always bundled into payment for other services, which are 
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 bundled for CPT codes 
92921, 92925 and 92929 for CY 2014. We are also finalizing for CY 2014 
a work RVU of 12.56 for CPT code 92941, with the AMA RUC-recommended 
intraservice time of 70 minutes.
(33) Cardiovascular: Intracardiac Electrophysiological Procedures/
Studies (CPT Codes 93655 and 93657)
    Previously, CPT codes 93651 and 93652 were identified as 
potentially misvalued through the codes reported together 75 percent or 
more screen. Upon reviewing these codes, the CPT Editorial Panel 
deleted CPT codes 93651 and 93652 and and replaced them with new CPT 
codes 93653 through 93657 effective January 1, 2013.
    As detailed in CY 2013 final rule with comment period, we believed 
these codes had a similar level of intensity to CPT codes 93653, 93654, 
and 93656, which were all valued at 5.00 RVUs per 1 hour of 
intraservice time. Therefore, for CY 2013 we assigned a work RVU of 
7.50 to CPT codes 93655 and 93657, which have 90 minutes of 
intraservice time. The AMA RUC recommended a work RVU of 9.00 for CPT 
code 93655 and a work RVU of 10.00 for CPT code 93657.
    Comment: Commenters disagreed with the incremental value 
methodology for CPT codes 93655 and 93657, stating that our approach 
did not accurately account for the intensity of these services. They 
stated that CPT codes 93655 and 93657 are more intense and complex 
procedures than CPT codes 93653, 93654, and 93656 because patients who 
require the services have widespread refractory disease, requiring 
additional technical skill and time. Therefore, commenters requested we 
use the AMA RUC-recommended work RVUs of 9.0 for CPT code 93655 and 
10.0 for CPT code 93657. In addition, one commenter requested that we 
refer these codes to the refinement panel.
    Response: After reviewing the request for refinement, we agreed 
that CPT codes 93655 and 93657 met the requirements for refinement and 
referred the codes to the CY 2013 multi-specialty refinement panel for 
further review. The refinement panel median work RVU for CPT codes 
93655 and 93657 are 9.00, and 10.00 respectively. Following the 
refinement panel meeting, we again reviewed the work involved in this 
code and continue to believe that the two services involve a very 
similar level of intensity to CPT codes 93653, 93654, and 93656, which 
are all valued at 5.00 RVUs per 1 hour of intraservice time. We 
continue to believe that this is the appropriate value for CPT codes 
93655 and 93657 because we believe these services contain the same 
amount of work as the base codes, CPT codes 93653, 93654, and 93656. 
Therefore, we are finalizing a work RVU of 7.50 for CPT codes 93655 and 
93657 for CY 2014.
(34) Noninvasive Vascular Diagnostic Studies: Extremity Arterial 
Studies (Including Digits) (CPT Codes 93925 and 93926)
    Previously, CPT codes 93925 and 93926 were identified by the AMA 
RUC as potentially misvalued and we received AMA RUC recommendations 
for CY 2013.
    After reviewing CPT codes 93925 and 93926, we believed that the 
survey's 25th percentile work RVUs of 0.80 for CPT code 93925 and 0.50 
for CPT code 93926 accurately accounted for the work involved in 
furnishing the services and appropriately captured the increase in work 
since the services were last valued and assigned these as interim final 
work RVUs for CY 2013. As we noted in the CY 2013 final rule with 
comment period, we believed that the AMA RUC-recommended survey median 
work RVUs of 0.90 for CPT code 93925 and 0.70 for CPT code 93926 
overstated the increase in work for the services and that the RVUs were 
too high relative to similar services. Regarding physician time, we 
refined the AMA RUC-

[[Page 74304]]

recommended preservice and postservice times from 5 minutes to 3 
minutes to align with similar services, specifically CPT codes 93922 
and 93923.
    Comment: All commenters disagreed with our work valuation and some 
commenters also disagreed with our time refinements for CPT codes 93925 
and 93926. One commenter stated that the work RVUs for CPT codes 93925 
and 93926 should be increased because the work associated with the 
services has changed and also argued that our valuations were arbitrary 
in nature and unsupported. Two commenters noted that the AMA RUC-
recommended work RVUs of 0.90 for CPT code 93925 and 0.70 for CPT code 
93926 were supported by relativity comparisons to CPT codes 93306, 
73700, 76776 and 76817 and according the CY 2013 interim final work RVU 
values were too low. Additionally, two commenters disagreed with our 
time refinements for CPT codes 93925 and 93926 from the survey's median 
to the survey's 25th percentile values. One commenter specifically 
disagreed with our use of CPT codes 93922 and 93923 as reference codes 
for time refinements because they stated ``physiologic studies do not 
require artery-by-artery inch-by-inch assessment of femoral and tibial 
arteries, as do the duplex exams'' and as such, are not appropriate 
codes for comparison. They added that CPT codes 93925 and 93926 require 
more time for proper performance of the exam and interpretation of 
results. All commenters suggested acceptance of the AMA RUC 
recommendations. One commenter also requested refinement panel review 
of the codes.
    Response: After evaluation of the request for refinement, we 
determined that the criteria for the request for refinement were not 
met and, as a result, we did not refer CPT codes 93925 and 93926 to the 
CY 2013 multi-specialty refinement panel for further review.
    After reviewing the comments, we maintain that our valuation is 
appropriate. We continue to believe that that the survey's 25th 
percentile work RVUs of 0.80 for CPT code 93925, and 0.50 for CPT code 
93926 accurately account for the work involved in furnishing these 
services and appropriately captures the increase in work since these 
services were last valued. Additionally, we continue to believe that a 
refinement to the AMA RUC-recommended time is appropriate to align the 
times with those associated with CPT codes 93922 and 93923 that 
describe similar services. Therefore, we are finalizing a work RVU of 
0.80 to CPT code 93925 and a work RVU of 0.50 to CPT code 93926, with 3 
minutes of preservice and postservice time for CY 2014.
(35) Neurology and Neuromuscular Procedures: Sleep Medicine Testing 
(CPT Codes 95782 and 95783)
    The CPT Editorial Panel created new CPT codes 95782 and 95783, 
effective January 1, 2013, to describe the work involved in pediatric 
polysomnography for children 5 years of age or younger. For CY 2013, we 
assigned an interim final work RVU of 2.60 to CPT code 95782 and a work 
RVU of 2.83 to CPT code 95783. As we noted in the CY 2013 final rule 
with comment period, we assigned these values after we reviewed CPT 
codes 95782 and 95783 and determined that the survey's 25th percentile 
work RVUs of 2.60 for CPT code 95782 and 2.83 for CPT code 95783 
appropriately reflected the work involved in furnishing the services. 
The AMA RUC recommended the survey's median work RVUs of 3.00 for CPT 
code 95782 and 3.20 for CPT code 95783.
    Comment: Commenters disagreed with our valuation of CPT codes 95782 
and 95783, stating that the services should have received a greater 
valuation explaining that it is more difficult to perform sleep studies 
on children than adults, and more work is required to obtain an 
accurate polysomnogram due to children's greater need for attention 
and, in some cases, even mild sedation. Additionally, commenters noted 
that the work involved in the interpretation of data supported a higher 
work RVU. Therefore, commenters requested that we use the AMA RUC-
recommended work RVU of 3.00 for CPT code 95782 and 3.20 for CPT code 
95783.
    Response: After consideration of comments and re-reviewing of CPT 
codes 95782 and 95783, we maintain that our valuation is appropriate. 
We continue to believe that that the survey's 25th percentile work RVUs 
of 2.60 for CPT code 95782 and 2.83 for CPT code 95783 accurately 
accounts for the work involved in furnishing these services. Therefore, 
we are finalizing a work RVU of 2.60 for CPT code 95782 and 2.83 for 
CPT code 95783, for CY 2014.
(36) Neurology and Neuromuscular Procedures: Electromyography and Nerve 
Conduction Tests (CPT Codes 95885, 95886, and 95887)
    CPT codes 95860, 95861, 95863, and 95864 were previously identified 
as potentially misvalued through the codes reported together 75 percent 
or more screen. The relevant specialty societies submitted a code 
change proposal to the CPT Editorial Panel to bundle the services 
commonly reported together. In response, the CPT created three add-on 
codes (CPT codes 95885, 95886, and 95887) and seven new codes (CPT 
codes 95907 through 95913) that bundled the work of multiple nerve 
conduction studies into each individual code.
    We agreed with the AMA RUC recommendation for CPT code 95885 and 
assigned a CY 2013 interim final work RVU of 0.35. After review, we 
determined that CPT codes 95886 and 95887 involved the same level of 
work intensity as CPT code 95885. To determine the appropriate RVU for 
CPT codes 95886 and 95887, we increased the work RVUs of CPT codes 
95886 and 95887 proportionate to the differences in times from CPT code 
95885. Therefore, we assigned an interim final work RVU of 0.70 to CPT 
code 95886 and of 0.47 to CPT code 95887 for CY 2013 as compared to the 
AMA RUC-recommended 0.92 and 0.73, respectively.
    Comment: Commenters indicated that we utilized a flawed building 
block approach in valuing CPT codes 95886 and 95887 because the 
methodology did not take into account precise distinctions within each 
service and inaccurately assumed that the codes had identical intensity 
and complexity. Commenters supported the AMA RUC-recommended values 
developed using magnitude estimation saying that the methodology was 
more precise due to its use of data derived from multiple factors like 
physician time, intensity and work value estimates. Additionally, 
commenters noted that we failed to distinguish the increasing intensity 
and complexity involved as additional nerve conductions were performed. 
Therefore, commenters requested our use of the AMA RUC-recommended work 
RVU of 0.92 for CPT code 95886 and 0.73 for CPT code 95887 and 
refinement panel review of the codes.
    Response: After reviewing the request for refinement, we agreed 
that CPT codes 95886 and 95887 met the requirements for refinement and 
referred the codes to the CY 2013 multi-specialty refinement panel for 
further review. The refinement panel median work RVUs for CPT codes 
95886 and 95887 were respectively, 0.92 and 0.73. Following the 
refinement panel meeting, we again reviewed the work involved in these 
codes and agreed with the panel that these codes were more intense and 
complex than reflected in the CY 2013 interim final values and, as 
such, warranted a higher work RVU. While we agree that work RVUs for 
CPT codes 95886 and 95887 should be increased, based on our clinical 
review, we conclude that the refinement panel's

[[Page 74305]]

suggested values overstate the work involved in these procedures.
    We believe that the work for CPT code 95886 is similar to the work 
performed when five or more muscles are examined in one extremity, as 
described by CPT code 95860, which has a work RVU of 0.96. However, CPT 
code 95886 is an add-on code to nerve conduction studies. Therefore, as 
we have previously valued services that overlap with another CPT code, 
we applied a 10% reduction to the work RVU of CPT code 95860 to 
determine a work RVU of 0.86 for CPT code 95886. Similarly, in our 
valuation of CPT code 95887, we believe that the work for the code is 
similar to the work performed when cranial nerve supplied muscles are 
examined, as described by CPT code 95867, which has a work RVU of 0.79. 
However, CPT code 95887 is an add-on code to nerve conduction studies. 
Therefore, as we have previously valued services that overlap with 
another code, we applied a 10 percent reduction to the work RVU of CPT 
code 95867 to determine a work RVU of 0.79 for CPT code 95887. For CY 
2014, we are finalizing a work RVU of 0.86 for CPT code 95886 and 0.71 
for CPT code 95887.
(37) Neurology and Neuromuscular Procedures: Electromyography and Nerve 
Conduction Tests (CPT Codes 95908, 95909, 95910, 95911, 95912, and 
95913)
    In our CY 2013 review, we did not accept the AMA RUC-recommended 
values for CPT codes 95908, 95909, 95910, 95911, 95912, and 95913. For 
those codes, we found that the progression of the survey's 25th 
percentile work RVUs and survey's median times appropriately reflected 
the relativity of the services and valued the codes accordingly. CPT 
code 95908 was an exception to this, as we believed the survey's 25th 
percentile work RVU was too low relative to other fee schedule 
services. Therefore, we assigned the following work RVUs for CY 2013: 
1.00 to CPT code 95907, 1.25 to CPT code 95908, 1.50 to CPT code 95909, 
2.00 to CPT code 95910, 2.50 to CPT code 95911, 3.00 to CPT code 95912, 
and 3.56 to CPT code 95913.
    Additionally, we refined the AMA RUC-recommended intraservice time 
for CPT code 95908 from 25 minutes to the survey's median time of 22 
minutes and for CPT code 95909 from 35 minutes to the survey's median 
time of 30 minutes, so that all the CPT codes in the series were valued 
using the survey's median intraservice time.
    Comment: Commenters disagreed with our valuation of CPT codes 
95908, 95909, 95910, 95911, 95912, and 95913. Commenters opposed the 
interim final values for the codes because they believed the intensity 
and complexity of the procedures increased as more nerve conductions 
were performed and as a result, believed that the valuations should be 
higher. Additionally, commenters believe that because no significant 
changes in the efficiencies of the test had occurred, in terms of time 
and cost related to performance, that our changes in the valuations 
were unjustified. Therefore, commenters requested that we accept the 
AMA RUC-recommended work RVUs for all of these codes and requested 
refinement panel review. Lastly, commenters also suggested that if the 
interim final values were to be finalized, that their implementation be 
staggered to limit the adverse impacts that the values would have on 
health care access.
    Response: After reviewing the request for refinement, we agreed 
that CPT codes 95908, 95909, 95910, 95911, 95912, and 95913 met the 
requirements for refinement and referred the codes to the CY 2013 
multi-specialty refinement panel for further review. The refinement 
panel median work RVUs were: 1.37 for CPT code 95908, 1.77 for CPT code 
95909, 2.80 for CPT code 95910, 3.34 for CPT code 95911, 4.00 for CPT 
code 95912, and 4.20 for CPT code 95913. Following the refinement panel 
meeting, we again reviewed the work involved in these codes and 
continue to believe that the progression of the survey's 25th 
percentile work RVUs and survey median times for these codes 
appropriately reflect the relativity of these codes. CPT code 95908 was 
an exception to this approach because we believe that the survey's 25th 
percentile work RVU is too low relative to other fee schedule services. 
We also note that we do not believe that the results of the survey 
support the notion that the intensity and complexity of the procedures 
increases as more nerve conductions are performed. Instead, we believe 
that the incremental differences reflected in the survey correspond 
with the incremental differences in our CY 2013 interim final values. 
Therefore, we are finalizing the CY 2013 interim final work RVUs and 
time refinements for CPT codes 95908, 95909, 95910, 95911, 95912, and 
95913 for CY 2014. With regard to the comment that our rates would 
impede access to these critical services, we are unaware of data that 
shows that access has declined.
(38) Evoked Potentials (CPT Codes 95928 and 95929)
    As detailed in the CY 2013 final rule with comment period, CPT 
codes 95928 and 95929 were each assigned a CY 2013 interim final work 
RVU of 1.50. Subsequently, the AMA RUC recommended intraservice time 
for these codes based on only 19 of the 28 survey responses. As a 
result, the AMA RUC recommendations included an intraservice time of 40 
minutes with which we do not agree. When based on all 28 survey 
responses, the intraservice time is 33 minutes. We agree with the AMA 
RUC recommended preservice and postservice times because they are 
consistent across all 28 survey responses. Therefore, for CY 2014, we 
are refining the preservice time, intraservice and postservice times 
for CPT codes 95928 and 95929 to 15 minutes, 33 minutes and 10 minutes, 
respectively. We are assigning CY 2014 interim final work RVUs of 1.50 
to CPT codes 95928 and 95929, based upon the AMA RUC recommendations, 
and are seeking public input on the time of the codes.
(39) Neurology and Neuromuscular Procedures: Intraoperative 
Neurophysiology (CPT Codes 95940 and 95941 and HCPCS Code G0453)
    Effective January 1, 2013, the CPT Editorial Panel deleted CPT code 
95920 and replaced it with CPT codes 95940 for continuous 
intraoperative neurophysiology monitoring in the operating room 
requiring personal attendance and 95941 for continuous intraoperative 
neurophysiology monitoring from outside the operating room (remote or 
nearby). Prior to CY 2013, the Medicare PFS paid for remote monitoring 
billed under CPT code 95920, which was used for both in-person and 
remote monitoring. For CY 2013, we created HCPCS code G0453 to be used 
for Medicare purposes instead of CPT code 95941. Unlike CPT code 95941, 
HCPCS code G0453 can be billed only for undivided attention by the 
monitoring physician to a single beneficiary, not for the monitoring of 
multiple beneficiaries simultaneously. Since G0453 was used for remote 
monitoring of Medicare beneficiaries, CPT code 95941 was assigned a PFS 
procedure status indicator of I (Not valid for Medicare purposes. 
Medicare uses another code for the reporting of and the payment for 
these services.
    As detailed in the CY 2013 final rule with comment period, after 
reviewing CPT code 95940, we agreed with the AMA RUC that a work RVU of 
0.60 accurately accounted for the work involved in furnishing the 
procedure. Also, we agreed with the AMA RUC that a work RVU of 2.00 
accurately accounted for the work involved in furnishing 60 minutes of 
continuous

[[Page 74306]]

intraoperative neurophysiology monitoring from outside the operating 
room. Accordingly, we assigned a work RVU of 0.50 to HCPCS code G0453, 
which described 15 minutes of monitoring from outside the operating 
room, on an interim final basis for CY 2013.
    Comment: Commenters disagreed with our valuation of CPT codes 
95940, 95941 and G0453. Commenters opposed the one-on-one patient to 
physician model that our recommendations proposed. Commenters stated 
the following: G0453 was contradictory to current provider models; the 
accessibility of IONM services would be lowered; surgeons would be 
deprived of advantageous services; qualified level of professional 
supervision would be reduced; hospitals would suffer increased 
overheard costs; and GO453 inappropriately assessed the services. 
Therefore, commenters requested we withdraw HCPCS code G0453 and 
validate CPT codes 95940 and 95941 together, through acceptance of the 
AMA RUC-recommended work RVUs of 0.60 for CPT code 95940 and 2.00 for 
CPT code 95941.
    Another commenter suggested we value CPT code 95941 at 0.5 of CPT 
95940 although a rationale for that valuation was not provided. Several 
other commenters requested we increase the work value of G0453 so that 
it was equal to the work RVU assigned to CPT code 95940 because they 
believed the physician time and effort for both services was the same. 
The majority of commenters suggested we value the concurrent monitoring 
of up to 4 patients by a neurologist with the creation of additional G 
codes for the remote monitoring of 2, 3 or 4 patients.
    Response: Based on comments received, we re-reviewed CPT codes 
95940, 95941 and HCPCS code G0453 and agree that based on the 
comparable nature of the work between CPT code 95940 and HCPCS code 
G0453, that G0453 should be valued equally to CPT code 95940.
    Therefore, we are finalizing a work RVU of 0.60 to CPT code 95940 
and 0.60 to HCPCS code G0453 for CY 2014. We are also finalizing a PFS 
procedure status indicator of I (Not valid for Medicare purposes. 
Medicare uses another code for the reporting of and the payment for 
these services) to CPT code 95941 for CY 2014, because for Medicare 
purposes, HCPCS code G0453 will continue to be used instead of CPT code 
95941. Although we considered commenters' suggestions to value 
concurrent monitoring of up to 3 or 4 patients by a neurologist with 
the creation of additional G-codes for the remote monitoring of 2, 3 or 
4 patients, creation of these G codes would allow billing for more than 
60 minutes of work during a 60 minute time period. We continue to 
believe that HCPCS code G0453 adequately accounts for the relative 
resources involved when the physician monitors a Medicare beneficiary, 
while it precludes inaccurate payment in cases where multiple patients 
are being monitored simultaneously. Therefore, we will maintain the 
current code descriptor for HCPCS code G0453.
    Comment: Some commenters suggested we create mechanisms for 
practitioners to report the professional and technical components 
separately for CPT codes 95940 and HCPCS code G0453. One of these 
commenters suggested that creating separate technical component payment 
for the PFS would allow hospitals to approximate the relative resource 
costs associated with the technical component of the service.
    Response: It is our understanding that these services are nearly 
always furnished to beneficiaries in facility settings. Therefore, 
Medicare would not make payments through the PFS that account for the 
clinical labor, disposable supplies, or medical equipment involved in 
furnishing the service. Instead, these resource costs would be included 
in the payment Medicare makes to the facility through other payment 
mechanisms. Therefore, we do not believe it would be appropriate to 
create separate payment rates for the professional and technical 
component of these services.
(40) Neurology System: Autonomic Function Tests (CPT Code 95943)
    As detailed in the CY 2013 final rule with comment period, we 
assigned a PFS procedure status of C to CPT code 95943, pursuant to the 
AMA RUC recommendation. (Contractors price the code. Contractors 
establish RVUs and payment amounts for these services.) The AMA RUC 
believes that a PFS procedure status of ``C'' was appropriate because 
they did not have sufficient information for making a specific work RVU 
recommendation.
    Comment: Commenters opposed contractor pricing of CPT code 95943 
because the other autonomic nervous system testing codes have national 
work RVUs and payment rates. Commenters suggested we crosswalk CPT code 
95943 to CPT code 95924 due to the procedures' similarity in total 
work.
    Response: We continue to believe that a PFS procedure status of C 
(Contractors price the code. Contractors establish RVUs and payment 
amounts for these services.) is appropriate for CPT code 95943. We do 
not believe that the commenters provided sufficient data to value the 
service. Therefore, we are finalizing a Contractor Pricing procedure 
status to CPT code 95943 for CY 2014.
(41) Inpatient Neonatal Intensive Care Services and Pediatric and 
Neonatal Critical Care Services: Pediatric Critical Care Patient 
Transport (CPT Codes 99485 and 99486)
    For CY 2013, he CPT editorial panel created CPT codes 99485 and 
99486, to describe the non-face-to-face services provided by physician 
to supervise interfacility care of critically ill or critically injured 
pediatric patients.
    As detailed in the CY 2013 final rule with comment period, we 
reviewed CPT codes 99485 and 99486 and believed the services should be 
bundled into other services and not be separately payable. We believed 
the services were similar to CPT code 99288, which is also bundled on 
the PFS. The AMA RUC recommended a work RVU of 1.50 for CPT code 99485 
and a work RVU of 1.30 for CPT code 99486. On an interim final basis 
for CY 2013, we assigned CPT codes 99485 and 99486 a PFS procedure 
status indicator of B (Payments for covered services are always bundled 
into payment for other services, which are 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 bundled).
    Comment: Commenters disagreed with our assignment of CPT codes 
99485 and 99486 as bundled codes. They stated that that classification 
puts pediatric physicians at a disadvantage since the majority of non-
Medicare payers will commonly bundle the codes as well. Commenters 
strongly recommended that we adopt status indicator A (Active) or, at 
the very least, status indicator N (Noncovered Service) for CPT codes 
99485 and 99486.
    Response: We continue to believe that CPT codes 99485 and 99486 are 
similar to CPT code 99288 and, like CPT code 99288, involve work that 
is already considered in the valuation of other services. Therefore, we 
do not believe that these services should be separately payable. 
Therefore, we are finalizing a PFS procedure status of B (Payments for 
covered services are always bundled into payment for other services, 
which are 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

[[Page 74307]]

bundled) to CPT codes 99485 and 99486 for CY 2014.
(42) Molecular Pathology (HCPCS Code G0452)
    As detailed in the CY 2013 final rule with comment period, one of 
the molecular pathology CPT codes that was deleted by CPT for CY 2012 
was payable on the PFS: CPT code 83912-26. To replace this CPT code, we 
created HCPCS code G0452 to describe medically necessary interpretation 
and written report of a molecular pathology test, above and beyond the 
report of laboratory results. We reviewed the work associated with this 
procedure and we believed it was appropriate to directly crosswalk the 
work RVUs and times of CPT code 83912-26 to HCPCS code G0452, because 
we did not believe the coding change reflected a change in the service 
or in the resources involved in furnishing the service. Accordingly, we 
assigned a work RVU of 0.37, with 5 minutes of preservice time, 10 
minutes of intraservice time, and 5 minutes of postservice time to 
HCPCS code G0452 on an interim final basis for CY 2013.
    Comment: Commenters disagreed with our valuation of HCPCS code 
G0452. Commenters expressed concern about the creation of a single 
HCPCS G-code to distinguish work related to a considerable number of 
procedures with changing relative values recommended by the AMA RUC.
    Response: The decision to pay for molecular pathology codes under 
the CLFS required the creation of a new code for the interpretation and 
reporting services by pathologists on the PFS. We continue to believe 
that the creation of HCPCS code G0452 was appropriate to describe 
medically necessary interpretation and written report of a molecular 
pathology test, above and beyond the report of laboratory results. We 
also believe that this single HCPCS code is sufficient to capture the 
work involved in any of the numerous molecular pathology codes. 
Additionally, the professional component-only HCPCS G-code is a 
``clinical laboratory interpretation service,'' which is one of the 
current categories of PFS pathology services under the definition of 
physician pathology services at Sec.  415.130(b)(4). Therefore, we are 
finalizing a work RVU of 0.37 to HCPCS code G0452.
(43) Digestive System: Intestines (Except Rectum) (CPT Code G0455)
    For CY 2013, we created HCPCS code G0455 to be used for Medicare 
purposes instead of CPT code 44705. HCPCS code G0455 will be used to 
bundle the preparation and instillation of microbiota. CPT code 44705 
was assigned a PFS procedure status indicator of I (Not valid for 
Medicare purposes).
    After reviewing the preparation and instillation work associated 
with this procedure, we believed that CPT code 99213 was an appropriate 
crosswalk for the work and time of HCPCS code G0455. Therefore, on an 
interim final basis for CY 2013, we assigned a work RVU of 0.97 to 
HCPCS code G0455.
    Comment: Commenters disagreed with our valuation of HCPCS code 
G0455. Commenters opposed the interim final work RVU because they 
believed extensive work was required for the preparation of the 
microbiota, to determine if a patient was an appropriate candidate for 
fecal donation. Commenters believed that our work RVU valuation failed 
to distinguish between varying clinical circumstances for the use of 
this code. Commenters also suggested that we should consider coverage 
of more than one donor specimen screening when clinically suitable.
    Response: After review, we agree with the commenters that the 
interim final work RVU of 0.97 undervalues this service. We believe 
that bundling the work RVU and physician time of CPT code 80500, a lab 
pathology consultation, with CPT code 99213 more appropriately values 
this work. Therefore, we are finalizing a work RVU of 1.34 and an 
intraservice time of 28 minutes for HCPCS code G0455.
b. Finalizing CY 2013 Interim Direct PE Inputs
(i) Background and Methodology
    On an annual basis, the AMA RUC provides CMS with recommendations 
regarding direct PE inputs, including clinical labor, disposable 
supplies, and medical equipment, for new, revised, and potentially 
misvalued codes. We review the AMA RUC-recommended direct PE inputs on 
a code-by-code basis. When we determine that the AMA RUC 
recommendations appropriately estimate the direct PE inputs required 
for the typical service and reflect our payment policies, we use those 
direct PE inputs to value a service. If not, we refine the PE inputs to 
better reflect our estimate of the PE resources required for the 
service. We also confirm whether CPT codes should have facility and/or 
nonfacility direct PE inputs and refine the inputs accordingly.
    In the CY 2013 PFS final rule with comment period (77 FR 69072), we 
addressed the general nature of some of our common refinements to the 
AMA RUC-recommended direct PE inputs as well as the reasons for 
refinements to particular inputs. In the following subsections, we 
respond to the comments we received regarding common refinements we 
made based on established principles or policies. Following those 
discussions, we summarize and respond to comments received regarding 
other refinements to particular codes.
    We note that the interim final direct PE inputs for CY 2013 that 
are being finalized for CY 2014 are displayed in the final CY 2014 
direct PE input database, available on the CMS Web site under the 
downloads for the CY 2014 PFS final rule at http://www.cms.gov/
Medicare/Medicare-Fee-for-Service-Payment/PhysicianFeeSched/PFS-
Federal-Regulation-Notices.html. The inputs displayed there have also 
been used in developing the CY 2014 PE RVUs as displayed in Addendum B 
of this final rule with comment period.
(ii) Common Refinements
(1) Equipment Time
    Prior to CY 2010, the AMA RUC did not generally provide CMS with 
recommendations regarding equipment time inputs. In CY 2010, in the 
interest of ensuring the greatest possible degree of accuracy in 
allocating equipment minutes, we requested that the AMA RUC provide 
equipment times along with the other direct PE recommendations, and we 
provided the AMA RUC with general guidelines regarding appropriate 
equipment time inputs. We continue to appreciate the AMA RUC's 
willingness to provide us with these additional inputs as part of its 
direct PE recommendations.
    In general, the equipment time inputs correspond to the service 
period portion of the clinical labor times. We have clarified this 
principle, indicating that we consider equipment time as the times 
within the intraservice period when a clinician is using the piece of 
equipment plus any additional time that the piece of equipment is not 
available for use for another patient due to its use during the 
designated procedure. For services in which we allocate cleaning time 
to portable equipment items, we do not include that time for the 
remaining equipment items as they are available for use for other 
patients during that time. In addition, when a piece of equipment is 
typically used during any additional visits included in a service's 
global period, the equipment time would also reflect that use.
    We believe that certain highly technical pieces of equipment and 
equipment rooms are less likely to be

[[Page 74308]]

used during all of the preservice or postservice tasks performed by 
clinical labor staff on the day of the procedure (the clinical labor 
service period) and are typically available for other patients even 
when one member of clinical staff may be occupied with a preservice or 
postservice task related to the procedure.
    Some commenters have repeatedly objected to our rationale for 
refinement of equipment minutes on this basis. We acknowledge the 
comments we received that reiterate those objections to this rationale 
and refer readers to our extensive discussion regarding those 
objections in the CY 2012 PFS final rule with comment period (76 FR 
73182). In the following paragraphs we address new comments on this 
policy.
    Comment: Several commenters pointed out that technician time is 
independent of physician time for some procedures so that equipment 
time should not be altered based on changes in physician intraservice 
time.
    Response: The estimated time it takes for a practitioner or 
clinical staff to furnish a procedure is an important factor used in 
determining the appropriate direct PE input values used in developing 
nonfacility PE RVUs. For many services, the physician intraservice time 
serves as the basis for allocating the appropriate number of minutes 
within the service period to account for the time used in furnishing 
the service to the patient. In the case of many services, the number of 
physician intraservice minutes, or occasionally a particular proportion 
thereof, is allocated to both the clinical staff that assist the 
practitioner in furnishing the service and to the equipment used by 
either the practitioner or the staff in furnishing the service. This 
allocation reflects only the time the beneficiary receives treatment 
and does not include resources used immediately prior to or following 
the service. Additional minutes are often allocated to both clinical 
labor and equipment resources to account for the time used for 
necessary preparatory tasks immediately preceding the procedure or 
tasks typically performed immediately following it. For these services, 
we routinely adjust the minutes assigned to the direct PE inputs so 
that they correspond with the procedure time assumptions displayed in 
the physician time file that are used in determining work RVUs and 
allocating indirect PE values.
    The commenters accurately point out that for a significant number 
of services, especially diagnostic tests, the procedure time 
assumptions used in determining direct PE inputs are distinct from, and 
therefore not dependent on, physician intraservice time assumptions. 
For these services, we do not make refinements to the direct PE inputs 
based on changes to estimated physician intraservice times.
    Comment: Several commenters asked that CMS identify what 
constitutes a highly technical piece of equipment.
    Response: During our review of all recommended direct PE inputs, we 
consider whether or not particular equipment items would typically be 
used in the most efficient manner possible. In making this 
determination, we consider such items as the degree of specificity of a 
piece of equipment, which may influence whether the equipment item is 
likely to be stored in the same room in which the clinical staff greets 
and gowns, obtains vitals, or provides education to a patient prior to 
the procedure itself. We also consider the level of portability 
(including the level of difficulty involved in cleaning the equipment 
item) to determine whether an item could be easily transferred between 
rooms before or after a given procedure. We also examine the prices for 
the particular equipment items to determine whether the equipment is 
likely to be located in the same room used for all the tasks undertaken 
by clinical staff prior to and following the procedure. For each 
service, on a case-by-case basis, we look at the description provided 
in the AMA RUC recommendation and consider the overlap of the equipment 
item's level of specificity, portability, and cost; and, consistent 
with the review of other recommended direct PE inputs, make the 
determination of whether the recommended equipment items are highly 
technical.
(2) Standard Tasks and Minutes for Clinical Labor Tasks
    In general, the preservice, service period, and postservice 
clinical labor minutes associated with clinical labor inputs in the 
direct PE input database reflect the sum of particular tasks described 
in the information that accompanies the recommended direct PE inputs, 
``PE worksheets.'' For most of these described tasks, there are a 
standardized number of minutes, depending on the type of procedure, its 
typical setting, its global period, and the other procedures with which 
it is typically reported. At times, the AMA RUC recommends a number of 
minutes either greater than or less than the time typically allotted 
for certain tasks. In those cases, CMS clinical staff reviews the 
deviations from the standards to determine their clinical 
appropriateness. Where the AMA RUC-recommended exceptions are not 
accepted, we refine the interim final direct PE inputs to match the 
standard times for those tasks. In addition, in cases when a service is 
typically billed with an E/M, we remove the preservice clinical labor 
tasks so that the inputs are not duplicative and reflect the resource 
costs of furnishing the typical service.
    In general, clinical labor tasks fall into one of the categories on 
the PE worksheets. In cases where tasks cannot be attributed to an 
existing category, the tasks are labeled ``other clinical activity.'' 
In these instances, CMS clinical staff reviews these tasks to determine 
whether they are similar to tasks delineated for other services under 
the PFS. For those tasks that do not meet this criterion, we do not 
accept those clinical labor tasks as direct inputs.
    Comment: Several commenters objected to CMS's refinement to 
recommended clinical labor minutes to meet these standards in cases 
where the recommendation included information suggesting that the 
service requires specialized clinical labor tasks, especially relating 
to quality assurance documentation, that are not typically included on 
the PE worksheets.
    Response: Although we appreciate the importance of quality 
assurance and other tasks, we note that the nonfacility direct PE 
inputs include an estimated number of clinical labor minutes for most 
codes developed based on an extensive, standard list of clinical labor 
tasks such as ``prepare equipment,'' and ``prepare and position 
patient.'' We believe that quality assurance documentation tasks for 
services across the PFS are already accounted for in the overall 
estimate of clinical labor time. We do not believe that it would serve 
the relativity of the direct PE input database were additional minutes 
added for each clinical task that could be discretely described for 
every code and thus are not making any changes based upon this comment.
(3) Equipment Minutes for Film Equipment Inputs
    In general, the equipment time allocated to film equipment, such as 
``film processor, dry, laser'' (ED024), ``film processor, wet'' 
(ED025), and ``film alternator (motorized film viewbox)'' (ER029), 
corresponds to the clinical labor task ``hang and process film.''
    Comment: Several commenters argued that the film equipment should 
be allocated for the entire service period.
    Response: We believe that the film equipment, when used, is 
typically only used during the time associated with

[[Page 74309]]

certain clinical labor tasks, and is otherwise generally available for 
use in furnishing services to other patients. In reviewing these 
equipment inputs in the direct PE input database, we note that this 
equipment is generally not allocated for the full number of minutes of 
the clinical labor service period. Because we do not believe that this 
equipment would be in use during periods other than during particular 
clinical labor tasks, and to maintain relativity, we are finalizing the 
CY 2013 direct PE inputs based on this general principle.
(4) Film Inputs as a Proxy for Digital Imaging Inputs
    Comment: A few commenters objected to our refinement of certain 
film inputs including eliminating VHS video system and tapes, and 
reducing the number of films for several procedures. Commenters also 
stated that the film processor was a necessary input for several 
procedures from which it was removed.
    Response: As stated in the CY 2013 PFS final rule with comment 
period (77 FR 69029), a variety of imaging services across the PFS 
include direct PE inputs that reflect film-based technology instead of 
digital technology. We believe that for imaging services, digital 
technology is more typical than film technology. However, stakeholders, 
including the AMA RUC, have recommended that we continue to use film 
technology inputs as a proxy for digital until digital inputs for all 
imaging services can be considered. In response to these 
recommendations, we have maintained inputs for film-based technology as 
proxy inputs while this review occurs. In the case of new, revised, and 
potentially misvalued codes, we have accepted the recommended proxy 
inputs to the extent that the recommended proxy inputs are those that 
are usually associated with imaging codes. However, we have not 
accepted recommended inputs that are not usually included in other 
imaging services. We have reviewed the recommended inclusion of the 
film processor and, upon additional review, noted that the item is 
routinely included in other imaging codes. Therefore, we are including 
that item in the direct PE input database. We anticipate updating all 
of the associated inputs in future rulemaking. After consideration of 
comments received, we are finalizing the direct PE inputs in accordance 
with this general principle with the additional refinement of inserting 
the film processor for relevant codes.
(iii) Code-Specific Direct PE Inputs
    We note that we received many comments objecting to refinements 
made based on CMS clinical review (including our determination that 
certain recommended items were duplicative of others already included 
with the service), statutory requirements, or established principles 
and policies under the PFS. We note that for many of our refinements, 
the medical specialty societies that represent the practitioners who 
furnish the service objected to most of these refinements for the 
general reasons described above or for the reasons we respond to in the 
``background and methodology'' portion of this section. Below, we 
respond to comments in which commenters address specific CPT/HCPCS 
codes and provide rationale for their objections to our refinements in 
the form of new information supporting the inclusion of the items and/
or times requested. When discussing these refinements, rather than 
listing all refinements made for each service, we discuss only the 
specific refinements that meet these criteria. We indicate the presence 
of other refinements by noting ``among other refinements'' after 
delineating the specific refinements for a particular service or group 
of services. For those comments that stated that an item was 
``necessary for the service'' and no additional rationale or evidence 
was provided, we conducted further review to determine whether the 
inputs as refined were appropriate and concluded that the inputs as 
refined were indeed appropriate.
    Further, in the CY 2013 PFS correction notice (78 FR 48996), we 
addressed several technical and typographical errors that respond to 
comments received. We do not repeat those comments nor provide our 
responses for those items here.
(1) Cross-Family Comments
    Comment: We received comments regarding refinements to equipment 
times for many procedures, in which commenters indicated that the 
equipment time for the procedure should include the time that the 
equipment is unavailable for other patients, including while preparing 
equipment, positioning the patient, assisting the physician, and 
cleaning the room.
    Response: As stated above, we agree with commenters that the 
equipment time should include the times within the intraservice period 
when a clinician is using the piece of equipment plus any additional 
time the piece of equipment is not available for use for another 
patient due to its use during the designated procedure. We believe that 
some of these commenters are suggesting that we should allocate the 
full number of clinical labor minutes included in the service period to 
the equipment items. However, as we have explained, the clinical labor 
service period includes minutes based on some clinical labor tasks 
associated with preservice and postservice activities that we do not 
believe typically preclude equipment items from being used in 
furnishing services to other patients because these activities 
typically occur in other rooms.
    The equipment times allocated to the CPT codes in Table 25 already 
include the full intraservice time the equipment is typically used in 
furnishing the service, plus additional minutes to reflect time that 
the equipment is unavailable for use in furnishing services to other 
patients.

Table 25--Equipment Inputs That Include Appropriate Clinical Labor Tasks
                   About Which Comments Were Received
------------------------------------------------------------------------
                CPT code                          Equipment items
------------------------------------------------------------------------
50590...................................  EQ175.
52214...................................  all items.
52224...................................  all items.
72040...................................  EL012.
72050...................................  EL012.
72052...................................  EL012.
72192...................................  EL007.
72193...................................  EL007.
72194...................................  EL007.
73221...................................  EL008.
73721...................................  EL008.
74150...................................  EL007.
74160...................................  EL007.
74170...................................  EL007.
74175...................................  EL007.
74177...................................  EL007.
74178...................................  EL007.
77301...................................  ER005.
78012...................................  ER063.
78013...................................  ER032.
78014...................................  EF010, ER063.
78070...................................  ER032.
78071...................................  ER032.
93925...................................  EL016.
93926...................................  EL016.
93970...................................  EL016.
------------------------------------------------------------------------

    Comment: Some commenters stated that selected items added to 
various CPT codes during clinical review by CMS were not typical. In 
Table 26, we list those services and items identified by commenters as 
atypical for the service. For each of these items, we note whether we 
maintained our refinement or removed the input based on commenter 
recommendation. In general,

[[Page 74310]]

we have accepted the comments to remove the items, except when we 
believed that doing so would deviate from our standard policies. 
Specifically, as we discuss above, we are maintaining standard times 
for clinical labor tasks; these include 10 minutes for ``clean surgical 
instrument package'' for CPT codes 11301-11313, the time for ``Assist 
physician in performing procedure'' to conform to physician time for 
CPT code 13150, and the equipment minutes used exclusively for the 
patient for ``lane, screening (oph)'' (EL006) for CPT codes 92081, 
92082, and 92083.

                                                 Table 26--Items Identified as Not Typical by Commenters
--------------------------------------------------------------------------------------------------------------------------------------------------------
                                               CMS code       Labor activity (if       AMA RUC            CMS           Commenter        CMS decision/
CPT code/ code range       CMS code          description          applicable)      recommendation     refinement     recommendation        rationale
--------------------------------------------------------------------------------------------------------------------------------------------------------
11301-11313.........  L037D............  RN/LPN/MTA.........  Clean Surgical                     1              10                 1  Maintain
                                                               Instrument                                                              refinement/
                                                               Package.                                                                Standard Time.
13150...............  L037D............  RN/LPN/MTA.........  Assist physician                  20              26                20  Maintain
                                                               in performing                                                           refinement/
                                                               procedure.                                                              Standard Time.
32554...............  SA067............  tray, shave prep...  ..................                 0               1                 0  Removed.
                      SB001............  cap, surgical......  ..................                 0               2                 0  Removed.
                      SB039............  shoe covers,         ..................                 0               2                 0  Removed.
                                          surgical.
32556...............  SA044............  pack, moderate       ..................                 0               1                 0  Removed.
                                          sedation.
                      SA067............  tray, shave prep...  ..................                 0               1                 0  Removed.
                      SB001............  cap, surgical......  ..................                 0               2                 0  Removed.
                      SB039............  shoe covers,         ..................                 0               2                 0  Removed.
                                          surgical.
                      SC010............  closed flush         ..................                 0               1                 0  Removed.
                                          system,
                                          angiography.
                      SH065............  sodium chloride      ..................                 0               1                 0  Removed.
                                          0.9% flush syringe.
                      SH069............  sodium chloride      ..................                 0               1                 0  Removed.
                                          0.9% irrigation
                                          (500-1000 ml uou).
32557...............  SB027............  gown, staff,         ..................                 0               1                 0  Removed.
                                          impervious.
                      SG078............  tape, surgical       ..................                 0              25                 0  Removed.
                                          occlusive 1 in
                                          (Blenderm).
67810...............  SB011............  drape, sterile,      ..................                 0               1                 0  Removed.
                                          fenestrated 16 in
                                          x 29 in.
72192...............  SK076............  slide sleeve (photo  ..................                 0               1                 0  Removed.
                                          slides).
                      SK098............  film, x-ray, laser   ..................                 0               8                 4  Removed.
                                          print.
72193...............  SH065............  sodium chloride      ..................                 0              15                 1  Removed.
                                          0.9% flush syringe.
                      SK076............  slide sleeve (photo  ..................                 0               1                 0  Removed.
                                          slides).
74150...............  SK076............  slide sleeve (photo  ..................                 0               1                 0  Removed.
                                          slides).
                      SK098............  film, x-ray, laser   ..................                 0               8                 4  Removed.
                                          print.
74160...............  SH065............  sodium chloride      ..................                 0              15                 1  Removed.
                                          0.9% flush syringe.
74170...............  SH065............  sodium chloride      ..................                 0              15                 1  Removed.
                                          0.9% flush syringe.
92081...............  EL006............  lane, screening      ..................                12              17                12  Maintain
                                          (oph).                                                                                       refinement/
                                                                                                                                       Standard Time.
92082...............  EL006............  lane, screening      ..................                22              27                22  Maintain
                                          (oph).                                                                                       refinement/
                                                                                                                                       Standard Time.
92083...............  EL006............  lane, screening      ..................                32              37                32  Maintain
                                          (oph).                                                                                       refinement/
                                                                                                                                       Standard Time.

[[Page 74311]]

 
93017...............  L051A............  RN.................  Complete                           0               4                 0  Removed.
                                                               diagnostic forms,
                                                               lab & X-ray
                                                               requisitions.
--------------------------------------------------------------------------------------------------------------------------------------------------------

(2) Integumentary System: Skin, Subcutaneous, and Accessory Structures 
(CPT Codes 11300, 11301, 11302, 11303, 11305, 11306, 11307, 11308, 
11310, 11311, 11312, 11313)
    In establishing interim final direct PE inputs for CY 2013, CMS 
refined the AMA RUC's recommendation for CPT codes 11300 (Shaving of 
epidermal or dermal lesion, single lesion, trunk, arms or legs; lesion 
diameter 0.5 cm or less), 11301 (Shaving of epidermal or dermal lesion, 
single lesion, trunk, arms or legs; lesion diameter 0.6 to 1.0 cm), 
11302 (Shaving of epidermal or dermal lesion, single lesion, trunk, 
arms or legs; lesion diameter 1.1 to 2.0 cm), 11303 (Shaving of 
epidermal or dermal lesion, single lesion, trunk, arms or legs; lesion 
diameter over 2.0 cm), 11305 (Shaving of epidermal or dermal lesion, 
single lesion, scalp, neck, hands, feet, genitalia; lesion diameter 0.5 
cm or less), 11306 (Shaving of epidermal or dermal lesion, single 
lesion, scalp, neck, hands, feet, genitalia; lesion diameter 0.6 to 1.0 
cm), 11307 (Shaving of epidermal or dermal lesion, single lesion, 
scalp, neck, hands, feet, genitalia; lesion diameter 1.1 to 2.0 cm), 
11308 (Shaving of epidermal or dermal lesion, single lesion, scalp, 
neck, hands, feet, genitalia; lesion diameter over 2.0 cm), 11310 
(Shaving of epidermal or dermal lesion, single lesion, face, ears, 
eyelids, nose, lips, mucous membrane; lesion diameter 0.5 cm or less), 
11311 (Shaving of epidermal or dermal lesion, single lesion, face, 
ears, eyelids, nose, lips, mucous membrane; lesion diameter 0.6 to 1.0 
cm), 11312 (Shaving of epidermal or dermal lesion, single lesion, face, 
ears, eyelids, nose, lips, mucous membrane; lesion diameter 1.1 to 2.0 
cm), and 11313 (Shaving of epidermal or dermal lesion, single lesion, 
face, ears, eyelids, nose, lips, mucous membrane; lesion diameter over 
2.0 cm) by removing ``electrocautery-hyfrecator, up to 45 watts'' 
(EQ110), and ``cover, probe (cryosurgery)'' (SB003), among other 
refinements.
    Comment: Commenters noted that there is an ``inherent and 
persistent risk of bleeding'' during these procedures, and that the 
electrocautery-hyfrecator needs to be readily available to prevent 
excessive blood loss and is typically included in the surgical field. 
These commenters explained that the item, ``cover, probe 
(cryosurgery)'' is the generic sterile sheath that covers the 
electrocautery-hyfrecator pen-handle and cable, and therefore required 
to be used with the electrocautery-hyfrecator.
    Response: In our clinical review, we reviewed the work vignettes 
for these procedures, which did not include the use of the 
electrocautery-hyfrecator as a part of the procedure. Although we 
acknowledge that the electrocautery-hyfrecator needs to be readily 
available during the procedure, we note that ``standby'' equipment, or 
items that are not used in the typical case, are considered indirect 
costs. For further discussion of this issue, we refer readers to our 
discussion of ``standby'' equipment in the CY 2001 PFS proposed rule 
(65 FR 44187). With regard to the ``cover, probe (cryosurgery)'', this 
item is a disposable supply that would only be used with each patient 
if the electrocautery-hyfrecator is in the sterile field during all 
procedures. We do not have information to suggest that the 
electrocautery-hyfrecator is typically in the sterile field, so we are 
not including the supply item ``cover, probe (cryosurgery)'' in the 
direct PE database for this service. After consideration of the 
comments received, we are finalizing the CY 2013 interim final direct 
PE inputs for 11300-11313 as established.
(3) Integumentary System: Repair (Closure) (CPT Codes 13100, 13101, 
13102, 13120, 13121, 13122, 13131, 13132, 13133, 13152, and 13153)
    In establishing interim final direct PE inputs for CY 2013, CMS 
refined the AMA RUC's recommendations for CPT codes 13100 (Repair, 
complex, trunk; 1.1 cm to 2.5 cm), 13101 (Repair, complex, trunk; 2.6 
cm to 7.5 cm), 13102 (Repair, complex, trunk; each additional 5 cm or 
less (list separately in addition to code for primary procedure)), 
13120 (Repair, complex, scalp, arms, and/or legs; 1.1 cm to 2.5 cm), 
13121 (Repair, complex, scalp, arms, and/or legs; 2.6 cm to 7.5 cm), 
13122 (Repair, complex, scalp, arms, and/or legs; each additional 5 cm 
or less (list separately in addition to code for primary procedure)), 
13131 (Repair, complex, forehead, cheeks, chin, mouth, neck, axillae, 
genitalia, hands and/or feet; 1.1 cm to 2.5 cm), 13132 (Repair, 
complex, forehead, cheeks, chin, mouth, neck, axillae, genitalia, hands 
and/or feet; 2.6 cm to 7.5 cm), 13133 (Repair, complex, forehead, 
cheeks, chin, mouth, neck, axillae, genitalia, hands and/or feet; each 
additional 5 cm or less (list separately in addition to code for 
primary procedure)), 13150 (Repair, complex, eyelids, nose, ears and/or 
lips; 1.0 cm or less), 13151 (Repair, complex, eyelids, nose, ears and/
or lips; 1.1 cm to 2.5 cm), 13152 (Repair, complex, eyelids, nose, ears 
and/or lips; 2.6 cm to 7.5 cm), and 13153 (Repair, complex, eyelids, 
nose, ears and/or lips; each additional 5 cm or less (list separately 
in addition to code for primary procedure)) by removing duplicative 
items, among other refinements.
    Comment: A few commenters argued that the majority of procedures 
reported using CPT codes 13100, 13101, 13120, 13121, 13131, 13132, 
13150, 13151, and 13153 are furnished under local anesthesia, delivered 
by subcutaneous injection, and therefore typically require ``needle, 
18-27g'' (SC029). Commenters also pointed out that the second ``gown, 
staff, impervious'' (SB027) and ``mask, surgical'' (SB033) are not 
duplicative, but required, because an assistant at surgery is allowed 
for these surgeries in some cases, and OSHA requirements mandate that 
health care workers be protected from blood exposure. Commenters stated 
that they did not believe these procedures could be furnished without 
these inputs.
    Response: Based on the rationale provided by commenters, we agree 
that the needle should be included as a direct PE input for this family 
of codes. However, we continue to believe that a second gown and mask 
are not typical because our claims data show that an assistant at 
surgery is rarely, if ever, used for these services.
    After consideration of the comments received, we are finalizing the 
CY 2013 interim final direct PE inputs for 13100-13153 with the 
additional refinement of incorporating the ``needle, 18-27g''

[[Page 74312]]

(SC029) as recommended by commenters.
(4) Integumentary System: Nails (CPT Code 11719)
    In establishing interim final direct PE inputs for CY 2013, we 
refined the AMA RUC recommendation for CPT code 11719 by adjusting the 
times allocated for clinical labor tasks as follows: ``Provide 
preservice education/obtain consent'' from 2 minutes to 1 minute, 
``Greet patient, provide gowning, assure appropriate medical records 
are available'' from 3 minutes to 1 minute, ``Prepare room, equipment, 
supplies'' from 2 minutes to 1 minute, and ``Clean room/equipment by 
physician staff'' from 3 minutes to 1 minute, among other refinements.
    Comment: A commenter objected to our refinements to this clinical 
labor task, and argued that one minute of ``provide preservice 
education/obtain consent'' is inadequate to review the advanced 
beneficiary notice (ABN) and answer patient questions. This commenter 
also objected to our decreasing the number of minutes associated with 
the other clinical labor activities to below the AMA-RUC recommended 
standard minutes.
    Response: We believe that the time assigned to ``provide preservice 
education/obtain consent'' appropriately reflects the resources 
required in furnishing the typical procedure and thus are not making 
the change requested, particularly since five minutes of preservice 
physician time are also included for the service. We also would not 
expect an ABN to be provided in the typical case. We agree with 
commenters that we should allocate the standard number of minutes for 
the remaining clinical labor activities and have adjusted the direct PE 
database accordingly.
    Comment: One commenter suggested that it was typical to position a 
patient in a power table/chair in lieu of an exam table when furnishing 
this service.
    Response: CMS clinical staff reviewed CPT code 11719 in the context 
of this comment. We do not believe that it is typical that a power 
table/chair would be used for these procedures. After considering the 
comments received, we are finalizing the CY 2013 interim final direct 
PE inputs for CPT code 11719 as established, with the exception of 
increasing the minutes assigned to clinical labor activities to the 
standard number of minutes.
(5) Arthrocentesis (CPT Codes 20600, 20605, 20610)
    In establishing direct PE inputs for CY 2013, we refined the AMA 
RUC's recommendations for CPT codes 20600 (Arthrocentesis, aspiration 
and/or injection; small joint or bursa (eg, fingers, toes), 20605 
(Arthrocentesis, aspiration and/or injection; intermediate joint or 
bursa (eg, temporomandibular, acromioclavicular, wrist, elbow or ankle, 
olecranon bursa)), and 20610 (Arthrocentesis, aspiration and/or 
injection; major joint or bursa (eg, shoulder, hip, knee joint, 
subacromial bursa)) by removing the minutes associated with the 
clinical labor activity ``discharge day management'' and replacing 
these minutes with ``conduct phone calls/call in prescriptions'' in the 
facility setting.
    Comment: Commenters requested clarification as to whether the time 
allocated for ``conduct phone calls/call in prescriptions'' is limited 
to the facility setting or is also included in the non-facility 
setting.
    Response: The AMA RUC recommendation included ``conduct phone 
calls/call in prescriptions'' in the nonfacility setting and we did not 
refine this recommendation. Therefore, this activity is included in the 
inputs for the nonfacility setting as well.
    Comment: One commenter suggested it was typical for a physician to 
position a patient in a power table/chair in lieu of an exam table when 
furnishing 20600 and 20605.
    Response: Our clinical staff reviewed CPT codes 20600 and 20605 in 
the context of this comment. We do not believe that it is typical that 
a power table/chair would be used for these procedures. After 
considering the comments received, we are finalizing the CY 2013 
interim final direct PE inputs for CPT codes 20600, 20605, and 20610 as 
established.
(6) Respiratory System: Accessory Sinuses (CPT Code 31231)
    In establishing interim final direct PE inputs for CY 2013, we 
refined the AMA RUC's recommendation for CPT code 31231 (Nasal 
endoscopy, diagnostic, unilateral or bilateral (separate procedure)) by 
removing the second ``endoscope, rigid, sinoscopy'' (ES013) from the 
inputs for the service, refining the equipment time to reflect typical 
use exclusive to the patient, and removing the time allocated to 
preservice clinical labor tasks, among other refinements.
    Comment: A commenter disagreed with our removal of the second 
endoscope, arguing that the second scope is medically necessary because 
the first scope (zero degree rigid scope) does not allow visualizing 
above or behind all the normal structures of the nasal vault such as 
superior turbinate and the frontal recess. The second scope (for 
example, a 30, 45 or 70 degree scope) is used more than 51 percent of 
the time.
    Response: We agree with the commenter that the second scope is used 
in the typical case, and based on this comment; we are adding the 
second scope to the direct PE inputs for the service.
    Comment: A commenter disagreed with our refinements to the 
equipment time for this service, and stated that the entire clinical 
labor service period time of 63 minutes, and at a minimum, 43 minutes, 
should be allocated to all equipment used in this procedure.
    Response: In general, for equipment that we do not consider to be 
highly technical, we allocate the entire service period time, with the 
exception of the time allocated for cleaning of other, portable pieces 
of equipment. Therefore, we agree with the commenter that the equipment 
times should be modified, but do not agree with the commenter that 63 
minutes should be allocated. Instead, we are modifying the time 
allocated for the equipment in this procedure by assigning 53 minutes 
to the instrument pack to reflect the intraservice time other than 
cleaning of the scopes, 48 minutes to the scopes to reflect the 
intraservice time other than the cleaning of the instrument pack, and 
38 minutes to the remaining equipment items, which reflects the entire 
intraservice clinical labor time except for the time allocated for 
cleaning the portable equipment items instrument pack and scope.
    Comment: Commenters argued that the preservice clinical labor tasks 
included in the RUC recommendation should have been maintained in this 
procedure.
    Response: This procedure is typically billed with an E/M service, 
and the preservice tasks are already included as direct PE inputs for 
the E/M services. Therefore, we believe that including these items 
again in CPT 31231 would be duplicative.
    After consideration of public comments, we are finalizing the CY 
2013 interim final direct PE inputs for 31231 as established with the 
additional refinements of adding in the second scope as an equipment 
item and adjusting the equipment times as discussed above.
(7) Respiratory System: Lungs and Pleura (CPT Codes 32554, 32555, and 
32557)
    In establishing interim final direct PE inputs for CY 2013, we 
refined the AMA RUC's recommendation for CPT codes 32554 (Removal of 
fluid from chest cavity), 32555 (Removal of fluid from

[[Page 74313]]

chest cavity with imaging guidance), and 32557 (Removal of fluid from 
chest cavity with insertion of indwelling catheter and imaging 
guidance), by inserting supply item ``kit, pleural catheter insertion'' 
(SA077) and refining the equipment times to reflect the typical use 
exclusive to the patient.
    Comment: Commenters indicated that a tunneled catheter is not used 
during this procedure, so that the pleural catheter insertion kit is 
not an accurate supply item to use as the thoracentesis kit (SA113). 
The commenter also pointed out that the price of the thoracentesis kit 
that appears in the direct PE input database appeared to be 
inaccurately priced at $260.59. The commenter pointed out that the 
price listed in the database reflects an invoice that includes ten 
units, so that the accurate price for the items is $26.06.
    Response: Based on the information provided by commenters, we agree 
that supply item ``Kit, thoracentesis'' (SA113) would be more 
appropriate than ``kit, pleural catheter insertion'' (SA077) and we 
agree that the correct price for the item is $26.06. We have updated 
this price in the direct PE input database accordingly.
    Comment: Commenters stated that the time allocated to equipment 
items ``room, ultrasound, general'' (EL015) and ``room, CT'' (EL007), 
as well as ``light, exam'' (EQ168) should reflect the time for tasks 
during which the room is not available to other patients; specifically, 
for CPT code 32555, 33 minutes should be assigned to EL015, and for CPT 
code 32557, 45 minutes should be assigned to EL007 and EQ168.
    Response: We agree with commenters that it is consistent with our 
stated policy to allocate time for highly technical equipment for 
preparing the room, positioning the patient, acquiring images, and 
cleaning the room. Therefore, for CPT code 32555, we are assigning 33 
minutes to ``room, ultrasound, general'' (EL015), and for CPT code 
32557, we are assigning 45 minutes to ``room, CT'' (EL007) and ``light, 
exam'' (EQ168).
    After reviewing the public comments received, we are finalizing the 
CY 2013 interim final direct PE inputs for CPT codes 32554, 32555, and 
32557 as established with the additional refinements of including and 
updating the price of the ``kit, thoracentesis'' (SA113) supply item 
and adjusting the equipment times as commenters recommended.
(8) Cardiovascular System: Heart and Pericardium (CPT Codes 33361, 
33362, 33363, 33364, 33365, and 33405)
    In establishing interim final direct PE inputs for CY 2013, we 
refined the AMA RUC's recommendation for CPT codes 33361, 33362, 33363, 
33364, and 33365 by refining the time allocated to clinical labor tasks 
in the preservice and postservice periods to be consistent with the 
standards for adjusted 000-day global services.
    Comment: Commenters stated that these services are furnished in a 
facility setting, requiring a fully equipped operating room or hybrid 
suite. The commenter detailed the various clinical labor tasks that are 
needed for these procedures, and noted that the requirements are 
similar to those of 90-day global procedures.
    Response: We agree with commenters that it would be appropriate to 
allocate the standard 90-day global clinical labor inputs for these 
services. After consideration of public comments, we are finalizing the 
CY 2013 interim final direct PE inputs for CPT codes 33361-33365 as 
established, with the additional refinement of replacing the current 
times for clinical labor tasks with those of the standard 90-day global 
inputs.
    We also refined the direct PE inputs for CPT code 33405 by removing 
the clinical labor activity, ``Additional coordination between multiple 
specialties for complex procedures (tests, meds, scheduling, etc.) 
prior to patient arrival at site of service.''
    Comment: A commenter stated that inclusion of the time allocated 
for this additional coordination activity is consistent with other 
major surgical procedures, and that removing it would create an anomaly 
with other cardiac procedures.
    Response: We do not agree that it is appropriate to include these 
``additional coordination'' tasks as inputs to this procedure. We thank 
the commenter for bringing to our attention the potential anomaly 
created by having this activity included in other procedures and will 
consider any relativity issues regarding clinical labor preservice 
minutes allocated for other procedures in future rulemaking. After 
consideration of the comments received, we are finalizing the CY 2013 
direct PE inputs for CPT code 33405 as established.
(9) Cardiovascular System: Arteries and Veins (CPT Codes 36221, 36222, 
36223, 36224, 36225, 36226, 36227, 36228, and 37197)
    In establishing interim final direct PE inputs for CY 2013, we 
refined the AMA RUC's recommendation for CPT codes 36221 (Insertion of 
catheter into chest aorta for diagnosis or treatment), 36222 (Insertion 
of catheter into neck artery for diagnosis or treatment), 36223 
(Insertion of catheter into neck artery for diagnosis or treatment), 
36224 (Insertion of catheter into neck artery for diagnosis or 
treatment), 36225 (Insertion of catheter into chest artery for 
diagnosis or treatment), 36226 (Insertion of catheter into chest artery 
for diagnosis or treatment), and 36227 (Insertion of catheter into neck 
artery for diagnosis or treatment) by substituting equipment item 
``table, instrument, mobile'' (EF027) for equipment item ``Stretcher'' 
(EF018), refining equipment time to reflect typical use exclusive to 
the patient for equipment items ``room, angiography'' (EL011), 
``contrast media warmer'' (EQ088), and ``film alternator (motorized 
film viewbox)'' (ER029), and removing the recommended minutes based on 
the clinical labor task described as ``image post processing'' from CPT 
code 36221, among other refinements.
    Comment: Commenters stated that they believed that the removal of 
the stretcher was an error because a stretcher is necessary for these 
cerebral angiography codes and requested that the stretcher be included 
as an input for these procedures.
    Response: We do not agree with commenters that it is appropriate to 
include a stretcher for this family of codes. The inclusion of a 
stretcher is not consistent with the AMA RUC-recommended standardized 
nonfacility direct PE inputs that account for moderate sedation as 
typically furnished as a part of such service, which we used as the 
basis for proposing and finalizing a standard package of direct PE 
inputs for moderate sedation during CY 2012 rulemaking. For further 
discussion of this issue, we refer readers to the CY 2012 PFS rule (76 
FR 73044).
    Comment: Commenters stated the CMS refinement for equipment minutes 
was inappropriate, and that the equipment time for ``room, 
angiography'' (EL011), ``contrast media warmer'' (EQ088), and ``film 
alternator (motorized film viewbox)'' (ER029) should include the 
clinical labor tasks of ``prepare room,'' ``prepare and position 
patient,'' ``sedate patient,'' ``assist physician/acquire images,'' and 
``clean room.'' Specifically, commenters requested that we adjust the 
time for all equipment items as follows: 49 minutes for CPT code 36221, 
59 minutes for CPT code 36222, 64 minutes for CPT code 36223, 69 
minutes for CPT code 36224,

[[Page 74314]]

64 minutes for CPT code 36225, and 69 minutes for CPT code 36226.
    Response: We agree with commenters that the time allocated to the 
equipment should account for these tasks. We are adjusting the 
equipment times for ``room, angiography'' (EL011), ``contrast media 
warmer'' (EQ088), and ``film alternator (motorized film viewbox)'' 
(ER029) to those identified by the commenters and described above.
    Comment: A commenter noted that ``image post processing'' often 
appears as a clinical labor task activity on the PE worksheet and that 
the task is integral to patient care for the services described by 
these codes. Commenters requested that we include these clinical labor 
tasks for these procedures.
    Response: Upon further review of similar codes, we agree with the 
commenter that it is consistent with other services in this family to 
include clinical labor minutes based on the ``image post processing'' 
task. After consideration of public comments, we are finalizing the CY 
2013 interim final direct PE inputs for CPT codes 36221-36227 as 
established with the additional refinements of the adjusted equipment 
and clinical labor times noted above.
    We also refined the AMA RUC's recommendation for direct PE inputs 
for CPT code 36228 (Insertion of catheter into neck artery for 
diagnosis or treatment) by removing 1 minute of clinical labor time, 
based on the task called ``prepare room, equipment, and supplies,'' and 
1 minute for ``assisting with fluoroscopy/image acquisition.'' We also 
refined the recommendation by not including the supply item ``syringe, 
5-6 ml'' (SC075).
    Comment: Commenters stated that the additional minute for ``prepare 
room, equipment, and supplies'' is necessary for this add-on code. They 
also requested that we adjust the time for acquiring images as well. 
Commenters also stated that the syringe is necessary to safely inject 
micro-catheters and should be included.
    Response: We do not agree with commenters that an additional minute 
should be added to the clinical labor time for this add-on code to 
account for additional time to ``prepare the room, equipment, and 
supplies.'' As we stated in the CY 2013 PFS final rule with comment 
period (77 FR 68933), we believe that preparing the room would not 
typically be duplicated when furnishing a subsequent procedure to the 
same patient on the same day, and we believe that the standard number 
of minutes allocated on the basis of the clinical labor task accounts 
for the typical amount time spent preparing the items for the primary 
procedure, regardless of whether or not a separate code is reported for 
some cases. However, based on the commenters' explanation, we agree 
that an additional minute for image acquisition is typical when the 
add-on code is reported. We also agree that the syringe is necessary 
for this procedure.
    After reviewing public comments received, we are finalizing the CY 
2013 direct PE inputs for CPT code 36228 as established with the 
additional refinements to the clinical labor and supply items noted 
above.
    In establishing interim final direct PE inputs for CY 2013, we 
refined the AMA RUC's recommendation for CPT code 37197 (Retrieval of 
intravascular foreign body) by removing equipment items ``ultrasound 
unit, portable'' (EQ250) and ``contrast media warmer'' (EQ088), and 
supply items ``sheath-cover, sterile, 96in x 6in (transducer)'' 
(SB048), ``catheter, (Glide)'' (SD147), ``guidewire, Amplatz wire 260 
cm'' (SD252), and ``sodium chloride 0.9% flush syringe'' (SH065).
    Comment: Commenters indicated that the portable ultrasound unit is 
necessary to gain vascular access, the contrast media warmer is 
necessary for the procedure, and the supply items we refined from the 
AMA RUC recommendation are also required for the procedures since the 
foreign body cannot be removed without these items.
    Response: We do not agree that the portable ultrasound unit should 
be included as a direct PE input for this procedure. The CPT 
description of this code states that either fluoroscopy or ultrasound 
is used; the angiography room accounts for the resources associated 
with fluoroscopy. When fluoroscopy is used, these resources are 
appropriately accounted for. In the event that a portable ultrasound 
unit is used in place of fluoroscopy, the resource costs would be 
significantly overestimated, since a portable ultrasound unit is far 
less expensive than the angiography room. Therefore, we continue to 
believe that the PE inputs adequately account for the resource costs 
used for imaging in this procedure. We also continue to believe that 
the supply items we refined from the AMA RUC recommendation are 
duplicative since the inputs for this service already include supply 
items that are used for removing the foreign body during the procedure. 
We agree with commenters that the contrast media warmer should be 
included in the procedure, and are including this equipment item as a 
direct PE input for this service.
    After consideration of these comments, we are finalizing the CY 
2013 interim final direct PE inputs for CPT code 37197 as established 
with the additional refinement of adding the equipment item ``contrast 
media warmer'' (EQ088), as noted above.
(10) Digestive System: Intestines (Except Rectum) (CPT Code 44705 and 
HCPCS Code G0455)
    In establishing interim final direct PE inputs for CY 2013, CMS 
crosswalked the inputs from 44705 (Prepare fecal microbiota for 
instillation, including assessment of donor specimen) to G0455 
(Preparation with instillation of fecal microbiota by any method, 
including assessment of donor specimen), and incorporated a minimum 
multi-specialty visit pack (SA048) and an additional 17 minutes of 
clinical labor time in the service period based on the amount of time 
allocated for clinical labor tasks in the direct PE inputs for E/M 
services. In the CY 2013 final rule with comment period, we noted that 
Medicare would only pay for the preparation of the donor specimen if 
the specimen is ultimately used for the treatment of a beneficiary. 
Accordingly, we bundled preparation and instillation into a HCPCS code, 
G0455, to be used for Medicare beneficiaries instead of the new CPT 
code 44705 (Preparation of fecal microbiota for instillation, including 
assessment of donor specimen), which we assigned a PFS procedure status 
indicator of I (Not valid for Medicare purposes). G0455 includes both 
the work of preparation and instillation of the microbiota.
    Comment: A commenter asserted that CMS listed G0455 as having a PE 
RVU of 2.48 without explaining how this value was derived.
    Response: In the CY 2013 PFS final rule with comment period (77 FR 
69073), we described how we established the direct PE inputs for G0455. 
Specifically, we stated that we used the AMA RUC-recommended 
nonfacility PE inputs for CPT code 44705, in addition to 17 minutes of 
clinical labor time and a ``minimum multi-specialty visit pack'' 
(SA048), to account for both the preparation and instillation. The PE 
RVU of 2.48 results from the standard methodology outlined in PFS rules 
in the section entitled ``Resource-Based Practice Expense (PE) Relative 
Value Units (RVUs)'' (see, for example, 77 FR 68899). After 
consideration of the public comment, we are finalizing the interim 
final direct PE inputs for HCPCS code G0455 as established.
(11) Digestive System: Biliary Tract (CPT Codes 47600 and 47605)
    In establishing interim final direct PE inputs for CY 2013, we 
refined the AMA

[[Page 74315]]

RUC's recommendation for CPT codes 47600 (Removal of gallbladder) and 
47605 (Removal of gallbladder with X-ray study of bile ducts) by 
replacing the supply item ``pack, post-op incision care (suture & 
staple)'' (SA053) with supply item ``pack, post-op incision care 
(suture)'' (SA054).
    Comment: Commenters stated that although sutures and staples are 
sometimes both used, at a minimum, staples are used in this procedure. 
Therefore, commenters requested that, as a minimum, we include the 
staple removal pack.
    Response: We agree with the commenters that the staple removal pack 
(SA052) should be included instead of the suture pack. After 
consideration of these comments, we are finalizing the CY 2013 interim 
final direct PE inputs for CPT codes 47600 and 47605 as established, 
with the additional refinement of substituting the staple removal pack 
(SA052) for the suture removal pack (SA054).
(12) Urinary System: Bladder (CPT Codes 52214, 52224, and 52287)
    In establishing the interim final direct practice expense inputs 
for CY 2013 for CPT code 52214, we refined the AMA RUC recommendation 
to remove supply items ``drape-towel, sterile, 18in x 26in'' (SB019),'' 
``lidocaine 1%-2% inj (Xylocaine)'' (SH047), and ``penis clamp.''
    Comment: Commenters indicated that the supply item ``drape-towel, 
sterile, 18in x 26in,'' is used on the instrument table and that the 
supply item ``lidocaine 1%-2% inj (Xylocaine)'' (SH047), is used to 
instill into the bladder as a numbing agent. Commenters also indicated 
that the item ``penis clamp'' is required to keep the lidocaine in the 
penile urethra.
    Response: We agree with commenters that the drape towel and 
lidocaine should be included in this procedure. However, we do not 
agree that the reusable penis clamp, even when typically used, should 
be included in the direct PE input database for this procedure. Since 
the item is reusable, the resource cost associated with the item is not 
considered to be a direct PE supply input. Given the price associated 
with the item, the cost per minute over several years of useful life 
becomes negligible relative to the other costs accounted for in the PE 
methodology. We refer readers to a discussion of equipment items under 
$500 in the NPRM for CY 2005 (69 FR 47494). We note that including such 
items as equipment in the direct PE input database would not impact the 
PE RVU values.
    In establishing the interim final direct practice expense inputs 
for CY 2013, we refined the AMA RUC recommendation for CPT code 52224 
by adjusting the equipment time for ``fiberscope, flexible, 
cystoscopy'' (ES018) to 94 minutes, adjusting the clinical labor 
activity ``prepare biopsy specimen'' to 2 minutes, and adjusting the 
quantity of the supply item ``gloves, sterile'' (SB024) to 1 pair, and 
``cup, biopsy-specimen sterile 4oz'' (SL036) to 3, among other 
refinements.
    Comment: Commenters stated that the time for this equipment item 
should include all standard tasks, in addition to the cleaning of the 
scope. Commenters also noted that, depending upon the number of 
biopsies, the preparation of the specimen can take more than 2 minutes, 
that a minimum of 3 pairs of gloves are required, and that biopsy 
specimens are submitted in several containers.
    Response: We re-examined the time for the fiberscope and agree with 
commenters that the time should include all time associated with 
standard tasks and cleaning the scope. We are therefore adjusting the 
time for this equipment item to 97 minutes. We continue to believe that 
2 minutes represents the typical time required to prepare the specimen 
and are not adjusting the time. We agree with commenters that more than 
1 pair of gloves may be required; however, since a biopsy is not 
required in all cases, we believe that 2 pairs of gloves accounts for 
the resources used in furnishing the typical service. Finally, we 
continue to believe that 3 containers represent the typical resources 
used in furnishing this procedure given the small size of the lesions. 
After considering the comments received, we are finalizing the CY 2013 
interim final direct PE inputs for CPT code 52224 as established with 
the additional refinement of adjusting the equipment time to account 
for cleaning the scope, and adding one pair of gloves, as noted above.
    In establishing interim final direct PE inputs for CY 2013, we 
refined the AMA RUC's recommendation for CPT code 52287 by adjusting 
the time for the clinical labor activity ``assist physician in 
performing procedure'' from 20 minutes to 21 minutes to conform to the 
physician intraservice time, and refining the equipment time to reflect 
the typical use exclusive to the patient.
    Comment: The AMA RUC stated that its original submission to CMS 
contained 21 minutes for this clinical labor activity. Another 
commenter noted that the times allocated to preservice clinical labor 
tasks were missing in the nonfacility setting. Another commenter stated 
that the equipment time should include the time for all of the standard 
clinical labor tasks.
    Response: We note that the AMA RUC and CMS agree on the appropriate 
number of minutes to assign to the clinical labor service period to 
account for ``assist physician.'' Regarding the preservice clinical 
labor tasks, we note that the AMA RUC did not recommend preservice 
clinical labor time for these tasks in the nonfacility setting, and 
that such inputs are not standard for 000-day global services. With 
respect to equipment time, we agree with commenters that the equipment 
time for all equipment in this procedure should include time for all of 
the standard clinical labor tasks, with the exception of the time 
allocated for cleaning of the scope. The times for the equipment items 
included in CPT code 52287 already include all of these tasks, with the 
exception of ``fiberscope, flexible, cystoscopy'' (ES018). We are 
adjusting time for the scope from 76 to 78 minutes to align the 
equipment time with that of the standard clinical labor tasks.
    After considering the comments received, we are finalizing the CY 
2013 interim final direct PE inputs for CPT code 52287 as established 
with the additional refinement of adjusting the equipment time as noted 
above.
(13) Transurethral Destruction of Prostate Tissue (CPT Code 53850)
    In establishing interim final direct PE inputs for CY 2013, we 
refined the AMA RUC's recommendation for CPT code 53850 by refining 
equipment time to reflect typical use exclusive to the patient.
    Comment: A commenter stated that the equipment time should include 
the time for all of the standard clinical labor tasks.
    Response: We agree with the commenter that the equipment time for 
all equipment in this procedure should include time for all of the 
standard clinical labor tasks, and we are allocating the entire service 
period of 99 minutes for ``stretcher, endoscopy'' (EF020), ``table, 
instrument, mobile'' (EF027), ``TUMT system control unit'' (EQ037), and 
``ultrasound unit, portable'' (EQ250), which are used during the 
service period only. In addition, we are allocating 169 minutes for 
items used during both the service period and postservice period, which 
are ``table, power'' (EF031) and ``light, exam'' (EQ168), to account 
for both the service period and postservice period.
    We also refined the AMA recommendation for this code by not 
assigning additional clinical labor

[[Page 74316]]

minutes for non-standard clinical labor tasks described as ``setup 
ultrasound probe,'' ``setup TUMT machine,'' and ``clean TUMT machine.''
    Comment: The same commenter also stated that the clinical labor 
tasks were necessary because extra time was required.
    Response: We do not agree that the time for these clinical labor 
tasks is reflective of typical resource costs involved in furnishing 
the service. For this procedure the assigned clinical labor time 
already includes the standard number of minutes for set-up and clean-
up, and the commenter provided no information justifying a deviation 
from these standard times for this procedure.
    Comment: A commenter stated that there is no preservice clinical 
staff time assigned for the nonfacility, and that the clinical labor 
time should account for tasks such as ``setting up the room,'' 
``greeting patient,'' and ``position patient prior to the procedure.''
    Response: The clinical labor tasks referred to by the commenter are 
tasks generally included in service period activities; the preservice 
clinical staff time that is included when the procedure is done in the 
facility includes scheduling and coordination services that are unique 
to procedures furnished in facility settings. The service period time 
for this procedure includes minutes allocated for clinical labor tasks 
such as ``greet patient,'' ``provide gowning,'' ``ensure appropriate 
medical records are available,'' and ``prepare and position patient.'' 
Therefore, we are not making a change at this time and are finalizing 
the CY 2013 interim final direct PE inputs for CPT code 53850, 
including the clinical labor tasks, as established.
(14) Nervous System: Extracranial Nerves, Peripheral Nerves, and 
Autonomic Nervous System (CPT Code 64615)
    In establishing interim final direct PE inputs for CY 2013, we 
accepted the AMA RUC's recommendation for CPT code 64615 (Injection of 
chemical for destruction of facial and neck nerve muscles).
    Comment: A commenter questioned why this service had only 3 minutes 
of postservice clinical labor time, while other codes in the family 
have 27 or 30 minutes.
    Response: The apparent discrepancy between CPT code 64615 and the 
other codes in the family results because CPT 64615 does not have any 
post-operative visits in the global period while the other codes in the 
family have post-operative visits. Specifically, the 30 minutes of 
postservice clinical labor time in 64612 are allocated specifically for 
the post-operative visits. After consideration of public comment, we 
are finalizing the CY 2013 interim final direct PE inputs for CPT code 
64615 as established.
(15) Diagnostic Radiology: Abdomen and Pelvis (CPT Codes 72191, 72192, 
72193, 72194, 74150, 74160, 74170, 74175, 74176, 74177, 74178)
    In establishing interim final direct PE inputs for CY 2013, we 
reviewed the direct PE inputs for all of the abdomen, pelvis, and 
abdomen/pelvis combined CT codes. For each set of codes, we established 
a common set of disposable supplies and medical equipment. We 
established clinical labor minutes that reflect the fundamental 
assumption that the component codes should include a base number of 
minutes for particular tasks, and that the number of minutes in the 
combined codes should reflect efficiencies that occur when the regions 
are examined together. Among other refinements, we adjusted the 
intraservice time for CPT codes 72194, 74160, and 74177 by 2 minutes, 4 
minutes, and 6 minutes respectively.
    Comment: Commenters stated that more information was required about 
from where CMS decreased the minutes from the service period for CPT 
codes 72194, 74160, and 74177.
    Response: We refined the minutes in the service period such that 
the aggregate number of clinical labor minutes reflected in the direct 
PE input database and used to develop PE RVUs was consistent within 
this family of codes. We believe that the aggregate clinical labor time 
in each clinical service period (preservice period, service period, and 
postservice period) or aggregate number of minutes for particular 
equipment items that reflects the total typical resource use is more 
important than the minutes associated with each clinical labor task, 
which are a tool used by the AMA RUC to develop their recommendations. 
We hope that in reviewing future services, commenters consider the 
aggregate clinical labor time as well, recognizing that it is the 
aggregate time that ultimately has implications for payment. Finally, 
we welcome comments that address the appropriateness of the number of 
clinical labor minutes in each service period and the number of 
equipment minutes for each service.
    In this refinement process, we also removed supply item ``needle, 
18-27g'' (SC029) and replaced it with ``needle, 14-20g, biopsy'' 
(SC025) for CPT codes 72193, 72194, 74160, and 74170.
    Comment: Commenters stated that the biopsy needle (SC025) was not 
appropriate for these services, and that supply item ``needle, 18-27g'' 
(SC029) would be more appropriate. In addition, commenters noted that 
the ``film processor'' (ED024) is in use during a portion of the 
service.
    Response: We agree with commenters that the ``needle, 18-28g'' 
(SC029) is more appropriate for these services, and that the film 
processor should be included for these codes. We are adjusting the 
direct PE inputs to include the needle and film processor in CPT codes 
72193, 72194, 74160, and 74170.
    In refining the direct PE inputs, we also substituted a radiologic 
technologist for a CT technologist for CPT codes 72191 and 74175, and 
removed the clinical labor time for ``Retrieve prior appropriate 
imaging exams and hang for MD review, verify orders, review the chart 
to incorporate relevant clinical information'' from 72191, 74170, and 
74175.
    Comment: Commenters stated that a CT technologist was the typical 
clinical labor type for these CT procedures. Commenters also objected 
to the removal of recommended minutes based on the clinical labor 
activity ``Retrieve prior appropriate imaging exams and hang for MD 
review, verify orders, review the chart to incorporate relevant 
clinical information'' from CPT codes 72191, 74170, and 74175, and to 
the reduction of preservice and intraservice clinical labor time in 
this family of codes.
    Response: Based on the information provided by commenters, we agree 
that CPT codes 72191 and 74175 should include a CT technologist rather 
than a radiologic technologist for CPT codes 72191 and 74175 because 
the CT technologist is typical. However, we do not agree that the 
clinical labor time should be changed per the commenters' request, as 
we continue to believe that these tasks are already captured in the 
preservice clinical labor time. We refer readers to the CY 2013 PFS 
final rule with comment period (77 FR 69073) for a discussion of the 
development of a standard allocation of inputs for these families of 
codes.
    For CPT code 72191, we refined the time for equipment item ``room, 
CT'' (EL007) to 40 minutes.
    Comment: Commenters stated that the CT room time for should be at 
least 43 minutes to include time for cleaning the room.
    Response: We agree with commenters that the time for the CT room 
should be 43 minutes to include the standard clinical labor tasks for 
highly technical equipment, including cleaning the room.

[[Page 74317]]

    After considering the comments received, we are finalizing the CY 
2013 interim final direct PE inputs for CPT codes 72193, 72194, 73221, 
73721, 74150, 74160, 74170, 74175, 74176, and 74177 as established with 
the additional refinements of the supply item, changes to clinical 
labor staff type, and equipment time noted above.
(16) Diagnostic Ultrasound: Transvaginal and Transrectal Ultrasound 
(CPT Codes 76830 and 76872)
    In establishing interim final direct PE inputs for CY 2013, we 
refined the AMA RUC's recommendation for CPT code 76830 by removing the 
equipment item ``room, ultrasound, general'' (EL015) and replacing it 
with individual items including a portable ultrasound unit.
     Comment: A commenter noted that a panel of obstetrician/
gynecologists, a specialty that frequently furnishes this service, 
indicated that a dedicated ultrasound room was used.
    Response: Based on the comments we received, we agree that it would 
be more appropriate to allocate a general ultrasound room for this 
procedure rather than a portable ultrasound unit and accompanying 
items. We are including the ultrasound room as a direct PE input for 
CPT code 76830.
    In refining the inputs for CPT code 76830, we also removed ``film 
alternator (motorized film viewbox)'' (ER029), ``Surgilube lubricating 
jelly'' (SJ033), and ``film processor, dry, laser'' (ED024).
    Comment: Another commenter stated that the film alternator and 
Surgilube lubricating jelly are required; however, the specialty that 
most frequently furnishes the service stated that they did not use 
either of these items.
    Response: We continue to believe that neither the film alternator 
nor the lubricating jelly should be included for this service as, and 
after considering the comments from the specialty that most frequently 
furnishes the service, we agree that these are not used in the typical 
case.
    After considering the comments received, we are finalizing the CY 
2013 interim final direct PE inputs for CPT code 76830 as established 
with the additional refinement of allocating a general ultrasound room 
and removing individual inputs related to a portable ultrasound unit.
    In establishing interim final direct PE inputs for CY 2013, we 
refined the AMA RUC's recommendation for CPT code 76872 by adjusting 
the equipment time to reflect the typical use exclusive to the patient, 
and removing clinical labor tasks, ``obtain vital signs,'' and 
``prepare ultrasound probe'' from the preservice period; removing 
``obtain vital signs'' from the service period; and removing supply 
items ``drape, sterile, for Mayo stand'' (SB012), ``iv tubing 
(extension)'' (SC019), ``lidocaine 2% jelly, topical (Xylocaine)'' 
(SH048), ``alcohol isopropyl 70%'' (SJ001), ``lubricating jelly (K-Y) 
(5gm uou)'' (SJ032), ``glutaraldehyde 3.4% (Cidex, Maxicide, 
Wavicide)'' (SM018), ``glutaraldehyde test strips (Cidex, Metrex)'' 
(SM019), and ``sanitizing cloth-wipe (surface, instruments, 
equipment)'' (SM022).
    Comment: Commenters indicated that the equipment time allocated for 
this procedure should be 68 minutes to reflect the time that the 
equipment is unavailable for other patients.
    Response: We agree with commenters that the equipment time for all 
equipment in this procedure should include time for all of the standard 
clinical labor tasks in the service period, so we are allocating 42 
minutes for those equipment items.
    Comment: Commenters noted that it is necessary to obtain vital 
signs prior to the service, and that the supplies were necessary for a 
variety of purposes outlined in the comment.
    Response: We do not agree that it is necessary to obtain vital 
signs in the preservice period in order to determine if the patient 
becomes hypotensive during the service period, but agree that obtaining 
vital signs in the service period is necessary. We note that we have 
standard setup times for equipment and do not generally allocate 
separate time for preparing individual pieces of equipment. After 
considering the information provided by the commenters, we are 
persuaded that the supplies that were removed are necessary for the 
procedure. Therefore, we are including 3 additional minutes in the 
service period and reinstating the supplies that we removed from the 
procedure in establishing interim final direct PE inputs.
    After considering comments received, we are finalizing the CY 2013 
interim final direct PE inputs for CPT code 76872 as established with 
the additional refinement of adjusting equipment time and incorporating 
supply items as noted above.
(17) Radiation Oncology: Medical Radiation Physics, Dosimetry, 
Treatment Devices, and Special Services (CPT Code 77301)
    In establishing interim final direct PE inputs for CY 2013, we 
refined the AMA RUC's recommendation for CPT code 77301 by removing 
equipment item ``computer system, record and verify'' from the service, 
adjusting the equipment time for ``treatment planning system, IMRT 
(Corvus w-Peregrine 3D Monte Carlo)'' from 376 to 330, among other 
refinements previously discussed in the context of our discussion of 
general refinements.
    Comment: Commenters indicated that the minutes used for the 
computer system are not captured elsewhere and should be included in 
the service, and that there is physician time independent of clinical 
staff time for the treatment planning system.
    Response: The computer system was not previously an input for this 
service, and the commenter did not provide sufficient information or 
evidence for us to conclude that there should be a change. We also note 
that this service has both a technical and professional component; the 
professional component has no inputs, and the equipment time associated 
with the physician time is not appropriately placed in the technical 
component. Thus, the equipment time is allocated for the technical 
component only.
    After considering public comments, we are finalizing the CY 2013 
interim final direct PE inputs for CPT code 77301 as established.
(18) Nuclear Medicine: Diagnostic (CPT Code 78072)
    In establishing interim final direct PE inputs for CY 2013, we were 
unable to price the new equipment item ``gamma camera system, single-
dual head SPECT/CT'' for CPT code 78072 (Parathyroid planar imaging 
(including subtraction, when performed); with tomographic (SPECT), and 
concurrently acquired computed tomography (CT) for anatomical 
localization)) since we did not receive any paid invoices. Because the 
cost of the item that we were unable to price is disproportionately 
large relative to the costs reflected by remainder of the recommended 
direct PE inputs, we contractor priced the technical component of the 
code for CY 2013, on an interim basis, until the newly recommended 
equipment item could be appropriately priced.
    Comment: A commenter indicated that it would provide necessary 
documentation so that CMS can establish a price for the new SPECT/CT 
equipment item associated with CPT code 78072. We received 4 paid 
invoices for the SPECT/CT equipment.
    Response: Out of the four invoices we received, we were only able 
to use one of them to price the equipment because the other three 
included training and other costs as part of the overall equipment 
price. Since training and these other costs are not considered part of 
the price of the equipment in the

[[Page 74318]]

current PE methodology, we are unable to use invoices when these items 
are not separately priced on the invoice. Based on the invoice that met 
our criteria, this equipment is priced at $600,272. We are assigning 92 
minutes based on our standard allocation for highly technical 
equipment, to include ``prepare room, prepare and position patient, 
administer radiopharmaceutical, acquire images, complete diagnostic 
forms, and clean room.'' After reviewing the comments received, we are 
establishing interim final direct PE inputs for CPT code 78082 and, 
rather than contractor price the code as we did in 2013, we are pricing 
this code under the PFS on an interim final basis for CY 2014.
(19) Pathology and Laboratory: Chemistry (CPT Code 86153)
    In establishing interim final direct PE inputs for CY 2013, we 
refined the AMA RUC's recommendation for CPT code 86153 (Cell 
enumeration using immunologic selection and identification in fluid 
specimen (eg, circulating tumor cells in blood)) by valuing the service 
without direct practice expense inputs.
    Comment: Commenters requested that we include direct PE inputs for 
CPT code 86153, explaining that in the majority of cases, CPT code 
86152 is submitted without an accompanying 86153 code. Commenters noted 
that there are clinical labor tasks furnished by a laboratory 
technician for this service.
    Response: CPT code 86153 is a professional component-only CPT code 
that is a ``clinical laboratory interpretation service,'' which is one 
of the current categories of PFS physician pathology services. For this 
category of services, only services billed with a ``26'' modifier may 
be paid under the PFS; the technical component of these services is 
paid under the Clinical Lab Fee Schedule (CLFS). Generally, under the 
PFS, RVUs for services billed with a ``26'' modifier do not include 
direct PE inputs, since the development of the RVUs for such codes 
incorporate all associated direct PE inputs in the RVUs for the 
technical component of the service. When the corresponding laboratory 
service is billed under the CLFS, the payment accounts for the resource 
costs involved in furnishing the laboratory service, including the 
kinds of costs described by the items in the direct PE input database. 
In addition, we do not believe that it would serve appropriate 
relativity to include direct PE inputs for professional component 
services only when the corresponding technical component payment is 
made through a different Medicare payment system. After consideration 
of public comment, we are finalizing our CY 2013 interim final 
valuation of this service as established.
(20) Pathology and Laboratory: Surgical Pathology (CPT Codes 88300, 
88302, 88304, 88305, 88307, 88309)
    In establishing interim final direct PE inputs for CY 2013, we 
refined the AMA RUC's recommendation for CPT codes 88300, 88302, 88304, 
88305, 88307, and 88309 (Surgical Pathology, Levels I through VI), by 
not including new supply items ``specimen, solvent, and formalin 
disposal cost,'' and ``courier transportation costs'' and new equipment 
items called ``equipment maintenance cost,'' ``Copath System with 
maintenance contract,'' and ``Copath software.'' We stated in the CY 
2013 final rule with comment period that we would consider additional 
information from commenters regarding whether the Copath computer 
system and associated software should be considered a direct cost as 
medical equipment associated with furnishing the technical component of 
these surgical pathology services. We stated that we were especially 
interested in understanding the clinical functionality of the equipment 
in relation to the services being furnished. We also sought additional 
public comment regarding the appropriate assumptions regarding the 
direct PE inputs for these services, as well as independent evidence 
regarding the appropriate number of blocks to assume as typical for 
each of these services. We requested public comment regarding the 
appropriate number of blocks and urged the AMA RUC and interested 
medical specialty societies to provide corroborating, independent 
evidence that the number of blocks assumed in the current direct PE 
input recommendations is typical prior to finalizing the direct PE 
inputs for these services.
    Comment: Commenters generally rejected the notion that the items 
CMS did not accept for this family of codes are indirect costs and 
asked for a basis for CMS's statement that disposal costs are accounted 
for in the indirect PE allocation. A commenter asserted that it is 
extremely rare for CMS to not accept direct PE inputs recommended by 
the AMA RUC.
    Response: As we noted above and in the CY 2014 PFS proposed rule 
(78 FR 43292), within the PE methodology all costs other than clinical 
labor, disposable supplies, and medical equipment are considered 
indirect costs. We note that we frequently refine direct PE 
recommendations from the AMA RUC and address these refinements through 
rulemaking. Below, we respond to the specific statements by commenters 
regarding particular items not accepted as direct inputs.
    Comment: Commenters stated that specimen, solvent, and formalin 
disposal costs are variable costs that can be allocated to individual 
specimens, and noted that these costs are not captured in surveys of 
indirect costs used for the PFS. Commenters asserted that these costs 
are proportional to the number of specimens processed each day, and are 
directly attributable to each case by specimen size and the number of 
tissue blocks associated with that specimen. Commenters pointed to 
several items in the direct PE database that they believed were 
anomalous to the specimen, solvent, and formalin disposal costs that we 
did not accept.
    Response: In the CY 2014 PFS proposed rule (78 FR 43293), we 
addressed the items in the direct PE database brought to our attention 
by the commenters. There, we clarified that we believe that a 
disposable supply is one that is attributable, in its entirety, to an 
individual patient for a particular service. We clarified that we 
believe that supply costs related to specimen disposal attributable to 
individual services may be appropriately categorized as disposable 
supplies, but that specimen disposal costs related to an allocated 
portion of service contracts that cannot be attributed to individual 
services should not be incorporated into the direct PE input database 
as disposable supplies. As we address in section II.B. of this final 
rule, all costs other than clinical labor, disposable supplies, and 
medical equipment should be considered indirect costs in order to 
maintain relativity within the PE methodology. We believe that there 
are a wide range of costs allocable to individual services that are 
appropriately considered part of indirect cost categories for purposes 
of the PE methodology.
    Comment: Commenters argued that courier transportation costs are 
directly allocable to individual beneficiary specimens, and represent a 
significant practice expense. One commenter stated, ``Although more 
than one specimen may be included in a courier run, still there is a 
cost per specimen'' and asserted that the indirect PE costs allocated 
to CPT code 88305 do not adequately account for the sizeable expense of 
couriers.
    Response: Again, we maintain that all costs other than clinical 
labor, disposable supplies, and medical equipment should be considered 
indirect costs to maintain relativity within the PE methodology. In 
addition

[[Page 74319]]

to not meeting that criterion to be considered direct PE, the commenter 
pointed out that more than one specimen may be included in a courier 
run, so that the cost of courier services does not meet the additional 
criterion of being ``attributable, in its entirety, to an individual 
patient for a particular service.'' We acknowledge the commenters' 
concern that the indirect costs allocated to CPT code 88305 may not 
equate to the indirect costs associated for every instance a service 
described by that code is furnished. However, we note that the practice 
expense methodology is applied consistently throughout the fee 
schedule, and that the nature of indirect costs is such that the costs 
allocated to an individual procedure are an estimate of the relative 
costs associated with the typical procedure reported with a particular 
code, and are not intended to account for those costs on a line item 
basis for each instance the code is reported.
    Comment: Commenters argued that the maintenance costs are in fact 
variable costs in that the costs are proportional to specimen volume. 
Commenters acknowledged the 5% equipment maintenance factor that is 
figured into the costs of equipment inputs to the PE methodology, but 
argued that pathology laboratories have several equipment items that 
require more frequent maintenance (in the range of 10%-12%). Commenters 
requested that we establish specialty-specific maintenance factors.
    Response: We believe that the nature of many equipment items across 
the fee schedule is such that the required maintenance would relate, at 
least in part, to the volume of procedures furnished using the 
equipment. We note that the established PE methodology does not 
generally account for either additional costs incurred or efficiencies 
gained when services are furnished in atypical volumes. The equipment 
maintenance factor is intended to represent the typical cost per minute 
associated with a particular piece of equipment. At this time, our PE 
methodology does not accommodate equipment maintenance factors that 
vary by specialty.
    Comment: Commenters provided descriptions of the CoPath system, 
indicating that the system provides procedure support that assists labs 
with specimen management and tracking, report generation, record 
storage, workflow automation, management reporting and quality 
assurance functions and support. Commenters stated that the CoPath 
system is a stand-alone system that must be interfaced with the main 
electronic health care record system, and is unique to pathology and 
only used by pathology. The CoPath system is required for labs to 
assign each specimen its unique identifier and associate it with other 
specimens from the same patient, as well as track the course of the 
entire process.
    Commenters also explained that the CoPath system is an advanced 
pathology information management system for storing and reporting 
pathology information and accommodates clinical disciplines including 
surgical pathology, cytology, histology, and autopsy. CoPath manages 
the integrity of specimen accession and processing, and provides 
patient history review, pathology text entry, support for diagnostic 
coding using the CAP SNOMED database, report generation, case review 
and sign out, and retrieval for subsequent purposes. It also assists in 
inputting blocks and interfaces with cassette and slide labelers, 
querying database for cases, patient histories, and reducing workload. 
Commenters compared the Picture Archiving and Communication System 
(PACS) system for radiologists to the CoPath or equivalent system for 
pathology.
    One commenter argued that the clerical and administrative 
functionality support by a laboratory information system is immaterial 
to the direct costs associated with its more prominent utility as the 
clinical information infrastructure for anatomic pathology 
laboratories.
    Response: We asked for comments to help with our understanding of 
the clinical functionality of the equipment in relation to the services 
being furnished. We appreciate the explanations provided, as well as 
the comparison to the PACS system for radiologists. Based on our review 
of the comments received, we understand that this information 
management system is used for a variety of administrative and clerical 
functions, as well as clinical support functions. Tools that facilitate 
the similar functionality for other services, such as the cognitive 
work involved in the professional component, are considered indirect 
costs under the PFS. For instance, across services furnished by a range 
of physician specialties, many items that support clinical decision-
making are considered indirect costs, irrespective of their utility and 
are not included in the PE methodology as direct costs. Instead, they 
are part of the indirect category of resource costs. As a general 
principle, for this reason, we do not believe that information 
management systems are appropriately characterized as direct costs.
    Furthermore, we believe that the relativity within the PE 
methodology would be undermined by including these kinds of items as 
medical equipment only for particular kinds of services. We believe 
that, were we to reconsider the categorization of clinical information 
systems for this particular kind of service, it would be necessary to 
reconsider the categorization of resource costs of other clinical 
information systems used across PFS services. Therefore, we continue to 
believe that the CoPath system is best characterized as an indirect 
cost that is captured in the indirect cost allocation.
    Comment: One commenter suggested that the labor cost of the 
histotechnologist is closer to 50 cents per minute, rather than the 37 
cents per minute used in the PE direct inputs database.
    Response: We did not change the labor cost for histotechnologists 
in the CY 2013 final rule with comment period. We note, however, that 
the prices associated with the labor codes derive from data from the 
Bureau of Labor Statistics, and we will consider the appropriate time 
to update all labor category costs in the PE direct inputs database for 
future rulemaking.
    Comment: Commenters disputed the assertion that there is a 
``typical'' case for CPT code 88305, given that there are wide 
variations in the types of tissues being biopsied.
    Response: Under the PFS, services are priced based on the typical 
case. We continue to seek the best information regarding the inputs 
involved in furnishing the typical case.
    Comment: Commenters expressed concern that CMS asked the AMA RUC to 
review CPT code 88305 based on the assertion of a single stakeholder 
that the clinical vignette used to identify the PE inputs was not 
typical.
    Response: As indicated in section II.C.2 of this final rule with 
comment period, we note that we generally do not identify a code as 
potentially misvalued solely on the basis of individual assertions. On 
the contrary, when stakeholders bring information to our attention, it 
is subject to internal review to determine whether the code would 
appropriately be proposed as a potentially misvalued code, and we offer 
the public the opportunity to comment prior to finalizing a code as 
potentially misvalued. We followed our standard process in evaluating 
CPT code 88305 as potentially misvalued and reached the conclusion that 
it was appropriate the refer the service to the AMA RUC. Therefore, we 
do not agree

[[Page 74320]]

with commenters that we asked the AMA RUC to review this service based 
solely on information provided by a single stakeholder.
    Comment: Some commenters provided information regarding the number 
of blocks that is typical for 88305. An association representing 
pathologists argued that there is no typical case for 88305, and 
provided several vignettes to illustrate the variation based on the 
type of tissue being biopsied. The association also presented findings 
from one data collection effort involving several specialty societies 
that suggested that the typical number of blocks may be as high as 
four. However, the association supported the AMA RUC's recommendation 
of two blocks as most likely to represent the typical case. Other 
commenters indicated that a review of hundreds of cases from multiple 
institutions indicated that the typical, or average, case of 88305 
requires one block, not two, and that 92% of cases including pathology, 
skin pathology, surgical pathology, urologic pathology, cell blocks, 
and bone marrow cases required one block. Another medical specialty 
indicated that more than two slide-blocks are routinely required, and 
requested the use of a modifier for 88305 for those services that 
routinely require more than two slide-blocks. Another commenter 
requested that we stratify payment based on the number of blocks. 
Another commenter suggested that the AMA RUC's recommended number of 
clinical labor minutes for 88305 underestimates the amount of clinical 
labor time associated with the typical service described by the code.
    Response: Based on the wide range of views expressed in comments, 
it is difficult to determine the appropriate number of blocks to use in 
establishing direct PE inputs for CPT code 88305. At this time, because 
we do not have strong evidence to conclude that a change should be 
made, are maintaining these values. However, we will continue to seek 
better information to permit consideration of the appropriate number of 
blocks, and the appropriate direct PE inputs for this code. We are not 
establishing a modifier to differentiate the number of blocks since 
there is not a current billing mechanism to make adjustments based on 
the number of blocks used when a code is reported.
    Comment: One commenter argued that the practice expense RVU for CPT 
code 88305 is insufficient for a tissue exam with two blocks and 
certainly insufficient for those exams that require more than the two 
blocks and slides than are accounted for in the AMA RUC's vignette. The 
commenter argued that even though many tissue biopsies may use an 
average of two blocks, the valuation of this service does not account 
for the many kinds of biopsies that use more than two blocks. Another 
commenter argued that the payment will no longer allow ``profits'' for 
1-2 block specimens to offset the ``losses'' from specimens that 
require a larger number of blocks.
    Response: We acknowledge the commenter's concern that the valuation 
of this service is based on two blocks when some services require a 
greater number of blocks. However, this circumstance is not 
inconsistent with the established PE methodology, which accounts for 
the relative resources involved in furnishing a typical case for a 
particular HCPCS code. We acknowledge that there are cases that use 
higher than typical resources, and that there are also cases that use 
lower than typical resources. As a general principle, we do not believe 
that the direct inputs associated with a particular PFS service should 
be established or maintained to result in payment rates that might 
offset outlier cases for that service or support practice expenses for 
practitioners who furnish lower-paid services.
    Furthermore, we note that we continue to receive feedback regarding 
the appropriate coding and code descriptors for surgical pathology for 
the prostate needle biopsy services. We believe that revising the code 
descriptors to ensure that all prostate needle biopsy services with 10 
or more specimens are described by the G-codes may facilitate broader 
consensus regarding the typical resource costs for 88305. Therefore, 
for clarity, we are revising the CY 2014 descriptors for these HCPCS 
codes to include the phrase ``any method'' following ``sampling.''
    The revised HCPCS code descriptors for microscopic examination for 
prostate biopsy are as follows: G0416 (Surgical pathology, gross and 
microscopic examination for prostate needle biopsies, any method; 10-20 
specimens), G0417 (Surgical pathology, gross and microscopic 
examination for prostate needle biopsies, any method; 21-40 specimens), 
G0418 (Surgical pathology, gross and microscopic examination for 
prostate needle biopsies, any method; 41-60 specimens) and G0419 
(Surgical pathology, gross and microscopic examination for prostate 
needle biopsies, any method; greater than 60 specimens).
    After consideration of public comments received, we are finalizing 
the CY 2013 interim final direct PE inputs for CPT codes 88300-88309 as 
established.
(21) Pathology and Laboratory: Cytopathology (CPT Codes 88120 and 
88121)
    In the PFS final rule with comment period, we addressed comments 
from stakeholders who suggested that CMS increase the price of the 
supply ``UroVysion test kit'' (SA105) by building in an ``efficiency 
factor'' to account for the kits that are purchased by practitioners 
and used in tests that fail. The stakeholders provided documentation 
suggesting that a certain failure rate is inherent in the procedure.
    We indicated that the prices associated with supply inputs in the 
direct PE input database reflect the price per unit of each supply. 
Since the current PE methodology relies on the inputs for each service 
reflecting the typical direct practice expense costs for each service, 
and the supply costs for the failed tests are not used in furnishing 
PFS services, we do not believe that the methodology accommodates a 
failure rate in allocating the cost of disposable medical supplies. 
Therefore, we did not adjust the price input for ``UroVysion test kit'' 
(SA105) in the direct PE input database.
    Comment: Commenters disagreed with our decision, stating that these 
are valid expenses and that the inherent failure rate is commonly due 
to factors beyond the control of the laboratory or quality of 
equipment. Further, commenters pointed out that these costs are not 
reflected in overhead costs, and should therefore be included in direct 
practice expense inputs.
    Response: Because the current PE methodology relies on the inputs 
used in furnishing each service, reflecting the typical direct practice 
expense costs for each service, we continue to believe that the price 
of the supply kit should not reflect any failure rate. After 
consideration of public comment, we are finalizing the CY 2013 interim 
final direct PE inputs for CPT codes 88120 and 88121 as established.
(22) Immunotherapy Injections (CPT Codes 95115 and 95117)
    In establishing interim final direct PE inputs for CPT codes 95115 
and 95117, we refined the AMA RUC's recommendation by removing 
equipment item ``refrigerator, vaccine, commercial grade, w-alarm 
lock.''
    Comment: Commenters indicated that injectable materials need to be 
refrigerated, and thus the refrigerator should be included for this 
service.
    Response: As previously noted, equipment that is used for multiple

[[Page 74321]]

procedures at once is considered an indirect cost. In future 
rulemaking, we anticipate reviewing our files for consistency across 
practice expense inputs in this regard. After consideration of comments 
received, we are finalizing the CY 2013 interim final direct practice 
expense inputs for CPT codes 95115 and 95117 as established.
(23) Neurology and Neuromuscular Procedures: Intraoperative 
Neurophysiology (CPT Codes 95940, 95941 and HCPCS Code G0453)
    In establishing payment for intraoperative neurophysiology (95940 
and G0453) for CY 2013, we did not accept the AMA RUC direct PE input 
recommendations, since we do not believe that these services are 
furnished to patients outside of facility settings.
    Comment: A commenter noted that hospitals previously owned all of 
the equipment and supplies and employed the technicians for 
intraoperative monitoring. The commenter asserted that, currently, 
hospitals often use ``mobile services'' to furnish these monitoring 
procedures, and thus there should be technical component RVUs for these 
services.
    Response: The structure of monitoring businesses and the 
arrangements made with hospitals are not a factor in determining the 
inputs typical to a particular service. Since this service is furnished 
in a facility, we have not included direct PE inputs for this service. 
We continue to believe that this service should be priced without 
direct PE inputs because when a service is furnished in the facility 
setting, the equipment, supplies, and labor costs of the service are 
considered in the calculation of Medicare payments made to the facility 
through other Medicare payment systems. After consideration of comments 
received, we are finalizing the CY 2013 interim final direct PE inputs 
for 95940 and G0453 as established.
(24) Neurology and Neuromuscular Procedures: Sleep Medicine Testing 
(CPT Codes 95782, 95783)
    In establishing interim final direct PE inputs for CY 2013, we 
refined the AMA RUC's recommendation for CPT codes 95782 
(Polysomnography, younger than 6 years, 4 or more) and 95783 
(Polysomnography, younger than 6 years, w/cpap) by reducing time 
associated with ``Measure and mark head and face. Apply and secure 
electrodes to head and face. Check impedances. Reapply electrodes as 
needed'' and ``apply recording devices'' and removing equipment item 
``crib'' for use in these services. We stated that we did not believe a 
crib would typically be used in this service, and we incorporated the 
bedroom furniture including a hospital bed and a reclining chair as 
typical equipment for this service.
    Comment: Commenters disagreed, stating that it takes additional 
time to perform these clinical labor tasks for a child, and that we 
should assign 30 minutes to the ``measure and mark head and face'' task 
and 25 minutes to the ``apply recording devices'' task. Commenters also 
indicated that the crib is used in the typical case, while the parent 
uses the hospital bed to remain close to the child. We also received a 
paid invoice for the equipment item ``crib.''
    Response: After additional clinical review, we agree with 
commenters' explanation that the additional clinical labor minutes are 
required when furnishing these services to children. Therefore, we are 
allocating an additional 5 minutes for each of these tasks, so that 25 
minutes are allocated based on the clinical labor task called ``Measure 
and mark head and face. Apply and secure electrodes to head and face. 
Check impedances. Reapply electrodes as needed'' and 20 minutes are 
allocated for the task ``apply recording devices.'' Based on the 
information provided by commenters, we agree that the equipment item 
``crib'' should be included for CPT codes 95782 and 95783. We are 
pricing the equipment item ``crib'' at $3,900 based on the invoice 
received. After consideration of the comments received, we are 
finalizing the CY 2013 interim final direct PE inputs for 95782 and 
95783 as established with the additional refinement of adjusting the 
clinical labor time and incorporating the ``crib'' discussed above.
(25) Neurology and Neuromuscular Procedures: Electromyography and Nerve 
Conduction Tests (CPT Codes 95907, 95908, 95909, 95910, 95911, 95912, 
95913, and 95861)
    In establishing interim final direct PE inputs for CY 2013, we 
refined the AMA RUC's recommendation for CPT code 95861 by adjusting 
the time for the clinical labor activity ``assist physician in 
performing procedure'' from 19 minutes to 29 minutes to conform to 
physician time.
    Comment: Commenters brought to our attention that this refinement 
was inaccurate, in that the AMA RUC recommendation included 29 minutes 
for this labor activity.
    Response: We agree with commenters that this refinement was 
inaccurate and acknowledge the administrative discrepancy in the 
refinement table. We note that this had no impact on payment rates, 
since there was no corresponding discrepancy in the direct PE input 
database. After considering comments received, we are finalizing the CY 
2013 interim final direct PE inputs for CPT code 95861 as established.
    We also refined the AMA RUC's recommendation for CPT codes 95907, 
95908, 95909, 95910, 95911, 95912, and 95913 by substituting non-
sterile gauze for sterile gauze, and removing surgical tape and 
electrode gel.
    Comment: Commenters indicated that sterile gauze is required 
because the skin is cleansed before the procedure with vigorous 
scrubbing that often can produce minor bleeding, and that tape is 
required because the electrodes may not stick well when testing 
patients who have used lotions or creams prior to testing. Finally, the 
electrode gel is required to maximize conductivity, especially in 
patients who have used lotions or creams prior to testing.
    Response: We agree with commenters that the sterile gauze and tape 
should be included for this service. However, since the disposable 
electrode pack includes pre-gelled electrodes, we do not believe it is 
typical that electrode gel is also used in this procedure. After 
consideration of public comments, we are finalizing the CY 2013 interim 
final direct practice expense inputs for CPT codes 95907--95913 as 
established, with the additional refinement of including the sterile 
gauze and tape.
(26) Neurology and Neuromuscular Procedures: Autonomic Function Testing 
(CPT Codes 95921, 95922, 95923, and 95924)
    In establishing interim final direct PE inputs for CY 2013, we 
refined the AMA RUC's recommendation for CPT codes 95921 and 95922 by 
removing the preservice clinical labor tasks, and adjusting the 
monitoring time following the procedure from 5 to 2 minutes for 95921, 
95922, 95923, and 95924.
    Comment: Commenters stated that the patient requires assistance 
following the tests; therefore, additional time for monitoring the 
patient is necessary and should be added to the number of clinical 
labor minutes in the service period.
    Response: CMS clinical staff reviewed the information presented by 
commenters and found no evidence that 2 minutes did not represent the 
typical resources involved in furnishing the service for CPT codes 
95921, 95922, 95923, and 95924.
    In refining CPT codes 95921, 95922, 95923, and 95924, we refined 
the

[[Page 74322]]

equipment time to reflect the typical use exclusive to the patient.
    Comment: Commenters stated that extra time was required for the 
equipment so that the patient can lie still after the procedure to 
ensure that there are not negative side effects due to fluctuations in 
blood pressure.
    Response: We agree with commenters' justification for allocating 
additional equipment minutes to account for the time that the patient 
is laying still after the procedure.
    In refining CPT code 95923, we refined the clinical labor activity 
``assist physician'' to 45 minutes.
    Comment: Commenters stated that an additional 10 minutes of 
``assist physician'' time was needed to assist the patient out of the 
machine and into the shower, since patients are extremely sweaty after 
the procedure.
    Response: Assisting patients following the procedure is not part of 
the ``assist physician'' labor activity. Since this clinical labor 
activity was not specified in the AMA RUC recommendation, we do not 
believe this activity typically takes additional time over that already 
allotted to the procedure. After considering public comments received, 
we are finalizing the CY 2013 interim final direct practice expense 
inputs for CPT codes 95921--95924 as established.
(27) Special Dermatological Procedures (CPT Codes 96920, 96921, 96922)
    In establishing interim final direct PE inputs for CY 2013, we 
refined the AMA RUC's recommendation for CPT codes 96920, 96921, and 
96922 by decreasing the time allocated to clinical labor activity 
``monitor patient following service/check tubes, monitors, drains'' 
from 3 minutes to 1 minutes, and clinical labor activity ``clean room/
equipment by physician staff'' from 3 minutes to 2 minutes.
    Comment: Commenters objected to CMS's refinement of clinical labor 
tasks below the standard number of minutes allocated for these tasks.
    Response: We agree with commenters that the standard number of AMA 
RUC-recommended minutes should be allocated for these tasks. After 
considering public comments received, we are finalizing the CY 2013 
interim final direct practice expense inputs for CPT codes 96920, 
96921, and 96922 with the additional refinement of adjusting the times 
allocated for the clinical labor activities noted above.
(28) Psychiatry (CPT Codes 90791, 90832, 90834, and 90837)
    As we addressed in the CY 2013 PFS final rule (77 FR 69075), the 
AMA RUC submitted direct PE input recommendations in the revised set of 
codes that describe psychotherapy services. These recommendations 
included significant reductions to the direct PE inputs associated with 
the predecessor codes. For most of the new codes, we accepted these 
recommended reductions in direct practice expense. This was consistent 
with our general approach of maintaining the existing values for these 
services given that many practitioners who furnished these services 
prior to CY 2013 would report concurrent medical evaluation and 
management services (which have practice expense values that will 
offset the differences in total PE values between the new and old 
psychotherapy codes). However, for practitioners who do not furnish 
medical E/M services, there were no corresponding PE value increases to 
offset the recommended reductions. Therefore, instead of accepting the 
recommended direct PE inputs for the new CPT codes that describe 
services primarily furnished by practitioners who do not also report 
medical E/M services, for CY 2013, we crosswalked the 2012 PE RVUs from 
the predecessor codes. This crosswalk used the CY 2012 year fully-
implemented PE RVUs established for CPT codes 90791 (Psychiatric 
diagnostic evaluation), 90832 (Psychotherapy, 30 minutes with patient 
and/or family member), 90834 (Psychotherapy, 45 minutes with patient 
and/or family member), and 90837 (Psychotherapy, 60 minutes with 
patient and/or family member).
    Comment: Several commenters pointed out that by crosswalking the PE 
RVUs from predecessor codes, CMS created a rank order anomaly for CPT 
codes 90791 (Psychiatric diagnostic evaluation) and 90792 (Psychiatric 
diagnostic evaluation with medical services). These commenters urged 
CMS to issue a technical correction for CY 2013 and accept the AMA-RUC 
recommended inputs in developing PE RVUs for these services for CY 
2014.
    Response: We appreciate the commenters' concerns regarding rank 
order anomalies for these services. However, as we explained in 
establishing the interim final values for CY 2013, we believed that it 
was important to maintain approximate overall value for the family of 
services for the specialties involved, pending valuation of the whole 
set of codes for CY 2014. Now that we have considered the full family 
of codes for CY 2014 including the additional work RVUs, we agree with 
the commenters and believe that the AMA RUC- recommended direct PE 
inputs for the whole family of codes can be implemented. Given the 
significant change in PE RVUs and in the context of the whole family of 
services, the direct PE inputs for these services will be interim final 
and subject to comment for CY 2014.
    Comment: In a comment to the CY 2014 proposed PFS rule, one 
commenter argued that the crosswalked PE RVUs for these services should 
be maintained due to the negative impact of the PE methodology on 
certain specialties, especially clinical psychologists. This commenter 
also suggested that the reductions in PE RVUs that would result from 
implementing the AMA RUC recommended direct PE inputs for CY 2014 would 
fully offset any increases in work RVUs for these services.
    Response: We do not agree that the reductions in PE RVUs that 
result from the AMA RUC-recommended inputs fully offset the increases 
in overall payment for these services that results from CMS' adoption 
of the AMA RUC-recommended work RVUs for most of the codes in this 
family. However, we will consider the commenter's concerns regarding 
the effect of the PE methodology for specialties like clinical 
psychologists for future rulemaking.
(29) Transitional Care Management Services (CPT Codes 99495, 99496)
    In establishing interim final direct PE inputs for CY 2013, we 
refined the AMA RUC recommendation by incorporating the clinical labor 
inputs for dedicated non-face-to-face care management tasks as facility 
inputs in addition to increasing clinical labor minutes for 99496.
    Comment: The AMA RUC disagreed with CMS's refinement to include 
clinical labor minutes in the facility setting based on the assertion 
that the non-face-to-face care management tasks are critical to the 
codes and cannot be separated from the care coordination delivered by 
the clinical staff in the non-facility setting. The AMA RUC also 
suggested that several medical specialty societies also disagreed with 
the refinement to include clinical labor minutes in the facility 
setting, while one specialty society agreed with our refinement.
    Response: After considering the rationale of the AMA RUC, we agree 
that only non-facility direct PE inputs should be included for these 
services. Therefore, we are finalizing the CY 2013 interim final direct 
PE inputs for 99495 and 99496 as established with the additional 
refinement of removing the facility direct PE inputs.

[[Page 74323]]

c. Finalizing CY 2013 Interim and Proposed Malpractice Crosswalks for 
CY 2014
    In accordance with our malpractice methodology, we adjusted the 
malpractice RVUs for the CY 2013 new/revised codes for the difference 
in work RVUs (or, if greater, the clinical labor portion of the PE 
RVUs) between the source codes and the new/revised codes to reflect the 
specific risk-of-service for the new/revised codes. The interim final 
malpractice crosswalks were listed in Table 75 of the CY 2013 PFS final 
rule with comment period.
    We received no comments on the CY 2013 interim final malpractice 
crosswalks and are finalizing them without modification for CY 2014. 
The malpractices RVUs for these services are reflected in Addendum B of 
this CY 2014 PFS final rule with comment period.
    Consistent with past practice when the MEI has been rebased or 
revised we proposed to make adjustments to ensure that estimates of the 
aggregate CY 2014 PFS payments for work, PE and malpractice are in 
proportion to the weights for these categories in the revised MEI. As 
discussed in the II.A., the MEI is being revised for CY 2014, the PE 
and malpractice RVUs, and the CF are being adjusted accordingly. For 
more information on this, see section II.B. We received no comments 
specifically on the adjustment to malpractice RVUs.
d. Other New, Revised or Potentially Misvalued Codes With CY 2013 
Interim Final RVUs Not Specifically Discussed in the CY 2014 Final Rule 
With Comment Period
    For all other new, revised, or potentially misvalued codes with CY 
2013 interim final RVUs that are not specifically discussed in this CY 
2014 PFS final rule with comment period, we are finalizing for CY 2014, 
without modification, the CY 2013 interim final or CY 2014 proposed 
work RVUs, malpractice crosswalks, and direct PE inputs. Unless 
otherwise indicated, we agreed with the time values recommended by the 
AMA RUC or HCPAC for all codes addressed in this section. The time 
values for all codes are listed in a file called ``CY 2014 PFS 
Physician Time,'' available on the CMS Web site under downloads for the 
CY 2014 PFS final rule with comment period at http://www.cms.gov/
Medicare/Medicare-Fee-for-Service-Payment/PhysicianFeeSched/PFS-
Federal-Regulation-Notices.html.
3. Establishing CY 2014 Interim Final RVUs
a. Establishing CY 2014 Interim Final Work RVUs
    Table 27 contains the CY 2014 interim final work RVUs for all codes 
for which we received AMA RUC recommendations for CY 2014 and new G-
codes created for CY 2014. These values are subject to public comment 
in this final rule with comment period. Codes for which work RVUs are 
not applicable have the appropriate PFS procedure status indicator in 
the relevant column. A description of all PFS procedure status 
indicators can be found in Addendum A. The column labeled ``CMS Time 
Refinement'' indicates for each code whether we refined the time values 
recommended by the AMA RUC or HCPAC.
    The RVUs and other payment information for all CY 2014 payable 
codes are available in Addendum B. The RVUs and other payment 
information regarding all codes subject to public comment in this final 
rule with comment period are available in Addendum C. All addenda are 
available on the CMS Web site under downloads for the CY 2014 PFS final 
rule with comment period at http://www.cms.gov/Medicare/Medicare-Fee-
for-Service-Payment/PhysicianFeeSched/PFS-Federal-Regulation-
Notices.html. The time values for all CY 2014 codes are listed in a 
file called ``CY 2014 PFS Physician Time,'' available on the CMS Web 
site under downloads for the CY 2014 PFS final rule with comment period 
at http://www.cms.gov/Medicare/Medicare-Fee-for-Service-Payment/
PhysicianFeeSched/PFS-Federal-Regulation-Notices.html.

                  Table 27--Interim Final Work RVUs for New/Revised/Potentially Misvalued Codes
----------------------------------------------------------------------------------------------------------------
                                                                AMA RUC/HCPAC
    HCPCS code          Long descriptor     CY 2013  work RVU    recommended    CY 2014  work       CMS time
                                                                  work RVU           RVU           refinement
----------------------------------------------------------------------------------------------------------------
10030.............  Image-guided fluid      New..............            3.00            3.00  No.
                     collection drainage
                     by catheter (eg,
                     abscess, hematoma,
                     seroma, lymphocele,
                     cyst), soft tissue
                     (eg, extremity,
                     abdominal wall,
                     neck), percutaneous.
17000.............  Destruction (eg, laser  0.65.............            0.61            0.61  No.
                     surgery,
                     electrosurgery,
                     cryosurgery,
                     chemosurgery,
                     surgical
                     curettement),
                     premalignant lesions
                     (eg, actinic
                     keratoses); first
                     lesion.
17003.............  Destruction (eg, laser  0.07.............            0.04            0.04  No.
                     surgery,
                     electrosurgery,
                     cryosurgery,
                     chemosurgery,
                     surgical
                     curettement),
                     premalignant lesions
                     (eg, actinic
                     keratoses); second
                     through 14 lesions,
                     each (list separately
                     in addition to code
                     for first lesion).
17004.............  Destruction (eg, laser  1.85.............            1.37            1.37  No.
                     surgery,
                     electrosurgery,
                     cryosurgery,
                     chemosurgery,
                     surgical
                     curettement),
                     premalignant lesions
                     (eg, actinic
                     keratoses), 15 or
                     more lesions.
17311.............  Mohs micrographic       6.20.............            6.20            6.20  No.
                     technique, including
                     removal of all gross
                     tumor, surgical
                     excision of tissue
                     specimens, mapping,
                     color coding of
                     specimens,
                     microscopic
                     examination of
                     specimens by the
                     surgeon, and
                     histopathologic
                     preparation including
                     routine stain(s) (eg,
                     hematoxylin and
                     eosin, toluidine
                     blue), head, neck,
                     hands, feet,
                     genitalia, or any
                     location with surgery
                     directly involving
                     muscle, cartilage,
                     bone, tendon, major
                     nerves, or vessels;
                     first stage, up to 5
                     tissue blocks.

[[Page 74324]]

 
17312.............  Mohs micrographic       3.30.............            3.30            3.30  No.
                     technique, including
                     removal of all gross
                     tumor, surgical
                     excision of tissue
                     specimens, mapping,
                     color coding of
                     specimens,
                     microscopic
                     examination of
                     specimens by the
                     surgeon, and
                     histopathologic
                     preparation including
                     routine stain(s) (eg,
                     hematoxylin and
                     eosin, toluidine
                     blue), head, neck,
                     hands, feet,
                     genitalia, or any
                     location with surgery
                     directly involving
                     muscle, cartilage,
                     bone, tendon, major
                     nerves, or vessels;
                     each additional stage
                     after the first
                     stage, up to 5 tissue
                     blocks (list
                     separately in
                     addition to code for
                     primary procedure).
17313.............  Mohs micrographic       5.56.............            5.56            5.56  No.
                     technique, including
                     removal of all gross
                     tumor, surgical
                     excision of tissue
                     specimens, mapping,
                     color coding of
                     specimens,
                     microscopic
                     examination of
                     specimens by the
                     surgeon, and
                     histopathologic
                     preparation including
                     routine stain(s) (eg,
                     hematoxylin and
                     eosin, toluidine
                     blue), of the trunk,
                     arms, or legs; first
                     stage, up to 5 tissue
                     blocks.
17314.............  Mohs micrographic       3.06.............            3.06            3.06  No.
                     technique, including
                     removal of all gross
                     tumor, surgical
                     excision of tissue
                     specimens, mapping,
                     color coding of
                     specimens,
                     microscopic
                     examination of
                     specimens by the
                     surgeon, and
                     histopathologic
                     preparation including
                     routine stain(s) (eg,
                     hematoxylin and
                     eosin, toluidine
                     blue), of the trunk,
                     arms, or legs; each
                     additional stage
                     after the first
                     stage, up to 5 tissue
                     blocks (list
                     separately in
                     addition to code for
                     primary procedure).
17315.............  Mohs micrographic       0.87.............            0.87            0.87  No.
                     technique, including
                     removal of all gross
                     tumor, surgical
                     excision of tissue
                     specimens, mapping,
                     color coding of
                     specimens,
                     microscopic
                     examination of
                     specimens by the
                     surgeon, and
                     histopathologic
                     preparation including
                     routine stain(s) (eg,
                     hematoxylin and
                     eosin, toluidine
                     blue), each
                     additional block
                     after the first 5
                     tissue blocks, any
                     stage (list
                     separately in
                     addition to code for
                     primary procedure).
19081.............  Biopsy, breast, with    New..............            3.29            3.29  No.
                     placement of breast
                     localization
                     device(s) (eg, clip,
                     metallic pellet),
                     when performed, and
                     imaging of the biopsy
                     specimen, when
                     performed,
                     percutaneous; first
                     lesion, including
                     stereotactic guidance.
19082.............  Biopsy, breast, with    New..............            1.65            1.65  No.
                     placement of breast
                     localization
                     device(s) (eg, clip,
                     metallic pellet),
                     when performed, and
                     imaging of the biopsy
                     specimen, when
                     performed,
                     percutaneous; each
                     additional lesion,
                     including
                     stereotactic guidance
                     (list separately in
                     addition to code for
                     primary procedure).
19083.............  Biopsy, breast, with    New..............            3.10            3.10  No.
                     placement of breast
                     localization
                     device(s) (eg, clip,
                     metallic pellet),
                     when performed, and
                     imaging of the biopsy
                     specimen, when
                     performed,
                     percutaneous; first
                     lesion, including
                     ultrasound guidance.
19084.............  Biopsy, breast, with    New..............            1.55            1.55  No.
                     placement of breast
                     localization
                     device(s) (eg, clip,
                     metallic pellet),
                     when performed, and
                     imaging of the biopsy
                     specimen, when
                     performed,
                     percutaneous; each
                     additional lesion,
                     including ultrasound
                     guidance (list
                     separately in
                     addition to code for
                     primary procedure).
19085.............  Biopsy, breast, with    New..............            3.64            3.64  No.
                     placement of breast
                     localization
                     device(s) (eg, clip,
                     metallic pellet),
                     when performed, and
                     imaging of the biopsy
                     specimen, when
                     performed,
                     percutaneous; first
                     lesion, including
                     magnetic resonance
                     guidance.
19086.............  Biopsy, breast, with    New..............            1.82            1.82  No.
                     placement of breast
                     localization
                     device(s) (eg, clip,
                     metallic pellet),
                     when performed, and
                     imaging of the biopsy
                     specimen, when
                     performed,
                     percutaneous; each
                     additional lesion,
                     including magnetic
                     resonance guidance
                     (list separately in
                     addition to code for
                     primary procedure).
19281.............  Placement of breast     New..............            2.00            2.00  No.
                     localization
                     device(s) (eg, clip,
                     metallic pellet, wire/
                     needle, radioactive
                     seeds), percutaneous;
                     first lesion,
                     including
                     mammographic guidance.
19282.............  Placement of breast     New..............            1.00            1.00  No.
                     localization
                     device(s) (eg, clip,
                     metallic pellet, wire/
                     needle, radioactive
                     seeds), percutaneous;
                     each additional
                     lesion, including
                     mammographic guidance
                     (list separately in
                     addition to code for
                     primary procedure).
19283.............  Placement of breast     New..............            2.00            2.00  No.
                     localization
                     device(s) (eg, clip,
                     metallic pellet, wire/
                     needle, radioactive
                     seeds), percutaneous;
                     first lesion,
                     including
                     stereotactic guidance.

[[Page 74325]]

 
19284.............  Placement of breast     New..............            1.00            1.00  No.
                     localization
                     device(s) (eg, clip,
                     metallic pellet, wire/
                     needle, radioactive
                     seeds), percutaneous;
                     each additional
                     lesion, including
                     stereotactic guidance
                     (list separately in
                     addition to code for
                     primary procedure).
19285.............  Placement of breast     New..............            1.70            1.70  No.
                     localization
                     device(s) (eg, clip,
                     metallic pellet, wire/
                     needle, radioactive
                     seeds), percutaneous;
                     first lesion,
                     including ultrasound
                     guidance.
19286.............  Placement of breast     New..............            0.85            0.85  Yes.
                     localization
                     device(s) (eg, clip,
                     metallic pellet, wire/
                     needle, radioactive
                     seeds), percutaneous;
                     each additional
                     lesion, including
                     ultrasound guidance
                     (list separately in
                     addition to code for
                     primary procedure).
19287.............  Placement of breast     New..............            3.02            2.55  No.
                     localization
                     device(s) (eg clip,
                     metallic pellet, wire/
                     needle, radioactive
                     seeds), percutaneous;
                     first lesion,
                     including magnetic
                     resonance guidance.
19288.............  Placement of breast     New..............            1.51            1.28  No.
                     localization
                     device(s) (eg clip,
                     metallic pellet, wire/
                     needle, radioactive
                     seeds), percutaneous;
                     each additional
                     lesion, including
                     magnetic resonance
                     guidance (list
                     separately in
                     addition to code for
                     primary procedure).
23333.............  Removal of foreign      New..............            6.00            6.00  No.
                     body, shoulder; deep
                     (subfascial or
                     intramuscular).
23334.............  Removal of prosthesis,  New..............           18.89           15.50  No.
                     includes debridement
                     and synovectomy when
                     performed; humeral or
                     glenoid component.
23335.............  Removal of prosthesis,  New..............           22.13           19.00  No.
                     includes debridement
                     and synovectomy when
                     performed; humeral
                     and glenoid
                     components (eg, total
                     shoulder).
24164.............  Removal of prosthesis,  6.43.............           10.00           10.00  No.
                     includes debridement
                     and synovectomy when
                     performed; radial
                     head.
27130.............  Arthroplasty,           21.79............           19.60           20.72  Yes.
                     acetabular and
                     proximal femoral
                     prosthetic
                     replacement (total
                     hip arthroplasty),
                     with or without
                     autograft or
                     allograft.
27236.............  Open treatment of       17.61............           17.61           17.61  Yes.
                     femoral fracture,
                     proximal end, neck,
                     internal fixation or
                     prosthetic
                     replacement.
27446.............  Arthroplasty, knee,     16.38............           17.48           17.48  No.
                     condyle and plateau;
                     medial or lateral
                     compartment.
27447.............  Arthroplasty, knee,     23.25............           19.60           20.72  Yes.
                     condyle and plateau;
                     medial and lateral
                     compartments with or
                     without patella
                     resurfacing (total
                     knee arthroplasty).
31237.............  Nasal/sinus endoscopy,  2.98.............            2.60            2.60  No.
                     surgical; with
                     biopsy, polypectomy
                     or debridement
                     (separate procedure).
31238.............  Nasal/sinus endoscopy,  3.26.............            2.74            2.74  No.
                     surgical; with
                     control of nasal
                     hemorrhage.
31239.............  Nasal/sinus endoscopy,  9.33.............            9.04            9.04  No.
                     surgical; with
                     dacryocystorhinostomy.
31240.............  Nasal/sinus endoscopy,  2.61.............            2.61            2.61  No.
                     surgical; with concha
                     bullosa resection.
33282.............  Implantation of         4.80.............            3.50            3.50  No.
                     patient-activated
                     cardiac event
                     recorder.
33284.............  Removal of an           3.14.............            3.00            3.00  No.
                     implantable, patient-
                     activated cardiac
                     event recorder.
33366.............  Transcatheter aortic    New..............           40.00           35.88  No.
                     valve replacement
                     (tavr/tavi) with
                     prosthetic valve;
                     transapical exposure
                     (eg, left
                     thoracotomy).
34841.............  Endovascular repair of  New..............               C               C  N/A.
                     visceral aorta (eg,
                     aneurysm,
                     pseudoaneurysm,
                     dissection,
                     penetrating ulcer,
                     intramural hematoma,
                     or traumatic
                     disruption) by
                     deployment of a
                     fenestrated visceral
                     aortic endograft and
                     all associated
                     radiological
                     supervision and
                     interpretation,
                     including target zone
                     angioplasty, when
                     performed; including
                     one visceral artery
                     endoprosthesis
                     (superior mesenteric,
                     celiac or renal
                     artery).
34842.............  Endovascular repair of  New..............               C               C  N/A.
                     visceral aorta (eg,
                     aneurysm,
                     pseudoaneurysm,
                     dissection,
                     penetrating ulcer,
                     intramural hematoma,
                     or traumatic
                     disruption) by
                     deployment of a
                     fenestrated visceral
                     aortic endograft and
                     all associated
                     radiological
                     supervision and
                     interpretation,
                     including target zone
                     angioplasty, when
                     performed; including
                     two visceral artery
                     endoprostheses
                     (superior mesenteric,
                     celiac and/or renal
                     artery[s]).

[[Page 74326]]

 
34843.............  Endovascular repair of  New..............               C               C  N/A.
                     visceral aorta (eg,
                     aneurysm,
                     pseudoaneurysm,
                     dissection,
                     penetrating ulcer,
                     intramural hematoma,
                     or traumatic
                     disruption) by
                     deployment of a
                     fenestrated visceral
                     aortic endograft and
                     all associated
                     radiological
                     supervision and
                     interpretation,
                     including target zone
                     angioplasty, when
                     performed; including
                     three visceral artery
                     endoprostheses
                     (superior mesenteric,
                     celiac and/or renal
                     artery[s]).
34844.............  Endovascular repair of  New..............               C               C  N/A.
                     visceral aorta (eg,
                     aneurysm,
                     pseudoaneurysm,
                     dissection,
                     penetrating ulcer,
                     intramural hematoma,
                     or traumatic
                     disruption) by
                     deployment of a
                     fenestrated visceral
                     aortic endograft and
                     all associated
                     radiological
                     supervision and
                     interpretation,
                     including target zone
                     angioplasty, when
                     performed; including
                     four or more visceral
                     artery endoprostheses
                     (superior mesenteric,
                     celiac and/or renal
                     artery[s]).
34845.............  Endovascular repair of  New..............               C               C  N/A.
                     visceral aorta and
                     infrarenal abdominal
                     aorta (eg, aneurysm,
                     pseudoaneurysm,
                     dissection,
                     penetrating ulcer,
                     intramural hematoma,
                     or traumatic
                     disruption) with a
                     fenestrated visceral
                     aortic endograft and
                     concomitant unibody
                     or modular infrarenal
                     aortic endograft and
                     all associated
                     radiological
                     supervision and
                     interpretation,
                     including target zone
                     angioplasty, when
                     performed; including
                     one visceral artery
                     endoprosthesis
                     (superior mesenteric,
                     celiac or renal
                     artery).
34846.............  Endovascular repair of  New..............               C               C  N/A.
                     visceral aorta and
                     infrarenal abdominal
                     aorta (eg, aneurysm,
                     pseudoaneurysm,
                     dissection,
                     penetrating ulcer,
                     intramural hematoma,
                     or traumatic
                     disruption) with a
                     fenestrated visceral
                     aortic endograft and
                     concomitant unibody
                     or modular infrarenal
                     aortic endograft and
                     all associated
                     radiological
                     supervision and
                     interpretation,
                     including target zone
                     angioplasty, when
                     performed; including
                     two visceral artery
                     endoprostheses
                     (superior mesenteric,
                     celiac and/or renal
                     artery[s]).
34847.............  Endovascular repair of  New..............               C               C  N/A.
                     visceral aorta and
                     infrarenal abdominal
                     aorta (eg, aneurysm,
                     pseudoaneurysm,
                     dissection,
                     penetrating ulcer,
                     intramural hematoma,
                     or traumatic
                     disruption) with a
                     fenestrated visceral
                     aortic endograft and
                     concomitant unibody
                     or modular infrarenal
                     aortic endograft and
                     all associated
                     radiological
                     supervision and
                     interpretation,
                     including target zone
                     angioplasty, when
                     performed; including
                     three visceral artery
                     endoprostheses
                     (superior mesenteric,
                     celiac and/or renal
                     artery[s]).
34848.............  Endovascular repair of  New..............               C               C  N/A.
                     visceral aorta and
                     infrarenal abdominal
                     aorta (eg, aneurysm,
                     pseudoaneurysm,
                     dissection,
                     penetrating ulcer,
                     intramural hematoma,
                     or traumatic
                     disruption) with a
                     fenestrated visceral
                     aortic endograft and
                     concomitant unibody
                     or modular infrarenal
                     aortic endograft and
                     all associated
                     radiological
                     supervision and
                     interpretation,
                     including target zone
                     angioplasty, when
                     performed; including
                     four or more visceral
                     artery endoprostheses
                     (superior mesenteric,
                     celiac and/or renal
                     artery[s]).
35301.............  Thromboendarterectomy,  19.61............           21.16           21.16  No.
                     including patch
                     graft, if performed;
                     carotid, vertebral,
                     subclavian, by neck
                     incision.
36245.............  Selective catheter      4.67.............            4.90            4.90  No.
                     placement, arterial
                     system; each first
                     order abdominal,
                     pelvic, or lower
                     extremity artery
                     branch, within a
                     vascular family.
37217.............  Transcatheter           New..............           22.00           20.38  No.
                     placement of an
                     intravascular
                     stent(s),
                     intrathoracic common
                     carotid artery or
                     innominate artery by
                     retrograde treatment,
                     via open ipsilateral
                     cervical carotid
                     artery exposure,
                     including
                     angioplasty, when
                     performed, and
                     radiological
                     supervision and
                     interpretation.
37236.............  Transcatheter           New..............            9.00            9.00  No.
                     placement of an
                     intravascular
                     stent(s) (except
                     lower extremity,
                     cervical carotid,
                     extracranial
                     vertebral or
                     intrathoracic
                     carotid,
                     intracranial, or
                     coronary), open or
                     percutaneous,
                     including
                     radiological
                     supervision and
                     interpretation and
                     including all
                     angioplasty within
                     the same vessel, when
                     performed; initial
                     artery.

[[Page 74327]]

 
37237.............  Transcatheter           New..............            4.25            4.25  No.
                     placement of an
                     intravascular
                     stent(s) (except
                     lower extremity,
                     cervical carotid,
                     extracranial
                     vertebral or
                     intrathoracic
                     carotid,
                     intracranial, or
                     coronary), open or
                     percutaneous,
                     including
                     radiological
                     supervision and
                     interpretation and
                     including all
                     angioplasty within
                     the same vessel, when
                     performed; each
                     additional artery
                     (list separately in
                     addition to code for
                     primary procedure).
37238.............  Transcatheter           New..............            6.29            6.29  No.
                     placement of an
                     intravascular
                     stent(s), open or
                     percutaneous,
                     including
                     radiological
                     supervision and
                     interpretation and
                     including angioplasty
                     within the same
                     vessel, when
                     performed; initial
                     vein.
37239.............  Transcatheter           New..............            3.34            2.97  No.
                     placement of an
                     intravascular
                     stent(s), open or
                     percutaneous,
                     including
                     radiological
                     supervision and
                     interpretation and
                     including angioplasty
                     within the same
                     vessel, when
                     performed; each
                     additional vein (list
                     separately in
                     addition to code for
                     primary procedure).
37241.............  Vascular embolization   New..............            9.00            9.00  No.
                     or occlusion,
                     inclusive of all
                     radiological
                     supervision and
                     interpretation,
                     intraprocedural
                     roadmapping, and
                     imaging guidance
                     necessary to complete
                     the intervention;
                     venous, other than
                     hemorrhage (eg,
                     congenital or
                     acquired venous
                     malformations, venous
                     and capillary
                     hemangiomas, varices,
                     varicoceles).
37242.............  Vascular embolization   New..............           11.98           10.05  No.
                     or occlusion,
                     inclusive of all
                     radiological
                     supervision and
                     interpretation,
                     intraprocedural
                     roadmapping, and
                     imaging guidance
                     necessary to complete
                     the intervention;
                     arterial, other than
                     hemorrhage or tumor
                     (eg, congenital or
                     acquired arterial
                     malformations,
                     arteriovenous
                     malformations,
                     arteriovenous
                     fistulas, aneurysms,
                     pseudoaneurysms).
37243.............  Vascular embolization   New..............           14.00           11.99  No.
                     or occlusion,
                     inclusive of all
                     radiological
                     supervision and
                     interpretation,
                     intraprocedural
                     roadmapping, and
                     imaging guidance
                     necessary to complete
                     the intervention; for
                     tumors, organ
                     ischemia, or
                     infarction.
37244.............  Vascular embolization   New..............           14.00           14.00  No.
                     or occlusion,
                     inclusive of all
                     radiological
                     supervision and
                     interpretation,
                     intraprocedural
                     roadmapping, and
                     imaging guidance
                     necessary to complete
                     the intervention; for
                     arterial or venous
                     hemorrhage or
                     lymphatic
                     extravasation.
43191.............  Esophagoscopy, rigid,   New..............            2.78            2.00  No.
                     transoral;
                     diagnostic, including
                     collection of
                     specimen(s) by
                     brushing or washing
                     when performed
                     (separate procedure).
43192.............  Esophagoscopy, rigid,   New..............            3.21            2.45  No.
                     transoral; with
                     directed submucosal
                     injection(s), any
                     substance.
43193.............  Esophagoscopy, rigid,   New..............            3.36            3.00  No.
                     transoral; with
                     biopsy, single or
                     multiple.
43194.............  Esophagoscopy, rigid,   New..............            3.99            3.00  No.
                     transoral; with
                     removal of foreign
                     body.
43195.............  Esophagoscopy, rigid,   New..............            3.21            3.00  No.
                     transoral; with
                     balloon dilation
                     (less than 30 mm
                     diameter).
43196.............  Esophagoscopy, rigid,   New..............            3.36            3.30  No.
                     transoral; with
                     insertion of guide
                     wire followed by
                     dilation over guide
                     wire.
43197.............  Esophagoscopy,          New..............            1.59            1.48  Yes.
                     flexible, transnasal;
                     diagnostic, includes
                     collection of
                     specimen(s) by
                     brushing or washing
                     when performed
                     (separate procedure).
43198.............  Esophagoscopy,          New..............            1.89            1.78  Yes.
                     flexible, transnasal;
                     with biopsy, single
                     or multiple.
43200.............  Esophagoscopy,          1.59.............            1.59            1.50  No.
                     flexible, transoral;
                     diagnostic, including
                     collection of
                     specimen(s) by
                     brushing or washing,
                     when performed
                     (separate procedure).
43201.............  Esophagoscopy,          2.09.............            1.90            1.80  No.
                     flexible, transoral;
                     with directed
                     submucosal
                     injection(s), any
                     substance.
43202.............  Esophagoscopy,          1.89.............            1.89            1.80  No.
                     flexible, transoral;
                     with biopsy, single
                     or multiple.
43204.............  Esophagoscopy,          3.76.............            2.89            2.40  No.
                     flexible, transoral;
                     with injection
                     sclerosis of
                     esophageal varices.
43205.............  Esophagoscopy,          3.78.............            3.00            2.51  No.
                     flexible, transoral;
                     with band ligation of
                     esophageal varices.
43211.............  Esophagoscopy,          New..............            4.58            4.21  No.
                     flexible, transoral;
                     with endoscopic
                     mucosal resection.
43212.............  Esophagoscopy,          New..............            3.73            3.38  No.
                     flexible, transoral;
                     with placement of
                     endoscopic stent
                     (includes pre- and
                     post-dilation and
                     guide wire passage,
                     when performed).

[[Page 74328]]

 
43213.............  Esophagoscopy,          New..............            5.00            4.73  No.
                     flexible, transoral;
                     with dilation of
                     esophagus, by balloon
                     or dilator,
                     retrograde (includes
                     fluoroscopic
                     guidance, when
                     performed).
43214.............  Esophagoscopy,          New..............            3.78            3.38  No.
                     flexible, transoral;
                     with dilation of
                     esophagus with
                     balloon (30 mm
                     diameter or larger)
                     (includes
                     fluoroscopic
                     guidance, when
                     performed).
43215.............  Esophagoscopy,          2.60.............            2.60            2.51  No.
                     flexible, transoral;
                     with removal of
                     foreign body.
43216.............  Esophagoscopy,          2.40.............            2.40            2.40  No.
                     flexible, transoral;
                     with removal of
                     tumor(s), polyp(s),
                     or other lesion(s) by
                     hot biopsy forceps or
                     bipolar cautery.
43217.............  Esophagoscopy,          2.90.............            2.90            2.90  No.
                     flexible, transoral;
                     with removal of
                     tumor(s), polyp(s),
                     or other lesion(s) by
                     snare technique.
43220.............  Esophagoscopy,          2.10.............            2.10            2.10  No.
                     flexible, transoral;
                     with transendoscopic
                     balloon dilation
                     (less than 30 mm
                     diameter).
43226.............  Esophagoscopy,          2.34.............            2.34            2.34  No.
                     flexible, transoral;
                     with insertion of
                     guide wire followed
                     by passage of
                     dilator(s) over guide
                     wire.
43227.............  Esophagoscopy,          3.59.............            3.26            2.99  No.
                     flexible, transoral;
                     with control of
                     bleeding, any method.
43229.............  Esophagoscopy,          New..............            3.72            3.54  No.
                     flexible, transoral;
                     with ablation of
                     tumor(s), polyp(s),
                     or other lesion(s)
                     (includes pre- and
                     post-dilation and
                     guide wire passage,
                     when performed).
43231.............  Esophagoscopy,          3.19.............            3.19            2.90  No.
                     flexible, transoral;
                     with endoscopic
                     ultrasound
                     examination.
43232.............  Esophagoscopy,          4.47.............            3.83            3.54  No.
                     flexible, transoral;
                     with transendoscopic
                     ultrasound-guided
                     intramural or
                     transmural fine
                     needle aspiration/
                     biopsy(s).
43233.............  Esophagogastroduodenos  New..............            4.45            4.05  No.
                     copy, flexible,
                     transoral; with
                     dilation of esophagus
                     with balloon (30 mm
                     diameter or larger)
                     (includes
                     fluoroscopic
                     guidance, when
                     performed).
43235.............  Esophagogastroduodenos  2.39.............            2.26            2.17  No.
                     copy, flexible,
                     transoral;
                     diagnostic, including
                     collection of
                     specimen(s) by
                     brushing or washing,
                     when performed
                     (separate procedure).
43236.............  Esophagogastroduodenos  2.92.............            2.57            2.47  No.
                     copy, flexible,
                     transoral; with
                     directed submucosal
                     injection(s), any
                     substance.
43237.............  Esophagogastroduodenos  3.98.............            3.85            3.57  No.
                     copy, flexible,
                     transoral; with
                     endoscopic ultrasound
                     examination limited
                     to the esophagus,
                     stomach or duodenum,
                     and adjacent
                     structures.
43238.............  Esophagogastroduodenos  5.02.............            4.50            4.11  No.
                     copy, flexible,
                     transoral; with
                     transendoscopic
                     ultrasound-guided
                     intramural or
                     transmural fine
                     needle aspiration/
                     biopsy(s), esophagus
                     (includes endoscopic
                     ultrasound
                     examination limited
                     to the esophagus,
                     stomach or duodenum,
                     and adjacent
                     structures).
43239.............  Esophagogastroduodenos  2.87.............            2.56            2.47  No.
                     copy, flexible,
                     transoral; with
                     biopsy, single or
                     multiple.
43240.............  Esophagogastroduodenos  6.85.............            7.25            7.25  No.
                     copy, flexible,
                     transoral; with
                     transmural drainage
                     of pseudocyst
                     (includes placement
                     of transmural
                     drainage catheter[s]/
                     stent[s], when
                     performed, and
                     endoscopic
                     ultrasound, when
                     performed).
43241.............  Esophagogastroduodenos  2.59.............            2.59            2.59  No.
                     copy, flexible,
                     transoral; with
                     insertion of
                     intraluminal tube or
                     catheter.
43242.............  Esophagogastroduodenos  7.30.............            5.39            4.68  No.
                     copy, flexible,
                     transoral; with
                     transendoscopic
                     ultrasound-guided
                     intramural or
                     transmural fine
                     needle aspiration/
                     biopsy(s) (includes
                     endoscopic ultrasound
                     examination of the
                     esophagus, stomach,
                     and either the
                     duodenum or a
                     surgically altered
                     stomach where the
                     jejunum is examined
                     distal to the
                     anastomosis).
43243.............  Esophagogastroduodenos  4.56.............            4.37            4.37  No.
                     copy, flexible,
                     transoral; with
                     injection sclerosis
                     of esophageal/gastric
                     varices.
43244.............  Esophagogastroduodenos  5.04.............            4.50            4.50  No.
                     copy, flexible,
                     transoral; with band
                     ligation of
                     esophageal/gastric
                     varices.
43245.............  Esophagogastroduodenos  3.18.............            3.18            3.18  No.
                     copy, flexible,
                     transoral; with
                     dilation of gastric/
                     duodenal stricture(s)
                     (eg, balloon, bougie).
43246.............  Esophagogastroduodenos  4.32.............            4.32            3.66  No.
                     copy, flexible,
                     transoral; with
                     directed placement of
                     percutaneous
                     gastrostomy tube.
43247.............  Esophagogastroduodenos  3.38.............            3.27            3.18  No.
                     copy, flexible,
                     transoral; with
                     removal of foreign
                     body.

[[Page 74329]]

 
43248.............  Esophagogastroduodenos  3.15.............            3.01            3.01  No.
                     copy, flexible,
                     transoral; with
                     insertion of guide
                     wire followed by
                     passage of dilator(s)
                     through esophagus
                     over guide wire.
43249.............  Esophagogastroduodenos  2.90.............            2.77            2.77  No.
                     copy, flexible,
                     transoral; with
                     transendoscopic
                     balloon dilation of
                     esophagus (less than
                     30 mm diameter).
43250.............  Esophagogastroduodenos  3.20.............            3.07            3.07  No.
                     copy, flexible,
                     transoral; with
                     removal of tumor(s),
                     polyp(s), or other
                     lesion(s) by hot
                     biopsy forceps or
                     bipolar cautery.
43251.............  Esophagogastroduodenos  3.69.............            3.57            3.57  No.
                     copy, flexible,
                     transoral; with
                     removal of tumor(s),
                     polyp(s), or other
                     lesion(s) by snare
                     technique.
43253.............  Esophagogastroduodenos  New..............            5.39            4.68  No.
                     copy, flexible,
                     transoral; with
                     transendoscopic
                     ultrasound-guided
                     transmural injection
                     of diagnostic or
                     therapeutic
                     substance(s) (eg,
                     anesthetic,
                     neurolytic agent) or
                     fiducial marker(s)
                     (includes endoscopic
                     ultrasound
                     examination of the
                     esophagus, stomach,
                     and either the
                     duodenum or a
                     surgically altered
                     stomach where the
                     jejunum is examined
                     distal to the
                     anastomosis).
43254.............  Esophagogastroduodenos  New..............            5.25            4.88  No.
                     copy, flexible,
                     transoral; with
                     endoscopic mucosal
                     resection.
43255.............  Esophagogastroduodenos  4.81.............            4.20            3.66  No.
                     copy, flexible,
                     transoral; with
                     control of bleeding,
                     any method.
43257.............  Esophagogastroduodenos  5.50.............            4.25            4.11  No.
                     copy, flexible,
                     transoral; with
                     delivery of thermal
                     energy to the muscle
                     of lower esophageal
                     sphincter and/or
                     gastric cardia, for
                     treatment of
                     gastroesophageal
                     reflux disease.
43259.............  Esophagogastroduodenos  5.19.............            4.74            4.14  No.
                     copy, flexible,
                     transoral; with
                     endoscopic ultrasound
                     examination,
                     including the
                     esophagus, stomach,
                     and either the
                     duodenum or a
                     surgically altered
                     stomach where the
                     jejunum is examined
                     distal to the
                     anastomosis.
43260.............  Endoscopic retrograde   5.95.............            5.95            5.95  No.
                     cholangiopancreatogra
                     phy (ercp);
                     diagnostic, including
                     collection of
                     specimen(s) by
                     brushing or washing,
                     when performed
                     (separate procedure).
43261.............  Endoscopic retrograde   6.26.............            6.25            6.25  No.
                     cholangiopancreatogra
                     phy (ercp); with
                     biopsy, single or
                     multiple.
43262.............  Endoscopic retrograde   7.38.............            6.60            6.60  No.
                     cholangiopancreatogra
                     phy (ercp); with
                     sphincterotomy/
                     papillotomy.
43263.............  Endoscopic retrograde   7.28.............            7.28            6.60  No.
                     cholangiopancreatogra
                     phy (ercp); with
                     pressure measurement
                     of sphincter of oddi.
43264.............  Endoscopic retrograde   8.89.............            6.73            6.73  No.
                     cholangiopancreatogra
                     phy (ercp); with
                     removal of calculi/
                     debris from biliary/
                     pancreatic duct(s).
43265.............  Endoscopic retrograde   10.00............            8.03            8.03  No.
                     cholangiopancreatogra
                     phy (ercp); with
                     destruction of
                     calculi, any method
                     (eg, mechanical,
                     electrohydraulic,
                     lithotripsy).
43266.............  Esophagogastroduodenos  New..............            4.40            4.05  No.
                     copy, flexible,
                     transoral; with
                     placement of
                     endoscopic stent
                     (includes pre- and
                     post-dilation and
                     guide wire passage,
                     when performed).
43270.............  Esophagogastroduodenos  New..............            4.39            4.21  No.
                     copy, flexible,
                     transoral; with
                     ablation of tumor(s),
                     polyp(s), or other
                     lesion(s) (includes
                     pre- and post-
                     dilation and guide
                     wire passage, when
                     performed).
43273.............  Endoscopic cannulation  2.24.............            2.24            2.24  No.
                     of papilla with
                     direct visualization
                     of pancreatic/common
                     bile duct(s) (list
                     separately in
                     addition to code(s)
                     for primary
                     procedure).
43274.............  Endoscopic retrograde   New..............            8.74            8.48  No.
                     cholangiopancreatogra
                     phy (ercp); with
                     placement of
                     endoscopic stent into
                     biliary or pancreatic
                     duct, including pre-
                     and post-dilation and
                     guide wire passage,
                     when performed,
                     including
                     sphincterotomy, when
                     performed, each stent.
43275.............  Endoscopic retrograde   New..............            6.96            6.96  No.
                     cholangiopancreatogra
                     phy (ercp); with
                     removal of foreign
                     body(s) or stent(s)
                     from biliary/
                     pancreatic duct(s).
43276.............  Endoscopic retrograde   New..............            9.10            8.84  No.
                     cholangiopancreatogra
                     phy (ercp); with
                     removal and exchange
                     of stent(s), biliary
                     or pancreatic duct,
                     including pre- and
                     post-dilation and
                     guide wire passage,
                     when performed,
                     including
                     sphincterotomy, when
                     performed, each stent
                     exchanged.

[[Page 74330]]

 
43277.............  Endoscopic retrograde   New..............            7.11            7.00  No.
                     cholangiopancreatogra
                     phy (ercp); with
                     trans-endoscopic
                     balloon dilation of
                     biliary/pancreatic
                     duct(s) or of ampulla
                     (sphincteroplasty),
                     including
                     sphincterotomy, when
                     performed, each duct.
43278.............  Endoscopic retrograde   New..............            8.08            7.99  No.
                     cholangiopancreatogra
                     phy (ercp); with
                     ablation of tumor(s),
                     polyp(s), or other
                     lesion(s), including
                     pre- and post-
                     dilation and guide
                     wire passage, when
                     performed.
43450.............  Dilation of esophagus,  1.38.............            1.38            1.38  No.
                     by unguided sound or
                     bougie, single or
                     multiple passes.
43453.............  Dilation of esophagus,  1.51.............            1.51            1.51  No.
                     over guide wire.
49405.............  Image-guided fluid      New..............            4.25            4.25  No.
                     collection drainage
                     by catheter (eg,
                     abscess, hematoma,
                     seroma, lymphocele,
                     cyst); visceral (eg,
                     kidney, liver,
                     spleen, lung/
                     mediastinum),
                     percutaneous.
49406.............  Image-guided fluid      New..............            4.25            4.25  No.
                     collection drainage
                     by catheter (eg,
                     abscess, hematoma,
                     seroma, lymphocele,
                     cyst); peritoneal or
                     retroperitoneal,
                     percutaneous.
49407.............  Image-guided fluid      New..............            4.50            4.50  No.
                     collection drainage
                     by catheter (eg,
                     abscess, hematoma,
                     seroma, lymphocele,
                     cyst); peritoneal or
                     retroperitoneal,
                     transvaginal or
                     transrectal.
50360.............  Renal                   40.90............           40.90           39.88  No.
                     allotransplantation,
                     implantation of
                     graft; without
                     recipient nephrectomy.
52332.............  Cystourethroscopy,      2.82.............            2.82            2.82  No.
                     with insertion of
                     indwelling ureteral
                     stent (eg, gibbons or
                     double-j type).
52356.............  Cystourethroscopy,      New..............            8.00            8.00  No.
                     with ureteroscopy and/
                     or pyeloscopy; with
                     lithotripsy including
                     insertion of
                     indwelling ureteral
                     stent (eg, gibbons or
                     double-j type).
62310.............  Injection(s), of        1.91.............            1.68            1.18  No.
                     diagnostic or
                     therapeutic
                     substance(s)
                     (including
                     anesthetic,
                     antispasmodic,
                     opioid, steroid,
                     other solution), not
                     including neurolytic
                     substances, including
                     needle or catheter
                     placement, includes
                     contrast for
                     localization when
                     performed, epidural
                     or subarachnoid;
                     cervical or thoracic.
62311.............  Injection(s), of        1.54.............            1.54            1.17  No.
                     diagnostic or
                     therapeutic
                     substance(s)
                     (including
                     anesthetic,
                     antispasmodic,
                     opioid, steroid,
                     other solution), not
                     including neurolytic
                     substances, including
                     needle or catheter
                     placement, includes
                     contrast for
                     localization when
                     performed, epidural
                     or subarachnoid;
                     lumbar or sacral
                     (caudal).
62318.............  Injection(s),           2.04.............            2.04            1.54  No.
                     including indwelling
                     catheter placement,
                     continuous infusion
                     or intermittent
                     bolus, of diagnostic
                     or therapeutic
                     substance(s)
                     (including
                     anesthetic,
                     antispasmodic,
                     opioid, steroid,
                     other solution), not
                     including neurolytic
                     substances, includes
                     contrast for
                     localization when
                     performed, epidural
                     or subarachnoid;
                     cervical or thoracic.
62319.............  Injection(s),           1.87.............            1.87            1.50  No.
                     including indwelling
                     catheter placement,
                     continuous infusion
                     or intermittent
                     bolus, of diagnostic
                     or therapeutic
                     substance(s)
                     (including
                     anesthetic,
                     antispasmodic,
                     opioid, steroid,
                     other solution), not
                     including neurolytic
                     substances, includes
                     contrast for
                     localization when
                     performed, epidural
                     or subarachnoid;
                     lumbar or sacral
                     (caudal).
63047.............  Laminectomy,            15.37............           15.37           15.37  No.
                     facetectomy and
                     foraminotomy
                     (unilateral or
                     bilateral with
                     decompression of
                     spinal cord, cauda
                     equina and/or nerve
                     root[s], [eg, spinal
                     or lateral recess
                     stenosis]), single
                     vertebral segment;
                     lumbar.
63048.............  Laminectomy,            3.47.............            3.47            3.47  No.
                     facetectomy and
                     foraminotomy
                     (unilateral or
                     bilateral with
                     decompression of
                     spinal cord, cauda
                     equina and/or nerve
                     root[s], [eg, spinal
                     or lateral recess
                     stenosis]), single
                     vertebral segment;
                     each additional
                     segment, cervical,
                     thoracic, or lumbar
                     (list separately in
                     addition to code for
                     primary procedure).
64616.............  Chemodenervation of     New..............            1.79            1.53  No.
                     muscle(s); neck
                     muscle(s), excluding
                     muscles of the
                     larynx, unilateral
                     (eg, for cervical
                     dystonia, spasmodic
                     torticollis).
64617.............  Chemodenervation of     New..............            2.06            1.90  No.
                     muscle(s); larynx,
                     unilateral,
                     percutaneous (eg, for
                     spasmodic dysphonia),
                     includes guidance by
                     needle
                     electromyography,
                     when performed.
64642.............  Chemodenervation of     New..............            1.65            1.65  No.
                     one extremity; 1-4
                     muscle(s).

[[Page 74331]]

 
64643.............  Chemodenervation of     New..............            1.32            1.22  No.
                     one extremity; each
                     additional extremity,
                     1-4 muscle(s) (list
                     separately in
                     addition to code for
                     primary procedure).
64644.............  Chemodenervation of     New..............            1.82            1.82  No.
                     one extremity; 5 or
                     more muscle(s).
64645.............  Chemodenervation of     New..............            1.52            1.39  No.
                     one extremity; each
                     additional extremity,
                     5 or more muscle(s)
                     (list separately in
                     addition to code for
                     primary procedure).
64646.............  Chemodenervation of     New..............            1.80            1.80  No.
                     trunk muscle(s); 1-5
                     muscle(s).
64647.............  Chemodenervation of     New..............            2.11            2.11  No.
                     trunk muscle(s); 6 or
                     more muscle(s).
66183.............  Insertion of anterior   New..............           13.20           13.20  No.
                     segment aqueous
                     drainage device,
                     without extraocular
                     reservoir, external
                     approach.
67914.............  Repair of ectropion;    3.75.............            3.75            3.75  No.
                     suture.
67915.............  Repair of ectropion;    3.26.............            2.03            2.03  No.
                     thermocauterization.
67916.............  Repair of ectropion;    5.48.............            5.48            5.48  No.
                     excision tarsal wedge.
67917.............  Repair of ectropion;    6.19.............            5.93            5.93  No.
                     extensive (eg, tarsal
                     strip operations).
67921.............  Repair of entropion;    3.47.............            3.47            3.47  No.
                     suture.
67922.............  Repair of entropion;    3.14.............            2.03            2.03  No.
                     thermocauterization.
67923.............  Repair of entropion;    6.05.............            5.48            5.48  No.
                     excision tarsal wedge.
67924.............  Repair of entropion;    5.93.............            5.93            5.93  No.
                     extensive (eg, tarsal
                     strip or
                     capsulopalpebral
                     fascia repairs
                     operation).
69210.............  Removal impacted        0.61.............            0.58            0.61  No.
                     cerumen requiring
                     instrumentation,
                     unilateral.
70450.............  Computed tomography,    0.85.............            0.85            0.85  No.
                     head or brain;
                     without contrast
                     material.
70460.............  Computed tomography,    1.13.............            1.13            1.13  No.
                     head or brain; with
                     contrast material(s).
70551.............  Magnetic resonance      1.48.............            1.48            1.48  No.
                     (eg, proton) imaging,
                     brain (including
                     brain stem); without
                     contrast material.
70552.............  Magnetic resonance      1.78.............            1.78            1.78  No.
                     (eg, proton) imaging,
                     brain (including
                     brain stem); with
                     contrast material(s).
70553.............  Magnetic resonance      2.36.............            2.36            2.29  No.
                     (eg, proton) imaging,
                     brain (including
                     brain stem); without
                     contrast material,
                     followed by contrast
                     material(s) and
                     further sequences.
72141.............  Magnetic resonance      1.60.............            1.48            1.48  No.
                     (eg, proton) imaging,
                     spinal canal and
                     contents, cervical;
                     without contrast
                     material.
72142.............  Magnetic resonance      1.92.............            1.78            1.78  No.
                     (eg, proton) imaging,
                     spinal canal and
                     contents, cervical;
                     with contrast
                     material(s).
72146.............  Magnetic resonance      1.60.............            1.48            1.48  No.
                     (eg, proton) imaging,
                     spinal canal and
                     contents, thoracic;
                     without contrast
                     material.
72147.............  Magnetic resonance      1.92.............            1.78            1.78  No.
                     (eg, proton) imaging,
                     spinal canal and
                     contents, thoracic;
                     with contrast
                     material(s).
72148.............  Magnetic resonance      1.48.............            1.48            1.48  No.
                     (eg, proton) imaging,
                     spinal canal and
                     contents, lumbar;
                     without contrast
                     material.
72149.............  Magnetic resonance      1.78.............            1.78            1.78  No.
                     (eg, proton) imaging,
                     spinal canal and
                     contents, lumbar;
                     with contrast
                     material(s).
72156.............  Magnetic resonance      2.57.............            2.29            2.29  No.
                     (eg, proton) imaging,
                     spinal canal and
                     contents, without
                     contrast material,
                     followed by contrast
                     material(s) and
                     further sequences;
                     cervical.
72157.............  Magnetic resonance      2.57.............            2.29            2.29  No.
                     (eg, proton) imaging,
                     spinal canal and
                     contents, without
                     contrast material,
                     followed by contrast
                     material(s) and
                     further sequences;
                     thoracic.
72158.............  Magnetic resonance      2.36.............            2.29            2.29  No.
                     (eg, proton) imaging,
                     spinal canal and
                     contents, without
                     contrast material,
                     followed by contrast
                     material(s) and
                     further sequences;
                     lumbar.
77280.............  Therapeutic radiology   0.70.............            0.70            0.70  No.
                     simulation-aided
                     field setting; simple.
77285.............  Therapeutic radiology   1.05.............            1.05            1.05  No.
                     simulation-aided
                     field setting;
                     intermediate.
77290.............  Therapeutic radiology   1.56.............            1.56            1.56  No.
                     simulation-aided
                     field setting;
                     complex.
77293.............  Respiratory motion      New..............            2.00            2.00  No.
                     management simulation
                     (list separately in
                     addition to code for
                     primary procedure).
77295.............  3-dimensional           4.56.............            4.29            4.29  No.
                     radiotherapy plan,
                     including dose-volume
                     histograms.
81161.............  Dmd (dystrophin) (eg,   New..............            1.85               X  N/A
                     duchenne/becker
                     muscular dystrophy)
                     deletion analysis,
                     and duplication
                     analysis, if
                     performed.
88112.............  Cytopathology,          1.18.............            0.56            0.56  No.
                     selective cellular
                     enhancement technique
                     with interpretation
                     (eg, liquid based
                     slide preparation
                     method), except
                     cervical or vaginal.

[[Page 74332]]

 
88342.............  Immunohistochemistry    0.85.............            0.60               I  N/A
                     or
                     immunocytochemistry,
                     each separately
                     identifiable antibody
                     per block, cytologic
                     preparation, or
                     hematologic smear;
                     first separately
                     identifiable antibody
                     per slide.
88343.............  Immunohistochemistry    New..............            0.24               I  N/A
                     or
                     immunocytochemistry,
                     each separately
                     identifiable antibody
                     per block, cytologic
                     preparation, or
                     hematologic smear;
                     each additional
                     separately
                     identifiable antibody
                     per slide (list
                     separately in
                     addition to code for
                     primary procedure).
92521.............  Evaluation of speech    New..............            1.75            1.75  No.
                     fluency (eg,
                     stuttering,
                     cluttering).
92522.............  Evaluation of speech    New..............            1.50            1.50  No.
                     sound production (eg,
                     articulation,
                     phonological process,
                     apraxia, dysarthria).
92523.............  Evaluation of speech    New..............            3.36            3.00  No.
                     sound production (eg,
                     articulation,
                     phonological process,
                     apraxia, dysarthria);
                     with evaluation of
                     language
                     comprehension and
                     expression (eg,
                     receptive and
                     expressive language).
92524.............  Behavioral and          New..............            1.75            1.50  No.
                     qualitative analysis
                     of voice and
                     resonance.
93000.............  Electrocardiogram,      0.17.............            0.17            0.17  No.
                     routine ecg with at
                     least 12 leads; with
                     interpretation and
                     report.
93010.............  Electrocardiogram,      0.17.............            0.17            0.17  No.
                     routine ecg with at
                     least 12 leads;
                     interpretation and
                     report only.
93582.............  Percutaneous            New..............           14.00           12.56  No.
                     transcatheter closure
                     of patent ductus
                     arteriosus.
93583.............  Percutaneous            New..............           14.00           14.00  No.
                     transcatheter septal
                     reduction therapy
                     (eg, alcohol septal
                     ablation) including
                     temporary pacemaker
                     insertion when
                     performed.
93880.............  Duplex scan of          0.60.............            0.80            0.60  No.
                     extracranial
                     arteries; complete
                     bilateral study.
93882.............  Duplex scan of          0.40.............            0.50            0.40  No.
                     extracranial
                     arteries; unilateral
                     or limited study.
95816.............  Electroencephalogram    1.08.............            1.08            1.08  No.
                     (eeg); including
                     recording awake and
                     drowsy.
95819.............  Electroencephalogram    1.08.............            1.08            1.08  No.
                     (eeg); including
                     recording awake and
                     asleep.
95822.............  Electroencephalogram    1.08.............            1.08            1.08  No.
                     (eeg); recording in
                     coma or sleep only.
96365.............  Intravenous infusion,   0.21.............            0.21            0.21  No.
                     for therapy,
                     prophylaxis, or
                     diagnosis (specify
                     substance or drug);
                     initial, up to 1 hour.
96366.............  Intravenous infusion,   0.18.............            0.18            0.18  No.
                     for therapy,
                     prophylaxis, or
                     diagnosis (specify
                     substance or drug);
                     each additional hour
                     (list separately in
                     addition to code for
                     primary procedure).
96367.............  Intravenous infusion,   0.19.............            0.19            0.19  No.
                     for therapy,
                     prophylaxis, or
                     diagnosis (specify
                     substance or drug);
                     additional sequential
                     infusion of a new
                     drug/substance, up to
                     1 hour (list
                     separately in
                     addition to code for
                     primary procedure).
96368.............  Intravenous infusion,   0.17.............            0.17            0.17  No.
                     for therapy,
                     prophylaxis, or
                     diagnosis (specify
                     substance or drug);
                     concurrent infusion
                     (list separately in
                     addition to code for
                     primary procedure).
96413.............  Chemotherapy            0.28.............            0.28            0.28  No.
                     administration,
                     intravenous infusion
                     technique; up to 1
                     hour, single or
                     initial substance/
                     drug.
96415.............  Chemotherapy            0.19.............            0.19            0.19  No.
                     administration,
                     intravenous infusion
                     technique; each
                     additional hour (list
                     separately in
                     addition to code for
                     primary procedure).
96417.............  Chemotherapy            0.21.............            0.21            0.21  No.
                     administration,
                     intravenous infusion
                     technique; each
                     additional sequential
                     infusion (different
                     substance/drug), up
                     to 1 hour (list
                     separately in
                     addition to code for
                     primary procedure).
97610.............  Low frequency, non-     New..............               C               C  N/A
                     contact, non-thermal
                     ultrasound, including
                     topical
                     application(s), when
                     performed, wound
                     assessment, and
                     instruction(s) for
                     ongoing care, per day.
98940.............  Chiropractic            0.45.............            0.46            0.46  No.
                     manipulative
                     treatment (cmt);
                     spinal, 1-2 regions.
98941.............  Chiropractic            0.65.............            0.71            0.71  No.
                     manipulative
                     treatment (cmt);
                     spinal, 3-4 regions.
98942.............  Chiropractic            0.87.............            0.96            0.96  No.
                     manipulative
                     treatment (cmt);
                     spinal, 5 regions.
99446.............  Interprofessional       New..............            0.35               B  No.
                     telephone/internet
                     assessment and
                     management service
                     provided by a
                     consultative
                     physician including a
                     verbal and written
                     report to the
                     patient's treating/
                     requesting physician
                     or other qualified
                     health care
                     professional; 5-10
                     minutes of medical
                     consultative
                     discussion and review.
99447.............  Interprofessional       New..............            0.70               B  No.
                     telephone/internet
                     assessment and
                     management service
                     provided by a
                     consultative
                     physician including a
                     verbal and written
                     report to the
                     patient's treating/
                     requesting physician
                     or other qualified
                     health care
                     professional; 11-20
                     minutes of medical
                     consultative
                     discussion and review.

[[Page 74333]]

 
99448.............  Interprofessional       New..............            1.05               B  No.
                     telephone/internet
                     assessment and
                     management service
                     provided by a
                     consultative
                     physician including a
                     verbal and written
                     report to the
                     patient's treating/
                     requesting physician
                     or other qualified
                     health care
                     professional; 21-30
                     minutes of medical
                     consultative
                     discussion and review.
99449.............  Interprofessional       New..............            1.40               B  No.
                     telephone/internet
                     assessment and
                     management service
                     provided by a
                     consultative
                     physician including a
                     verbal and written
                     report to the
                     patient's treating/
                     requesting physician
                     or other qualified
                     health care
                     professional; 31
                     minutes or more of
                     medical consultative
                     discussion and review.
99481.............  Total body systemic     New..............               C               C  N/A
                     hypothermia in a
                     critically ill
                     neonate per day (list
                     separately in
                     addition to code for
                     primary procedure).
99482.............  Selective head          New..............               C               C  N/A
                     hypothermia in a
                     critically ill
                     neonate per day (list
                     separately in
                     addition to code for
                     primary procedure).
G0461.............  Immunohistochemistry    New..............             N/A            0.60  No.
                     or
                     immunocytochemistry,
                     per specimen; first
                     separately
                     identifiable antibody.
G0462.............  Immunohistochemistry    New..............             N/A            0.24  No.
                     or
                     immunocytochemistry,
                     per specimen; each
                     additional separately
                     identifiable antibody
                     (List separately in
                     addition to code for
                     primary procedure).
----------------------------------------------------------------------------------------------------------------

    As previously discussed in section III.E.2 of this final rule with 
comment period, each year, the AMA RUC and HCPAC, along with other 
public commenters, provide us with recommendations regarding physician 
work values for new, revised, and potentially misvalued CPT codes. This 
section discusses codes for which the interim final work RVU or time 
values assigned for CY 2014 vary from those recommended by the AMA RUC. 
It also discusses work RVU and time values for new and revised HCPCS G-
codes.
i. Code Specific Issues
(1) Breast Biopsy (CPT Codes 19081, 19082, 19083, 19084, 19085, 19086, 
19281, 19282, 19283, 19284, 19285, 19286, 19287, and 19288)
    The AMA RUC identified several breast intervention codes as 
potentially misvalued using the codes reported together 75 percent or 
more screen as potentially misvalued. For CY 2014, the CPT Editorial 
Panel created 14 new codes, CPT codes 19081 through 19288, to describe 
breast biopsy and placement of breast localization devices.
    We are establishing the AMA RUC-recommended values as CY 2014 
interim final values for all of the breast biopsy codes with the 
exception of CPT code 19287 and its add-on CPT code, 19288. We believe 
that the work RVU recommended by the AMA RUC for CPT code 19287 would 
create a rank order anomaly with other codes in the family. To avoid 
this anomaly, we are assigning a CY 2014 interim final work RVU of 
2.55, which is between the 25th percentile and the median work RVU in 
the survey. In determining how to value this service, we examined the 
work RVU relationship among the breast biopsy codes as established by 
the AMA RUC and believed those to be correct. We used those 
relationships to establish the value for CPT code 19287. We believe 
that using this work value creates the appropriate relativity with 
other codes in the family.
    To value CPT code 19288, we followed the same procedure used by the 
AMA RUC in making its recommendation for the add-on codes, which was to 
value add-on services at 50 percent of the applicable base code value, 
resulting in a work RVU of 1.28 for CPT code 19288.
    We received public input suggesting that when one of these 
procedures is performed without mammography guidance, mammography is 
commonly performed afterwards to confirm appropriate placement. We seek 
public input as to whether or not post-procedure mammography is 
commonly furnished with breast biopsy and marker placement, and if so, 
whether the services should be bundled together.
    Finally, we note that the physician intraservice time for CPT code 
19286, which is an add-on code, is 19 minutes, which is higher than the 
15 minutes of intraservice time for its base code, CPT code 19285. 
Therefore we are reducing the intraservice time for CPT code 19286 to 
the survey 25th percentile value of 14 minutes.
(2) Shoulder Prosthesis Removal (CPT Codes 23333, 23334, and 23335)
    Three new codes, CPT codes 23333, 23334 and 23335, were created to 
replace CPT codes 23331 (removal of foreign body, shoulder; deep (eg, 
Neer hemiarthroplasty removal)) and 23332 (removal of foreign body, 
shoulder; complicated (eg, total shoulder)).
    We are establishing a CY 2014 interim final work RVU of 6.00 for 
CPT code 23333, as recommended by the AMA RUC.
    The AMA RUC recommended a work RVU of 18.89 for CPT code 23334 
based on a crosswalk to the work value of CPT code 27269 (Open 
treatment of femoral fracture, proximal end, head, includes internal 
fixation, when performed). The code currently reported for this 
service, CPT code 23331, has a work RVU of 7.63. Recognizing that more 
physician time is involved with CPT code 23334 than CPT code 23331 and 
that the technique for removal of prosthesis may have changed since its 
last valuation, we still do not believe that the work has more than 
doubled for this service. Therefore, instead of assigning a work RVU of 
18.89, we are assigning CPT 23334 a CY 2014 interim final work RVU of 
15.50, based upon the 25th percentile of the survey. We believe this 
more appropriately reflects the work required to furnish this service.
    Similarly, we believe that the 25th percentile of the survey also 
provides the appropriate work RVU for CPT code 23335. The AMA RUC 
recommended a work RVU of 22.13 based on a crosswalk to the CY 2013 
interim final value of

[[Page 74334]]

CPT code 23472 (Arthroplasty, glenohumeral joint; total shoulder 
(glenoid and proximal humeral replacement (eg, total shoulder))). CPT 
code 23332 is currently billed for the work of new CPT code 23335 and 
has a work RVU of 12.37. Although the physician time for CPT code 23335 
has increased from that of the predecessor code, CPT code 22332, and 
the technique for removal of prosthesis may have changed, we do not 
believe that the work has almost doubled for this service. Therefore, 
we are assigning a work RVU of 19.00 based upon the 25th percentile 
work RVU in the survey. We believe this appropriately reflects the work 
required to perform this service.
(3) Hip and Knee Replacement (CPT Codes 27130, 27236, 27446 and 27447)
    CPT codes CY 27130, 27446 and 27447 were identified as potentially 
misvalued codes under the CMS high expenditure procedural code screen 
in the CY 2012 final rule with comment period. The AMA RUC reviewed the 
family of codes for hip and knee replacement (CPT codes 27130, 27236, 
27446 and 27447) and provided us with recommendations for work RVUs and 
physician time for these services for CY 2014. We are establishing the 
AMA RUC-recommended values of 17.61 and 17.48 a CY 2014 interim final 
work RVUs for CPT codes 27236 and 27446, respectively.
    For CPT codes 27130 and 27447, we are establishing work RVUs that 
vary from those recommended by the AMA RUC. In addition to the 
recommendation we received from the AMA RUC, we received alternative 
recommendations and input regarding appropriate values for codes within 
this family from the relevant specialty societies. These societies 
raised several objections to the AMA RUC's recommended values, 
including the inconsistent data sources used for determining the time 
for this recommendation relative to its last recommendation in 2005, 
concerns regarding the thoroughness of the AMA RUC's review of the 
services, and questions regarding the appropriate number of visits 
estimated to be furnished within the global period for the codes.
    We have examined the information presented by the specialty 
societies and the AMA RUC regarding these services and we share 
concerns raised by stakeholders regarding the appropriate valuation of 
these services, especially related to using the most accurate data 
source available for determining the intraservice time involved in 
furnishing PFS services. Specifically, there appears to be significant 
variation between the time values estimated through a survey versus 
those collected through specialty databases. However, we also note that 
the AMA RUC, in making its recommendation, acknowledged that there has 
been a change in the source for time estimates since these services 
were previously valued.
    We note that one source of disagreement regarding the appropriate 
valuation of these services result from differing views as to the 
postoperative visits that typically occur in the global period for both 
of these procedures. The AMA RUC recommended including three inpatient 
postoperative visits (2 CPT code 99231 and one CPT code 99232), one 
discharge day management visit (99238), and three outpatient 
postoperative office visits (1 CPT code 99212 and 2 CPT code 99213) in 
the global periods for both CPT codes 27130 and 27447. The specialty 
societies agreed with the number of visits included in the AMA RUC 
recommendation, but contended that the visits were not assigned to the 
appropriate level. Specifically, the specialty societies believe that 
the three inpatient postoperative visits should be 1 CPT code 99231 and 
2 CPT code 99232. Similarly, the specialty societies indicated that the 
three outpatient postoperative visits should all be CPT code 99213. The 
visits recommended by the specialty societies would result in greater 
resources in the global period and thus higher work values.
    The divergent recommendations from the specialty societies and the 
AMA RUC regarding the accuracy of the estimates of time for these 
services, including both the source of time estimates for the procedure 
itself as well as the inpatient and outpatient visits included in the 
global periods for these codes, lead us to take a cautious approach in 
valuing these services.
    We agree with the AMA RUC's recommendation to value CPT codes 27130 
and 27447 equally so we are establishing the same CY 2014 interim final 
work RVUs for these two procedures. However, based upon the information 
that we have at this time, we believe it is also appropriate to modify 
the AMA RUC-recommended RVU to reflect the visits in the global period 
as recommended by the specialty societies. This change results in a 
1.12 work RVU increase for the visits in the global period. We added 
the additional work to the AMA RUC-recommended work RVU of 19.60 for 
CPT codes 27130 and 27447, resulting in an interim final work RVU of 
20.72 for both services.
    To finalize values for these services for CY 2015, we seek public 
comment regarding not only the appropriate work RVUs for these 
services, but also the most appropriate reconciliation for the 
conflicting information regarding time values for these services as 
presented to us by the physician community. We are also interested in 
public comment on the use of specialty databases as compared to surveys 
for determining time values. We are especially interested in potential 
sources of objective data regarding procedure times and levels of 
visits furnished during the global periods for the services described 
by these codes.
(4) Transcatheter Aortic Valve Replacement (TAVR) (CPT Code 33366)
    For the CY 2013 final rule with comment period, we reviewed and 
valued several codes within the transcatheter aortic valve replacement 
(TAVR) family including CPT Codes 33361 (transcatheter aortic valve 
replacement (tavr/tavi) with prosthetic valve; percutaneous femoral 
artery approach), 33362 (transcatheter aortic valve replacement (tavr/
tavi) with prosthetic valve; open femoral artery approach), 33363 
(transcatheter aortic valve replacement (tavr/tavi) with prosthetic 
valve; open axillary artery approach), 33364 (transcatheter aortic 
valve replacement (tavr/tavi) with prosthetic valve; open iliac artery 
approach) and 33365 (transcatheter aortic valve replacement (tavr/tavi) 
with prosthetic valve; transaortic approach (eg, median sternotomy, 
mediastinotomy)). For these codes, we finalized the CY 2013 interim 
final values for CY 2014 (see section II.E.2.a.ii.) For CY 2014, CPT 
created a new code in the TAVR family, CPT code 33366, (Trcath replace 
aortic value).
    The AMA RUC has recommended the median survey value RVU of 40.00 
for CPT Code 33366. After review, we believe that a work RVU of 35.88, 
which is between the survey's 25th percentile of 30.00 and the median 
of 40.00, accurately reflects the work associated with this service. 
The median intraservice time from the survey for CPT code 33365 is 180 
minutes and for CPT code 33366 is 195. Using a ratio between the times 
for these procedures we determined the current work RVU of 33.12 for 
CPT code 33365 results in the work RVU of 35.88 for CPT code 33366. We 
believe that an RVU of 35.88 more appropriately reflects the work 
required to perform CPT code 33366 and maintains appropriate relativity 
among these five codes. We are establishing a CY 2014 interim final 
work RVU of 35.88 for CPT code 33366.

[[Page 74335]]

(5) Retrograde Treatment Open Carotid Stent (CPT Code 37217)
    The CPT Editorial Panel created CPT Code 37217, effective January 
1, 2014. The AMA RUC recommended a work RVU of 22.00, the median from 
the survey, and an intraservice time of 120 minutes.
    The AMA RUC identified CPT Code 37215 (Transcatheter placement of 
intravascular stent(s), cervical carotid artery, percutaneous; with 
distal embolic protection), which has an RVU of 19.68, as the key 
reference code for CPT code 37217. For its recommendations, the AMA RUC 
also compared CPT code 37217 to CPT Code 35301 (thromboendarterectomy, 
including patch graft, if performed; carotid, vertebral, subclavian, by 
neck incision), which has a work RVU of 19.61, and CPT code 35606 
(Bypass graft, with other than vein; carotid-subclavian), which has a 
work RVU of 22.46.
    In our review, we used the same comparison codes for CPT code 37217 
as the AMA RUC used in valuing CPT code 37217. To assess the work RVUs 
for CPT code 37217 relative to CPT code 35606, we compared the AMA RUC-
recommended work RVUs after removing the inpatient and outpatient 
visits in each code's 90-day global period, resulting in work RVUs of 
15.39 and 15.85, respectively. Although these RVUs are similar, the 
intraservice times are not. CPT code 35606 has an intraservice time of 
145 minutes compared with 120 minutes for CPT code 37217. To address 
the variation in intraservice times, we calculated a work RVU for CPT 
code 37217 that results in its work RVU having the same relationship to 
its time as does CPT code 35606. This results in a work RVU of 13.12 
for the intraservice time. Adding back the RVUs for the visits results 
in a total work RVU of 19.73. This value, along with the RVUs of the 
other comparison codes used by the AMA RUC (CPT codes 37215 and 35301), 
supports our decision to establish a CY 2014 interim final work RVU of 
20.38, the 25th percentile of the survey. We believe that this work RVU 
of 20.38 more accurately reflects the work involved and maintains 
relatively among the other codes involving similar work.
(6) Transcatheter Placement Intravascular Stent (CPT Code 37236, 37237, 
37238, and 37239)
    For CY 2014, the CPT Editorial Panel deleted four intravascular 
stent placement codes and created four new bundled codes, CPT codes 
37236, 37237, 37238, and 37239.
    We agreed with the AMA RUC recommendations for all of the codes in 
the family except CPT code 37239. The AMA RUC recommended a work RVU of 
3.34 for CPT code 37239, which they crosswalked to the work value of 
35686 (Creation of distal arteriovenous fistula during lower extremity 
bypass surgery (non-hemodialysis) (List separately in addition to code 
for primary procedure)). CPT code 37239 is the add-on code to 37238 for 
placement of an intravascular stent in each additional vein. The AMA 
RUC valued placement of a stent in the initial artery (CPT code 37236) 
at 9.0 work RVUs and its corresponding add-on code (37237) for 
placement of a stent in an additional artery at 4.25 work RVUs. After 
review, we believe that the ratio of the work of placement of the 
initial stent and additional stents would be the same regardless of 
whether the stent is placed in an artery or a vein, and that the 
appropriate ratio is found in the AMA RUC-recommended work RVUs of CPT 
codes 37236 and 37237. To determine the work RVU for CPT code 37239, we 
applied that ratio to the AMA RUC-recommended work RVU of 6.29 for CPT 
code 37238. Therefore, we are assigning an interim final work RVU of 
2.97 to CPT code 37239 for CY 2014.
(7) Embolization and Occlusion Procedures (CPT Codes 37241, 37242, 
37243, and 37244)
    For CY 2014, the CPT Editorial Panel deleted CPT code 37204 
(transcatheter occlusion or embolization (eg, for tumor destruction, to 
achieve hemostasis, to occlude a vascular malformation), percutaneous, 
any method, non-central nervous system, non-head or neck)) and created 
four new bundled codes to describe embolization and occlusion 
procedures, CPT codes 37241, 37242, 37423, and 37244.
    We agreed with the AMA RUC recommendations for CPT codes 37241 and 
37244. However, we disagree with the AMA RUC-recommended work RVU of 
11.98 for CPT code 37242. The AMA RUC recommended a direct crosswalk to 
CPT code 34833 (Open iliac artery exposure with creation of conduit for 
delivery of aortic or iliac endovascular prosthesis, by abdominal or 
retroperitoneal incision, unilateral) because of the similarity in 
intraservice time. The service described by CPT code 37242 was 
previously reported using CPT codes 37204 (Transcatheter occlusion or 
embolization (eg, for tumor destruction, to achieve hemostasis, to 
occlude a vascular malformation), percutaneous, any method, non-central 
nervous system, non-head or neck, 75894 (Transcatheter therapy, 
embolization, any method, radiological supervision and interpretation), 
and 75898 (Angiography through existing catheter for follow-up study 
for transcatheter therapy, embolization or infusion, other than for 
thrombolysis). The intraservice time for CPT code 37204 is 240 minutes 
and the work RVU is 18.11. The AMA RUC-recommended intraservice time 
for CPT code 37242 is 100 minutes. We believe that the AMA RUC-
recommended work RVU does not adequately consider the substantial 
decrease in intraservice time for CPT code 37242 as compared to CPT 
code 37204. Therefore, we believe that the survey's 25th percentile 
work RVU of 10.05 is consistent with the decreases in intraservice time 
and more appropriately reflects the work of this procedure.
    We also disagree with the AMA RUC-recommended work RVU of 14.00 for 
CPT code 37243, which the AMA RUC crosswalked from CPT code 37244, 
which has a work RVU of 14.00. The AMA RUC stated that work RVU of CPT 
codes 37243 and 37244 should be the same despite a 30-minute 
intraservice time difference between the codes because the work of CPT 
code 37244 (recommended intraservice time of 90 minutes) was more 
intense than CPT code 37243 (recommended intraservice time of 120 
minutes). This service was previously reported using CPT codes 37204, 
75894 and 75898; or 37210 (Uterine fibroid embolization (UFE, 
embolization of the uterine arteries to treat uterine fibroids, 
leiomyoma), percutaneous approach inclusive of vascular access, vessel 
selection, embolization, and all radiological supervision and 
interpretation, intraprocedural roadmapping, and imaging guidance 
necessary to complete the procedure). The current intraservice time for 
CPT code 37204 is 240 minutes and the work RVU is 18.11. The current 
intraservice time for CPT code 37210 is 90 minutes and the work RVU is 
10.60. The AMA RUC-recommended intraservice time for 37243 is 120 
minutes. We do not believe that the AMA RUC-recommended work RVU 
adequately considers the substantial decrease in intraservice time for 
CPT code 37243 as compared to CPT code 37204. We also note that the AMA 
recognized that CPT code 37243 is less intense than CPT code 37244. 
Therefore, we believe that the survey's 25th percentile work RVU of 
11.99 more appropriately reflects the work required to perform this 
service.

[[Page 74336]]

(8a) Gastrointestinal (GI) Endoscopy (CPT Codes 43191-43453)
    In CY 2011, numerous esophagoscopy codes were identified as 
potentially misvalued because they were on the CMS multi-specialty 
points of comparison list. For CY 2014, the CPT Editorial Panel revised 
the code sets for these services. The AMA RUC submitted recommendations 
for 65 codes that describe esophagoscopy, esophagogastroduodenoscopy 
(EGD), and endoscopic retrograde cholangiopancreatography (ERCP) of the 
esophagus, stomach, duodenum, and pancreas/gall bladder.
    In valuing this revised set of codes, we note that the AMA RUC 
recommendations included information demonstrating significant overall 
reduction in time resources associated with furnishing these services. 
In the absence of information supporting an increase in intensity, we 
would expect that the work RVUs would decrease if there are reductions 
in time. However, the AMA RUC-recommended work RVUs do not reflect 
overall reductions in work RVUs proportionate to the reductions in 
time. Therefore, we questioned the recommended work RVUs unless the 
recommendations included information indicating that the intensity of 
the work had increased.
    We note that in assigning values that maintain the appropriate 
relativity throughout the PFS, it is extremely important to review a 
family of services together and we aim to address recommendations 
regarding potentially misvalued codes in the first possible rulemaking 
cycle. Therefore, we are establishing interim final values for these 
codes for CY 2014 although we do not have the AMA RUC recommendations 
for the remaining lower GI tract codes. We expect to receive these 
recommendations in time to include them in the CY 2015 final rule with 
comment period. At that time, we may revise the interim final values 
established in this final rule with comment period to address any 
family relativity issues that may arise once we have more complete 
information for the entire family.
    The AMA RUC used a number of methodologies in valuing these codes. 
These include accepting survey medians or 25th percentiles, 
crosswalking to other codes, and calculating work RVUs using the 
building block methodology. These are reviewed in section II.E.1. 
above. The AMA RUC also made extensive use of a methodology that uses 
the incremental difference in codes to determine values for many of 
these services. This methodology, which we call the incremental 
difference methodology, uses a base code or other comparable code and 
considers what the difference should be between that code and another 
code by comparing the differentials to those for other similar codes. 
Many of the procedures described within the esophagoscopy subfamily 
have identical counterparts in the esophagogastroduodenoscopy (EGD) 
subfamily. For instance, the base esophagoscopy CPT code 43200 is 
described as ``Esophagoscopy, flexible, transoral; diagnostic, 
including collection of specimen(s) by brushing or washing when 
performed.'' The base EGD CPT code 43235 is described as 
``Esophagogastroduodenoscopy, flexible, transoral; diagnostic, with 
collection of specimen(s) by brushing or washing, when performed.'' In 
valuing other codes within both subfamilies, the AMA RUC frequently 
used the difference between these two base codes as an increment for 
measuring the difference in work involved in doing a similar procedure 
utilizing esophagoscopy versus utilizing EGD. For example, the EGD CPT 
code 43239 includes a biopsy in addition to the base diagnostic EGD CPT 
code 43235. The AMA RUC valued this by adding the incremental 
difference in the base esophagoscopy code over the base EGD CPT code to 
the value it recommended for the esophagoscopy biopsy, CPT code 43202. 
With some variations, the AMA RUC extensively used this incremental 
difference methodology in valuing subfamilies of codes. We have made 
use of similar methodologies, in addition to the methodologies listed 
above, in establishing work RVUs for codes in this family. We have also 
made use of an additional methodology not typically utilized by the AMA 
RUC. As noted above in this section, we believe that the significant 
decreases in intraservice and total times for these services should 
result in corresponding changes to the work RVUs for the services. In 
keeping with this principle, we chose, in some cases, to decrement the 
work RVUs for particular codes in direct proportion to the decrement in 
time. For example, for a CPT code with a current work RVU of 4.00 and 
an intraservice time of 20 minutes that decreases to 15 minutes 
following the survey, we might have reconciled the 25 percent reduction 
in overall time by reducing the work RVU to 3.00, a reduction of 25 
percent.
(8b) Esophagoscopy
    The rigid and flexible esophagoscopy services are currently 
combined into one code, but under the new coding structure the services 
are separated into rigid transoral, flexible transnasal and flexible 
transoral procedure CPT codes.
(8c) Rigid Transoral Esophagoscopy
    To determine the interim final values for the rigid transoral 
esophagoscopy codes, CPT codes 43191, 43192, 43193, 43194, 43195, and 
43196, we considered the AMA RUC-recommended intraservice times and 
found that the surveys showed that half of the rigid transoral 
esophagoscopy codes had 30 minutes of intraservice time and a work RVU 
survey low of 3.00, a ratio of 1 RVU per 10 minutes (1 work RVU/10 
minutes). This ratio was further supported by the relationship between 
the CY 2013 work value of 1.59 RVUs for CPT code 43200 (Esophagoscopy, 
rigid or flexible; diagnostic, with or without collection of 
specimen(s) by brushing or washing (separate procedure)) and its 
intraservice time of 15 minutes. Based upon the 1 work RVU/10 minutes 
ratio, we are establishing CY 2014 interim final work RVU of 2.00 for 
CPT code 43191, 3.00 for CPT code 43193, 3.00 for CPT code 43194, 3.00 
for CPT code 43195, and 3.30 for CPT code 43196.
    For CPT code 43192, the 1 work RVU/10 minute ratio resulted in a 
value that was less than the survey low, and thus did not appear to 
work appropriately for this procedure. Therefore, we are establishing a 
CY 2014 interim final work RVU for CPT code 43192 of 2.45 based upon 
the survey low.
(8d) Flexible Transnasal Esophagoscopy
    In recommending work RVUs for the two CPT codes 43197 and 43198, 
which describe flexible transnasal services, the AMA RUC recommended 
the same work RVUs as it recommended for the corresponding flexible 
transoral CPT codes (43200 and 43202). We believe these recommendations 
overstate the work involved in the transnasal codes since, unlike the 
transoral codes, they are not typically furnished with moderate 
sedation. Therefore, to value CPT code 43197 and 43198, we removed 2 
minutes of the pre-scrub, dress and wait preservice time from the 
calculation of the work RVUs that we are establishing for CY 2014 for 
CPT codes 43200 and 43202. We are establishing CY 2014 interim final 
values of 1.48 for CPT code 43197 and 1.78 for CPT code 43198.
(8e) Flexible Transoral Esophagoscopy
    We established values for CPT codes 43216 through 43226 based on 
the AMA RUC recommendations.
    We used CPT code 43200 as the base code for evaluating all the 
flexible esophagoscopy services. The CY 2013

[[Page 74337]]

code descriptor for 43200 includes both flexible and rigid 
esophagoscopy, while for CY 2014, the descriptor has been revised to 
include only flexible esophagoscopy. Despite this change in the code 
descriptor for CY 2014, the AMA RUC-recommended maintaining a work RVU 
of 1.59 for this code. However, we believe that the rigid 
esophagoscopy, described by the new CPT code 43191, is a more difficult 
procedure and by removing the rigid service from CPT code 43200 the 
intensity of services described by the revised CPT code 43200 are lower 
than the intensity of services described by the existing code. To 
establish an appropriate interim final value for the new code, we 
followed the 1 work RVU per 10 minutes of intraservice time methodology 
described above resulting in an interim final work RVU of 1.50 for the 
service. This interim final work RVU valuation is further supported by 
the AMA RUC's recommendation that would decrease total time from 55 
minutes to 52 minutes.
    We believe that the work value difference between CPT code 43200 
and 43202 as recommended by the AMA RUC is correct. Therefore, we added 
the difference in the AMA RUC recommended values for CPT codes 43200 
and 43202, 0.30 RVUs, to CPT code 43200, resulting in a work RVU of 
1.80 for CPT codes 43201. We note that the resulting difference between 
43200 and 43201 of 0.30 RVUs is also similar to the 0.31 difference 
between the values the AMA RUC recommended for these two codes.
    We also believe that the work involved in CPT code 43201 is similar 
to the work involved in CPT code 43202. Accordingly we are establishing 
a CY 2014 interim final work RVU of 1.80.
    For CPT code 43204, the AMA RUC recommended a work RVU of 2.89. We 
believe that this code is similar to CPT code 43201 in that both codes 
involve injections in the esophagus. However, CPT code 43204 has 20 
minutes of intraservice time compared to 15 minutes for CPT code 43201. 
Applying this increase in intraservice time to the work RVU that we are 
establishing for CPT code 43201 results in a work RVU of 2.40 for this 
code. The AMA RUC recommended a work RVU of 3.00 for CPT code 43205, an 
increment of 0.11 RVUs over its recommended value for CPT code 43204. 
Both of these codes involve treatment of esophageal varices. We agree 
with that increment and are adding that to our CY 2014 interim final 
work RVU for CPT code 43204 of 2.40 to arrive at a CY 2014 interim 
final work RVU of 2.51 for CPT code 43205.
    In establishing interim final work RVUs for CPT code 43211, we 
followed the methodology used by the AMA RUC to develop its 
recommendation. The AMA RUC decreased the work RVU of the corresponding 
esophagogastroduodenoscopy (EGD for mucosal resection), CPT code 43254, 
by the difference between the base esophagoscopy code 43200 and the 
base EGD code 43235, which is 0.67 RVU. Reducing our CY 2014 interim 
final work RVU of 4.88 for CPT code 43254 by this difference results in 
a CY 2014 interim final work RVU of 4.21 for CPT code 43211.
    Since CPT code 43212 has almost identical times and intensities as 
CPT code 43214, we crosswalked the work RVU from our CY 2014 interim 
final work RVU of 3.38.
    In valuing CPT code 43213, we believe it is comparable to CPT code 
43200, but has intraservice time of 45 minutes, while CPT code 43200 
has only 20 minutes. We are establishing a CY 2014 interim final work 
RVU of 4.73, which is based upon the difference in intraservice time 
between the two codes.
    CPT code 43214 is esophageal dilatation using fluoroscopic 
guidance. We believe that the service described by CPT code 43214 is 
similar in intensity and intraservice time to CPT code 31622 
(Bronchoscopy, rigid or flexible, including fluoroscopic guidance, when 
performed; diagnostic, with cell washing, when performed (separate 
procedure)), another endoscopic code using fluoroscopic guidance. 
However, CPT code 43214 includes an endoscopic dilation in addition to 
the fluoroscopic guided endoscopy. Therefore, we added the incremental 
increase between the work RVU of the esophagoscopy base code for 
dilation without fluoroscopic guidance, CPT code 43220, and the base 
code to the work RVU for CPT code 31622 and are establishing a CY 2014 
interim final work RVU of 3.38 for CPT code 43214.
    We believe that the time and work for CPT 43215 are identical to 
those for CPT code 43205. Therefore, we crosswalked the work RVU for 
CPT code 43215 to CPT code 43205, and are establishing a CY 2014 
interim final work RVU of 2.51.
    For current CPT code 43227, the survey reflected a decrease in 
intraservice time from the current, 36 minutes to 30 minutes. The AMA 
RUC recommended a small decrease in RVUs, but not one that was 
proportionate to the difference in intraservice time. Therefore, we 
decreased the current work RVU proportionate to the decrease in 
intraservice time, resulting in a CY 2014 interim final work RVU of 
2.99.
    CPT code 43231 is a basic esophagoscopy procedure done with 
endoscopic ultrasound. We disagree with the AMA RUC recommendation to 
maintain the current work RVU of 3.19, despite a decrease in 
intraservice time. Instead, we used the work RVU of another endoscopic 
code using endoscopic ultrasound to value the incremental difference in 
work between this service and the esophagoscopy base code. CPT code 
31620 (Endobronchial ultrasound (EBUS) during bronchoscopic diagnostic 
or therapeutic intervention(s) (List separately in addition to code for 
primary procedure[s])) is an add-on code for EBUS to other bronchoscopy 
codes, with a current work RVU of 1.40. We added this EBUS work RUV to 
the work RVU of base esophagoscopy code 43200 and are establishing a CY 
2014 interim final work RVU of 2.90.
    For CPT code 43232, we believe that the work value difference 
between CPT code 43231 and 43232 as recommended by the AMA RUC is 
correct. We added that difference of 0.64 work RVUs to our CY 2014 
interim final work RVU for CPT code 43231 to arrive at our CY 2014 
interim final work RVU of 3.54 for CPT code 43232.
    CPT code 43229 has similar times and intensity to CPT code 43232 
and therefore, we directly crosswalked the work value of CPT code 43229 
to CPT code 43232, resulting in a CY 2014 interim final work RVU of 
3.54.
(8f) Esophagogastroduodenoscopy (EGD)
    Various EGD codes were identified as potentially misvalued through 
the multi-specialty point of comparison, high expenditures, and fastest 
growing screens. The AMA RUC recommended values for all EGD codes. We 
agreed with the AMA RUC recommended values and are establishing CY 2014 
interim final work RVUs for CPT codes 43240, 43241, 43243, 43244, 
43245, 43248, 43249, 43250, and 43251 based on its recommendations.
    In reviewing the base EGD code, CPT code 43235, we determined that 
we agreed with the AMA RUC's recommended work RVU difference between 
this EGD base code and the esophagoscopy base code, CPT 43200. We 
applied this difference to our CY 2014 interim final work RVU of 1.50 
for CPT code 43200 and are establishing a CY 2014 interim final RVU of 
2.17 for CPT code 43235.
    CPT code 43233 is an identical procedure to CPT code 43214 except 
that it uses EGD rather than esophagoscopy. We added the

[[Page 74338]]

additional work RVU of furnishing an EGD as compared to an 
esophagoscopy to our CY 2014 interim final work RVU of 3.38 for CPT 
code 43214, resulting in a CY 2014 interim final work RVU of 4.05 for 
CPT 43233.
    CPT code 43236 is the EGD equivalent of the esophagoscopy CPT code 
43201. In valuing CPT code 43236, the AMA RUC used the incremental 
difference methodology using CPT codes 43200 and 43201 and added that 
difference to its recommended work value for CPT code 43235 to arrive 
at its recommended RVU of 2.57 for CPT code 43236. We used the same 
methodology but instead of using the AMA RUC recommended work RVU for 
CPT code 43235, we used our CY 2014 interim final value of 2.17 for CPT 
code 43235. We are establishing a CY 2014 interim final work RVU of 
2.47 for CPT code 43236.
    CPT code 43237 is the EGD equivalent to the esophagoscopy CPT code 
43231. We do not believe that the AMA RUC-recommended work RVU 
adequately accounts for the 20 percent decrease from current time to 
the AMA RUC-recommended intraservice time. Therefore, we applied an 
incremental difference methodology as discussed above for CPT code 
43233. We used the comparable esophagoscopy code 43231 and added its CY 
2014 interim final work RVUs to the incremental value of a base EGD 
over the base esophagoscopy, resulting in a CY 2014 interim final work 
RVU of 3.57 for CPT code 43237.
    CPT code 43238 is the EGD equivalent to the esophagoscopy CPT code 
43232. We valued this code similarly to CPT code 43237 using the 
incremental difference approach. We do not believe that the AMA RUC 
recommended RVU adequately accounts for the 36 percent decrease in 
intraservice time. We used the CY 2014 interim final work RVU for the 
comparable esophagoscopy CPT code 43232 and added that to that the 
incremental work RVU of an EGD over esophagoscopy, resulting in a CY 
2014 interim final work RVU of 4.11 for CPT code 43238.
    CPT code 43239 is the EGD equivalent to the esophagoscopy CPT code 
43202 and we used the incremental difference methodology described 
above. We do not believe that the AMA RUC recommended RVU adequately 
accounts for the 56 percent decrease in intraservice time. We used the 
CY 2014 interim final work RVU for the comparable esophagoscopy code 
43202 and added that to the incremental work RVU value of an EGD over 
esophagoscopy, resulting in a work RVU of 2.47, which we are 
establishing as the CY 2014 interim final work RVU for CPT code 43239.
    CPT code 43242 is an equivalent service to CPT code 43238 except 
that CPT code 43242 includes diagnostic services in a surgically 
altered GI tract. The AMA RUC recommendation used a methodology that 
took the increment between CPT code 43238 and CPT code 43237, which is 
an ultrasound examination of a gastrointestinal (GI) tract that has not 
been surgically altered. The AMA RUC then applied that difference in 
its recommended work RVUs for these two codes to CPT code 43259, which 
is an ultrasound of a GI tract that has been surgically altered. We 
agree with that methodology but instead applied our CY 2014 interim 
final work RVUs for those codes. Accordingly, we are establishing a CY 
2014 interim final RVU of 4.68 for CPT code 43242.
    In valuing CPT code 43246, we note that the work and time are very 
similar to CPT code 43255. Therefore, we directly crosswalked the 
service to the CY 2014 interim final work RVU of CPT code 43255 and are 
establishing a CY 2014 interim final value of 3.66.
    CPT code 43247 is the EGD equivalent to the esophagoscopy CPT code 
43215. In valuing this code, the AMA RUC applied the increment between 
CPT code 43200 and 43215 to the EGD base CPT code 43235 to arrive at 
its recommended RVU of 3.27. We agree with this methodology but applied 
the values we have established for these codes, resulting in a work RVU 
of 3.18 for CPT code 43247.
    In valuing CPT code 43253, the AMA RUC applied the same methodology 
as it used in valuing CPT code 43242, resulting in a recommended RVU of 
5.39. We agree with that methodology, but instead of using the AMA RUC-
recommended values, we are using our CY 2014 interim final work RVUs. 
We are establishing a CY 2014 interim final work RVU of 4.68 for CPT 
code 43253.
    CPT code 43254 is the EGD equivalent to the esophagoscopy CPT code 
43211. The AMA RUC-recommended a work RVU of the survey's 25th 
percentile of 5.25. We believe that this overstates the work involved 
in this code and that the incremental methodology used by the AMA RUC 
for many of these codes is more appropriate. Thus, we applied the 
incremental difference methodology between the base EGD and 
esophagoscopy codes to the equivalent esophagoscopy CPT code 43211 and 
are establishing a CY 2014 interim final RVU of 4.88.
    CPT code 43255 is the EGD equivalent to the esophagoscopy CPT code 
43227. We do not believe that the AMA RUC-recommended 13 percent work 
RVU decrease adequately accounts for the 44 percent decrease in 
intraservice time. Therefore, we applied the incremental difference 
methodology, using our CY 2014 interim final values and the comparable 
esophagoscopy code, CPT code 43227. We are establishing a CY 2014 
interim final work RVU of 3.66 for CPT code 43255.
    CPT code 43257 is a CY 2013 code for which the AMA RUC recommended 
the survey's 25th percentile. We note that the service has an identical 
intraservice time and similar intensity to CPT code 43238. Thus, we 
directly crosswalked the work RVU from CPT code 43238 to CPT code 
43257. We are establishing a CY 2014 interim final work RVU of 4.11 for 
CPT code 43257, which is consistent with the 25 percent reduction from 
current intraservice time.
    In valuing CPT code 43259, the AMA RUC recommended the survey's 
25th percentile RVU of 4.74. We disagree with that value and note that 
the intraservice time has decreased 35 percent and the total time has 
decreased 20 percent. Applying the intraservice time decrease to the CY 
2013 work RVU would result in an RVU of 3.38. We believe that value 
does not maintain the appropriate rank order with the other EGD codes. 
Adjusting the current RVU to account for the reduction in total time 
results in a work RVU of 4.14. We believe that this work RVU more 
accurately values the work involved in this service. Thus, we are 
establishing a CY 2014 interim final RVU of 4.14 for this code.
    CPT code 43266 is the EGD equivalent to the esophagoscopy CPT code 
43212. In valuing CPT code 43266, the AMA RUC recommended the survey's 
25th percentile RVU of 4.40, higher than the current value of 4.34 even 
though the intraservice time decreased from 45 minutes to 40 minutes. 
We disagree with this recommended work RVU. Therefore, we used the 
incremental difference methodology and added the difference in work 
RVUs between the base esophagoscopy code and the base EGD code to the 
equivalent esophagoscopy CPT code 43212 for an RVU of 4.05. Thus, we 
are establishing a CY 2014 interim final work RVU of 4.05 for CPT code 
43266.
    CPT code 43270 is the EGD equivalent to the esophagoscopy CPT code 
43229. The AMA RUC recommended the survey's 25th percentile work RVU of 
4.39. We disagree with this value and believe that utilizing the 
incremental difference methodology more accurately determines the 
appropriate work for this service. For CPT code 43270, we added the 
difference in work RVUs between the base EGD code over the base

[[Page 74339]]

esophagoscopy code to our CY 2014 interim final work RVU for CPT 43229, 
resulting in a work RVU of 4.21. Thus, we are establishing a CY 2014 
interim final value of 4.21 for CPT code 43270.
(8g) Endoscopic Retrograde Cholangiopancreatography
    In CY 2011, several endoscopic retrograde cholangiopancreatography 
(ERCP) codes were identified by CMS through the multi-specialty points 
of comparison screen. The AMA RUC provided recommendations for seven 
current codes and five new codes. CPT codes 43260-43265 and 43273-43278 
were reviewed. We agreed with the AMA RUC-recommended values for CPT 
codes 43260, 43261, 43262, 43264, 43265, 43273, 43275, and 43277 as 
shown on Table 27.
    The AMA RUC recommended that the work RVU for CPT code 43263 be 
maintained at its current RVU of 7.28 in spite of a 25 percent decrease 
to its recommended intraservice time for this code. This code has 
identical times to CPT code 43262 for which the AMA RUC recommended a 
decrease in the work RVU from its current value of 7.38 to 6.60, 
consistent with the decrease in time. We believe that this reduction 
more accurately reflects the work involved in this code, so we 
crosswalked the work RVU for CPT code 43263 to CPT code 43262. We are 
establishing a CY 2014 interim final work RVU of 6.60 for CPT code 
43263.
    CPT code 43274 is a new code involving stent placement and 
sphincterotomy. The AMA RUC valued this code by adding the increment of 
a sphincterotomy and stent placement to the work RVU of the base ERCP, 
CPT code 43260, resulting in an AMA RUC-recommended work RVU of 8.74. 
We agree with this methodology, except we have used our CY 2014 interim 
final work RVUs. We are establishing an interim final RVU of 8.48 for 
CPT code 43274.
    CPT code 43276 is a new code without previous physician times to 
compare that involves the removal and replacement of a stent. The AMA 
RUC developed its recommendation using the incremental difference 
methodology. It determined the incremental work RVU associated with 
removing a foreign body by comparing CPT code 43215 to the base 
esophagoscopy code, CPT code 43200. It also determined the incremental 
value of placing a stent with esophagoscopy, CPT code 43212, over the 
base esophagoscopy, CPT code 43200. By adding these two increments to 
the work RVU of the ERCP base code, CPT code 43260, the AMA recommended 
a work RVU for CPT code 43276 of 9.10. The median survey value was 9.88 
and the survey's 25th percentile was 6.95. The combination of 60 
minutes of intraservice time with an RVU of 9.10 is not comparable with 
other ERCP codes. For CPT code 43274, for example, the AMA RUC 
recommended 68 minutes intraservice time and a work RVU of 8.74. We 
accepted the AMA RUC recommendations for CPT code 43265 of 78 minutes 
intraservice time and a work RVU of 8.03. Both CPT codes 43262 and 
43263 have intraservice times of 60 minutes and a CY 2014 interim final 
work RVU of 6.60. Based on these comparisons, we believe that the AMA 
RUC recommendation for this code of 9.10 is inconsistent with the RVUs 
assigned to codes that describe similar services with similar 
intraservice times. Therefore, we are using the incremental difference 
methodology to arrive at the appropriate work RVU. CPT code 43275 
describes the removal of a stent using ERCP. We used CPT code 43275 
with a CY 2014 interim final work RVU of 6.96 and added the incremental 
difference of placing a stent utilizing esophagoscopy, CPT code 43212, 
over the base esophagoscopy code CPT code 43200. We believe that this 
valuation approach results in values that are more consistent with 
other codes in this family than the AMA RUC recommendation. We are 
establishing a CY 2014 interim final RVU of 8.84 for CPT code 43276.
    CPT code 43277 is a new code for CY 2014, which describes ERCP with 
dilation and if furnished, sphincterotomy. The AMA RUC recommended a 
work RVU of 7.11 RVU. The AMA RUC determined this value using an 
incremental approach. Specifically, the work RVU for dilation was 
calculated as the difference between the esophagoscopy dilation code 
(CPT code 43220) and the esophagoscopy base code, CPT code 43200, and 
the sphincterotomy work RVU was calculated as the difference between 
the base ERCP code, CPT 43260, and the ERCP sphincterotomy code, CPT 
code 43262. By adding these two values to the work RVU of CPT code 
43260, the AMA RUC calculated its recommended work RVU of 7.11. The 
survey's 25th percentile is 7.00.
    Currently, ERCP sphincterotomy is billed using a single code, CPT 
code 43262, and duct dilation using ERCP is currently billed using CPT 
code 43271. Adding together the current work RVUs for these two codes 
results in a RVU of 8.81. The total combined intraservice time for 
these two codes is 90 minutes. Since the new CPT code 43277 has an 
intraservice time of only 70 minutes, we applied the percentage 
decrease in time to the current combined work RVU for CPT 43262 and 
43271 of 8.81, resulting in a work RVU of 6.85. Although this value 
reflects a proportional reduction in intraservice time between the 
current codes and the time presumed for the AMA RUC recommendation, we 
believe that a work RVU of 6.85 does not adequately reflect the 
intensity of this service and are therefore establishing an interim 
final RVU for CPT code of 43277 of 7.00, which is the survey's 25th 
percentile.
    CPT code 43278 is a new code involving lesion ablation. The AMA RUC 
valued this code by adding the incremental work RVU difference between 
the base esophagoscopy code and the esophagoscopy ablation code, CPT 
code 43229, to the base ERCP code, resulting in a RVU of 8.08. We agree 
with this methodology. However, using our CY 2014 interim final values 
we are establishing a CY 2014 interim final work RVU of 7.99.
(8h) Dilation of Esophagus
    We agree with the AMA RUC recommended values for the dilation of 
the esophagus, CPT codes 43450 and 43453, as shown on Table 27.
(9) Transplantation of Kidney (CPT Code 50360)
    We received an AMA RUC work RVU recommendation of 40.90 for CPT 
code 50360 which included an increase in the service's intraservice 
time, from 183 minutes to 210 minutes. We also note that there is a 
significant decrease in the number of AMA RUC-recommended visits in the 
global period for this procedure.
    In CY 2006, the work RVU for CPT 50360 was 31.48. In CY 2007 and CY 
2010, the work RVUs for all services with global periods, including CPT 
code 50360, were increased to take into account increases in the work 
RVUs for E/M services. These changes resulted in the current work RVU 
for CPT code 50360 of 40.90. We note that this increase was based on an 
assumption of 32 visits in the global period. Based upon information 
that we now have, it appears that an assumption of 10 visits may have 
been more appropriate. If we had used an assumption of 10 visits when 
adding E/M services in 2007 and 2010, the current work RVU would be 
34.68.
    In determining a CY 2014 interim final work RVU, we began with the 
34.68 work RVU value. The AMA RUC recommended a 14.75 percent increase 
in intraservice time, from 183 min to 210 min. Applying this ratio to 
the refined base work RVU of 34.68 results

[[Page 74340]]

in a new base work RVU of 39.80. Adding the changes in work RVU 
resulting from the changes in the preservice and postservice times 
recommended by the AMA RUC results in an interim final work RVU of 
39.88 for CPT code 50360.
(10) Spinal Injections (CPT Codes 62310, 62311, 62318, and 62319)
    For CY 2014, we received AMA RUC recommendations for CPT codes 
62310, 62311, 62318, and 62319. Although the AMA RUC recommendations 
show a significant reduction in intraservice and total times for the 
family, the recommended work RVUs do not reflect a similar decrease.
    For CPT code 62310, we disagree with the work RVU of 1.68 
recommended by the AMA RUC because the reduction from the current work 
is not comparable to the 63 percent reduction in time being recommended 
by the AMA RUC. We, however, agree that the methodology used by the AMA 
RUC to develop a recommendation was appropriate. Using this 
methodology, we calculated the difference in the AMA RUC 
recommendations for CPT 62310 and 62318 and subtracted this from our CY 
2014 interim work RVU for CPT 62318, which results in a work RVU of 
1.18, which we are establishing as the CY 2014 interim final work RVU 
for CPT code 62310.
    The AMA RUC recommended maintaining the current work RVU for CPT 
code 62311 of 1.54 even though its recommended intraservice time 
decreased 50 percent. We disagreed with this approach.To determine the 
CY 2014 interim final work RVU we subtracted the difference between the 
AMA RUC-recommended work RVUs of 62311 and 62319 from our CY 2014 
interim final work RVU for CPT code 62319. We believe that the 
resultant work RVU of 1.17 is a better approximation of the work 
involved in CPT code 62311.
    CPT code 62318 currently has an intraservice time of 20 minutes and 
a work RVU of 2.04. The intraservice time reduced by 25 percent but the 
AMA RUC recommended no change in the work RVU. The low value of the 
survey is 1.54, which is consistent with the reduction in intraservice 
time. Therefore, we are establishing an interim final RVU for CPT code 
62318 of 1.54.
    The AMA RUC recommended a 50 percent decrease in intraservice time 
for CPT 62319 but no change in the work RVU. Similar to the CPT code 
62318, we believe the low value of 1.50 more accurately represents the 
work involved in the code and the significant reduction in intraservice 
time.
(11) Laminectomy (CPT Codes 63047 and 63048)
    We identified CPT code 63047 through the high expenditure procedure 
code screen. For CY 2014, we received AMA RUC recommendations on CPT 
codes 63047 and 63048.
    In reviewing the AMA RUC recommendations for these codes, we 
determined that to appropriately value these codes, we need to consider 
the other two codes in this family: CPT codes 63045 (Laminectomy, 
facetectomy and foraminotomy (unilateral or bilateral with 
decompression of spinal cord, cauda equina and/or nerve root[s], [eg, 
spinal or lateral recess stenosis]), single vertebral segment; 
cervical) and 63046 (Laminectomy, facetectomy and foraminotomy 
(unilateral or bilateral with decompression of spinal cord, cauda 
equina and/or nerve root[s], [eg, spinal or lateral recess stenosis]), 
single vertebral segment; thoracic). Since the AMA RUC did not submit 
recommendations for these codes, we are valuing CPT codes 63047 and 
63048 on an interim final basis for CY 2014 at work RVUs of 15.37 and 
3.47, respectively, based upon the AMA RUC recommendations. We note 
that expect to review these values in concert with the AMA RUC 
recommendations for CPT codes 63045 and 63046.
(12) Chemodenervation of Neck Muscles (CPT Codes 64616 and 64617)
    For CY 2014, we received AMA RUC recommendations for two new 
chemodenervation codes, CPT codes 64616 and 64617, which replace CPT 
code 64613 (chemodenervation of muscle(s); neck muscle(s) (eg, for 
spasmodic torticollis, spasmodic dysphonia)). We disagree with the AMA 
RUC-recommended work RVUs of 1.79 for CPT code 64616 and 2.06 for CPT 
code 64617. We do not think that these recommended values account for 
the absence of the outpatient visit that was included in the 
predecessor code, CPT 64613. To adjust for this, we subtracted the 0.48 
work RVUs associated with the outpatient visit from the 2.01 work RVU 
of the predecessor code, CPT code 64613; resulting in a work RVU of 
1.53, which we are assigning as an interim final value for CPT 64616.
    CPT code 64617 is chemodenervation of the larynx and includes EMG 
guidance when furnished. The EMG guidance CPT code 95874 (Needle 
electromyography for guidance in conjunction with chemodenervation 
(List separately in addition to code for primary procedure)) has a work 
RVU of 0.37. To calculate the work RVU for CPT 64617 we added the work 
RVU for CPT 95874, EMG guidance, to the 1.53 work RVU for CPT 64616, 
which results in a work RVU of 1.90.
    Therefore, on an interim final basis for CY 2014, we are assigning 
a work RVU of 1.53 to CPT code 64616 and 1.90 to CPT code 64617.
(13) Chemodenervation of Extremity or Trunk Muscles (CPT Codes 64642, 
64643, 64644, 64645, and 64647)
    For CY 2014, the CPT Editorial Panel created six new codes to more 
precisely describe chemodenervation of extremity and trunk muscles. We 
assigned CY 2014 interim final work RVUs for four of these CPT codes 
(64642, 64644, 64646 and 64647), based upon the AMA RUC 
recommendations.
    CPT Codes 64643 and 64645 are add-on codes to CPT codes 64642 and 
64644, respectively. We disagree with the AMA RUC-recommended work RVUs 
of 1.32 for CPT code 64643 and 1.52 for CPT code 64645. We agree with 
the AMA RUC that the intraservice times for each base code and its add-
on code should be the same. However, the AMA RUC-recommendations for 
the add-on codes contain 19 minutes less time than the base codes 
because of decreased preservice and post-times in the add-on codes. 
Therefore, we are adjusting the add-on codes by subtracting the RVUs 
equal to 19 minutes of preservice and postservice from the AMA RUC 
recommended work RVU for each base code to account for the decrease in 
time for performing the add-on service. Using the methodology outlined 
above, we are assigning a CY 2014 interim final work RVU for CPT code 
64643 of 1.22 and a work RVU for CPT code 64645 of 1.39.
    We are basing the global period for these codes on their 
predecessor code, CPT code 64614 (chemodenervation of muscle(s); 
extremity and/or trunk muscle(s) (eg, for dystonia, cerebral palsy, 
multiple sclerosis)), which is being deleted for CY 2014. Therefore, we 
are assigning these codes a 010-day global period.
(14) Cerumen Removal (CPT Code 69210)
    This code was reviewed as a potentially misvalued code pursuant to 
the CMS high expenditure screen. The CPT Editorial Panel changed the 
code descriptor for removal of impacted cerumen from ``1 or both ears'' 
to ``unilateral,'' effective January 1, 2014. The AMA RUC recommended a 
work RVU for this code of 0.58. In its recommendation to the AMA RUC, 
the specialty society stated that there was

[[Page 74341]]

no information to determine how often the service was performed 
unilaterally but asserted, and the AMA RUC agreed, that the service was 
performed bilaterally 10 percent of the time. In determining its 
recommendation, the AMA RUC applied work neutrality to the current work 
RVU of 0.61 to arrive at the recommended work RVU of 0.58 based upon 
the assertion that the code that was previously only reported once if 
furnished bilaterally, would now be reported for two units, due the 
descriptor change.
    We disagree with the assumption by the AMA RUC that the procedure 
will be furnished in both ears only 10 percent of the time as the 
physiologic processes that create cerumen impaction likely would affect 
both ears. Given this, we will continue to allow only one unit of CPT 
69210 to be billed when furnished bilaterally. We do not believe the 
AMA RUC's recommended value reflects this and therefore, we will 
maintain the CY 2013 work value of 0.61 for CPT code 69210 when the 
service is furnished.
(15) MRI Brain (CPT Code 70551, 70552, 70553, 72141, 72142, 72146, 
72147, 72148, 72149, 72156, 72157, and 72158)
    For CY 2014, the AMA RUC reviewed the family of magnetic resonance 
imaging (MRI) for the brain (CPT codes 70551, 70552, and 70553) and the 
family for MRI for the spine (CPT codes 72141, 72142, 72146, 72147, 
72148, 72149, 72156, 72157, and 72158). We are assigning the AMA RUC-
recommended work RVUs as CY 2014 interim final values for all of these 
codes except for CPT code 70553.
    The AMA RUC found that the codes in these two families required a 
similar amount of work and valued the codes with similar work 
identically, except for CPT code 70553, which is the MRI code for brain 
imaging. CPT code 70553 is brain imaging without contrast followed by 
brain imaging with contrast. The AMA RUC recommended that the work RVU 
for this code remain at its current value of 2.36, while recommending 
that the work RVUs of CPT codes 72156, 72157 and 72158 be decreased to 
2.29. These three codes are similar to CPT code 70553 in that they 
identify MRI services without contrast followed by contrast for the 
three sections of the spine--cervical, thoracic and lumbar. We agree 
with the AMA RUC that the work is similar for the two families of codes 
and that the codes should be valued accordingly. The AMA RUC-
recommended value for CPT code 70553 is not consistent with the 
determination that these codes require a similar amount of work. 
Therefore, we are assigning a CY 2014 interim final work RVU of 2.29 to 
CPT code 70553.
(16) Molecular Pathology (CPT Code 81161)
    The AMA RUC submitted a recommended value for CPT code 81161, a 
newly created molecular pathology code, for CY 2014. Consistent with 
our policy established in the CY 2013 final rule with comment period 
that molecular pathology codes are paid under the CLFS as lab tests, 
rather than under the PFS as physician services, we are assigning CPT 
code 81161, a PFS procedure status indicator of X (Statutory exclusion 
(not within definition of `physician service' for physician fee 
schedule payment purposes. Physician Fee Schedule does not allow 
payment, but perhaps another Medicare Fee Schedule does)). (77 FR 
68994-69002). As explained in the CY 2013 final rule with comment 
period, HCPCS code G0452 can be used under the PFS by a physician to 
bill for medically necessary interpretation and written report of a 
molecular pathology test, above and beyond the report of laboratory 
results.
(17) Immunohistochemistry (CPT Codes 88342 and 88343)
    The CPT Editorial Panel revised the existing immunohistochemistry 
code, CPT code 88342 and created a new add-on code 88343 for CY 2014. 
Current coding requirements only allow CPT code 88342 to be billed once 
per specimen for each antibody, but the revised CPT codes and 
descriptors would allow the reporting of multiple units for each slide 
and each block per antibody (88342 for the first antibody and 88343 for 
subsequent antibodies). We believe that this coding would encourage 
overutilization by allowing multiple blocks and slides to be billed.
    To avoid this incentive, we are creating G0461 
(Immunohistochemistry or immunocytochemistry, per specimen; first 
single or multiplex antibody stain) and G0462 (Immunohistochemistry or 
immunocytochemistry, per specimen; each additional single or multiplex 
antibody stain (List separately in addition to code for primary 
procedure)) to ensure that the services are only reported once for each 
antibody per specimen. We believe this will result in appropriate 
values for these services without creating incentives for 
overutilization.
    We examined the AMA RUC recommendations for work RVUs CPT codes 
88342 and 88343 in order to determine whether it would be appropriate 
to use these recommendations as the basis for establishing work RVUs 
for the new G-codes. To determine whether the AMA RUC-recommended work 
RVUs were appropriate for use in valuing the new G-codes, we examined 
whether the change in descriptors between the CPT and G-codes would 
change the underlying assumptions regarding the physician work and 
resource costs of the typical services described by the codes. We note 
that the existing CPT code 88342 is to be reported per specimen, per 
antibody. To crosswalk the utilization for the service described by the 
current CPT code 88342 to the new CPT coding structure, the AMA RUC 
recommended that 90 percent of the utilization previously reported with 
CPT code 88342 would continue to be reported with as a single unit of 
88342 and that 10 percent of the utilization previously reported with 
CPT code 88342 would be reported with the new add-on code, CPT code 
88343. It seems clear, then, that in recommending values for the new 
services, the AMA RUC did not anticipate that any additional services 
would be reported despite the new descriptors that would allow for 
units to be reported for each block and each slide for each antibody. 
Therefore, we assume that the AMA RUC's recommended work RVUs and 
direct PE inputs for the new CPT codes were also developed with the 
assumption that the typical case would continue to be one unit reported 
per specimen, per antibody. Since the descriptors for the G-codes we 
are adopting in lieu of the new and revised CPT codes make explicit 
what appears to be the premise underlying the AMA RUC-recommended 
values for these services, we believe it is appropriate to use the AMA 
RUC recommendations for CPT codes 88342 and 88343 as the basis for 
establishing interim final work RVUs and direct PE inputs for the new 
G-codes for CY 2014.
    Therefore, we are assigning an interim final work RVU of 0.60 for 
code G0461, which is the AMA RUC recommendation for CPT code 88342; and 
we are assigning an interim final work RVU of 0.24 for code G0462, 
which is the AMA RUC recommendation for CPT code 88343.
(18) Psychiatry (CPT Code 90863)
    For CY 2013, the CPT Editorial Panel restructured the psychiatry/
psychotherapy CPT codes allowing for separate reporting of E/M codes, 
eliminating the site-of-service differential, creation of CPT codes for 
crisis, and a series of add-on CPT codes to psychotherapy to describe 
interactive complexity and medication management. In CY 2013, the AMA 
RUC

[[Page 74342]]

provided us with recommendations for the majority, but not all, of the 
updated psychiatry/psychotherapy CPT codes. Due to the absence of AMA 
RUC recommendations for the entire family, we established interim final 
values for the codes based on a general approach of maintaining the 
previous values for the services, or as close to the previous values as 
possible, pending our receipt of recommended values for all codes in 
the new structure in CY 2014. See section II.E.2.a.ii.(25) of this 
final rule with comment period for a discussion of the finalization of 
the CY 2013 interim final RVUs.
    For CY 2014, we received the outstanding AMA RUC recommendations 
for the psychiatry/psychotherapy CPT code family. We are establishing 
interim final work RVUs for CPT codes 90785, 90839, and 90840 based 
upon the AMA RUC's recommended work RVUs.
    We are assigning CPT code 90863 a PFS procedure status indicator of 
I (Not valid for Medicare purposes. Medicare uses another code for the 
reporting of and the payment for these services.). The CPT Editorial 
Panel created CPT add-on code 90863 to describe medication management 
by a nonphysician when furnished with psychotherapy. As detailed in the 
CY 2013 final rule with comment period, clinical psychologists are 
precluded from billing Medicare for pharmacologic management services 
under CPT code 90863 because pharmacologic management services require 
some knowledge and ability to perform evaluation and management 
services, as some stakeholders acknowledged.
(19) Speech Evaluation (CPT Codes 92521, 92522, 92523, and 92524)
    For CY 2014, the CPT Editorial Panel replaced CPT code 92506 
(evaluation of speech, language, voice, communication, and/or auditory 
processing) with four new speech evaluation codes, CPT codes 92521, 
92522, 92523, and 92524, to more accurately describe speech-language 
pathology evaluation services.
    We are assigning CY 2014 interim final work RVUs of 1.75 and 1.50 
for CPT codes 92521 and 92522, respectively, as the HCPAC recommended.
    For CPT code 92523, we disagree with the HCPAC-recommended work RVU 
of 3.36. In arguing that this service should have a higher work RVU 
than the survey median of 1.86, the affected specialty society stated 
that its survey results were faulty for this CPT code because surveyees 
did not consider all the work necessary to perform the service. We 
believe that the appropriate value for 60 minutes of work for the 
speech evaluation codes is reflected in CPT code 92522, for which the 
HCPAC recommended 1.50 RVUs. Because the intraservice time for CPT code 
92523 is twice that for CPT code 92522, we are assigning a work RVU of 
3.0 to CPT code 92523.
    Similarly, since CPT codes 92524 and 92522 have identical 
intraservice time recommendations and similar descriptions of work we 
believe that the work RVU for CPT code 92524 should be the same as the 
work RVU for CPT code 95922. Therefore, we are assigning a work RVU of 
1.50 to CPT code 92524.
    Additionally, it is important to note that these codes are defined 
as ``always therapy'' services, regardless of the type of practitioner 
who performs them. As a result, CPT codes 92521, 92522, 92523 and 92524 
always require a therapy modifier (GP, GO, or GN). Also, as noted in 
Addendum H, these codes will be subject to the therapy MPPR.
    In accordance with longstanding Medicare policy, we also note that 
in general, we would expect that only one evaluation code would be 
billed for a therapy episode of care.
(20) Cardiovascular: Cardiac Catheterization (93582)
    For CY 2014, we reviewed new CPT code 93582. Although the AMA RUC 
compared this code to CPT code 92941 (percutaneous transluminal 
revascularization of acute total/subtotal occlusion during acute 
myocardial infarction, coronary artery or coronary), which has a work 
RVU of 12.56 and 70 minutes of intraservice time, it recommended a work 
RVU of 14.00, the survey's 25th percentile. We agree with the AMA RUC 
that CPT code 92941 is an appropriate comparison code and believe that 
due to the similarity in intensity and time that the codes should be 
valued with the same work RVU. Therefore, we are assigning an interim 
final work RVU of 12.56 to CPT code 93582 for CY 2014.
(21) Duplex Scans (CPT Codes 93880, 93882, 93925, 93926, 93930, 93931, 
93970, 93971, 93975, 93976, 93978 and 93979)
    CPT Code 93880 was identified as a high expenditure procedure code 
and referred to the AMA RUC for review. As part of its recommendations, 
the AMA RUC included recommendations for CPT code 93882. The AMA RUC 
recommended an increase in the work RVUs for 92880 and 92882 from 0.60 
and 0.40 to 0.80 and 0.50, respectively.
    In the 2013 PFS final rule with comment period, we reviewed 93925 
(Duplex scan of lower extremity arteries or arterial bypass grafts; 
complete bilateral study) and 93926 (Duplex scan of lower extremity 
arteries or arterial bypass grafts; unilateral or limited study), which 
were identified by the AMA RUC as potentially misvalued because the 
time and PE inputs for these services were Harvard valued and these 
services have utilization of 500,000 service per year. We disagreed 
with the respective AMA RUC-recommended work RVUs of 0.90 and 0.70 and 
established interim final values of 0.80 and 0.50 instead.
    We believe the AMA RUC-recommended values for these two sets of 
codes do not maintain the appropriate relative values within the family 
of duplex scans. In addition to these four codes, there are several 
other duplex scan codes that may fit within this family, including CPT 
codes: 93880 (Duplex scan of extracranial arteries; complete bilateral 
study), 93882 (Duplex scan of extracranial arteries; unilateral or 
limited study), 93925 (Duplex scan of lower extremity arteries or 
arterial bypass grafts; complete bilateral study), 93926 (Duplex scan 
of lower extremity arteries or arterial bypass grafts; unilateral or 
limited study), 93930 (Duplex scan of upper extremity arteries or 
arterial bypass grafts; complete bilateral study), 93931 (Duplex scan 
of upper extremity arteries or arterial bypass grafts; unilateral or 
limited study), 93970 (Duplex scan of extremity veins including 
responses to compression and other maneuvers; complete bilateral 
study), 93971 (Duplex scan of extremity veins including responses to 
compression and other maneuvers; unilateral or limited study), 93975 
(Duplex scan of arterial inflow and venous outflow of abdominal, 
pelvic, scrotal contents and/or retroperitoneal organs; complete 
study), 93976 (Duplex scan of arterial inflow and venous outflow of 
abdominal, pelvic, scrotal contents and/or retroperitoneal organs; 
limited study), 93978 (Duplex scan of aorta, inferior vena cava, iliac 
vasculature, or bypass grafts; complete study) and 93979 (Duplex scan 
of aorta, inferior vena cava, iliac vasculature, or bypass grafts; 
unilateral or limited study).
    We are concerned that the AMA RUC-recommended values for 93880 and 
93882, as well as our interim final values for 93925 and 93926, do not 
maintain the appropriate relativity within this family and we are 
referring the entire family to the AMA RUC to assess relativity among 
the codes and then recommend appropriate work RVUs. We also request 
that the AMA RUC consider CPT codes 93886

[[Page 74343]]

(Transcranial Doppler study of the intracranial arteries; complete 
study) and 93888 (Transcranial Doppler study of the intracranial 
arteries; limited study) in conjunction with the duplex scan codes in 
order to assess the relativity between and among these codes.
    Therefore, we will maintain the CY 2013 RVUs for CPT codes 93880 
and 93882 on an interim final basis until we receive further 
recommendations from the AMA RUC
(22) Ultrasonic Wound Assessment (CPT Code 97610)
    For CY 2014, the AMA RUC reviewed new CPT code 97610. We are 
contractor pricing this code for CY 2014 as recommended by the AMA RUC. 
Although the code will be contractor priced, we are designating this 
service as a ``sometimes therapy'' service. Like other ``sometimes 
therapy'' codes, when a therapist furnishes this service all outpatient 
therapy policies apply.
(23) Interprofessional Telephone Consultative Services (CPT Code 99446, 
99447, 99448, and 99449)
    For CY 2014, the CPT Editorial Panel created CPT codes 99446-99449 
to describe telephone/internet consultative services. The AMA RUC-
recommended work RVUs for these codes. Medicare pays for telephone 
consultations about a beneficiary services as a part of other services 
furnished to the beneficiary. Therefore, for CY 2014 we are assigning 
CPT codes 99446, 99447, 99448, and 99449 a PFS procedure status 
indicator of B (Bundled code. Payments for covered services are always 
bundled into payment for other services, which are 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 bundled (for example, a telephone call 
from a hospital nurse regarding care of a patient).)
b. Establishing Interim Final Direct PE RVUs for CY 2014
i. Background and Methodology
    The AMA RUC provides CMS with recommendations regarding direct PE 
inputs, including clinical labor, supplies, and equipment, for new, 
revised, and potentially misvalued codes. We review the AMA RUC-
recommended direct PE inputs on a code-by-code basis, including the 
recommended facility PE inputs and/or nonfacility PE inputs. This 
review is informed by both our clinical assessment of the typical 
resource requirements for furnishing the service and our intention to 
maintain the principles of accuracy and relativity in the database. We 
determine whether we agree with the AMA RUC's recommended direct PE 
inputs for a service or, if we disagree, we refine the PE inputs to 
represent inputs that better reflect our estimate of the PE resources 
required to furnish the service in the facility and/or nonfacility 
settings. We also confirm that CPT codes should have facility and/or 
nonfacility direct PE inputs and make changes based on our clinical 
judgment and any PFS payment policies that would apply to the code.
    We have accepted for CY 2014, as interim final and without 
refinement, the direct PE inputs based on the recommendations submitted 
by the AMA RUC for the codes listed in Table 28. For the remainder of 
the AMA RUC's direct PE recommendations, we have accepted the PE 
recommendations submitted by the AMA RUC as interim final, but with 
refinements. These codes and the refinements to their direct PE inputs 
are listed in Table 29.
    We note that the final CY 2014 PFS direct PE input database 
reflects the refined direct PE inputs that we are adopting on an 
interim final basis for CY 2014. That database is available under 
downloads for the CY 2014 PFS final rule with comment period on the CMS 
Web site at http://www.cms.gov/Medicare/Medicare-Fee-for-Service-
Payment/PhysicianFeeSched/PFS-Federal-Regulation-Notices.html. We also 
note that the PE RVUs displayed in Addenda B and C reflect the interim 
final values and policies described in this section. All PE RVUs 
adopted on an interim final basis for CY 2014 are included in Addendum 
C and are open for comment in this final rule with comment period.
ii. Common Refinements
    Table 29 details our refinements of the AMA RUC's direct PE 
recommendations at the code-specific level. In this section, we discuss 
the general nature of some common refinements and the reasons for 
particular refinements.
(a) Changes in Physician Time
    Some direct PE inputs are directly affected by revisions in 
physician time described in section II.E.3.a. of this final rule with 
comment period. We note that for many codes, changes in the 
intraservice portions of the physician time and changes in the number 
or level of postoperative visits included in the global periods result 
in corresponding changes to direct PE inputs. We also note that, for a 
significant number of services, especially diagnostic tests, the 
procedure time assumptions used in determining direct PE inputs are 
distinct from, and therefore not dependent on, physician intraservice 
time assumptions. For these services, we do not make refinements to the 
direct PE inputs based on changes to estimated physician intraservice 
times.
    Changes in Intraservice Physician Time in the Nonfacility Setting. 
For most codes valued in the nonfacility setting, a portion of the 
clinical labor time allocated to the intraservice period reflects 
minutes assigned for assisting the physician with the procedure. To the 
extent that we are refining the times associated with the intraservice 
portion of such procedures, we have adjusted the corresponding 
intraservice clinical labor minutes in the nonfacility setting.
    For equipment associated with the intraservice period in the 
nonfacility setting, we generally allocate time based on the typical 
number of minutes a piece of equipment is being used, and therefore, 
not available for use with another patient during that period. In 
general, we allocate these minutes based on the description of typical 
clinical labor activities. To the extent that we are making changes in 
the clinical labor times associated with the intraservice portion of 
procedures, we have adjusted the corresponding equipment minutes 
associated with the codes.
    Changes in the Number or Level of Postoperative Office Visits in 
the Global Period. For codes valued with postservice physician office 
visits during a global period, most of the clinical labor time 
allocated to the postservice period reflects a standard number of 
minutes allocated for each of those visits. To the extent that we are 
refining the number or level of postoperative visits, we have modified 
the clinical staff time in the postservice period to reflect the 
change. For codes valued with postservice physician office visits 
during a global period, we allocate standard equipment for each of 
those visits. To the extent that we are making a change in the number 
or level of postoperative visits associated with a code, we have 
adjusted the corresponding equipment minutes. For codes valued with 
postservice physician office visits during a global period, a certain 
number of supply items are allocated for each of those office visits. 
To the extent that we are making a change in the number of 
postoperative visits, we have adjusted the corresponding supply item 
quantities associated with the codes. We note that many supply items 
associated with postservice physician office visits are allocated for 
each office visit (for

[[Page 74344]]

example, a minimum multi-specialty visit pack (SA048) in the CY 2014 
direct PE input database). For these supply items, the quantities in 
the direct PE input database should reflect the number of office visits 
associated with the code's global period. However, some supply items 
are associated with postservice physician office visits but are only 
allocated once during the global period because they are typically used 
during only one of the postservice office visits (for example, pack, 
post-op incision care (suture) (SA054) in the direct PE input 
database). For these supply items, the quantities in the direct PE 
input database reflect that single quantity.
    These refinements are reflected in the final CY 2014 PFS direct PE 
input database and detailed in Table 29.
(b) Equipment Minutes
    In general, the equipment time inputs reflect the sum of the times 
within the intraservice period when a clinician is using the piece of 
equipment, plus any additional time the piece of equipment is not 
available for use for another patient due to its use during the 
designated procedure. While some services include equipment that is 
typically unavailable during the entire clinical labor service period, 
certain highly technical pieces of equipment and equipment rooms are 
less likely to be used by a clinician for all tasks associated with a 
service, and therefore, are typically available for other patients 
during the preservice and postservice components of the service period. 
We adjust those equipment times accordingly. We refer interested 
stakeholders to our extensive discussion of these policies in the CY 
2012 PFS final rule with comment period (76 FR 73182-73183) and in 
section II.E.2.b. of this final rule with comment period. We are 
refining the CY 2014 AMA RUC direct PE recommendations to conform to 
these equipment time policies. These refinements are reflected in the 
final CY 2013 PFS direct PE input database and detailed in Table 29.
(c) Moderate Sedation Inputs
    In the CY 2012 PFS final rule (76 FR 73043-73049), we finalized a 
standard package of direct PE inputs for services where moderate 
sedation is considered inherent in the procedure. We are refining the 
CY 2014 AMA RUC direct PE recommendations to conform to these policies. 
These refinements are reflected in the final CY 2013 PFS direct PE 
input database and detailed in Table 29.
(d) Standard Minutes for Clinical Labor Tasks
    In general, the preservice, service period, and postservice 
clinical labor minutes associated with clinical labor inputs in the 
direct PE input database reflect the sum of particular tasks described 
in the information that accompanies the recommended direct PE inputs on 
``PE worksheets.'' For most of these described tasks, there are a 
standardized number of minutes, depending on the type of procedure, its 
typical setting, its global period, and the other procedures with which 
it is typically reported. At times, the AMA RUC recommends a number of 
minutes either greater than or less than the time typically allotted 
for certain tasks. In those cases, CMS clinical staff reviews the 
deviations from the standards to assess whether they are clinically 
appropriate. Where the AMA RUC-recommended exceptions are not accepted, 
we refine the interim final direct PE inputs to match the standard 
times for those tasks. In addition, in cases when a service is 
typically billed with an E/M, we remove the preservice clinical labor 
tasks so that the inputs are not duplicative and reflect the resource 
costs of furnishing the typical service.
    In some cases the AMA RUC recommendations include additional 
minutes described by a category called ``other clinical activity,'' or 
through the addition of clinical labor tasks that are different from 
those previously included as standard. In these instances, CMS clinical 
staff reviews the tasks as described in the recommendation to determine 
whether they are already incorporated into the total number of minutes 
based on the standard tasks. Additionally, CMS reviews these tasks in 
the context of the kinds of tasks delineated for other services under 
the PFS. For those tasks that are duplicative or not separately 
incorporated for other services, we do not accept those additional 
clinical labor tasks as direct inputs. These refinements are reflected 
in the final CY 2013 PFS direct PE input database and detailed in Table 
29.
(e) New Supply and Equipment Items
    The AMA RUC generally recommends the use of supply and equipment 
items that already exist in the direct PE input database for new, 
revised, and potentially misvalued codes. Some recommendations include 
supply or equipment items that are not currently in the direct PE input 
database. In these cases, the AMA RUC has historically recommended a 
new item be created and has facilitated CMS's pricing of that item by 
working with the specialty societies to provide sales invoices to us.
    We received invoices for several new supply and equipment items for 
CY 2014. We have accepted the majority of these items and added them to 
the direct PE input database. However, in many cases we cannot 
adequately price a newly recommended item due to inadequate 
information. In some cases, no supporting information regarding the 
price of the item has been included in the recommendation to create a 
new item. In other cases, the supporting information does not 
demonstrate that the item has been purchased at the listed price (for 
example, price quotes instead of paid invoices). In cases where the 
information provided allowed us to identify clinically appropriate 
proxy items, we have used currently existing items as proxies for the 
newly recommended items. In other cases, we have included the item in 
the direct PE input database without an associated price. While 
including the item without an associated price means that the item does 
not contribute to the calculation of the PE RVU for particular 
services, it facilitates our ability to incorporate a price once we are 
able to do so.
(f) Recommended Items That Are Not Direct PE Inputs
    In some cases, the recommended direct PE inputs included items that 
are not clinical labor, disposable supplies, or medical equipment 
resources. We have addressed these kinds of recommendations in previous 
rulemaking and in sections II.E.2.b. and II.B.4.a. of this final rule 
with comment period. Refinements to adjust for these recommended inputs 
are reflected in the final CY 2013 PFS direct PE input database and 
detailed in Table 29.
iii. Code-Specific Refinements
(a) Breast Biopsy (CPT Codes 19085, 19086, 19287, and 19288)
    The AMA RUC submitted recommended direct PE inputs for CPT codes 
19085, 19086, 19287, 19288, including suggestions to create new PE 
inputs for items called ``20MM handpiece--MR,'' ``vacuum line 
assembly,'' ``introducer localization set (trocar),'' and ``tissue 
filter.'' CMS clinical staff reviewed these recommended items and 
concluded that each of these items serve redundant clinical purposes 
with other biopsy supplies already included as direct PE inputs for the 
codes. Similarly, CMS clinical staff reviewed three newly recommended 
equipment items described as ``breast biopsy software,'' ``breast 
biopsy device (coil),'' and

[[Page 74345]]

``lateral grid,'' and determined that these items serve clinical 
functions to similar items already included in MR room equipment 
package (EL008). Therefore, we did not create new direct PE inputs for 
these seven items. These refinements, as well as other applicable 
standard and common refinements for these codes, are reflected in the 
final CY 2014 PFS direct PE input database and detailed in Table 29.
(b) Esophagoscopy, Esophagogastroduodenoscopy and Endoscopic Retrograde 
Cholangiopancreatography (CPT Codes 43270, 43229, and 43198)
    For CY 2014, the CPT Editorial Panel revised the set of codes that 
describe esophagoscopy, esophagogastroduodenoscopy (EGD) and endoscopic 
retrograde cholangiopancreatography (ERCP). These revisions included 
the addition and deletion of several codes and the development of new 
guidelines and coding instructions. The AMA RUC provided CMS with 
recommended direct PE inputs for these services.
    For two codes within this family, CPT codes 43270 and 43229, the 
AMA RUC recommended including the supply item called ``kit, probe, 
radiofrequency, XIi-enhanced RF probe'' (SA100) as a proxy for an RF 
ablation catheter, as well as a new recommended equipment item called 
``radiofrequency generator (Angiodynamics).'' The AMA RUC did not 
provide additional information regarding what portion of the RF 
ablation catheter might be reusable. Additionally, the recommendation 
did not provide information regarding why the supply item SA100 that is 
priced at $2,695 would be an appropriate proxy for the RF ablation 
catheter. The CY 2013 codes that would be used to report these services 
do not include these or similar items, so we believe that it would not 
be appropriate to assume such a significant increase in resource costs 
without more detail regarding the item for which the recommended input 
would serve as a proxy. We note that in previous rulemaking (77 FR 
69031) we have addressed recommendations for other codes that also 
suggested using this expensive disposable supply as a proxy input. For 
these other services, we created a proxy equipment item instead of a 
proxy supply item, pending the submission of additional information 
regarding the newly recommended item.
    We also note that the AMA RUC recommendation did not include 
adequate information that would allow us to price the newly recommended 
item called ``'radiofrequency generator (Angiodynamics).'' To 
incorporate the best estimate of resource costs for these items for 
these new codes for CY 2014, we followed the precedents set in previous 
rulemaking and created a new equipment item to serve as a proxy for the 
``RF ablation catheter,'' and used a currently existing radiofrequency 
generator equipment item (EQ214) as a proxy item pending the submission 
of additional information regarding these items.
    For another new code in the family, CPT code 43198, the AMA RUC 
recommended including a disposable supply item called ``endoscopic 
biopsy forceps'' (SD066). However, additional information included with 
the recommendation suggested that a reusable biopsy forceps is 
typically used in furnishing the service. Therefore, we did not 
incorporate the disposable forceps in the direct PE input database.
    These refinements, as well as other applicable standard and common 
refinements for these codes, are reflected in the final CY 2014 PFS 
direct PE input database and detailed in Table 29.
(c) Dilation of Esophagus (CPT Codes 43450 and 43453)
    The AMA RUC recommended direct PE input updates for CTP codes 43450 
and 43453. The recommendation included a new item listed as a supply 
called ``esophageal bougies.'' We note that we did not receive an 
invoice or additional description of this item and, based on CMS 
clinical staff clinical review, we believe the functionality of this 
kind of item can be accomplished through the use of a reusable piece of 
equipment. Therefore, we created a new equipment item called 
``esophageal bougies, set, reusable.'' Once we receive appropriate 
pricing information regarding the new item, we will update the price in 
the direct PE input database. This refinement and other applicable 
standard and common refinements for these codes are reflected in the 
final CY 2014 PFS direct PE input database and detailed in Table 29.
(d) MRI of Brain (CPT Codes 70551, 70552, and 70553)
    The AMA RUC recommended updated direct PE inputs for a series of 
codes that describe magnetic resonance imaging (MRI) of the brain. We 
note the AMA RUC recommended that the typical length of time it takes 
for the MRI technician to acquire images is equal to the time it took 
in 2002, when the PE inputs for the codes were last evaluated.
    When reviewing the direct PE inputs for this code, CMS clinical 
staff concluded that there should be no significant difference between 
the assumed time to acquire images for MRI of the brain and MRI of the 
spine; therefore, we have adjusted the direct PE inputs accordingly. 
This refinement and other applicable standard and common refinements 
for these codes are reflected in the final CY 2014 PFS direct PE input 
database and detailed in Table 29.
(e) Selective Catheter Placement (CPT Codes 36245 and 75726)
    The AMA RUC submitted new direct PE inputs for CPT code 36245 
(Selective catheter placement, arterial system; each first order 
abdominal, pelvic, or lower extremity artery branch, within a vascular 
family). We have reviewed the recommended direct PE inputs for this 
service and made the applicable standard and common refinements which 
are reflected in the final CY 2014 PFS direct PE input database and 
detailed in Table 29. However, we note that the review of CPT code 
36245 was initiated based on the identification of the code through two 
misvalued code screens. One of these was the screen that identifies 
codes reported together at least 75 percent of the time. As the RUC 
noted in its recommendation, CPT 36245 may be reported with a number of 
different radiologic supervision and interpretation codes including 
75726 (Angiography, visceral, selective or supraselective (with or 
without flush aortogram), radiological supervision and interpretation). 
The AMA RUC recommendation stated that, because these code combinations 
were valued as individual component codes, no potential for duplication 
of physician work exists. The recommended direct PE inputs for CPT 
36245 did not address whether or not the direct PE inputs for CPT code 
75726 should be updated given that it is typically reported with CPT 
code 36245.
    The current direct PE inputs for 75726 include 73 clinical labor 
minutes for ``assist physician in performing procedure.'' This time 
matches the precise number of minutes assumed for the same task for CPT 
code 36245 in the existing direct PE inputs. The AMA RUC has 
recommended changing the amount of time considered typical for that 
task from 73 minutes to 45 minutes and we are accepting that change, 
without refinement, on an interim final basis for CY 2014. Given that 
these codes are typically reported together and the underlying 
procedure time assumption used in valuing 75726 is dependent on the 
assumed times for 36245, we believe it is appropriate to make a 
corresponding change to 75726

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on an interim final basis to reflect the best estimate of resources for 
these services which are frequently furnished together. This change is 
reflected in the final CY 2014 PFS direct PE input database and 
detailed in Table 29.
(g) Respiratory Motion Management Simulation (CPT Code 77293)
    The AMA RUC submitted direct PE inputs recommendations for CPT code 
77293 (Respiratory motion management simulation). Among these was the 
recommendation to create a new equipment item called ``virtual 
simulation package.'' However, the information that accompanied the 
recommendation included a price quote for the new item instead of a 
copy of paid invoice. We believe that the currently existing item 
``radiation virtual simulation system'' (ER057) will serve as an 
appropriate proxy for the new item pending our receipt of additional 
information regarding the newly recommended item. This refinement and 
other applicable standard and common refinements for these codes are 
reflected in the final CY 2014 PFS direct PE input database and 
detailed in Table 29.
(h) Stereotactic Body Radiation Therapy (CPT Code 77373)
    The AMA RUC recommended updated direct PE inputs for CPT code 77373 
(Stereotactic body radiation therapy, treatment delivery, per fraction 
to 1 or more lesions, including image guidance, entire course not to 
exceed 5 fractions). We note that we previously established final 
direct PE inputs for this code in the CY 2013 PFS final rule with 
comment period (77 FR 68922) in response to direct PE inputs we 
proposed in the CY 2013 PFS proposed rule (77 FR 44743). In finalizing 
the direct PE inputs for this code, we explained that we were including 
the equipment item called ``radiation treatment vault'' (ER056) based 
on public comment, and noting that we had questions regarding whether 
the item is appropriately categorized as equipment within the 
established PE methodology. The AMA RUC recommendations did not include 
the ``radiation treatment vault'' (ER056) for CPT 77373. Because we 
intend to address that issue in future rulemaking, we believe that we 
should continue to include the item as a direct PE input for CY 2014. 
This refinement and other applicable standard and common refinements 
for these codes are reflected in the final CY 2014 PFS direct PE input 
database and detailed in Table 29.
(i) Immunohistochemistry (CPT Codes 88342 and 88343 and HCPCS Codes 
G0461 and G0462
    The AMA RUC recommended direct PE inputs for revised CPT code 88342 
and new CPT code 88343. We direct the reader to section II.E.3 of this 
final rule with comment period. There, we discuss our decision for CY 
2014 to use HCPCS codes G0461 and G0462 for Medicare services instead 
of reporting the CPT codes describing immunohistochemistry services and 
to use the AMA RUC recommended values for the CPT codes in establishing 
interim final values for the HCPCS codes. We based the interim final 
direct PE inputs for G0461 and G0462 on the recommended inputs for CPT 
codes 88342 and 88343, therefore the standard and common refinements to 
the recommended direct PE inputs for these CPT codes are detailed in 
Table 29 as the inputs for G0461 and G0462. Likewise, the interim final 
direct PE inputs for G0461 and G0462 appear in the final CY 2014 PFS 
direct PE input database.
(j) Anogenital Examination With Colposcopic Magnification in Childhood 
for Suspected Trauma (CPT Code 99170)
    The AMA RUC recommended updated direct PE inputs for CPT code 
99170. As part of that recommendation, the AMA RUC recommended that we 
create a new clinical labor type called ``Child Life Specialist'' to be 
included in the direct PE input database for this particular service. 
The recommendation also contained additional information that might 
facilitate the development of an appropriate cost/minute for this new 
clinical labor type. After reviewing that information, we conclude that 
the resource costs for the new clinical labor type are very similar to 
the costs associated with the existing nurse blend clinical labor type 
(L037D). Therefore, we have created a new clinical labor category 
called ``Child Life Specialist'' (L037E) with a rate per minute 
crosswalked from the existing labor type L037D.
    We also note that the direct PE input recommendation for this code 
did not conform to the usual format. The PE worksheet included minutes 
for the new clinical labor type but instead of assigning minutes to 
specified clinical labor tasks, the worksheet referenced a narrative 
description of the tasks for the clinical labor type in the preservice, 
intra-, and postservice periods. This format did not limit our clinical 
staff from reviewing the recommendation, but it does not allow us to 
display refinements for particular tasks in Table 29. Instead, the 
refinements to the recommended aggregate number of minutes for each 
time component appear in the table along with other applicable standard 
and common refinements to the recommended direct PE inputs.

       Table 28--CY 2014 Interim Final Codes With Direct PE Input
               Recommendations Accepted Without Refinement
------------------------------------------------------------------------
             CPT code                       CPT code description
------------------------------------------------------------------------
17003............................  Destruct premalg les 2-14.
17311............................  Mohs 1 stage h/n/hf/g.
17312............................  Mohs addl stage.
17313............................  Mohs 1 stage t/a/l.
17314............................  Mohs addl stage t/a/l.
17315............................  Mohs surg addl block.
19081............................  Bx breast 1st lesion strtctc.
19082............................  Bx breast add lesion strtctc.
19083............................  Bx breast 1st lesion us imag.
19084............................  Bx breast add lesion us imag.
19283............................  Perq dev breast 1st strtctc.
19284............................  Perq dev breast add strtctc.
19285............................  Perq dev breast 1st us imag.
23333............................  Remove shoulder fb deep.
23334............................  Shoulder prosthesis removal.
23335............................  Shoulder prosthesis removal.
24160............................  Remove elbow joint implant.
24164............................  Remove radius head implant.
27130............................  Total hip arthroplasty.
27236............................  Treat thigh fracture.
27446............................  Revision of knee joint.
27447............................  Total knee arthroplasty.
27466............................  Lengthening of thigh bone.
31239............................  Nasal/sinus endoscopy surg.
31240............................  Nasal/sinus endoscopy surg.
33282............................  Implant pat-active ht record.
33284............................  Remove pat-active ht record.
35301............................  Rechanneling of artery.
37217............................  Stent placemt retro carotid.
37239............................  Open/perq place stent ea add.
43191............................  Esophagoscopy rigid trnso dx.
43192............................  Esophagoscp rig trnso inject.
43193............................  Esophagoscp rig trnso biopsy.
43194............................  Esophagoscp rig trnso rem fb.
43195............................  Esophagoscopy rigid balloon.
43196............................  Esophagoscp guide wire dilat.
43204............................  Esoph scope w/sclerosis inj.
43205............................  Esophagus endoscopy/ligation.
43211............................  Esophagoscop mucosal resect.
43212............................  Esophagoscop stent placement.
43214............................  Esophagosc dilate balloon 30.
43233............................  Egd balloon dil esoph30 mm/>.
43237............................  Endoscopic us exam esoph.
43238............................  Egd us fine needle bx/aspir.
43240............................  Egd w/transmural drain cyst.
43241............................  Egd tube/cath insertion.
43242............................  Egd us fine needle bx/aspir.
43243............................  Egd injection varices.
43244............................  Egd varices ligation.
43246............................  Egd place gastrostomy tube.
43251............................  Egd remove lesion snare.
43253............................  Egd us transmural injxn/mark.
43254............................  Egd endo mucosal resection.
43257............................  Egd w/thrml txmnt gerd.
43259............................  Egd us exam duodenum/jejunum.
43260............................  Ercp w/specimen collection.
43261............................  Endo cholangiopancreatograph.
43262............................  Endo cholangiopancreatograph.

[[Page 74347]]

 
43263............................  Ercp sphincter pressure meas.
43264............................  Ercp remove duct calculi.
43265............................  Ercp lithotripsy calculi.
43266............................  Egd endoscopic stent place.
43273............................  Endoscopic pancreatoscopy.
43274............................  Ercp duct stent placement.
43275............................  Ercp remove forgn body duct.
43276............................  Ercp stent exchange w/dilate.
43277............................  Ercp ea duct/ampulla dilate.
43278............................  Ercp lesion ablate w/dilate.
50360............................  Transplantation of kidney.
52356............................  Cysto/uretero w/lithotripsy.
62310............................  Inject spine cerv/thoracic.
62311............................  Inject spine lumbar/sacral.
62318............................  Inject spine w/cath crv/thrc.
62319............................  Inject spine w/cath lmb/scrl.
63047............................  Remove spine lamina 1 lmbr.
63048............................  Remove spinal lamina add-on.
64643............................  Chemodenerv 1 extrem 1-4 ea.
64645............................  Chemodenerv 1 extrem 5/> ea.
66183............................  Insert ant drainage device.
69210............................  Remove impacted ear wax uni.
77001............................  Fluoroguide for vein device.
77002............................  Needle localization by xray.
77003............................  Fluoroguide for spine inject.
77280............................  Set radiation therapy field.
77285............................  Set radiation therapy field.
77290............................  Set radiation therapy field.
77295............................  3-d radiotherapy plan.
77301............................  Radiotherapy dose plan imrt.
77336............................  Radiation physics consult.
77338............................  Design mlc device for imrt.
77372............................  Srs linear based.
88112............................  Cytopath cell enhance tech.
90839............................  Psytx crisis initial 60 min.
90840............................  Psytx crisis ea addl 30 min.
90875............................  Psychophysiological therapy.
91065............................  Breath hydrogen/methane test.
92521............................  Evaluation of speech fluency.
92522............................  Evaluate speech production.
92523............................  Speech sound lang comprehen.
92524............................  Behavral qualit analys voice.
93000............................  Electrocardiogram complete.
93005............................  Electrocardiogram tracing.
93010............................  Electrocardiogram report.
95928............................  C motor evoked uppr limbs.
95929............................  C motor evoked lwr limbs.
96365............................  Ther/proph/diag iv inf init.
96366............................  Ther/proph/diag iv inf addon.
96367............................  Tx/proph/dg addl seq iv inf.
96368............................  Ther/diag concurrent inf.
96413............................  Chemo iv infusion 1 hr.
96415............................  Chemo iv infusion addl hr.
96417............................  Chemo iv infus each addl seq.
98940............................  Chiropract manj 1-2 regions.
98941............................  Chiropract manj 3-4 regions.
98942............................  Chiropractic manj 5 regions.
98943............................  Chiropract manj xtrspinl 1/>.
------------------------------------------------------------------------

                          Table 29--CY 2014 Interim Final Codes With Direct PE Input Recommendations Accepted With Refinements
--------------------------------------------------------------------------------------------------------------------------------------------------------
                                                                                                               RUC
                                                                                                         recommendation      CMS
  HCPCS  code        HCPCS code       Input code       Input code       Non-fac/fac  Labor activity (if    or current     Refinement        Comment
                    description                        description                       applicable)     value  (min or    (min or
                                                                                                              qty)           qty)
--------------------------------------------------------------------------------------------------------------------------------------------------------
10030.........  Guide cathet fluid   EF018         stretcher.........  NF            ..................            120             0  Non-standard input
                 drainage.                                                                                                             for Moderate
                                                                                                                                       Sedation.
                                     EF027         table, instrument,  NF            ..................            159           152  Standard input for
                                                    mobile.                                                                            Moderate
                                                                                                                                       Sedation.
                                     EQ011         ECG, 3-channel      NF            ..................            159           152  Standard input for
                                                    (with SpO2, NIBP,                                                                  Moderate
                                                    temp, resp).                                                                       Sedation.
                                     EQ032         IV infusion pump..  NF            ..................            159           152  Standard input for
                                                                                                                                       Moderate
                                                                                                                                       Sedation.
                                     L037D         RN/LPN/MTA........  NF            Circulating                     8             7  Conforms to
                                                                                      throughout                                       proportionate
                                                                                      procedure (25%).                                 allocation of
                                                                                                                                       intraservice time
                                                                                                                                       among clinical
                                                                                                                                       labor types.
17000.........  Destruct premalg     ED004         camera, digital (6  NF            ..................             22            13  Refined equipment
                 lesion.                            mexapixel).                                                                        time to conform
                                                                                                                                       to changes in
                                                                                                                                       clinical labor
                                                                                                                                       time.
                                     EF031         table, power......  NF            ..................             46            40  Refined equipment
                                                                                                                                       time to conform
                                                                                                                                       to changes in
                                                                                                                                       clinical labor
                                                                                                                                       time.
                                     EQ093         cryosurgery         NF            ..................             22            13  Refined equipment
                                                    equipment (for                                                                     time to conform
                                                    liquid nitrogen).                                                                  to changes in
                                                                                                                                       clinical labor
                                                                                                                                       time.
                                     EQ168         light, exam.......  NF            ..................             46            40  Refined equipment
                                                                                                                                       time to conform
                                                                                                                                       to changes in
                                                                                                                                       clinical labor
                                                                                                                                       time.
                                     SA048         pack, minimum       NF            ..................              1             2  CMS clinical
                                                    multi-specialty                                                                    review.
                                                    visit.
                                     SA048         pack, minimum       F             ..................              0             1  CMS clinical
                                                    multi-specialty                                                                    review.
                                                    visit.
17004.........  Destroy premal       ED004         camera, digital (6  NF            ..................             41            30  Refined equipment
                 lesions 15/>.                      mexapixel).                                                                        time to conform
                                                                                                                                       to changes in
                                                                                                                                       clinical labor
                                                                                                                                       time.
                                     EQ093         cryosurgery         NF            ..................             41            30  Refined equipment
                                                    equipment (for                                                                     time to conform
                                                    liquid nitrogen).                                                                  to changes in
                                                                                                                                       clinical labor
                                                                                                                                       time.
                                     SA048         pack, minimum       NF            ..................              1             2  CMS clinical
                                                    multi-specialty                                                                    review.
                                                    visit.

[[Page 74348]]

 
                                     SA048         pack, minimum       F             ..................              0             1  CMS clinical
                                                    multi-specialty                                                                    review.
                                                    visit.
19085.........  Bx breast 1st        S             20MM handpiece--MR  NF            ..................              1             0  CMS clinical
                 lesion mr imag.                                                                                                       review;
                                                                                                                                       functionality of
                                                                                                                                       items redundant
                                                                                                                                       with other direct
                                                                                                                                       PE inputs.
                                     S             vacuum line         NF            ..................              1             0  CMS clinical
                                                    assembly.                                                                          review;
                                                                                                                                       functionality of
                                                                                                                                       items redundant
                                                                                                                                       with other direct
                                                                                                                                       PE inputs.
                                     S             introducer          NF            ..................              1             0  CMS clinical
                                                    localization set                                                                   review;
                                                    (trocar).                                                                          functionality of
                                                                                                                                       items redundant
                                                                                                                                       with other direct
                                                                                                                                       PE inputs.
                                     S             tissue filter.....  NF            ..................              1             0  CMS clinical
                                                                                                                                       review;
                                                                                                                                       functionality of
                                                                                                                                       items redundant
                                                                                                                                       with other direct
                                                                                                                                       PE inputs.
                                     E             breast biopsy       NF            ..................             54             0  CMS clinical
                                                    software.                                                                          review;
                                                                                                                                       functionality of
                                                                                                                                       items redundant
                                                                                                                                       with other direct
                                                                                                                                       PE inputs.
                                     E             breast biopsy       NF            ..................             54             0  CMS clinical
                                                    device (coil).                                                                     review;
                                                                                                                                       functionality of
                                                                                                                                       items redundant
                                                                                                                                       with other direct
                                                                                                                                       PE inputs.
                                     E             lateral grid......  NF            ..................             54             0  CMS clinical
                                                                                                                                       review;
                                                                                                                                       functionality of
                                                                                                                                       items redundant
                                                                                                                                       with other direct
                                                                                                                                       PE inputs.
19086.........  Bx breast add        S             20MM handpiece--MR  NF            ..................              1             0  CMS clinical
                 lesion mr imag.                                                                                                       review;
                                                                                                                                       functionality of
                                                                                                                                       items redundant
                                                                                                                                       with other direct
                                                                                                                                       PE inputs.
                                     S             vacuum line         NF            ..................              1             0  CMS clinical
                                                    assembly.                                                                          review;
                                                                                                                                       functionality of
                                                                                                                                       items redundant
                                                                                                                                       with other direct
                                                                                                                                       PE inputs.
                                     S             introducer          NF            ..................              1             0  CMS clinical
                                                    localization set                                                                   review;
                                                    (trocar).                                                                          functionality of
                                                                                                                                       items redundant
                                                                                                                                       with other direct
                                                                                                                                       PE inputs.
                                     S             tissue filter.....  NF            ..................              1             0  CMS clinical
                                                                                                                                       review;
                                                                                                                                       functionality of
                                                                                                                                       items redundant
                                                                                                                                       with other direct
                                                                                                                                       PE inputs.
                                     E             breast biopsy       NF            ..................             43             0  CMS clinical
                                                    software.                                                                          review;
                                                                                                                                       functionality of
                                                                                                                                       items redundant
                                                                                                                                       with other direct
                                                                                                                                       PE inputs.
                                     E             breast biopsy       NF            ..................             43             0  CMS clinical
                                                    device (coil).                                                                     review;
                                                                                                                                       functionality of
                                                                                                                                       items redundant
                                                                                                                                       with other direct
                                                                                                                                       PE inputs.
                                     E             lateral grid......  NF            ..................             43             0  CMS clinical
                                                                                                                                       review;
                                                                                                                                       functionality of
                                                                                                                                       items redundant
                                                                                                                                       with other direct
                                                                                                                                       PE inputs.
19281.........  Perq device breast   ED025         film processor,     NF            ..................              9             5  Refined equipment
                 1st imag.                          wet.                                                                               time to conform
                                                                                                                                       to changes in
                                                                                                                                       clinical labor
                                                                                                                                       time.
                                     ER029         film alternator     NF            ..................              9             5  CMS clinical
                                                    (motorized film                                                                    review.
                                                    viewbox).
                                     L043A         Mammography         NF            Process images,                 9             5  CMS clinical
                                                    Technologist.                     complete data                                    review.
                                                                                      sheet, present
                                                                                      images and data
                                                                                      to the
                                                                                      interpreting
                                                                                      physician.
19282.........  Perq device breast   ED025         film processor,     NF            ..................              9             5  Refined equipment
                 ea imag.                           wet.                                                                               time to conform
                                                                                                                                       to changes in
                                                                                                                                       clinical labor
                                                                                                                                       time.

[[Page 74349]]

 
                                     ER029         film alternator     NF            ..................              9             5  Refined equipment
                                                    (motorized film                                                                    time to conform
                                                    viewbox).                                                                          to changes in
                                                                                                                                       clinical labor
                                                                                                                                       time.
                                     L043A         Mammography         NF            Other Clinical                  9             5  CMS clinical
                                                    Technologist.                     Activity                                         review.
                                                                                      (Service).
19286.........  Perq dev breast add  L043A         Mammography         NF            Assist physician               19            14  Conforming to
                 us imag.                           Technologist.                     in performing                                    physician time.
                                                                                      procedure.
19287.........  Perq dev breast 1st  S             20MM handpiece--MR  NF            ..................              1             0  CMS clinical
                 mr guide.                                                                                                             review;
                                                                                                                                       functionality of
                                                                                                                                       items redundant
                                                                                                                                       with other direct
                                                                                                                                       PE inputs.
                                     S             vacuum line         NF            ..................              1             0  CMS clinical
                                                    assembly.                                                                          review;
                                                                                                                                       functionality of
                                                                                                                                       items redundant
                                                                                                                                       with other direct
                                                                                                                                       PE inputs.
                                     S             introducer          NF            ..................              1             0  CMS clinical
                                                    localization set                                                                   review;
                                                    (trocar).                                                                          functionality of
                                                                                                                                       items redundant
                                                                                                                                       with other direct
                                                                                                                                       PE inputs.
                                     S             tissue filter.....  NF            ..................              1             0  CMS clinical
                                                                                                                                       review;
                                                                                                                                       functionality of
                                                                                                                                       items redundant
                                                                                                                                       with other direct
                                                                                                                                       PE inputs.
                                     E             breast biopsy       NF            ..................             46             0  CMS clinical
                                                    software.                                                                          review;
                                                                                                                                       functionality of
                                                                                                                                       items redundant
                                                                                                                                       with other direct
                                                                                                                                       PE inputs.
                                     E             breast biopsy       NF            ..................             46             0  CMS clinical
                                                    device (coil).                                                                     review;
                                                                                                                                       functionality of
                                                                                                                                       items redundant
                                                                                                                                       with other direct
                                                                                                                                       PE inputs.
                                     E             lateral grid......  NF            ..................             46             0  CMS clinical
                                                                                                                                       review;
                                                                                                                                       functionality of
                                                                                                                                       items redundant
                                                                                                                                       with other direct
                                                                                                                                       PE inputs.
19288.........  Perq dev breast add  S             20MM handpiece--MR  NF            ..................              1             0  CMS clinical
                 mr guide.                                                                                                             review;
                                                                                                                                       functionality of
                                                                                                                                       items redundant
                                                                                                                                       with other direct
                                                                                                                                       PE inputs.
                                     S             vacuum line         NF            ..................              1             0  CMS clinical
                                                    assembly.                                                                          review;
                                                                                                                                       functionality of
                                                                                                                                       items redundant
                                                                                                                                       with other direct
                                                                                                                                       PE inputs.
                                     S             introducer          NF            ..................              1             0  CMS clinical
                                                    localization set                                                                   review;
                                                    (trocar).                                                                          functionality of
                                                                                                                                       items redundant
                                                                                                                                       with other direct
                                                                                                                                       PE inputs.
                                     S             tissue filter.....  NF            ..................              1             0  CMS clinical
                                                                                                                                       review;
                                                                                                                                       functionality of
                                                                                                                                       items redundant
                                                                                                                                       with other direct
                                                                                                                                       PE inputs.
                                     E             breast biopsy       NF            ..................             35             0  CMS clinical
                                                    software.                                                                          review;
                                                                                                                                       functionality of
                                                                                                                                       items redundant
                                                                                                                                       with other direct
                                                                                                                                       PE inputs.
                                     E             breast biopsy       NF            ..................             35             0  CMS clinical
                                                    device (coil).                                                                     review;
                                                                                                                                       functionality of
                                                                                                                                       items redundant
                                                                                                                                       with other direct
                                                                                                                                       PE inputs.
                                     E             lateral grid......  NF            ..................             35             0  CMS clinical
                                                                                                                                       review;
                                                                                                                                       functionality of
                                                                                                                                       items redundant
                                                                                                                                       with other direct
                                                                                                                                       PE inputs.
23333.........  Remove shoulder fb   EF031         table, power......  F             ..................             90            63  Refined equipment
                 deep.                                                                                                                 time to conform
                                                                                                                                       to changes in
                                                                                                                                       clinical labor
                                                                                                                                       time.
                                     EQ168         light, exam.......  F             ..................             90            63  Refined equipment
                                                                                                                                       time to conform
                                                                                                                                       to changes in
                                                                                                                                       clinical labor
                                                                                                                                       time.
                                     L037D         RN/LPN/MTA........  F             Total Office Visit             90            63  Conforming to
                                                                                      Time.                                            physician time.
                                     SA048         pack, minimum       F             ..................              3             2  Conforming to
                                                    multi-specialty                                                                    physician time.
                                                    visit.

[[Page 74350]]

 
27130.........  Total hip            L037D         RN/LPN/MTA........  F             Post Service                   99           108  Conforming to
                 arthroplasty.                                                        Period.                                          physician time.
                                     EF031         table, power......  F             ..................             99           108  Refined equipment
                                                                                                                                       time to conform
                                                                                                                                       to changes in
                                                                                                                                       clinical labor
                                                                                                                                       time.
27447.........  Total knee           L037D         RN/LPN/MTA........  F             Post Service                   99           108  Conforming to
                 arthroplasty.                                                        Period.                                          physician time.
                                     EF031         table, power......  F             ..................             99           108  Refined equipment
                                                                                                                                       time to conform
                                                                                                                                       to changes in
                                                                                                                                       clinical labor
                                                                                                                                       time.
31237.........  Nasal/sinus          L037D         RN/LPN/MTA........  NF            Monitor pt.                    15             5  CMS clinical
                 endoscopy surg.                                                      following service/                               review.
                                                                                      check tubes,
                                                                                      monitors, drains.
31238.........  Nasal/sinus          L037D         RN/LPN/MTA........  NF            Monitor pt.                    15             5  CMS clinical
                 endoscopy surg.                                                      following service/                               review.
                                                                                      check tubes,
                                                                                      monitors, drains.
33366.........  Trcath replace       L037D         RN/LPN/MTA........  F             Coordinate pre-                40            20  CMS clinical
                 aortic valve.                                                        surgery services.                                review;
                                                                                                                                       refinement
                                                                                                                                       reflects standard
                                                                                                                                       preservice times.
36245.........  Ins cath abd/l-ext   EF018         stretcher.........  NF            ..................            240             0  Non-standard input
                 art 1st.                                                                                                              for Moderate
                                                                                                                                       Sedation.
37236.........  Open/perq place      EF018         stretcher.........  NF            ..................            240             0  Non-standard input
                 stent 1st.                                                                                                            for Moderate
                                                                                                                                       Sedation.
                                     EF027         table, instrument,  NF            ..................            347           332  Standard input for
                                                    mobile.                                                                            Moderate
                                                                                                                                       Sedation.
                                     EQ011         ECG, 3-channel      NF            ..................            347           332  Standard input for
                                                    (with SpO2, NIBP,                                                                  Moderate
                                                    temp, resp).                                                                       Sedation.
                                     EQ032         IV infusion pump..  NF            ..................            347           332  Standard input for
                                                                                                                                       Moderate
                                                                                                                                       Sedation.
                                     S             Balloon expandable  NF            ..................              1             0  CMS clinical
                                                                                                                                       review; input
                                                                                                                                       already exists.
                                     SD152         catheter, balloon,  NF            ..................              0             1  CMS clinical
                                                    PTA.                                                                               review; input
                                                                                                                                       already exists.
37237.........  Open/perq place      S             Balloon expandable  NF            ..................              1             0  CMS clinical
                 stent ea add.                                                                                                         review; input
                                                                                                                                       already exists.
                                     SD152         catheter, balloon,  NF            ..................              0             1  CMS clinical
                                                    PTA.                                                                               review; input
                                                                                                                                       already exists.
37238.........  Open/perq place      EF018         stretcher.........  NF            ..................            180             0  Non-standard input
                 stent same.                                                                                                           for Moderate
                                                                                                                                       Sedation.
                                     EF027         table, instrument,  NF            ..................            257           302  Standard input for
                                                    mobile.                                                                            Moderate
                                                                                                                                       Sedation.
                                     EQ011         ECG, 3-channel      NF            ..................            257           302  Standard input for
                                                    (with SpO2, NIBP,                                                                  Moderate
                                                    temp, resp).                                                                       Sedation.
                                     EQ032         IV infusion pump..  NF            ..................            257           302  Standard input for
                                                                                                                                       Moderate
                                                                                                                                       Sedation.
37241.........  Vasc embolize/       EF018         stretcher.........  NF            ..................            180             0  Non-standard input
                 occlude venous.                                                                                                       for Moderate
                                                                                                                                       Sedation.
                                     EF027         table, instrument,  NF            ..................            287           272  Standard input for
                                                    mobile.                                                                            Moderate
                                                                                                                                       Sedation.
                                     EQ011         ECG, 3-channel      NF            ..................            287           272  Standard input for
                                                    (with SpO2, NIBP,                                                                  Moderate
                                                    temp, resp).                                                                       Sedation.
                                     EQ032         IV infusion pump..  NF            ..................            287           272  Standard input for
                                                                                                                                       Moderate
                                                                                                                                       Sedation.
                                     L037D         RN/LPN/MTA........  NF            Circulating                    23            22  Conforms to
                                                                                      throughout                                       proportionate
                                                                                      procedure (25%).                                 allocation of
                                                                                                                                       intraservice time
                                                                                                                                       among clinical
                                                                                                                                       labor types.
37242.........  Vasc embolize/       EF018         stretcher.........  NF            ..................            240             0  Non-standard input
                 occlude artery.                                                                                                       for Moderate
                                                                                                                                       Sedation.
                                     EF027         table, instrument,  NF            ..................            357           342  Standard input for
                                                    mobile.                                                                            Moderate
                                                                                                                                       Sedation.
                                     EQ011         ECG, 3-channel      NF            ..................            357           342  Standard input for
                                                    (with SpO2, NIBP,                                                                  Moderate
                                                    temp, resp).                                                                       Sedation.
                                     EQ032         IV infusion pump..  NF            ..................            357           342  Standard input for
                                                                                                                                       Moderate
                                                                                                                                       Sedation.
37243.........  Vasc embolize/       EF018         stretcher.........  NF            ..................            240             0  Non-standard input
                 occlude organ.                                                                                                        for Moderate
                                                                                                                                       Sedation.

[[Page 74351]]

 
                                     EF027         table, instrument,  NF            ..................            377           362  Standard input for
                                                    mobile.                                                                            Moderate
                                                                                                                                       Sedation.
                                     EQ011         ECG, 3-channel      NF            ..................            377           362  Standard input for
                                                    (with SpO2, NIBP,                                                                  Moderate
                                                    temp, resp).                                                                       Sedation.
                                     EQ032         IV infusion pump..  NF            ..................            377           362  Standard input for
                                                                                                                                       Moderate
                                                                                                                                       Sedation.
37244.........  Vasc embolize/       EF018         stretcher.........  NF            ..................            240             0  Non-standard input
                 occlude bleed.                                                                                                        for Moderate
                                                                                                                                       Sedation.
                                     EF027         table, instrument,  NF            ..................            347           332  Standard input for
                                                    mobile.                                                                            Moderate
                                                                                                                                       Sedation.
                                     EQ011         ECG, 3-channel      NF            ..................            347           332  Standard input for
                                                    (with SpO2, NIBP,                                                                  Moderate
                                                    temp, resp).                                                                       Sedation.
                                     EQ032         IV infusion pump..  NF            ..................            347           332  Standard input for
                                                                                                                                       Moderate
                                                                                                                                       Sedation.
                                     L037D         RN/LPN/MTA........  NF            Circulating                    23            22  Conforms to
                                                                                      throughout                                       proportionate
                                                                                      procedure (25%).                                 allocation of
                                                                                                                                       intraservice time
                                                                                                                                       among clinical
                                                                                                                                       labor types.
43197.........  Esophagoscopy flex   ED036         video printer,      NF            ..................             15            39  Refined equipment
                 dx brush.                          color (Sony                                                                        time to conform
                                                    medical grade).                                                                    to established
                                                                                                                                       policies for
                                                                                                                                       technical
                                                                                                                                       equipment.
                                     EF008         chair with          NF            ..................             15            39  Refined equipment
                                                    headrest, exam,                                                                    time to conform
                                                    reclining.                                                                         to established
                                                                                                                                       policies for
                                                                                                                                       technical
                                                                                                                                       equipment.
                                     EF015         mayo stand........  NF            ..................             15            39  Refined equipment
                                                                                                                                       time to conform
                                                                                                                                       to established
                                                                                                                                       policies for
                                                                                                                                       technical
                                                                                                                                       equipment.
                                     EQ170         light, fiberoptic   NF            ..................             15            39  Refined equipment
                                                    headlight w-                                                                       time to conform
                                                    source.                                                                            to established
                                                                                                                                       policies for
                                                                                                                                       technical
                                                                                                                                       equipment.
                                     EQ234         suction and         NF            ..................             15            39  Refined equipment
                                                    pressure cabinet,                                                                  time to conform
                                                    ENT (SMR).                                                                         to established
                                                                                                                                       policies for
                                                                                                                                       technical
                                                                                                                                       equipment.
                                     ER095         transnasal          NF            ..................             15            66  Refined equipment
                                                    esophagoscope 80K                                                                  time to conform
                                                    series.                                                                            to established
                                                                                                                                       policies for
                                                                                                                                       technical
                                                                                                                                       equipment.
                                     ES026         video add-on        NF            ..................             15            39  Refined equipment
                                                    camera system w-                                                                   time to conform
                                                    monitor                                                                            to established
                                                    (endoscopy).                                                                       policies for
                                                                                                                                       technical
                                                                                                                                       equipment.
                                     ES031         video system,       NF            ..................             15            39  Refined equipment
                                                    endoscopy                                                                          time to conform
                                                    (processor,                                                                        to established
                                                    digital capture,                                                                   policies for
                                                    monitor, printer,                                                                  technical
                                                    cart).                                                                             equipment.
                                     L026A         Medical/Technical   NF            Clean Surgical                 10             0  Standardized time
                                                    Assistant.                        Instrument                                       input; surgical
                                                                                      Package.                                         instrument
                                                                                                                                       package not
                                                                                                                                       included.
43198.........  Esophagosc flex      ED036         video printer,      NF            ..................             20            46  Refined equipment
                 trnsn biopsy.                      color (Sony                                                                        time to conform
                                                    medical grade).                                                                    to established
                                                                                                                                       policies for
                                                                                                                                       technical
                                                                                                                                       equipment.
                                     EF008         chair with          NF            ..................             20            46  Refined equipment
                                                    headrest, exam,                                                                    time to conform
                                                    reclining.                                                                         to established
                                                                                                                                       policies for
                                                                                                                                       technical
                                                                                                                                       equipment.

[[Page 74352]]

 
                                     EF015         mayo stand........  NF            ..................             20            46  Refined equipment
                                                                                                                                       time to conform
                                                                                                                                       to established
                                                                                                                                       policies for
                                                                                                                                       technical
                                                                                                                                       equipment.
                                     EQ170         light, fiberoptic   NF            ..................             20            46  Refined equipment
                                                    headlight w-                                                                       time to conform
                                                    source.                                                                            to established
                                                                                                                                       policies for
                                                                                                                                       technical
                                                                                                                                       equipment.
                                     EQ234         suction and         NF            ..................             20            46  Refined equipment
                                                    pressure cabinet,                                                                  time to conform
                                                    ENT (SMR).                                                                         to established
                                                                                                                                       policies for
                                                                                                                                       technical
                                                                                                                                       equipment.
                                     ER095         transnasal          NF            ..................             20            73  Refined equipment
                                                    esophagoscope 80K                                                                  time to conform
                                                    series.                                                                            to established
                                                                                                                                       policies for
                                                                                                                                       technical
                                                                                                                                       equipment.
                                     ES026         video add-on        NF            ..................             20            46  Refined equipment
                                                    camera system w-                                                                   time to conform
                                                    monitor                                                                            to established
                                                    (endoscopy).                                                                       policies for
                                                                                                                                       technical
                                                                                                                                       equipment.
                                     ES031         video system,       NF            ..................             20            46  Refined equipment
                                                    endoscopy                                                                          time to conform
                                                    (processor,                                                                        to established
                                                    digital capture,                                                                   policies for
                                                    monitor, printer,                                                                  technical
                                                    cart).                                                                             equipment.
                                     L026A         Medical/Technical   NF            Clean Surgical                 10             0  Standardized time
                                                    Assistant.                        Instrument                                       input.
                                                                                      Package.
                                     SD066         endoscopic biopsy   NF            ..................              1             0  CMS clinical
                                                    forceps.                                                                           review.
43200.........  Esophagoscopy        EF018         stretcher.........  NF            ..................             73             0  Non-standard input
                 flexible brush.                                                                                                       for Moderate
                                                                                                                                       Sedation.
                                     EF027         table, instrument,  NF            ..................             29            77  Standard input for
                                                    mobile.                                                                            Moderate
                                                                                                                                       Sedation.
                                     EF031         table, power......  NF            ..................             29            43  Refined equipment
                                                                                                                                       time to conform
                                                                                                                                       to established
                                                                                                                                       policies for
                                                                                                                                       technical
                                                                                                                                       equipment.
                                     EQ011         ECG, 3-channel      NF            ..................             52            77  Standard input for
                                                    (with SpO2, NIBP,                                                                  Moderate
                                                    temp, resp).                                                                       Sedation.
                                     EQ032         IV infusion pump..  NF            ..................             52            77  Standard input for
                                                                                                                                       Moderate
                                                                                                                                       Sedation.
                                     EQ235         suction machine     NF            ..................             29            43  Refined equipment
                                                    (Gomco).                                                                           time to conform
                                                                                                                                       to established
                                                                                                                                       policies for
                                                                                                                                       technical
                                                                                                                                       equipment.
                                     ES031         video system,       NF            ..................             29            43  Refined equipment
                                                    endoscopy                                                                          time to conform
                                                    (processor,                                                                        to established
                                                    digital capture,                                                                   policies for
                                                    monitor, printer,                                                                  technical
                                                    cart).                                                                             equipment.
                                     ES034         videoscope,         NF            ..................             59            70  Refined equipment
                                                    gastroscopy.                                                                       time to conform
                                                                                                                                       to established
                                                                                                                                       policies for
                                                                                                                                       technical
                                                                                                                                       equipment.
                                     SD009         canister, suction.  NF            ..................              2             1  CMS clinical
                                                                                                                                       review.
43201.........  Esoph scope w/       EF018         stretcher.........  NF            ..................             76             0  Non-standard input
                 submucous inj.                                                                                                        for Moderate
                                                                                                                                       Sedation.
                                     EF027         table, instrument,  NF            ..................             32            80  Standard input for
                                                    mobile.                                                                            Moderate
                                                                                                                                       Sedation.
                                     EF031         table, power......  NF            ..................             32            46  Refined equipment
                                                                                                                                       time to conform
                                                                                                                                       to changes in
                                                                                                                                       clinical labor
                                                                                                                                       time.
                                     EQ011         ECG, 3-channel      NF            ..................             55            80  Standard input for
                                                    (with SpO2, NIBP,                                                                  Moderate
                                                    temp, resp).                                                                       Sedation.

[[Page 74353]]

 
                                     EQ032         IV infusion pump..  NF            ..................             55            80  Standard input for
                                                                                                                                       Moderate
                                                                                                                                       Sedation.
                                     EQ235         suction machine     NF            ..................             32            46  Refined equipment
                                                    (Gomco).                                                                           time to conform
                                                                                                                                       to changes in
                                                                                                                                       clinical labor
                                                                                                                                       time.
                                     ES031         video system,       NF            ..................             32            46  Refined equipment
                                                    endoscopy                                                                          time to conform
                                                    (processor,                                                                        to changes in
                                                    digital capture,                                                                   clinical labor
                                                    monitor, printer,                                                                  time.
                                                    cart).
                                     ES034         videoscope,         NF            ..................             62            73  Refined equipment
                                                    gastroscopy.                                                                       time to conform
                                                                                                                                       to changes in
                                                                                                                                       clinical labor
                                                                                                                                       time.
                                     L037D         RN/LPN/MTA........  NF            Assist physician               18            15  Conforming to
                                                                                      in performing                                    physician time.
                                                                                      procedure.
                                     L051A         RN................  NF            Monitor patient                18            15  Conforming to
                                                                                      during Moderate                                  physician time.
                                                                                      Sedation.
                                     SC079         needle,             NF            ..................              1             0  CMS clinical
                                                    micropigmentation                                                                  review.
                                                    (tattoo).
                                     SD009         canister, suction.  NF            ..................              2             1  CMS clinical
                                                                                                                                       review.
                                     SL035         cup, biopsy-        NF            ..................              1             0  CMS clinical
                                                    specimen non-                                                                      review.
                                                    sterile 4 oz.
43202.........  Esophagoscopy flex   EF018         stretcher.........  NF            ..................             78             0  Non-standard input
                 biopsy.                                                                                                               for Moderate
                                                                                                                                       Sedation.
                                     EF027         table, instrument,  NF            ..................             34            82  Standard input for
                                                    mobile.                                                                            Moderate
                                                                                                                                       Sedation.
                                     EF031         table, power......  NF            ..................             34            48  Refined equipment
                                                                                                                                       time to conform
                                                                                                                                       to changes in
                                                                                                                                       clinical labor
                                                                                                                                       time.
                                     EQ011         ECG, 3-channel      NF            ..................             57            82  Standard input for
                                                    (with SpO2, NIBP,                                                                  Moderate
                                                    temp, resp).                                                                       Sedation.
                                     EQ032         IV infusion pump..  NF            ..................             57            82  Standard input for
                                                                                                                                       Moderate
                                                                                                                                       Sedation.
                                     EQ235         suction machine     NF            ..................             34            48  Refined equipment
                                                    (Gomco).                                                                           time to conform
                                                                                                                                       to changes in
                                                                                                                                       clinical labor
                                                                                                                                       time.
                                     ES031         video system,       NF            ..................             34            48  Refined equipment
                                                    endoscopy                                                                          time to conform
                                                    (processor,                                                                        to changes in
                                                    digital capture,                                                                   clinical labor
                                                    monitor, printer,                                                                  time.
                                                    cart).
                                     ES034         videoscope,         NF            ..................             64            75  Refined equipment
                                                    gastroscopy.                                                                       time to conform
                                                                                                                                       to changes in
                                                                                                                                       clinical labor
                                                                                                                                       time.
                                     L037D         RN/LPN/MTA........  NF            Assist physician               20            15  Conforming to
                                                                                      in performing                                    physician time.
                                                                                      procedure.
                                     L051A         RN................  NF            Monitor patient                20            15  Conforming to
                                                                                      during Moderate                                  physician time.
                                                                                      Sedation.
                                     SD009         canister, suction.  NF            ..................              2             1  CMS clinical
                                                                                                                                       review.
43206.........  Esoph optical        EF018         stretcher.........  NF            ..................             91             0  Non-standard input
                 endomicroscopy.                                                                                                       for Moderate
                                                                                                                                       Sedation.
                                     EF027         table, instrument,  NF            ..................             47            92  Standard input for
                                                    mobile.                                                                            Moderate
                                                                                                                                       Sedation.
                                     EF031         table, power......  NF            ..................             47            61  Refined equipment
                                                                                                                                       time to conform
                                                                                                                                       to established
                                                                                                                                       policies for
                                                                                                                                       technical
                                                                                                                                       equipment.
                                     EQ011         ECG, 3-channel      NF            ..................             70            92  Standard input for
                                                    (with SpO2, NIBP,                                                                  Moderate
                                                    temp, resp).                                                                       Sedation.
                                     EQ032         IV infusion pump..  NF            ..................             70            92  Standard input for
                                                                                                                                       Moderate
                                                                                                                                       Sedation.
                                     EQ235         suction machine     NF            ..................             47            61  Refined equipment
                                                    (Gomco).                                                                           time to conform
                                                                                                                                       to established
                                                                                                                                       policies for
                                                                                                                                       technical
                                                                                                                                       equipment.

[[Page 74354]]

 
                                     EQ355         optical             NF            ..................             77            61  Refined equipment
                                                    endomicroscope                                                                     time to conform
                                                    processor unit                                                                     to established
                                                    system.                                                                            policies for
                                                                                                                                       technical
                                                                                                                                       equipment.
                                     ES031         video system,       NF            ..................             47            61  Refined equipment
                                                    endoscopy                                                                          time to conform
                                                    (processor,                                                                        to established
                                                    digital capture,                                                                   policies for
                                                    monitor, printer,                                                                  technical
                                                    cart).                                                                             equipment.
                                     ES034         videoscope,         NF            ..................             77            88  Refined equipment
                                                    gastroscopy.                                                                       time to conform
                                                                                                                                       to established
                                                                                                                                       policies for
                                                                                                                                       technical
                                                                                                                                       equipment.
                                     SD009         canister, suction.  NF            ..................              2             1  CMS clinical
                                                                                                                                       review.
43213.........  Esophagoscopy retro  EF018         stretcher.........  NF            ..................            103             0  Non-standard input
                 balloon.                                                                                                              for Moderate
                                                                                                                                       Sedation.
                                     EF027         table, instrument,  NF            ..................             59           107  Standard input for
                                                    mobile.                                                                            Moderate
                                                                                                                                       Sedation.
                                     EF031         table, power......  NF            ..................             59            73  Refined equipment
                                                                                                                                       time to conform
                                                                                                                                       to established
                                                                                                                                       policies for
                                                                                                                                       technical
                                                                                                                                       equipment.
                                     EQ011         ECG, 3-channel      NF            ..................             82           107  Standard input for
                                                    (with SpO2, NIBP,                                                                  Moderate
                                                    temp, resp).                                                                       Sedation.
                                     EQ032         IV infusion pump..  NF            ..................             82           107  Standard input for
                                                                                                                                       Moderate
                                                                                                                                       Sedation.
                                     EQ235         suction machine     NF            ..................             59            73  Refined equipment
                                                    (Gomco).                                                                           time to conform
                                                                                                                                       to established
                                                                                                                                       policies for
                                                                                                                                       technical
                                                                                                                                       equipment.
                                     ES031         video system,       NF            ..................             59            73  Refined equipment
                                                    endoscopy                                                                          time to conform
                                                    (processor,                                                                        to established
                                                    digital capture,                                                                   policies for
                                                    monitor, printer,                                                                  technical
                                                    cart).                                                                             equipment.
                                     ES034         videoscope,         NF            ..................             89           100  Refined equipment
                                                    gastroscopy.                                                                       time to conform
                                                                                                                                       to established
                                                                                                                                       policies for
                                                                                                                                       technical
                                                                                                                                       equipment.
43215.........  Esophagoscopy flex   EF018         stretcher.........  NF            ..................             78             0  Non-standard input
                 remove fb.                                                                                                            for Moderate
                                                                                                                                       Sedation.
                                     EF027         table, instrument,  NF            ..................             34            82  Standard input for
                                                    mobile.                                                                            Moderate
                                                                                                                                       Sedation.
                                     EF031         table, power......  NF            ..................             34            48  Refined equipment
                                                                                                                                       time to conform
                                                                                                                                       to established
                                                                                                                                       policies for
                                                                                                                                       technical
                                                                                                                                       equipment.
                                     EQ011         ECG, 3-channel      NF            ..................             57            82  Standard input for
                                                    (with SpO2, NIBP,                                                                  Moderate
                                                    temp, resp).                                                                       Sedation.
                                     EQ032         IV infusion pump..  NF            ..................             57            82  Standard input for
                                                                                                                                       Moderate
                                                                                                                                       Sedation.
                                     EQ235         suction machine     NF            ..................             34            48  Refined equipment
                                                    (Gomco).                                                                           time to conform
                                                                                                                                       to established
                                                                                                                                       policies for
                                                                                                                                       technical
                                                                                                                                       equipment.
                                     ES031         video system,       NF            ..................             34            48  Refined equipment
                                                    endoscopy                                                                          time to conform
                                                    (processor,                                                                        to established
                                                    digital capture,                                                                   policies for
                                                    monitor, printer,                                                                  technical
                                                    cart).                                                                             equipment.
 
 
 
 
 
 

[[Page 74355]]

 
                                     ES034         videoscope,         NF            ..................             64            75  Refined equipment
                                                    gastroscopy.                                                                       time to conform
                                                                                                                                       to established
                                                                                                                                       policies for
                                                                                                                                       technical
                                                                                                                                       equipment.
                                     SD009         canister, suction.  NF            ..................              2             1  CMS clinical
                                                                                                                                       review.
43216.........  Esophagoscopy        EF018         stretcher.........  NF            ..................             80             0  Non-standard input
                 lesion removal.                                                                                                       for Moderate
                                                                                                                                       Sedation.
                                     EF027         table, instrument,  NF            ..................             36            84  Standard input for
                                                    mobile.                                                                            Moderate
                                                                                                                                       Sedation.
                                     EF031         table, power......  NF            ..................             36            50  Refined equipment
                                                                                                                                       time to conform
                                                                                                                                       to established
                                                                                                                                       policies for
                                                                                                                                       technical
                                                                                                                                       equipment.
                                     EQ011         ECG, 3-channel      NF            ..................             59            84  Standard input for
                                                    (with SpO2, NIBP,                                                                  Moderate
                                                    temp, resp).                                                                       Sedation.
                                     EQ032         IV infusion pump..  NF            ..................             59            84  Standard input for
                                                                                                                                       Moderate
                                                                                                                                       Sedation.
                                     EQ113         electrosurgical     NF            ..................             36            50  Refined equipment
                                                    generator,                                                                         time to conform
                                                    gastrocautery.                                                                     to established
                                                                                                                                       policies for
                                                                                                                                       technical
                                                                                                                                       equipment.
                                     EQ235         suction machine     NF            ..................             36            50  Refined equipment
                                                    (Gomco).                                                                           time to conform
                                                                                                                                       to established
                                                                                                                                       policies for
                                                                                                                                       technical
                                                                                                                                       equipment.
                                     ES031         video system,       NF            ..................             36            50  Refined equipment
                                                    endoscopy                                                                          time to conform
                                                    (processor,                                                                        to established
                                                    digital capture,                                                                   policies for
                                                    monitor, printer,                                                                  technical
                                                    cart).                                                                             equipment.
                                     ES034         videoscope,         NF            ..................             66            77  Refined equipment
                                                    gastroscopy.                                                                       time to conform
                                                                                                                                       to established
                                                                                                                                       policies for
                                                                                                                                       technical
                                                                                                                                       equipment.
                                     SD009         canister, suction.  NF            ..................              2             1  CMS clinical
                                                                                                                                       review.
43217.........  Esophagoscopy snare  EF018         stretcher.........  NF            ..................             88             0  Non-standard input
                 les remv.                                                                                                             for Moderate
                                                                                                                                       Sedation.
                                     EF027         table, instrument,  NF            ..................             44            92  Standard input for
                                                    mobile.                                                                            Moderate
                                                                                                                                       Sedation.
                                     EF031         table, power......  NF            ..................             44            58  Refined equipment
                                                                                                                                       time to conform
                                                                                                                                       to established
                                                                                                                                       policies for
                                                                                                                                       technical
                                                                                                                                       equipment.
                                     EQ011         ECG, 3-channel      NF            ..................             67            92  Standard input for
                                                    (with SpO2, NIBP,                                                                  Moderate
                                                    temp, resp).                                                                       Sedation.
                                     EQ032         IV infusion pump..  NF            ..................             67            92  Standard input for
                                                                                                                                       Moderate
                                                                                                                                       Sedation.
                                     EQ113         electrosurgical     NF            ..................             44            58  Refined equipment
                                                    generator,                                                                         time to conform
                                                    gastrocautery.                                                                     to established
                                                                                                                                       policies for
                                                                                                                                       technical
                                                                                                                                       equipment.
                                     EQ235         suction machine     NF            ..................             44            58  Refined equipment
                                                    (Gomco).                                                                           time to conform
                                                                                                                                       to established
                                                                                                                                       policies for
                                                                                                                                       technical
                                                                                                                                       equipment.
                                     ES031         video system,       NF            ..................             44            58  Refined equipment
                                                    endoscopy                                                                          time to conform
                                                    (processor,                                                                        to established
                                                    digital capture,                                                                   policies for
                                                    monitor, printer,                                                                  technical
                                                    cart).                                                                             equipment.
                                     ES034         videoscope,         NF            ..................             74            85  Refined equipment
                                                    gastroscopy.                                                                       time to conform
                                                                                                                                       to established
                                                                                                                                       policies for
                                                                                                                                       technical
                                                                                                                                       equipment.
                                     SD009         canister, suction.  NF            ..................              2             1  CMS clinical
                                                                                                                                       review.

[[Page 74356]]

 
43220.........  Esophagoscopy        EF018         stretcher.........  NF            ..................             78             0  Non-standard input
                 balloon LPN/MTA........  NF            Clean Surgical                  0            10  Standardized time
                                                                                      Instrument                                       input.
                                                                                      Package.
                                     SD009         canister, suction.  NF            ..................              2             1  CMS clinical
                                                                                                                                       review.
                                     SL035         cup, biopsy-        NF            ..................              1             0  CMS clinical
                                                    specimen non-                                                                      review.
                                                    sterile 4 oz.
43227.........  Esophagoscopy        EF018         stretcher.........  NF            ..................             88             0  Non-standard input
                 control bleed.                                                                                                        for Moderate
                                                                                                                                       Sedation.
                                     EF027         table, instrument,  NF            ..................             44            92  Standard input for
                                                    mobile.                                                                            Moderate
                                                                                                                                       Sedation.

[[Page 74357]]

 
                                     EF031         table, power......  NF            ..................             44            58  Refined equipment
                                                                                                                                       time to conform
                                                                                                                                       to established
                                                                                                                                       policies for
                                                                                                                                       technical
                                                                                                                                       equipment.
                                     EQ011         ECG, 3-channel      NF            ..................             67            92  Standard input for
                                                    (with SpO2, NIBP,                                                                  Moderate
                                                    temp, resp).                                                                       Sedation.
                                     EQ032         IV infusion pump..  NF            ..................             67            92  Standard input for
                                                                                                                                       Moderate
                                                                                                                                       Sedation.
                                     EQ113         electrosurgical     NF            ..................             44            58  Refined equipment
                                                    generator,                                                                         time to conform
                                                    gastrocautery.                                                                     to established
                                                                                                                                       policies for
                                                                                                                                       technical
                                                                                                                                       equipment.
                                     EQ235         suction machine     NF            ..................             44            58  Refined equipment
                                                    (Gomco).                                                                           time to conform
                                                                                                                                       to established
                                                                                                                                       policies for
                                                                                                                                       technical
                                                                                                                                       equipment.
                                     ES031         video system,       NF            ..................             44            58  Refined equipment
                                                    endoscopy                                                                          time to conform
                                                    (processor,                                                                        to established
                                                    digital capture,                                                                   policies for
                                                    monitor, printer,                                                                  technical
                                                    cart).                                                                             equipment.
                                     ............  videoscope,         NF            ..................             74            85  Refined equipment
                                                    gastroscopy.                                                                       time to conform
                                                                                                                                       to established
                                                                                                                                       policies for
                                                                                                                                       technical
                                                                                                                                       equipment.
                                     SD009         canister, suction.  NF            ..................              2             1  CMS clinical
                                                                                                                                       review.
43229.........  Esophagoscopy        EF018         stretcher.........  NF            ..................            103             0  Non-standard input
                 lesion ablate.                                                                                                        for Moderate
                                                                                                                                       Sedation.
                                     EF027         table, instrument,  NF            ..................             59           107  Standard input for
                                                    mobile.                                                                            Moderate
                                                                                                                                       Sedation.
                                     EF031         table, power......  NF            ..................             59            73  Refined equipment
                                                                                                                                       time to conform
                                                                                                                                       to established
                                                                                                                                       policies for
                                                                                                                                       technical
                                                                                                                                       equipment.
                                     EQ011         ECG, 3-channel      NF            ..................             82           107  Standard input for
                                                    (with SpO2, NIBP,                                                                  Moderate
                                                    temp, resp).                                                                       Sedation.
                                     EQ032         IV infusion pump..  NF            ..................             82           107  Standard input for
                                                                                                                                       Moderate
                                                                                                                                       Sedation.
                                     EQ113         electrosurgical     NF            ..................             59            73  Refined equipment
                                                    generator,                                                                         time to conform
                                                    gastrocautery.                                                                     to established
                                                                                                                                       policies for
                                                                                                                                       technical
                                                                                                                                       equipment.
                                     EQ214         radiofrequency      NF            ..................             59            73  CMS clinical
                                                    generator (NEURO).                                                                 review; see
                                                                                                                                       discussion in
                                                                                                                                       section II.D.3.b.
                                                                                                                                       of this final
                                                                                                                                       rule.
                                     EQ235         suction machine     NF            ..................             59            73  Refined equipment
                                                    (Gomco).                                                                           time to conform
                                                                                                                                       to established
                                                                                                                                       policies for
                                                                                                                                       technical
                                                                                                                                       equipment.
                                     EQ356         kit, probe,         NF            ..................              0            73  CMS clinical
                                                    radiofrequency,                                                                    review; see
                                                    XIi-enhanced RF                                                                    discussion in
                                                    probe (proxy for                                                                   section II.D.3.b.
                                                    catheter, RF                                                                       of this final
                                                    ablation,                                                                          rule.
                                                    endoscopic).
                                     ES031         video system,       NF            ..................             59            73  Refined equipment
                                                    endoscopy                                                                          time to conform
                                                    (processor,                                                                        to established
                                                    digital capture,                                                                   policies for
                                                    monitor, printer,                                                                  technical
                                                    cart).                                                                             equipment.
                                     ES034         videoscope,         NF            ..................             89           100  Refined equipment
                                                    gastroscopy.                                                                       time to conform
                                                                                                                                       to established
                                                                                                                                       policies for
                                                                                                                                       technical
                                                                                                                                       equipment.

[[Page 74358]]

 
                                     SA100         kit, probe,         NF            ..................              1             0  CMS clinical
                                                    radiofrequency,                                                                    review.
                                                    XIi-enhanced RF
                                                    probe.
43231.........  Esophagoscop         EF018         stretcher.........  NF            ..................            103             0  Non-standard input
                 ultrasound exam.                                                                                                      for Moderate
                                                                                                                                       Sedation.
                                     EF027         table, instrument,  NF            ..................             59           107  Standard input for
                                                    mobile.                                                                            Moderate
                                                                                                                                       Sedation.
                                     EF031         table, power......  NF            ..................             59            73  Refined equipment
                                                                                                                                       time to conform
                                                                                                                                       to changes in
                                                                                                                                       clinical labor
                                                                                                                                       time.
                                     EQ011         ECG, 3-channel      NF            ..................             82           107  Standard input for
                                                    (with SpO2, NIBP,                                                                  Moderate
                                                    temp, resp).                                                                       Sedation.
                                     EQ032         IV infusion pump..  NF            ..................             82           107  Standard input for
                                                                                                                                       Moderate
                                                                                                                                       Sedation.
                                     EQ235         suction machine     NF            ..................             59            73  Refined equipment
                                                    (Gomco).                                                                           time to conform
                                                                                                                                       to changes in
                                                                                                                                       clinical labor
                                                                                                                                       time.
                                     ER094         endoscopic          NF            ..................             59            73  Refined equipment
                                                    ultrasound                                                                         time to conform
                                                    processor.                                                                         to changes in
                                                                                                                                       clinical labor
                                                                                                                                       time.
                                     ES031         video system,       NF            ..................             59            73  Refined equipment
                                                    endoscopy                                                                          time to conform
                                                    (processor,                                                                        to changes in
                                                    digital capture,                                                                   clinical labor
                                                    monitor, printer,                                                                  time.
                                                    cart).
                                     ES038         videoscope,         NF            ..................             89           100  Refined equipment
                                                    endoscopic                                                                         time to conform
                                                    ultrasound.                                                                        to changes in
                                                                                                                                       clinical labor
                                                                                                                                       time.
                                     L037D         RN/LPN/MTA........  NF            Assist physician               45            30  Conforming to
                                                                                      in performing                                    physician time.
                                                                                      procedure.
                                     L051A         RN................  NF            Monitor patient                45            30  Conforming to
                                                                                      during Moderate                                  physician time.
                                                                                      Sedation.
                                     SD009         canister, suction.  NF            ..................              2             1  CMS clinical
                                                                                                                                       review.
                                     SL035         cup, biopsy-        NF            ..................              1             0  CMS clinical
                                                    specimen non-                                                                      review.
                                                    sterile 4 oz.
43232.........  Esophagoscopy w/us   EF018         stretcher.........  NF            ..................            118             0  Non-standard input
                 needle bx.                                                                                                            for Moderate
                                                                                                                                       Sedation.
                                     EF027         table, instrument,  NF            ..................             74           122  Standard input for
                                                    mobile.                                                                            Moderate
                                                                                                                                       Sedation.
                                     EF031         table, power......  NF            ..................             74            88  Refined equipment
                                                                                                                                       time to conform
                                                                                                                                       to changes in
                                                                                                                                       clinical labor
                                                                                                                                       time.
                                     EQ011         ECG, 3-channel      NF            ..................             97           122  Standard input for
                                                    (with SpO2, NIBP,                                                                  Moderate
                                                    temp, resp).                                                                       Sedation.
                                     EQ032         IV infusion pump..  NF            ..................             97           122  Standard input for
                                                                                                                                       Moderate
                                                                                                                                       Sedation.
                                     EQ235         suction machine     NF            ..................             74            88  Refined equipment
                                                    (Gomco).                                                                           time to conform
                                                                                                                                       to changes in
                                                                                                                                       clinical labor
                                                                                                                                       time.
                                     ER094         endoscopic          NF            ..................             74            88  Refined equipment
                                                    ultrasound                                                                         time to conform
                                                    processor.                                                                         to changes in
                                                                                                                                       clinical labor
                                                                                                                                       time.
                                     ES031         video system,       NF            ..................             74            88  Refined equipment
                                                    endoscopy                                                                          time to conform
                                                    (processor,                                                                        to changes in
                                                    digital capture,                                                                   clinical labor
                                                    monitor, printer,                                                                  time.
                                                    cart).
                                     ES038         videoscope,         NF            ..................            104           115  Refined equipment
                                                    endoscopic                                                                         time to conform
                                                    ultrasound.                                                                        to changes in
                                                                                                                                       clinical labor
                                                                                                                                       time.
                                     L037D         RN/LPN/MTA........  NF            Assist physician               60            45  Conforming to
                                                                                      in performing                                    physician time.
                                                                                      procedure.
                                     L051A         RN................  NF            Monitor patient                60            45  Conforming to
                                                                                      during Moderate                                  physician time.
                                                                                      Sedation.
                                     SD009         canister, suction.  NF            ..................              2             1  CMS clinical
                                                                                                                                       review.
43235.........  Egd diagnostic       EF018         stretcher.........  NF            ..................             73             0  Non-standard input
                 brush wash.                                                                                                           for Moderate
                                                                                                                                       Sedation.

[[Page 74359]]

 
                                     EF027         table, instrument,  NF            ..................             29            77  Standard input for
                                                    mobile.                                                                            Moderate
                                                                                                                                       Sedation.
                                     EF031         table, power......  NF            ..................             29            43  Refined equipment
                                                                                                                                       time to conform
                                                                                                                                       to established
                                                                                                                                       policies for
                                                                                                                                       technical
                                                                                                                                       equipment.
                                     EQ011         ECG, 3-channel      NF            ..................             52            77  Standard input for
                                                    (with SpO2, NIBP,                                                                  Moderate
                                                    temp, resp).                                                                       Sedation.
                                     EQ032         IV infusion pump..  NF            ..................             52            77  Standard input for
                                                                                                                                       Moderate
                                                                                                                                       Sedation.
                                     EQ235         suction machine     NF            ..................             29            43  Refined equipment
                                                    (Gomco).                                                                           time to conform
                                                                                                                                       to established
                                                                                                                                       policies for
                                                                                                                                       technical
                                                                                                                                       equipment.
                                     ES031         video system,       NF            ..................             29            43  Refined equipment
                                                    endoscopy                                                                          time to conform
                                                    (processor,                                                                        to established
                                                    digital capture,                                                                   policies for
                                                    monitor, printer,                                                                  technical
                                                    cart).                                                                             equipment.
                                     ES034         videoscope,         NF            ..................             59            70  Refined equipment
                                                    gastroscopy.                                                                       time to conform
                                                                                                                                       to established
                                                                                                                                       policies for
                                                                                                                                       technical
                                                                                                                                       equipment.
                                     SD009         canister, suction.  NF            ..................              2             1  CMS clinical
                                                                                                                                       review.
43236.........  Uppr gi scope w/     EF018         stretcher.........  NF            ..................             78             0  Non-standard input
                 submuc inj.                                                                                                           for Moderate
                                                                                                                                       Sedation.
                                     EF027         table, instrument,  NF            ..................             34            82  Standard input for
                                                    mobile.                                                                            Moderate
                                                                                                                                       Sedation.
                                     EF031         table, power......  NF            ..................             34            48  Refined equipment
                                                                                                                                       time to conform
                                                                                                                                       to established
                                                                                                                                       policies for
                                                                                                                                       technical
                                                                                                                                       equipment.
                                     EQ011         ECG, 3-channel      NF            ..................             57            82  Standard input for
                                                    (with SpO2, NIBP,                                                                  Moderate
                                                    temp, resp).                                                                       Sedation.
                                     EQ032         IV infusion pump..  NF            ..................             57            82  Standard input for
                                                                                                                                       Moderate
                                                                                                                                       Sedation.
                                     EQ235         suction machine     NF            ..................             34            48  Refined equipment
                                                    (Gomco).                                                                           time to conform
                                                                                                                                       to established
                                                                                                                                       policies for
                                                                                                                                       technical
                                                                                                                                       equipment.
                                     ES031         video system,       NF            ..................             34            48  Refined equipment
                                                    endoscopy                                                                          time to conform
                                                    (processor,                                                                        to established
                                                    digital capture,                                                                   policies for
                                                    monitor, printer,                                                                  technical
                                                    cart).                                                                             equipment.
                                     ES034         videoscope,         NF            ..................             64            75  Refined equipment
                                                    gastroscopy.                                                                       time to conform
                                                                                                                                       to established
                                                                                                                                       policies for
                                                                                                                                       technical
                                                                                                                                       equipment.
                                     SD009         canister, suction.  NF            ..................              2             1  CMS clinical
                                                                                                                                       review.
43239.........  Egd biopsy single/   EF018         stretcher.........  NF            ..................             73             0  Non-standard input
                 multiple.                                                                                                             for Moderate
                                                                                                                                       Sedation.
                                     EF027         table, instrument,  NF            ..................             29            77  Standard input for
                                                    mobile.                                                                            Moderate
                                                                                                                                       Sedation.
                                     EF031         table, power......  NF            ..................             29            43  Refined equipment
                                                                                                                                       time to conform
                                                                                                                                       to established
                                                                                                                                       policies for
                                                                                                                                       technical
                                                                                                                                       equipment.
                                     EQ011         ECG, 3-channel      NF            ..................             52            77  Standard input for
                                                    (with SpO2, NIBP,                                                                  Moderate
                                                    temp, resp).                                                                       Sedation.
                                     EQ032         IV infusion pump..  NF            ..................             52            77  Standard input for
                                                                                                                                       Moderate
                                                                                                                                       Sedation.

[[Page 74360]]

 
                                     EQ235         suction machine     NF            ..................             29            43  Refined equipment
                                                    (Gomco).                                                                           time to conform
                                                                                                                                       to established
                                                                                                                                       policies for
                                                                                                                                       technical
                                                                                                                                       equipment.
                                     ES031         video system,       NF            ..................             29            43  Refined equipment
                                                    endoscopy                                                                          time to conform
                                                    (processor,                                                                        to established
                                                    digital capture,                                                                   policies for
                                                    monitor, printer,                                                                  technical
                                                    cart).                                                                             equipment.
                                     ES034         videoscope,         NF            ..................             59            70  Refined equipment
                                                    gastroscopy.                                                                       time to conform
                                                                                                                                       to established
                                                                                                                                       policies for
                                                                                                                                       technical
                                                                                                                                       equipment.
                                     SD009         canister, suction.  NF            ..................              2             1  CMS clinical
                                                                                                                                       review.
43245.........  Egd dilate           EF018         stretcher.........  NF            ..................             81             0  Non-standard input
                 stricture.                                                                                                            for Moderate
                                                                                                                                       Sedation.
                                     EF027         table, instrument,  NF            ..................             37            85  Standard input for
                                                    mobile.                                                                            Moderate
                                                                                                                                       Sedation.
                                     EF031         table, power......  NF            ..................             37            51  Refined equipment
                                                                                                                                       time to conform
                                                                                                                                       to established
                                                                                                                                       policies for
                                                                                                                                       technical
                                                                                                                                       equipment.
                                     EQ011         ECG, 3-channel      NF            ..................             60            85  Standard input for
                                                    (with SpO2, NIBP,                                                                  Moderate
                                                    temp, resp).                                                                       Sedation.
                                     EQ032         IV infusion pump..  NF            ..................             60            85  Standard input for
                                                                                                                                       Moderate
                                                                                                                                       Sedation.
                                     EQ235         suction machine     NF            ..................             37            51  Refined equipment
                                                    (Gomco).                                                                           time to conform
                                                                                                                                       to established
                                                                                                                                       policies for
                                                                                                                                       technical
                                                                                                                                       equipment.
                                     ES031         video system,       NF            ..................             37            51  Refined equipment
                                                    endoscopy                                                                          time to conform
                                                    (processor,                                                                        to established
                                                    digital capture,                                                                   policies for
                                                    monitor, printer,                                                                  technical
                                                    cart).                                                                             equipment.
                                     ES034         videoscope,         NF            ..................             67            78  Refined equipment
                                                    gastroscopy.                                                                       time to conform
                                                                                                                                       to established
                                                                                                                                       policies for
                                                                                                                                       technical
                                                                                                                                       equipment.
                                     SD009         canister, suction.  NF            ..................              2             1  CMS clinical
                                                                                                                                       review.
43247.........  Egd remove foreign   EF018         stretcher.........  NF            ..................             88             0  Non-standard input
                 body.                                                                                                                 for Moderate
                                                                                                                                       Sedation.
                                     EF027         table, instrument,  NF            ..................             44            92  Standard input for
                                                    mobile.                                                                            Moderate
                                                                                                                                       Sedation.
                                     EF031         table, power......  NF            ..................             44            58  Refined equipment
                                                                                                                                       time to conform
                                                                                                                                       to established
                                                                                                                                       policies for
                                                                                                                                       technical
                                                                                                                                       equipment.
                                     EQ011         ECG, 3-channel      NF            ..................             67            92  Standard input for
                                                    (with SpO2, NIBP,                                                                  Moderate
                                                    temp, resp).                                                                       Sedation.
                                     EQ032         IV infusion pump..  NF            ..................             67            92  Standard input for
                                                                                                                                       Moderate
                                                                                                                                       Sedation.
                                     EQ235         suction machine     NF            ..................             44            58  Refined equipment
                                                    (Gomco).                                                                           time to conform
                                                                                                                                       to established
                                                                                                                                       policies for
                                                                                                                                       technical
                                                                                                                                       equipment.
                                     ES031         video system,       NF            ..................             44            58  Refined equipment
                                                    endoscopy                                                                          time to conform
                                                    (processor,                                                                        to established
                                                    digital capture,                                                                   policies for
                                                    monitor, printer,                                                                  technical
                                                    cart).                                                                             equipment.
                                     ES034         videoscope,         NF            ..................             74            85  Refined equipment
                                                    gastroscopy.                                                                       time to conform
                                                                                                                                       to established
                                                                                                                                       policies for
                                                                                                                                       technical
                                                                                                                                       equipment.
                                     SD009         canister, suction.  NF            ..................              2             1  CMS clinical
                                                                                                                                       review.

[[Page 74361]]

 
43248.........  Egd guide wire       EF018         stretcher.........  NF            ..................             78             0  Non-standard input
                 insertion.                                                                                                            for Moderate
                                                                                                                                       Sedation.
                                     EF027         table, instrument,  NF            ..................             34            82  Standard input for
                                                    mobile.                                                                            Moderate
                                                                                                                                       Sedation.
                                     EF031         table, power......  NF            ..................             34            48  Refined equipment
                                                                                                                                       time to conform
                                                                                                                                       to established
                                                                                                                                       policies for
                                                                                                                                       technical
                                                                                                                                       equipment.
                                     EQ011         ECG, 3-channel      NF            ..................             57            82  Standard input for
                                                    (with SpO2, NIBP,                                                                  Moderate
                                                    temp, resp).                                                                       Sedation.
                                     EQ032         IV infusion pump..  NF            ..................             57            82  Standard input for
                                                                                                                                       Moderate
                                                                                                                                       Sedation.
                                     EQ137         instrument pack,    NF            ..................             64            55  Refined equipment
                                                    basic ($500-                                                                       time to conform
                                                    $1499).                                                                            to established
                                                                                                                                       policies for
                                                                                                                                       technical
                                                                                                                                       equipment.
                                     EQ235         suction machine     NF            ..................             34            48  Refined equipment
                                                    (Gomco).                                                                           time to conform
                                                                                                                                       to established
                                                                                                                                       policies for
                                                                                                                                       technical
                                                                                                                                       equipment.
                                     ES031         video system,       NF            ..................             34            48  Refined equipment
                                                    endoscopy                                                                          time to conform
                                                    (processor,                                                                        to established
                                                    digital capture,                                                                   policies for
                                                    monitor, printer,                                                                  technical
                                                    cart).                                                                             equipment.
                                     ES034         videoscope,         NF            ..................             64            75  Refined equipment
                                                    gastroscopy.                                                                       time to conform
                                                                                                                                       to established
                                                                                                                                       policies for
                                                                                                                                       technical
                                                                                                                                       equipment.
                                     SD009         canister, suction.  NF            ..................              2             1  CMS clinical
                                                                                                                                       review.
43249.........  Esoph egd dilation   EF018         stretcher.........  NF            ..................             78             0  Non-standard input
                   E             Mobile stand,       NF            ..................             47             0  Non-standard input
                 mult pass.                         Vital Signs                                                                        for Moderate
                                                    Monitor.                                                                           Sedation.
                                     EF014         light, surgical...  NF            ..................             24            36  Refined equipment
                                                                                                                                       time to conform
                                                                                                                                       to established
                                                                                                                                       policies for
                                                                                                                                       technical
                                                                                                                                       equipment.
                                     EF018         stretcher.........  NF            ..................             51             0  Non-standard input
                                                                                                                                       for Moderate
                                                                                                                                       Sedation.
                                     EF027         table, instrument,  NF            ..................             24            77  Standard input for
                                                    mobile.                                                                            Moderate
                                                                                                                                       Sedation.
                                     EF031         table, power......  NF            ..................             24            36  Refined equipment
                                                                                                                                       time to conform
                                                                                                                                       to established
                                                                                                                                       policies for
                                                                                                                                       technical
                                                                                                                                       equipment.
                                     EQ011         ECG, 3-channel      NF            ..................             47            77  Standard input for
                                                    (with SpO2, NIBP,                                                                  Moderate
                                                    temp, resp).                                                                       Sedation.
                                     EQ032         IV infusion pump..  NF            ..................             47            77  Standard input for
                                                                                                                                       Moderate
                                                                                                                                       Sedation.
                                     EQ235         suction machine     NF            ..................             24            36  Refined equipment
                                                    (Gomco).                                                                           time to conform
                                                                                                                                       to established
                                                                                                                                       policies for
                                                                                                                                       technical
                                                                                                                                       equipment.
                                     EQ357         esophageal          NF            ..................              0            36  CMS clinical
                                                    bougies, set,                                                                      review; see
                                                    reusable.                                                                          discussion in
                                                                                                                                       section II.D.3.b.
                                                                                                                                       of this final
                                                                                                                                       rule.
                                     ES005         endoscope           NF            ..................             15             0  CMS clinical
                                                    disinfector,                                                                       review.
                                                    rigid or
                                                    fiberoptic, w-
                                                    cart.
43453.........  Dilate esophagus...  E             Mobile stand,       NF            ..................             57             0  CMS clinical
                                                    Vital Signs                                                                        review.
                                                    Monitor.
                                     EF014         light, surgical...  NF            ..................             34            46  Refined equipment
                                                                                                                                       time to conform
                                                                                                                                       to changes in
                                                                                                                                       clinical labor
                                                                                                                                       time.
                                     EF018         stretcher.........  NF            ..................             61             0  Non-standard input
                                                                                                                                       for Moderate
                                                                                                                                       Sedation.
                                     EF027         table, instrument,  NF            ..................             34            87  Standard input for
                                                    mobile.                                                                            Moderate
                                                                                                                                       Sedation.

[[Page 74365]]

 
                                     EF031         table, power......  NF            ..................             34            46  Refined equipment
                                                                                                                                       time to conform
                                                                                                                                       to changes in
                                                                                                                                       clinical labor
                                                                                                                                       time.
                                     EQ011         ECG, 3-channel      NF            ..................             57            87  Standard input for
                                                    (with SpO2, NIBP,                                                                  Moderate
                                                    temp, resp).                                                                       Sedation.
                                     EQ032         IV infusion pump..  NF            ..................             57            87  Standard input for
                                                                                                                                       Moderate
                                                                                                                                       Sedation.
                                     EQ235         suction machine     NF            ..................             34            46  Refined equipment
                                                    (Gomco).                                                                           time to conform
                                                                                                                                       to changes in
                                                                                                                                       clinical labor
                                                                                                                                       time.
                                     ES005         endoscope           NF            ..................             15             0  CMS clinical
                                                    disinfector,                                                                       review; an
                                                    rigid or                                                                           endoscope is not
                                                    fiberoptic, w-                                                                     included.
                                                    cart.
                                     L037D         RN/LPN/MTA........  NF            Assist physician               25            20  Conforming to
                                                                                      in performing                                    physician time.
                                                                                      procedure.
                                     L051A         RN................  NF            Monitor patient                25            20  Conforming to
                                                                                      during Moderate                                  physician time.
                                                                                      Sedation.
49405.........  Image cath fluid     EF018         stretcher.........  NF            ..................            120             0  Non-standard input
                 colxn visc.                                                                                                           for Moderate
                                                                                                                                       Sedation.
                                     EF027         table, instrument,  NF            ..................            169           162  Standard input for
                                                    mobile.                                                                            Moderate
                                                                                                                                       Sedation.
                                     EQ011         ECG, 3-channel      NF            ..................            169           162  Standard input for
                                                    (with SpO2, NIBP,                                                                  Moderate
                                                    temp, resp).                                                                       Sedation.
                                     EQ032         IV infusion pump..  NF            ..................            169           162  Standard input for
                                                                                                                                       Moderate
                                                                                                                                       Sedation.
49406.........  Image cath fluid     EF018         stretcher.........  NF            ..................            120             0  Non-standard input
                 peri/retro.                                                                                                           for Moderate
                                                                                                                                       Sedation.
                                     EF027         table, instrument,  NF            ..................            169           162  Standard input for
                                                    mobile.                                                                            Moderate
                                                                                                                                       Sedation.
                                     EQ011         ECG, 3-channel      NF            ..................            169           162  Standard input for
                                                    (with SpO2, NIBP,                                                                  Moderate
                                                    temp, resp).                                                                       Sedation.
                                     EQ032         IV infusion pump..  NF            ..................            169           162  Standard input for
                                                                                                                                       Moderate
                                                                                                                                       Sedation.
49407.........  Image cath fluid     EF018         stretcher.........  NF            ..................            120             0  Non-standard input
                 trns/vgnl.                                                                                                            for Moderate
                                                                                                                                       Sedation.
                                     EF027         table, instrument,  NF            ..................            174           167  Standard input for
                                                    mobile.                                                                            Moderate
                                                                                                                                       Sedation.
                                     EQ011         ECG, 3-channel      NF            ..................            174           167  Standard input for
                                                    (with SpO2, NIBP,                                                                  Moderate
                                                    temp, resp).                                                                       Sedation.
                                     EQ032         IV infusion pump..  NF            ..................            174           167  Standard input for
                                                                                                                                       Moderate
                                                                                                                                       Sedation.
63650.........  Implant              EF018         stretcher.........  NF            ..................             10            15  Refined equipment
                 neuroelectrodes.                                                                                                      time to conform
                                                                                                                                       to established
                                                                                                                                       policies for
                                                                                                                                       technical
                                                                                                                                       equipment.
                                     EF024         table, fluoroscopy  NF            ..................             60            84  Refined equipment
                                                                                                                                       time to conform
                                                                                                                                       to established
                                                                                                                                       policies for
                                                                                                                                       technical
                                                                                                                                       equipment.
                                     EQ011         ECG, 3-channel      NF            ..................             60            84  Refined equipment
                                                    (with SpO2, NIBP,                                                                  time to conform
                                                    temp, resp).                                                                       to established
                                                                                                                                       policies for
                                                                                                                                       technical
                                                                                                                                       equipment.
                                     ER031         fluoroscopic        NF            ..................             60            69  Refined equipment
                                                    system, mobile C-                                                                  time to conform
                                                    Arm.                                                                               to established
                                                                                                                                       policies for
                                                                                                                                       technical
                                                                                                                                       equipment.
                                     L037D         RN/LPN/MTA........  NF            Clean Surgical                 15             0  Standardized time
                                                                                      Instrument                                       input.
                                                                                      Package.
                                     SA043         pack, cleaning,     NF            ..................              1             0  CMS clinical
                                                    surgical                                                                           review.
                                                    instruments.
64616.........  Chemodenerv musc     EF023         table, exam.......  NF            ..................             28            24  Refined equipment
                 neck dyston.                                                                                                          time to conform
                                                                                                                                       to changes in
                                                                                                                                       clinical labor
                                                                                                                                       time.

[[Page 74366]]

 
                                     L037D         RN/LPN/MTA........  NF            Other Clinical                  3             0  CMS clinical
                                                                                      Activity:                                        review.
                                                                                      Complete botox
                                                                                      log.
                                     L037D         RN/LPN/MTA........  NF            Assist physician                7             5  Conforming to
                                                                                      in performing                                    physician time.
                                                                                      procedure.
64617.........  Chemodener muscle    EF023         table, exam.......  NF            ..................             30            33  Refined equipment
                 larynx emg.                                                                                                           time to conform
                                                                                                                                       to changes in
                                                                                                                                       clinical labor
                                                                                                                                       time.
                                     EQ024         EMG-NCV-EP system,  NF            ..................             30            33  Refined equipment
                                                    8 channel.                                                                         time to conform
                                                                                                                                       to changes in
                                                                                                                                       clinical labor
                                                                                                                                       time.
64642.........  Chemodenerv 1        EF023         table, exam.......  NF            ..................             44            38  Refined equipment
                 extremity 1-4.                                                                                                        time to conform
                                                                                                                                       to changes in
                                                                                                                                       clinical labor
                                                                                                                                       time.
                                     L037D         RN/LPN/MTA........  NF            Other Clinical                  3             0  CMS clinical
                                                                                      Activity:                                        review.
                                                                                      Complete botox
                                                                                      log.
64644.........  Chemodenerv 1        EF023         table, exam.......  NF            ..................             49            43  Refined equipment
                 extrem 5/> mus.                                                                                                       time to conform
                                                                                                                                       to established
                                                                                                                                       policies for
                                                                                                                                       technical
                                                                                                                                       equipment.
                                     L037D         RN/LPN/MTA........  NF            Other Clinical                  3             0  CMS clinical
                                                                                      Activity:                                        review.
                                                                                      Complete botox
                                                                                      log.
64646.........  Chemodenerv trunk    EF023         table, exam.......  NF            ..................             44            38  Refined equipment
                 musc 1-5.                                                                                                             time to conform
                                                                                                                                       to established
                                                                                                                                       policies for
                                                                                                                                       technical
                                                                                                                                       equipment.
                                     L037D         RN/LPN/MTA........  NF            Other Clinical                  3             0  CMS clinical
                                                                                      Activity:                                        review.
                                                                                      Complete botox
                                                                                      log.
64647.........  Chemodenerv trunk    EF023         table, exam.......  NF            ..................             49            43  Refined equipment
                 musc 6/>.                                                                                                             time to conform
                                                                                                                                       to established
                                                                                                                                       policies for
                                                                                                                                       technical
                                                                                                                                       equipment.
                                     L037D         RN/LPN/MTA........  NF            Other Clinical                  3             0  CMS clinical
                                                                                      Activity:                                        review.
                                                                                      Complete botox
                                                                                      log.
67914.........  Repair eyelid        EF015         mayo stand........  NF            ..................             31            20  Refined equipment
                 defect.                                                                                                               time to conform
                                                                                                                                       to established
                                                                                                                                       policies for
                                                                                                                                       technical
                                                                                                                                       equipment.
                                     EL006         lane, screening     NF            ..................            121           110  Refined equipment
                                                    (oph).                                                                             time to conform
                                                                                                                                       to established
                                                                                                                                       policies for
                                                                                                                                       technical
                                                                                                                                       equipment.
                                     EQ114         electrosurgical     NF            ..................             31            20  Refined equipment
                                                    generator, up to                                                                   time to conform
                                                    120 watts.                                                                         to established
                                                                                                                                       policies for
                                                                                                                                       technical
                                                                                                                                       equipment.
                                     EQ138         instrument pack,    NF            ..................             43            20  Refined equipment
                                                    medium ($1500 and                                                                  time to conform
                                                    up).                                                                               to established
                                                                                                                                       policies for
                                                                                                                                       technical
                                                                                                                                       equipment.
                                     EQ176         loupes, standard,   NF            ..................             31            20  Refined equipment
                                                    up to 3.5x.                                                                        time to conform
                                                                                                                                       to established
                                                                                                                                       policies for
                                                                                                                                       technical
                                                                                                                                       equipment.
                                     L038A         COMT/COT/RN/CST...  NF            Clean Surgical                 15            10  Standardized time
                                                                                      Instrument                                       input.
                                                                                      Package.
                                     SC027         needle, 18-19g,     NF            ..................          SB034         SC027  Supply/Equipment
                                                    filter.                                                                            code correction.
                                     SC057         syringe 5-6ml.....  NF            ..................          SK057         SC057  Supply/Equipment
                                                                                                                                       code correction.
67915.........  Repair eyelid        EF015         mayo stand........  NF            ..................             21            10  Refined equipment
                 defect.                                                                                                               time to conform
                                                                                                                                       to established
                                                                                                                                       policies for
                                                                                                                                       technical
                                                                                                                                       equipment.

[[Page 74367]]

 
                                     EL006         lane, screening     NF            ..................             71            64  Refined equipment
                                                    (oph).                                                                             time to conform
                                                                                                                                       to established
                                                                                                                                       policies for
                                                                                                                                       technical
                                                                                                                                       equipment.
                                     EQ114         electrosurgical     NF            ..................             21            10  Refined equipment
                                                    generator, up to                                                                   time to conform
                                                    120 watts.                                                                         to established
                                                                                                                                       policies for
                                                                                                                                       technical
                                                                                                                                       equipment.
                                     EQ176         loupes, standard,   NF            ..................             21            10  Refined equipment
                                                    up to 3.5x.                                                                        time to conform
                                                                                                                                       to established
                                                                                                                                       policies for
                                                                                                                                       technical
                                                                                                                                       equipment.
                                     SB027         gown, staff,        NF            ..................          SB034         SB027  Supply/Equipment
                                                    impervious.                                                                        code correction.
                                     SC057         syringe 5-6ml.....  NF            ..................          SK057         SC057  Supply/Equipment
                                                                                                                                       code correction.
67916.........  Repair eyelid        SB027         gown, staff,        NF            ..................          SB034         SB027  Supply/Equipment
                 defect.                            impervious.                                                                        code correction.
                                     SC057         syringe 5-6ml.....  NF            ..................          SK057         SC057  Supply/Equipment
                                                                                                                                       code correction.
67917.........  Repair eyelid        SB027         gown, staff,        NF            ..................          SB034         SB027  Supply/Equipment
                 defect.                            impervious.                                                                        code correction.
                                     SC057         syringe 5-6ml.....  NF            ..................          SK057         SC057  Supply/Equipment
                                                                                                                                       code correction.
67921.........  Repair eyelid        SB027         gown, staff,        NF            ..................          SB034         SB027  Supply/Equipment
                 defect.                            impervious.                                                                        code correction.
                                     SC057         syringe 5-6ml.....  NF            ..................          SK057         SC057  Supply/Equipment
                                                                                                                                       code correction.
67922.........  Repair eyelid        SB027         gown, staff,        NF            ..................          SB034         SB027  Supply/Equipment
                 defect.                            impervious.                                                                        code correction.
                                     SC057         syringe 5-6ml.....  NF            ..................          SK057         SC057  Supply/Equipment
                                                                                                                                       code correction.
67923.........  Repair eyelid        SB027         gown, staff,        NF            ..................          SB034         SB027  Supply/Equipment
                 defect.                            impervious.                                                                        code correction.
                                     SC057         syringe 5-6ml.....  NF            ..................          SK057         SC057  Supply/Equipment
                                                                                                                                       code correction.
67924.........  Repair eyelid        SB027         gown, staff,        NF            ..................          SB034         SB027  Supply/Equipment
                 defect.                            impervious.                                                                        code correction.
                                     SC057         syringe 5-6ml.....  NF            ..................          SK057         SC057  Supply/Equipment
                                                                                                                                       code correction.
70450.........  Ct head/brain w/o    ED024         film processor,     NF            ..................             15             4  Refined equipment
                 dye.                               dry, laser.                                                                        time to conform
                                                                                                                                       to established
                                                                                                                                       policies for
                                                                                                                                       technical
                                                                                                                                       equipment.
                                     EL007         room, CT..........  NF            ..................             26            17  Refined equipment
                                                                                                                                       time to conform
                                                                                                                                       to established
                                                                                                                                       policies for
                                                                                                                                       technical
                                                                                                                                       equipment.
                                     ER029         film alternator     NF            ..................             15             4  Refined equipment
                                                    (motorized film                                                                    time to conform
                                                    viewbox).                                                                          to established
                                                                                                                                       policies for
                                                                                                                                       technical
                                                                                                                                       equipment.
70460.........  Ct head/brain w/dye  ED024         film processor,     NF            ..................             15             4  Refined equipment
                                                    dry, laser.                                                                        time to conform
                                                                                                                                       to established
                                                                                                                                       policies for
                                                                                                                                       technical
                                                                                                                                       equipment.
                                     EL007         room, CT..........  NF            ..................             34            24  Refined equipment
                                                                                                                                       time to conform
                                                                                                                                       to established
                                                                                                                                       policies for
                                                                                                                                       technical
                                                                                                                                       equipment.
                                     ER029         film alternator     NF            ..................             15             4  Refined equipment
                                                    (motorized film                                                                    time to conform
                                                    viewbox).                                                                          to established
                                                                                                                                       policies for
                                                                                                                                       technical
                                                                                                                                       equipment.

[[Page 74368]]

 
70470.........  Ct head/brain w/o &  ED024         film processor,     NF            ..................             15             6  Refined equipment
                 w/dye.                             dry, laser.                                                                        time to conform
                                                                                                                                       to established
                                                                                                                                       policies for
                                                                                                                                       technical
                                                                                                                                       equipment.
                                     EL007         room, CT..........  NF            ..................             42            30  Refined equipment
                                                                                                                                       time to conform
                                                                                                                                       to established
                                                                                                                                       policies for
                                                                                                                                       technical
                                                                                                                                       equipment.
                                     ER029         film alternator     NF            ..................             15             6  Refined equipment
                                                    (motorized film                                                                    time to conform
                                                    viewbox).                                                                          to established
                                                                                                                                       policies for
                                                                                                                                       technical
                                                                                                                                       equipment.
70551.........  Mri brain stem w/o   EL008         room, MRI.........  NF            ..................             33            31  Refined equipment
                 dye.                                                                                                                  time to conform
                                                                                                                                       to established
                                                                                                                                       policies for
                                                                                                                                       technical
                                                                                                                                       equipment.
                                     L047A         MRI Technologist..  NF            Other Clinical                  8             3  CMS clinical
                                                                                      Activity:                                        review.
                                                                                      Retrieve prior
                                                                                      appropriate
                                                                                      imaging exams and
                                                                                      hang for MD
                                                                                      review, verify
                                                                                      orders, review
                                                                                      the chart to
                                                                                      incorporate
                                                                                      relevant clinical
                                                                                      information and
                                                                                      confirm contrast
                                                                                      protocol with
                                                                                      interpreting MD.
                                     L047A         MRI Technologist..  NF            Assist physician               30            20  CMS clinical
                                                                                      in performing                                    review.
                                                                                      procedure.
                                     L047A         MRI Technologist..  NF            Other Clinical                  2             0  CMS clinical
                                                                                      Activity: Escort                                 review.
                                                                                      patient from exam
                                                                                      room due to
                                                                                      magnetic
                                                                                      sensitivity.
70552.........  Mri brain stem w/    EL008         room, MRI.........  NF            ..................             47            45  Refined equipment
                 dye.                                                                                                                  time to conform
                                                                                                                                       to established
                                                                                                                                       policies for
                                                                                                                                       technical
                                                                                                                                       equipment.
                                     L047A         MRI Technologist..  NF            Other Clinical                  8             5  CMS clinical
                                                                                      Activity:                                        review.
                                                                                      Retrieve prior
                                                                                      appropriate
                                                                                      imaging exams and
                                                                                      hang for MD
                                                                                      review, verify
                                                                                      orders, review
                                                                                      the chart to
                                                                                      incorporate
                                                                                      relevant clinical
                                                                                      information and
                                                                                      confirm contrast
                                                                                      protocol with
                                                                                      interpreting MD.
                                     L047A         MRI Technologist..  NF            Obtain vital signs              0             3  CMS clinical
                                                                                                                                       review.
                                     L047A         MRI Technologist..  NF            Provide preservice              9             7  CMS clinical
                                                                                      education/obtain                                 review.
                                                                                      consent.
                                     L047A         MRI Technologist..  NF            Other Clinical                  2             0  CMS clinical
                                                                                      Activity: Escort                                 review.
                                                                                      patient from exam
                                                                                      room due to
                                                                                      magnetic
                                                                                      sensitivity.
                                     SG053         gauze, sterile 2in  NF            ..................              1             0  CMS clinical
                                                    x 2in.                                                                             review.
                                     SG089         tape, phix strips   NF            ..................              6             0  CMS clinical
                                                    (for nasal                                                                         review.
                                                    catheter).
                                     SJ043         povidone            NF            ..................              1             0  CMS clinical
                                                    swabsticks (3                                                                      review.
                                                    pack uou).
                                     SJ053         swab-pad, alcohol.  NF            ..................              1             0  CMS clinical
                                                                                                                                       review.
70553.........  Mri brain stem w/o   EL008         room, MRI.........  NF            ..................             57            53  Refined equipment
                 & w/dye.                                                                                                              time to conform
                                                                                                                                       to established
                                                                                                                                       policies for
                                                                                                                                       technical
                                                                                                                                       equipment.

[[Page 74369]]

 
                                     L047A         MRI Technologist..  NF            Other Clinical                  8             5  CMS clinical
                                                                                      Activity:                                        review.
                                                                                      Retrieve prior
                                                                                      appropriate
                                                                                      imaging exams and
                                                                                      hang for MD
                                                                                      review, verify
                                                                                      orders, review
                                                                                      the chart to
                                                                                      incorporate
                                                                                      relevant clinical
                                                                                      information and
                                                                                      confirm contrast
                                                                                      protocol with
                                                                                      interpreting MD.
                                     L047A         MRI Technologist..  NF            Obtain vital signs              0             3  CMS clinical
                                                                                                                                       review.
                                     L047A         MRI Technologist..  NF            Provide preservice              9             7  CMS clinical
                                                                                      education/obtain                                 review.
                                                                                      consent.
                                     L047A         MRI Technologist..  NF            Assist physician               40            38  CMS clinical
                                                                                      in performing                                    review.
                                                                                      procedure.
                                     L047A         MRI Technologist..  NF            Other Clinical                  2             0  CMS clinical
                                                                                      Activity: Escort                                 review.
                                                                                      patient from exam
                                                                                      room due to
                                                                                      magnetic
                                                                                      sensitivity.
                                     SG053         gauze, sterile 2in  NF            ..................              1             0  CMS clinical
                                                    x 2in.                                                                             review.
                                     SG089         tape, phix strips   NF            ..................              6             0  CMS clinical
                                                    (for nasal                                                                         review.
                                                    catheter).
                                     SJ043         povidone            NF            ..................              1             0  CMS clinical
                                                    swabsticks (3                                                                      review.
                                                    pack uou).
                                     SJ053         swab-pad, alcohol.  NF            ..................              1             0  CMS clinical
                                                                                                                                       review.
72141.........  Mri neck spine w/o   L047A         MRI Technologist..  NF            Other Clinical                  2             0  CMS clinical
                 dye.                                                                 Activity: Escort                                 review.
                                                                                      patient from exam
                                                                                      room due to
                                                                                      magnetic
                                                                                      sensitivity.
72142.........  Mri neck spine w/    L047A         MRI Technologist..  NF            Other Clinical                  2             0  CMS clinical
                 dye.                                                                 Activity: Escort                                 review.
                                                                                      patient from exam
                                                                                      room due to
                                                                                      magnetic
                                                                                      sensitivity.
72146.........  Mri chest spine w/o  L047A         MRI Technologist..  NF            Other Clinical                  2             0  CMS clinical
                 dye.                                                                 Activity: Escort                                 review.
                                                                                      patient from exam
                                                                                      room due to
                                                                                      magnetic
                                                                                      sensitivity.
72147.........  Mri chest spine w/   L047A         MRI Technologist..  NF            Other Clinical                  2             0  CMS clinical
                 dye.                                                                 Activity: Escort                                 review.
                                                                                      patient from exam
                                                                                      room due to
                                                                                      magnetic
                                                                                      sensitivity.
72148.........  Mri lumbar spine w/  L047A         MRI Technologist..  NF            Other Clinical                  2             0  CMS clinical
                 o dye.                                                               Activity: Escort                                 review.
                                                                                      patient from exam
                                                                                      room due to
                                                                                      magnetic
                                                                                      sensitivity.
72149.........  Mri lumbar spine w/  L047A         MRI Technologist..  NF            Other Clinical                  2             0  CMS clinical
                 dye.                                                                 Activity: Escort                                 review.
                                                                                      patient from exam
                                                                                      room due to
                                                                                      magnetic
                                                                                      sensitivity.
72156.........  Mri neck spine w/o   L047A         MRI Technologist..  NF            Other Clinical                  2             0  CMS clinical
                 & w/dye.                                                             Activity: Escort                                 review.
                                                                                      patient from exam
                                                                                      room due to
                                                                                      magnetic
                                                                                      sensitivity.
72157.........  Mri chest spine w/o  L047A         MRI Technologist..  NF            Other Clinical                  2             0  CMS clinical
                 & w/dye.                                                             Activity: Escort                                 review.
                                                                                      patient from exam
                                                                                      room due to
                                                                                      magnetic
                                                                                      sensitivity.
72158.........  Mri lumbar spine w/  L047A         MRI Technologist..  NF            Other Clinical                  2             0  CMS clinical
                 o & w/dye.                                                           Activity: Escort                                 review.
                                                                                      patient from exam
                                                                                      room due to
                                                                                      magnetic
                                                                                      sensitivity.
74174.........  Ct angio abd & pelv  L046A         CT Technologist...  NF            Other Clinical                 25            20  CMS clinical
                 w/o & w/dye.                                                         Activity: Process                                review.
                                                                                      films, hang films
                                                                                      and review study
                                                                                      with interpreting
                                                                                      MD prior to
                                                                                      patient discharge.
75726.........  Artery x-rays        L041A         Angio Technician..  NF            Assist physician               73            45  CMS clinical
                 abdomen.                                                             in performing                                    review.
                                                                                      procedure.
77280.........  Set radiation        E             Virtual Simulation  NF            ..................             27             0  CMS clinical
                 therapy field.                     Package.                                                                           review.

[[Page 74370]]

 
                                     ER057         radiation virtual   NF            ..................              0            27  CMS clinical
                                                    simulation system.                                                                 review;
                                                                                                                                       inadequate
                                                                                                                                       information to
                                                                                                                                       price new items;
                                                                                                                                       existing item
                                                                                                                                       used as a proxy.
77285.........  Set radiation        E             Virtual Simulation  NF            ..................             43             0  CMS clinical
                 therapy field.                     Package.                                                                           review.
                                     ER057         radiation virtual   NF            ..................              0            43  CMS clinical
                                                    simulation system.                                                                 review;
                                                                                                                                       inadequate
                                                                                                                                       information to
                                                                                                                                       price new items;
                                                                                                                                       existing item
                                                                                                                                       used as a proxy.
77290.........  Set radiation        E             Virtual Simulation  NF            ..................             50             0  CMS clinical
                 therapy field.                     Package.                                                                           review.
                                     ER057         radiation virtual   NF            ..................              0            50  CMS clinical
                                                    simulation system.                                                                 review;
                                                                                                                                       inadequate
                                                                                                                                       information to
                                                                                                                                       price new items;
                                                                                                                                       existing item
                                                                                                                                       used as a proxy.
77293.........  Respirator motion    E             Virtual Simulation  NF            ..................             40             0  CMS clinical
                 mgmt simul.                        Package.                                                                           review.
                                     E             4D Simulation       NF            ..................             40             0  CMS clinical
                                                    Package.                                                                           review.
                                     ER057         radiation virtual   NF            ..................              0            40  CMS clinical
                                                    simulation system.                                                                 review;
                                                                                                                                       inadequate
                                                                                                                                       information to
                                                                                                                                       price new items;
                                                                                                                                       existing item
                                                                                                                                       used as a proxy.
77373.........  Sbrt delivery......  EQ211         pulse oximeter w-   NF            ..................            104            86  Refined equipment
                                                    printer.                                                                           time to conform
                                                                                                                                       to established
                                                                                                                                       policies for
                                                                                                                                       technical
                                                                                                                                       equipment.
                                     ER056         radiation           NF            ..................              0            86  See discussion in
                                                    treatment vault.                                                                   section II.D.3.b.
                                                                                                                                       of this final
                                                                                                                                       rule.
                                     ER083         SRS system, SBRT,   NF            ..................            104            86  Refined equipment
                                                    six systems,                                                                       time to conform
                                                    average.                                                                           to established
                                                                                                                                       policies for
                                                                                                                                       technical
                                                                                                                                       equipment.
77600.........  Hyperthermia         EF015         mayo stand........  NF            ..................            123           105  Refined equipment
                 treatment.                                                                                                            time to conform
                                                                                                                                       to established
                                                                                                                                       policies for
                                                                                                                                       technical
                                                                                                                                       equipment.
                                     ER035         hyperthermia        NF            ..................            123           105  Refined equipment
                                                    system,                                                                            time to conform
                                                    ultrasound,                                                                        to established
                                                    external.                                                                          policies for
                                                                                                                                       technical
                                                                                                                                       equipment.
                                     L037D         RN/LPN/MTA........  NF            Clean Scope.......             10             0  CMS clinical
                                                                                                                                       review; catheters
                                                                                                                                       included are
                                                                                                                                       disposable
                                                                                                                                       supplies and time
                                                                                                                                       is already
                                                                                                                                       included for
                                                                                                                                       cleaning
                                                                                                                                       equipment.
77785.........  Hdr brachytx 1       E             Emergency service   NF            ..................             46             0  Indirect practice
                 channel.                           container-safety                                                                   expense.
                                                    kit.
                                     EF021         table,              NF            ..................             46            42  Refined equipment
                                                    brachytherapy                                                                      time to conform
                                                    treatment.                                                                         to established
                                                                                                                                       policies for
                                                                                                                                       technical
                                                                                                                                       equipment.
                                     EQ292         Applicator Base     NF            ..................             46            42  Refined equipment
                                                    Plate.                                                                             time to conform
                                                                                                                                       to established
                                                                                                                                       policies for
                                                                                                                                       technical
                                                                                                                                       equipment.
                                     ER003         HDR Afterload       NF            ..................             46            42  Refined equipment
                                                    System,                                                                            time to conform
                                                    Nucletron--Oldelf                                                                  to established
                                                    t.                                                                                 policies for
                                                                                                                                       technical
                                                                                                                                       equipment.

[[Page 74371]]

 
                                     ER028         electrometer, PC-   NF            ..................             46            42  Refined equipment
                                                    based, dual                                                                        time to conform
                                                    channel.                                                                           to established
                                                                                                                                       policies for
                                                                                                                                       technical
                                                                                                                                       equipment.
                                     ER054         radiation survey    NF            ..................             46            42  Refined equipment
                                                    meter.                                                                             time to conform
                                                                                                                                       to established
                                                                                                                                       policies for
                                                                                                                                       technical
                                                                                                                                       equipment.
                                     ER060         source, 10 Ci Ir    NF            ..................             46            42  Refined equipment
                                                    192.                                                                               time to conform
                                                                                                                                       to established
                                                                                                                                       policies for
                                                                                                                                       technical
                                                                                                                                       equipment.
                                     ER062         stirrups (for       NF            ..................             46            42  Refined equipment
                                                    brachytherapy                                                                      time to conform
                                                    table).                                                                            to established
                                                                                                                                       policies for
                                                                                                                                       technical
                                                                                                                                       equipment.
                                     ER073         Area Radiation      NF            ..................             46            42  Refined equipment
                                                    Monitor.                                                                           time to conform
                                                                                                                                       to established
                                                                                                                                       policies for
                                                                                                                                       technical
                                                                                                                                       equipment.
77786.........  Hdr brachytx 2-12    E             Emergency service   NF            ..................            100             0  Indirect practice
                 channel.                           container-safety                                                                   expense.
                                                    kit.
                                     EF021         table,              NF            ..................            100            86  Refined equipment
                                                    brachytherapy                                                                      time to conform
                                                    treatment.                                                                         to established
                                                                                                                                       policies for
                                                                                                                                       technical
                                                                                                                                       equipment.
                                     EQ011         ECG, 3-channel      NF            ..................            100            86  Refined equipment
                                                    (with SpO2, NIBP,                                                                  time to conform
                                                    temp, resp).                                                                       to established
                                                                                                                                       policies for
                                                                                                                                       technical
                                                                                                                                       equipment.
                                     EQ292         Applicator Base     NF            ..................            100            86  Refined equipment
                                                    Plate.                                                                             time to conform
                                                                                                                                       to established
                                                                                                                                       policies for
                                                                                                                                       technical
                                                                                                                                       equipment.
                                     ER003         HDR Afterload       NF            ..................            100            86  Refined equipment
                                                    System,                                                                            time to conform
                                                    Nucletron--Oldelf                                                                  to established
                                                    t.                                                                                 policies for
                                                                                                                                       technical
                                                                                                                                       equipment.
                                     ER028         electrometer, PC-   NF            ..................            100            86  Refined equipment
                                                    based, dual                                                                        time to conform
                                                    channel.                                                                           to established
                                                                                                                                       policies for
                                                                                                                                       technical
                                                                                                                                       equipment.
                                     ER054         radiation survey    NF            ..................            100            86  Refined equipment
                                                    meter.                                                                             time to conform
                                                                                                                                       to established
                                                                                                                                       policies for
                                                                                                                                       technical
                                                                                                                                       equipment.
                                     ER060         source, 10 Ci Ir    NF            ..................            100            86  Refined equipment
                                                    192.                                                                               time to conform
                                                                                                                                       to established
                                                                                                                                       policies for
                                                                                                                                       technical
                                                                                                                                       equipment.
                                     ER073         Area Radiation      NF            ..................            100            86  Refined equipment
                                                    Monitor.                                                                           time to conform
                                                                                                                                       to established
                                                                                                                                       policies for
                                                                                                                                       technical
                                                                                                                                       equipment.
77787.........  Hdr brachytx over    E             Emergency service   NF            ..................            162             0  Indirect practice
                 12 chan.                           container-safety                                                                   expense.
                                                    kit.
                                     EF021         table,              NF            ..................            162           137  Refined equipment
                                                    brachytherapy                                                                      time to conform
                                                    treatment.                                                                         to established
                                                                                                                                       policies for
                                                                                                                                       technical
                                                                                                                                       equipment.

[[Page 74372]]

 
                                     EQ011         ECG, 3-channel      NF            ..................            162           137  Refined equipment
                                                    (with SpO2, NIBP,                                                                  time to conform
                                                    temp, resp).                                                                       to established
                                                                                                                                       policies for
                                                                                                                                       technical
                                                                                                                                       equipment.
                                     EQ292         Applicator Base     NF            ..................            162           137  Refined equipment
                                                    Plate.                                                                             time to conform
                                                                                                                                       to established
                                                                                                                                       policies for
                                                                                                                                       technical
                                                                                                                                       equipment.
                                     ER003         HDR Afterload       NF            ..................            162           137  Refined equipment
                                                    System,                                                                            time to conform
                                                    Nucletron--Oldelf                                                                  to established
                                                    t.                                                                                 policies for
                                                                                                                                       technical
                                                                                                                                       equipment.
                                     ER028         electrometer, PC-   NF            ..................            162           137  Refined equipment
                                                    based, dual                                                                        time to conform
                                                    channel.                                                                           to established
                                                                                                                                       policies for
                                                                                                                                       technical
                                                                                                                                       equipment.
                                     ER054         radiation survey    NF            ..................            162           137  Refined equipment
                                                    meter.                                                                             time to conform
                                                                                                                                       to established
                                                                                                                                       policies for
                                                                                                                                       technical
                                                                                                                                       equipment.
                                     ER060         source, 10 Ci Ir    NF            ..................            162           137  Refined equipment
                                                    192.                                                                               time to conform
                                                                                                                                       to established
                                                                                                                                       policies for
                                                                                                                                       technical
                                                                                                                                       equipment.
                                     ER062         stirrups (for       NF            ..................            162           137  Refined equipment
                                                    brachytherapy                                                                      time to conform
                                                    table).                                                                            to established
                                                                                                                                       policies for
                                                                                                                                       technical
                                                                                                                                       equipment.
                                     ER073         Area Radiation      NF            ..................            162           137  Refined equipment
                                                    Monitor.                                                                           time to conform
                                                                                                                                       to established
                                                                                                                                       policies for
                                                                                                                                       technical
                                                                                                                                       equipment.
88112.........  Cytopath cell        E             Laboratory          NF            ..................              2             0  Included in
                 enhance tech.                      Information                                                                        equipment cost
                                                    System with                                                                        per minute
                                                    maintenance                                                                        calculation.
                                                    contract.
                                     E             Copath System       NF            ..................              2             0  Indirect practice
                                                    Software.                                                                          expense.
                                     L035A         Lab Tech/           NF            Order, restock,               0.5             0  CMS clinical
                                                    Histotechnologist.                and distribute                                   review.
                                                                                      specimen
                                                                                      containers with
                                                                                      requisition
                                                                                      forms..
                                     L045A         Cytotechnologist..  NF            Perform screening               8             0  CMS clinical
                                                                                      function (where                                  review.
                                                                                      applicable).
                                     L045A         Cytotechnologist..  NF            A. Confirm patient              2             0  CMS clinical
                                                                                      ID, organize                                     review.
                                                                                      work, verify and
                                                                                      review history.
                                     L045A         Cytotechnologist..  NF            B: Enter screening              2             0  CMS clinical
                                                                                      diagnosis in                                     review.
                                                                                      laboratory
                                                                                      information
                                                                                      system, complete
                                                                                      workload
                                                                                      recording logs,
                                                                                      manage any
                                                                                      relevant
                                                                                      utilization
                                                                                      review/quality
                                                                                      assurance
                                                                                      activities and
                                                                                      regulatory
                                                                                      compliance
                                                                                      documentation and
                                                                                      assemble and
                                                                                      deliver slides
                                                                                      with paperwork to
                                                                                      pathologist.
                                     S             Courier             NF            ..................           2.02             0  Indirect practice
                                                    transportation                                                                     expense.
                                                    costs.
                                     S             Specimen, solvent,  NF            ..................           0.18             0  Indirect practice
                                                    and formalin                                                                       expense.
                                                    disposal cost.

[[Page 74373]]

 
93880.........  Extracranial bilat   ED021         computer, desktop,  NF            ..................             68            51  Refined equipment
                 study.                             w-monitor.                                                                         time to conform
                                                                                                                                       to established
                                                                                                                                       policies for
                                                                                                                                       technical
                                                                                                                                       equipment.
                                     ED034         video SVHS VCR      NF            ..................             68             0  CMS clinical
                                                    (medical grade).                                                                   review;
                                                                                                                                       functionality of
                                                                                                                                       items redundant
                                                                                                                                       with other direct
                                                                                                                                       PE inputs.
                                     ED036         video printer,      NF            ..................             10             0  CMS clinical
                                                    color (Sony                                                                        review;
                                                    medical grade).                                                                    functionality of
                                                                                                                                       items redundant
                                                                                                                                       with other direct
                                                                                                                                       PE inputs.
                                     EL016         room, ultrasound,   NF            ..................             68            51  Refined equipment
                                                    vascular.                                                                          time to conform
                                                                                                                                       to established
                                                                                                                                       policies for
                                                                                                                                       technical
                                                                                                                                       equipment.
93882.........  Extracranial uni/    ED021         computer, desktop,  NF            ..................             44            29  Refined equipment
                 ltd study.                         w-monitor.                                                                         time to conform
                                                                                                                                       to established
                                                                                                                                       policies for
                                                                                                                                       technical
                                                                                                                                       equipment.
                                     ED034         video SVHS VCR      NF            ..................             44             0  CMS clinical
                                                    (medical grade).                                                                   review;
                                                                                                                                       functionality of
                                                                                                                                       items redundant
                                                                                                                                       with other direct
                                                                                                                                       PE inputs.
                                     ED036         video printer,      NF            ..................             10             0  CMS clinical
                                                    color (Sony                                                                        review;
                                                    medical grade).                                                                    functionality of
                                                                                                                                       items redundant
                                                                                                                                       with other direct
                                                                                                                                       PE inputs.
                                     EL016         room, ultrasound,   NF            ..................             44            29  Refined equipment
                                                    vascular.                                                                          time to conform
                                                                                                                                       to established
                                                                                                                                       policies for
                                                                                                                                       technical
                                                                                                                                       equipment.
94667.........  Chest wall           EF023         table, exam.......  NF            ..................              1            35  Refined equipment
                 manipulation.                                                                                                         time to conform
                                                                                                                                       to changes in
                                                                                                                                       clinical labor
                                                                                                                                       time.
94668.........  Chest wall           EF023         table, exam.......  NF            ..................              1            33  Refined equipment
                 manipulation.                                                                                                         time to conform
                                                                                                                                       to changes in
                                                                                                                                       clinical labor
                                                                                                                                       time.
94669.........  Mechanical chest     EF023         table, exam.......  NF            ..................              1            45  Refined equipment
                 wall oscill.                                                                                                          time to conform
                                                                                                                                       to changes in
                                                                                                                                       clinical labor
                                                                                                                                       time.
95816.........  Eeg awake and        EQ330         EEG, digital,       NF            ..................            116           107  Refined equipment
                 drowsy.                            testing system                                                                     time to conform
                                                    (computer                                                                          to established
                                                    hardware,                                                                          policies for
                                                    software &                                                                         technical
                                                    camera).                                                                           equipment.
95819.........  Eeg awake and        EQ330         EEG, digital,       NF            ..................            148           139  Refined equipment
                 asleep.                            testing system                                                                     time to conform
                                                    (computer                                                                          to established
                                                    hardware,                                                                          policies for
                                                    software &                                                                         technical
                                                    camera).                                                                           equipment.
95822.........  Eeg coma or sleep    EQ330         EEG, digital,       NF            ..................            123           114  Refined equipment
                 only.                              testing system                                                                     time to conform
                                                    (computer                                                                          to established
                                                    hardware,                                                                          policies for
                                                    software &                                                                         technical
                                                    camera).                                                                           equipment.
99170.........  Anogenital exam      ED005         camera, digital     NF            ..................             50            60  Refined equipment
                 child w imag.                      system, 12                                                                         time to conform
                                                    megapixel                                                                          to established
                                                    (medical grade).                                                                   policies for
                                                                                                                                       technical
                                                                                                                                       equipment.
                                     ED021         computer, desktop,  NF            ..................             50             0  Indirect practice
                                                    w-monitor.                                                                         expense.
                                     EF015         mayo stand........  NF            ..................             50            60  Refined equipment
                                                                                                                                       time to conform
                                                                                                                                       to established
                                                                                                                                       policies for
                                                                                                                                       technical
                                                                                                                                       equipment.

[[Page 74374]]

 
                                     EF031         table, power......  NF            ..................             50            60  Refined equipment
                                                                                                                                       time to conform
                                                                                                                                       to established
                                                                                                                                       policies for
                                                                                                                                       technical
                                                                                                                                       equipment.
                                     EQ170         light, fiberoptic   NF            ..................             50            60  Refined equipment
                                                    headlight w-                                                                       time to conform
                                                    source.                                                                            to established
                                                                                                                                       policies for
                                                                                                                                       technical
                                                                                                                                       equipment.
                                     ES004         colposcope........  NF            ..................             50            67  Refined equipment
                                                                                                                                       time to conform
                                                                                                                                       to established
                                                                                                                                       policies for
                                                                                                                                       technical
                                                                                                                                       equipment.
                                     L051A         RN................  NF            Coordinate pre-                 0             3  CMS clinical
                                                                                      surgery services.                                review.
                                     L051A         RN................  NF            Other Clinical                  5             0  CMS clinical
                                                                                      Activity                                         review.
                                                                                      (Preservice).
                                     L051A         RN................  NF            Other Clinical                 15             3  CMS clinical
                                                                                      Activity (Post                                   review.
                                                                                      Service).
                                     SA048         pack, minimum       F             ..................              1             0  Service period
                                                    multi-specialty                                                                    supplies are not
                                                    visit.                                                                             included in the
                                                                                                                                       facility setting.
                                     SB006         drape, non-         F             ..................              1             0  Service period
                                                    sterile, sheet                                                                     supplies are not
                                                    40in x 60in.                                                                       included in the
                                                                                                                                       facility setting.
                                     SB022         gloves, non-        F             ..................              1             0  Service period
                                                    sterile.                                                                           supplies are not
                                                                                                                                       included in the
                                                                                                                                       facility setting.
                                     SD118         specula, vaginal..  F             ..................              1             0  Service period
                                                                                                                                       supplies are not
                                                                                                                                       included in the
                                                                                                                                       facility setting.
                                     SG008         applicator, cotton- F             ..................              2             0  Service period
                                                    tipped, non-                                                                       supplies are not
                                                    sterile 6in.                                                                       included in the
                                                                                                                                       facility setting.
                                     SJ033         lubricating jelly   F             ..................              1             0  Service period
                                                    (Surgilube).                                                                       supplies are not
                                                                                                                                       included in the
                                                                                                                                       facility setting.
                                     SL146         tubed culture       F             ..................              2             0  Service period
                                                    media.                                                                             supplies are not
                                                                                                                                       included in the
                                                                                                                                       facility setting.
                                     SL157         cup, sterile, 8 oz  F             ..................              1             0  Service period
                                                                                                                                       supplies are not
                                                                                                                                       included in the
                                                                                                                                       facility setting.
G0461.........  Immunohistochemistr  E             Specimen, solvent,  NF            ..................           0.35             0  Indirect practice
                 y, initial                         and formalin                                                                       expense.
                 antibody.                          disposal cost.
                                     E             Laboratory          NF            ..................              2             0  Included in
                                                    Information                                                                        equipment cost
                                                    System with                                                                        per minute
                                                    maintenance                                                                        calculation.
                                                    contract.
                                     E             Copath System       NF            ..................              2             0  Indirect practice
                                                    Software.                                                                          expense.
                                     EP043         water bath,         NF            ..................              8             5  CMS clinical
                                                    general purpose                                                                    review.
                                                    (lab).
                                     ER041         microtome.........  NF            ..................              8             5  CMS clinical
                                                                                                                                       review.
G0462.........  Immunohistochemistr  EP112         Benchmark ULTRA     NF            ..................             33            15  CMS clinical
                 y, subsequent                      automated slide                                                                    review.
                 antibody.                          preparation
                                                    system.
                                     SL489         UtraView Universal  NF            ..................            0.2             2  CMS clinical
                                                    Alkaline                                                                           review.
                                                    Phosphatase Red
                                                    Detection Kit.
--------------------------------------------------------------------------------------------------------------------------------------------------------

c. Establishing CY 2014 Interim Final Malpractice RVUs
    According to our malpractice methodology discussed in section II.C, 
we are assigning malpractice RVUs for CY 2014 new, revised and 
potentially misvalued codes by utilizing a crosswalk to a source code 
with a similar malpractice risk. We have reviewed the AMA RUC 
recommended malpractice source code crosswalks for CY 2014 new, revised 
and potentially misvalued codes, and we are accepting all of them on an 
interim final basis for CY 2014.
    For CY 2014, we created two HCPCS G-codes. HCPCS code G0461 
(Immunohistochemistry or immunocytochemistry, per specimen; first stain 
with separately identifiable antibody(ies)) was created to replace CPT 
code 88342 (immunohistochemistry or immunocytochemistry, each 
separately identifiable antibody per block, cytologic preparation, or 
hematologic

[[Page 74375]]

smear; first separately identifiable antibody per slide), which is 
Invalid effective January 1, 2014. We believe CPT code 88342 has a 
similar malpractice risk-of-service as HCPCS code G0461. Therefore, we 
are assigning an interim final malpractice crosswalk of CPT code 88342 
to HCPCS code G0461 on an interim final basis for CY 2014. HCPCS code 
G0462 (Immunohistochemistry or immunocytochemistry, per specimen; each 
additional stain with separately identifiable antibody(ies) (List 
separately in addition to code for primary procedure) was created to 
replace CPT code 88343 (immunohistochemistry or immunocytochemistry, 
each separately identifiable antibody per block, cytologic preparation, 
or hematologic smear; each additional separately identifiable antibody 
per slide (list separately in addition to code for primary procedure), 
which is invalid effective Janauary 1, 2014. We believe CPT code 88343 
has a similar malpractice risk-of-service as HCPCS code G0462. 
Therefore, we are assigning an interim final malpractice crosswalk of 
CPT code 88343 to HCPCS code G0462 on an interim final basis for CY 
2014.
    Table 30 lists the adjusted CY 2013 and new/revised CY 2014 HCPCS 
codes and their respective source codes used to set the interim final 
CY 2014 malpractice RVUs. The malpractice RVUs for these services are 
reflected in Addendum B of this CY 2014 PFS final rule with comment 
period.
    Consistent with past practice when the MEI has been rebased or 
revised we proposed to make adjustments to ensure that estimates of the 
aggregate CY 2014 PFS payments for work, PE and malpractice are in 
proportion to the weights for these categories in the revised MEI. As 
discussed in the II.B. and II.D., the MEI is being revised, the PE and 
malpractice RVUs, and the CF are being adjusted accordingly. For more 
information on this, see those sections. We received no comments 
specifically on the adjustment to malpractice RVUs.

      Table 30--Crosswalk for Establishing CY 2014 New/Revised/Potentially Misvalued Codes Malpractice RVUs
----------------------------------------------------------------------------------------------------------------
 
----------------------------------------------------------------------------------------------------------------
   CY 2014 new, revised, or potentiallyMalpractice risk factor crosswalk HCPCS code
----------------------------------------------------------------------------------------------------------------
10030.............................  Guide cathet fluid          37200................  transcatheter biopsy.
                                     drainage.
13152.............................  Cmplx rpr e/n/e/l 2.6-7.5   13152................  cmplx rpr e/n/e/l 2.6-7.5
                                     cm.                                                cm.
17000.............................  Destruct premalg lesion...  17000................  destruct premalg lesion.
17003.............................  Destruct premalg les 2-14.  17003................  destruct premalg les 2-
                                                                                        14.
17004.............................  Destroy premal lesions 15/  17004................  destroy premal lesions 15/
                                     >.                                                 >.
17311.............................  Mohs 1 stage h/n/hf/g.....  17311................  mohs 1 stage h/n/hf/g.
17312.............................  Mohs addl stage...........  17312................  mohs addl stage.
17313.............................  Mohs 1 stage t/a/l........  17313................  mohs 1 stage t/a/l.
17314.............................  Mohs addl stage t/a/l.....  17314................  mohs addl stage t/a/l.
17315.............................  Mohs surg addl block......  17315................  mohs surg addl block.
19081.............................  Bx breast 1st Lesion        32553................  ins mark thor for rt
                                     strtctc.                                           perq.
19082.............................  Bx breast add Lesion        64480................  inj foramen epidural add-
                                     strtctc.                                           on.
19083.............................  Bx breast 1st Lesion US     32551................  insertion of chest tube.
                                     imag.
19084.............................  Bx breast add Lesion US     64480................  inj foramen epidural add-
                                     imag.                                              on.
19085.............................  Bx breast 1st lesion mr     36565................  insert tunneled cv cath.
                                     imag.
19086.............................  Bx breast add lesion mr     76812................  ob us detailed addl
                                     imag.                                              fetus.
19281.............................  Perq device breast 1st      50387................  change ext/int ureter
                                     imag.                                              stent.
19282.............................  Perq device breast ea imag  76812................  ob us detailed addl
                                                                                        fetus.
19283.............................  Perq dev breast 1st         50387................  change ext/int ureter
                                     strtctc.                                           stent.
19284.............................  Perq dev breast add         76812................  ob us detailed addl
                                     strtctc.                                           fetus.
19285.............................  Perq dev breast 1st us      36569................  insert picc cath.
                                     imag.
19286.............................  Perq dev breast add us      76812................  ob us detailed addl
                                     imag.                                              fetus.
19287.............................  Perq dev breast 1st mr      32551................  insertion of chest tube.
                                     guide.
19288.............................  Perq dev breast add mr      76812................  ob us detailed addl
                                     guide.                                             fetus.
23333.............................  Remove shoulder fb deep...  23472................  reconstruct shoulder
                                                                                        joint.
23334.............................  Shoulder prosthesis         23472................  reconstruct shoulder
                                     removal.                                           joint.
23335.............................  Shoulder prosthesis         23472................  reconstruct shoulder
                                     removal.                                           joint.
24160.............................  Remove elbow joint implant  24363................  replace elbow joint.
24164.............................  Remove radius head implant  23430................  repair biceps tendon.
27130.............................  Total hip arthroplasty....  27130................  total hip arthroplasty.
27236.............................  Treat thigh fracture......  27236................  treat thigh fracture.
27446.............................  Revision of knee joint....  27446................  revision of knee joint.
27447.............................  Total knee arthroplasty...  27447................  total knee arthroplasty.
31237.............................  Nasal/sinus endoscopy surg  31237................  nasal/sinus endoscopy
                                                                                        surg.
31238.............................  Nasal/sinus endoscopy surg  31238................  nasal/sinus endoscopy
                                                                                        surg.
31239.............................  Nasal/sinus endoscopy surg  31239................  nasal/sinus endoscopy
                                                                                        surg.
31240.............................  Nasal/sinus endoscopy surg  31240................  nasal/sinus endoscopy
                                                                                        surg.
33282.............................  Implant pat-active ht       33282................  implant pat-active ht
                                     record.                                            record.
33284.............................  Remove pat-active ht        33284................  remove pat-active ht
                                     record.                                            record.
33366.............................  Trcath replace aortic       33979................  insert intracorporeal
                                     valve.                                             device.
35301.............................  Rechanneling of artery....  35301................  rechanneling of artery.
35475.............................  Repair arterial blockage..  35475................  repair arterial blockage.
35476.............................  Repair venous blockage....  35476................  repair venous blockage.
36245.............................  Ins cath abd/l-ext art 1st  36245................  ins cath abd/l-ext art
                                                                                        1st.
37217.............................  Stent placemt retro         37660................  revision of major vein.
                                     carotid.
37236.............................  Open/perq place stent 1st.  36247................  ins cath abd/l-ext art
                                                                                        3rd.
37237.............................  Open/perq place stent ea    37223................  iliac revasc w/stent add-
                                     add.                                               on.
37238.............................  Open/perq place stent same  36247................  ins cath abd/l-ext art
                                                                                        3rd.
37239.............................  Open/perq place stent ea    37223................  iliac revasc w/stent add-
                                     add.                                               on.

[[Page 74376]]

 
37241.............................  Vasc embolize/occlude       37204................  transcatheter occlusion.
                                     venous.
37242.............................  Vasc embolize/occlude       37204................  transcatheter occlusion.
                                     artery.
37243.............................  Vasc embolize/occlude       37204................  transcatheter occlusion.
                                     organ.
37244.............................  Vasc embolize/occlude       37204................  transcatheter occlusion.
                                     bleed.
38240.............................  Transplt allo hct/donor...  38240................  transplt allo hct/donor.
43191.............................  Esophagoscopy rigid trnso   31575................  diagnostic laryngoscopy.
                                     dx.
43192.............................  Esophagoscp rig trnso       31575................  diagnostic laryngoscopy.
                                     inject.
43193.............................  Esophagoscp rig trnso       31575................  diagnostic laryngoscopy.
                                     biopsy.
43194.............................  Esophagoscp rig trnso rem   31575................  diagnostic laryngoscopy.
                                     fb.
43195.............................  Esophagoscopy rigid         31575................  diagnostic laryngoscopy.
                                     balloon.
43196.............................  Esophagoscp guide wire      31638................  bronchoscopy revise
                                     dilat.                                             stent.
43197.............................  Esophagoscopy flex dx       31575................  diagnostic laryngoscopy.
                                     brush.
43198.............................  Esophagosc flex trnsn       31575................  diagnostic laryngoscopy.
                                     biopsy.
43200.............................  Esophagoscopy flexible      43200................  esophagoscopy flexible
                                     brush.                                             brush.
43201.............................  Esoph scope w/submucous     43201................  esoph scope w/submucous
                                     inj.                                               inj.
43202.............................  Esophagoscopy flex biopsy.  43202................  esophagoscopy flex
                                                                                        biopsy.
43204.............................  Esoph scope w/sclerosis     43204................  esoph scope w/sclerosis
                                     inj.                                               inj.
43205.............................  Esophagus endoscopy/        43205................  esophagus endoscopy/
                                     ligation.                                          ligation.
43206.............................  Esoph optical               43200................  esophagoscopy flexible
                                     endomicroscopy.                                    brush.
43211.............................  Esophagoscop mucosal        43201................  esoph scope w/submucous
                                     resect.                                            inj.
43212.............................  Esophagoscop stent          43219................  esophagus endoscopy.
                                     placement.
43213.............................  Esophagoscopy retro         43456................  dilate esophagus.
                                     balloon.
43214.............................  Esophagosc dilate balloon   43458................  dilate esophagus.
                                     30.
43215.............................  Esophagoscopy flex remove   43215................  esophagoscopy flex remove
                                     fb.                                                fb.
43216.............................  Esophagoscopy lesion        43216................  esophagoscopy lesion
                                     removal.                                           removal.
43217.............................  Esophagoscopy snare les     43217................  esophagoscopy snare les
                                     remv.                                              remv.
43220.............................  Esophagoscopy balloon       43220................  esophagoscopy balloon
                                     us needle   43232................  esophagoscopy w/us needle
                                     bx.                                                bx.
43233.............................  Egd balloon dil esoph30 mm/ 43271................  endo
                                     >.                                                 cholangiopancreatograph.
43235.............................  Egd diagnostic brush wash.  43235................  egd diagnostic brush
                                                                                        wash.
43236.............................  Uppr gi scope w/submuc inj  43236................  uppr gi scope w/submuc
                                                                                        inj.
43237.............................  Endoscopic us exam esoph..  43237................  endoscopic us exam esoph.
43238.............................  Egd us fine needle bx/      43238................  egd us fine needle bx/
                                     aspir.                                             aspir.
43239.............................  Egd biopsy single/multiple  43239................  egd biopsy single/
                                                                                        multiple.
43240.............................  Egd w/transmural drain      43240................  egd w/transmural drain
                                     cyst.                                              cyst.
43241.............................  Egd tube/cath insertion...  43241................  egd tube/cath insertion.
43242.............................  Egd us fine needle bx/      43242................  egd us fine needle bx/
                                     aspir.                                             aspir.
43243.............................  Egd injection varices.....  43243................  egd injection varices.
43244.............................  Egd varices ligation......  43244................  egd varices ligation.
43245.............................  Egd dilate stricture......  43245................  egd dilate stricture.
43246.............................  Egd place gastrostomy tube  43246................  egd place gastrostomy
                                                                                        tube.
43247.............................  Egd remove foreign body...  43247................  egd remove foreign body.
43248.............................  Egd guide wire insertion..  43248................  egd guide wire insertion.
43249.............................  Esoph egd dilation     43242................  egd us fine needle bx/
                                     mark.                                              aspir.
43254.............................  Egd endo mucosal resection  43251................  egd remove lesion snare.
43255.............................  Egd control bleeding any..  43255................  egd control bleeding any.
43257.............................  Egd w/thrml txmnt gerd....  43257................  egd w/thrml txmnt gerd.
43259.............................  Egd us exam duodenum/       43259................  egd us exam duodenum/
                                     jejunum.                                           jejunum.
43260.............................  Ercp w/specimen collection  43260................  ercp w/specimen
                                                                                        collection.
43261.............................  Endo                        43261................  endo
                                     cholangiopancreatograph.                           cholangiopancreatograph.
43262.............................  Endo                        43262................  endo
                                     cholangiopancreatograph.                           cholangiopancreatograph.
43263.............................  Ercp sphincter pressure     43263................  ercp sphincter pressure
                                     meas.                                              meas.
43264.............................  Ercp remove duct calculi..  43264................  ercp remove duct calculi.
43265.............................  Ercp lithotripsy calculi..  43265................  ercp lithotripsy calculi.
43266.............................  Egd endoscopic stent place  43256................  uppr gi endoscopy w/
                                                                                        stent.
43270.............................  Egd lesion ablation.......  43258................  operative upper gi
                                                                                        endoscopy.
43273.............................  Endoscopic pancreatoscopy.  43273................  endoscopic
                                                                                        pancreatoscopy.
43274.............................  Ercp duct stent placement.  43268................  endo
                                                                                        cholangiopancreatograph.
43275.............................  Ercp remove forgn body      43269................  endo
                                     duct.                                              cholangiopancreatograph.
43276.............................  Ercp stent exchange w/      43269................  endo
                                     dilate.                                            cholangiopancreatograph.
43277.............................  Ercp ea duct/ampulla        43271................  endo
                                     dilate.                                            cholangiopancreatograph.
43278.............................  Ercp lesion ablate w/       43272................  endo
                                     dilate.                                            cholangiopancreatograph.
43450.............................  Dilate esophagus 1/mult     43450................  dilate esophagus 1/mult
                                     pass.                                              pass.
43453.............................  Dilate esophagus..........  43453................  dilate esophagus.
49405.............................  Image cath fluid colxn      37200................  transcatheter biopsy.
                                     visc.

[[Page 74377]]

 
49406.............................  Image cath fluid peri/      37200................  transcatheter biopsy.
                                     retro.
49407.............................  Image cath fluid trns/vgnl  37200................  transcatheter biopsy.
50360.............................  Transplantation of kidney.  50360................  transplantation of
                                                                                        kidney.
52332.............................  Cystoscopy and treatment..  52332................  cystoscopy and treatment.
52353.............................  Cystouretero w/lithotripsy  52353................  cystouretero w/
                                                                                        lithotripsy.
52356.............................  Cysto/uretero w/            52353................  cystouretero w/
                                     lithotripsy.                                       lithotripsy.
62310.............................  Inject spine cerv/thoracic  62310................  inject spine cerv/
                                                                                        thoracic.
62311.............................  Inject spine lumbar/sacral  62311................  inject spine lumbar/
                                                                                        sacral.
62318.............................  Inject spine w/cath crv/    62318................  inject spine w/cath crv/
                                     thrc.                                              thrc.
62319.............................  Inject spine w/cath lmb/    62319................  inject spine w/cath lmb/
                                     scrl.                                              scrl.
63047.............................  Remove spine lamina 1 lmbr  63047................  remove spine lamina 1
                                                                                        lmbr.
63048.............................  Remove spinal lamina add-   63048................  remove spinal lamina add-
                                     on.                                                on.
63650.............................  Implant neuroelectrodes...  63650................  implant neuroelectrodes.
64613.............................  Destroy nerve neck muscle.  64613................  destroy nerve neck
                                                                                        muscle.
64614.............................  Destroy nerve extrem musc.  64614................  destroy nerve extrem
                                                                                        musc.
64616.............................  Chemodenerv musc neck       64613................  destroy nerve neck
                                     dyston.                                            muscle.
64617.............................  Chemodener muscle larynx    31513................  injection into vocal
                                     emg.                                               cord.
64642.............................  Chemodenerv 1 extremity 1-  64614................  destroy nerve extrem
                                     4.                                                 musc.
64643.............................  Chemodenerv 1 extrem 1-4    64614................  destroy nerve extrem
                                     ea.                                                musc.
64644.............................  Chemodenerv 1 extrem 5/>    64614................  destroy nerve extrem
                                     mus.                                               musc.
64645.............................  Chemodenerv 1 extrem 5/>    64614................  destroy nerve extrem
                                     ea.                                                musc.
64646.............................  Chemodenerv trunk musc 1-5  64614................  destroy nerve extrem
                                                                                        musc.
64647.............................  Chemodenerv trunk musc 6/>  64614................  destroy nerve extrem
                                                                                        musc.
66180.............................  Implant eye shunt.........  66180................  implant eye shunt.
66183.............................  Insert ant drainage device  65850................  incision of eye.
66185.............................  Revise eye shunt..........  66185................  revise eye shunt.
67255.............................  Reinforce/graft eye wall..  67255................  reinforce/graft eye wall.
67914.............................  Repair eyelid defect......  67914................  repair eyelid defect.
67915.............................  Repair eyelid defect......  67915................  repair eyelid defect.
67916.............................  Repair eyelid defect......  67916................  repair eyelid defect.
67917.............................  Repair eyelid defect......  67917................  repair eyelid defect.
67921.............................  Repair eyelid defect......  67921................  repair eyelid defect.
67922.............................  Repair eyelid defect......  67922................  repair eyelid defect.
67923.............................  Repair eyelid defect......  67923................  repair eyelid defect.
67924.............................  Repair eyelid defect......  67924................  repair eyelid defect.
69210.............................  Remove impacted ear wax     69210................  remove impacted ear wax
                                     uni.                                               uni.
70450.............................  Ct head/brain w/o dye.....  70450................  ct head/brain w/o dye.
70460.............................  Ct head/brain w/dye.......  70460................  ct head/brain w/dye.
70551.............................  Mri brain stem w/o dye....  70551................  mri brain stem w/o dye.
70552.............................  Mri brain stem w/dye......  70552................  mri brain stem w/dye.
70553.............................  Mri brain stem w/o & w/dye  70553................  mri brain stem w/o & w/
                                                                                        dye.
72141.............................  Mri neck spine w/o dye....  72141................  mri neck spine w/o dye.
72142.............................  Mri neck spine w/dye......  72142................  mri neck spine w/dye.
72146.............................  Mri chest spine w/o dye...  72146................  mri chest spine w/o dye.
72147.............................  Mri chest spine w/dye.....  72147................  mri chest spine w/dye.
72148.............................  Mri lumbar spine w/o dye..  72148................  mri lumbar spine w/o dye.
72149.............................  Mri lumbar spine w/dye....  72149................  mri lumbar spine w/dye.
72156.............................  Mri neck spine w/o & w/dye  72156................  mri neck spine w/o & w/
                                                                                        dye.
72157.............................  Mri chest spine w/o & w/    72157................  mri chest spine w/o & w/
                                     dye.                                               dye.
72158.............................  Mri lumbar spine w/o & w/   72158................  mri lumbar spine w/o & w/
                                     dye.                                               dye.
72191.............................  Ct angiograph pelv w/o&w/   72191................  ct angiograph pelv w/o&w/
                                     dye.                                               dye.
74174.............................  Ct angio abd&pelv w/o&w/    74174................  ct angio abd&pelv w/o&w/
                                     dye.                                               dye.
74175.............................  Ct angio abdom w/o & w/dye  74175................  ct angio abdom w/o & w/
                                                                                        dye.
77001.............................  Fluoroguide for vein        77001................  fluoroguide for vein
                                     device.                                            device.
77002.............................  Needle localization by      77002................  needle localization by
                                     xray.                                              xray.
77003.............................  Fluoroguide for spine       77003................  fluoroguide for spine
                                     inject.                                            inject.
77280.............................  Set radiation therapy       77280................  set radiation therapy
                                     field.                                             field.
77285.............................  Set radiation therapy       77285................  set radiation therapy
                                     field.                                             field.
77290.............................  Set radiation therapy       77290................  set radiation therapy
                                     field.                                             field.
77293.............................  Respirator motion mgmt      77470................  special radiation
                                     simul.                                             treatment.
77295.............................  3-d radiotherapy plan.....  77295................  3-d radiotherapy plan.
77301.............................  Radiotherapy dose plan      77301................  radiotherapy dose plan
                                     imrt.                                              imrt.
77336.............................  Radiation physics consult.  77336................  radiation physics
                                                                                        consult.
77338.............................  Design mlc device for imrt  77338................  design mlc device for
                                                                                        imrt.
77372.............................  Srs linear based..........  77372................  srs linear based.
77373.............................  Sbrt delivery.............  77373................  sbrt delivery.
77402.............................  Radiation treatment         77402................  radiation treatment
                                     delivery.                                          delivery.
77403.............................  Radiation treatment         77403................  radiation treatment
                                     delivery.                                          delivery.
77404.............................  Radiation treatment         77404................  radiation treatment
                                     delivery.                                          delivery.
77406.............................  Radiation treatment         77406................  radiation treatment
                                     delivery.                                          delivery.
77407.............................  Radiation treatment         77407................  radiation treatment
                                     delivery.                                          delivery.
77408.............................  Radiation treatment         77408................  radiation treatment
                                     delivery.                                          delivery.
77409.............................  Radiation treatment         77409................  radiation treatment
                                     delivery.                                          delivery.

[[Page 74378]]

 
77411.............................  Radiation treatment         77411................  radiation treatment
                                     delivery.                                          delivery.
77412.............................  Radiation treatment         77412................  radiation treatment
                                     delivery.                                          delivery.
77413.............................  Radiation treatment         77413................  radiation treatment
                                     delivery.                                          delivery.
77414.............................  Radiation treatment         77414................  radiation treatment
                                     delivery.                                          delivery.
77416.............................  Radiation treatment         77416................  radiation treatment
                                     delivery.                                          delivery.
77417.............................  Radiology port film(s)....  77417................  radiology port film(s).
77600.............................  Hyperthermia treatment....  77600................  hyperthermia treatment.
77785.............................  Hdr brachytx 1 channel....  77785................  hdr brachytx 1 channel.
77786.............................  Hdr brachytx 2-12 channel.  77786................  hdr brachytx 2-12
                                                                                        channel.
77787.............................  Hdr brachytx over 12 chan.  77787................  hdr brachytx over 12
                                                                                        chan.
78072.............................  Parathyrd planar w/         78452................  ht muscle image spect
                                     spect&ct.                                          mult.
88112.............................  Cytopath cell enhance tech  88112................  cytopath cell enhance
                                                                                        tech.
88365.............................  Insitu hybridization        88365................  insitu hybridization
                                     (fish).                                            (fish).
88367.............................  Insitu hybridization auto.  88367................  insitu hybridization
                                                                                        auto.
88368.............................  Insitu hybridization        88368................  insitu hybridization
                                     manual.                                            manual.
90785.............................  Psytx complex interactive.  90836................  psytx pt&/fam w/e&m 45
                                                                                        min.
90791.............................  Psych diagnostic            90846................  family psytx w/o patient.
                                     evaluation.
90792.............................  Psych diag eval w/med       90846................  family psytx w/o patient.
                                     srvcs.
90832.............................  Psytx pt&/family 30         90846................  family psytx w/o patient.
                                     minutes.
90833.............................  Psytx pt&/fam w/e&m 30 min  90846................  family psytx w/o patient.
90834.............................  Psytx pt&/family 45         90846................  family psytx w/o patient.
                                     minutes.
90836.............................  Psytx pt&/fam w/e&m 45 min  90846................  family psytx w/o patient.
90837.............................  Psytx pt&/family 60         90846................  family psytx w/o patient.
                                     minutes.
90838.............................  Psytx pt&/fam w/e&m 60 min  90846................  family psytx w/o patient.
90839.............................  Psytx crisis initial 60     90837................  psytx pt&/family 60
                                     min.                                               minutes.
90840.............................  Psytx crisis ea addl 30     90833................  psytx pt&/fam w/e&m 30
                                     min.                                               min.
90845.............................  Psychoanalysis............  90845................  psychoanalysis.
90846.............................  Family psytx w/o patient..  90846................  family psytx w/o patient.
90847.............................  Family psytx w/patient....  90847................  family psytx w/patient.
90853.............................  Group psychotherapy.......  90853................  group psychotherapy.
91065.............................  Breath hydrogen/methane     91065................  breath hydrogen/methane
                                     test.                                              test.
92521.............................  Evaluation of speech        96105................  assessment of aphasia.
                                     fluency.
92522.............................  Evaluate speech production  96105................  assessment of aphasia.
92523.............................  Speech sound lang           96105................  assessment of aphasia.
                                     comprehen.
92524.............................  Behavral qualit analys      92520................  laryngeal function
                                     voice.                                             studies.
93000.............................  Electrocardiogram complete  93000................  electrocardiogram
                                                                                        complete.
93005.............................  Electrocardiogram tracing.  93005................  electrocardiogram
                                                                                        tracing.
93010.............................  Electrocardiogram report..  93010................  electrocardiogram report.
93582.............................  Perq transcath closure pda  93580................  transcath closure of asd.
93583.............................  Perq transcath septal       93580................  transcath closure of asd.
                                     reduxn.
93880.............................  Extracranial bilat study..  93880................  extracranial bilat study.
93882.............................  Extracranial uni/ltd study  93882................  extracranial uni/ltd
                                                                                        study.
94667.............................  Chest wall manipulation...  94667................  chest wall manipulation.
94668.............................  Chest wall manipulation...  94668................  chest wall manipulation.
94669.............................  Mechanical chest wall       94668................  chest wall manipulation.
                                     oscill.
95816.............................  Eeg awake and drowsy......  95816................  eeg awake and drowsy.
95819.............................  Eeg awake and asleep......  95819................  eeg awake and asleep.
95822.............................  Eeg coma or sleep only....  95822................  eeg coma or sleep only.
95886.............................  Musc test done w/n test     95886................  musc test done w/n test
                                     comp.                                              comp.
95887.............................  Musc tst done w/n tst       95887................  musc tst done w/n tst
                                     nonext.                                            nonext.
95928.............................  C motor evoked uppr limbs.  95928................  c motor evoked uppr
                                                                                        limbs.
95929.............................  C motor evoked lwr limbs..  95929................  c motor evoked lwr limbs.
96365.............................  Ther/proph/diag iv inf      96365................  ther/proph/diag iv inf
                                     init.                                              init.
96366.............................  Ther/proph/diag iv inf      96366................  ther/proph/diag iv inf
                                     addon.                                             addon.
96367.............................  Tx/proph/dg addl seq iv     96367................  tx/proph/dg addl seq iv
                                     inf.                                               inf.
96368.............................  Ther/diag concurrent inf..  96368................  ther/diag concurrent inf.
96413.............................  Chemo iv infusion 1 hr....  96413................  chemo iv infusion 1 hr.
96415.............................  Chemo iv infusion addl hr.  96415................  chemo iv infusion addl
                                                                                        hr.
96417.............................  Chemo iv infus each addl    96417................  chemo iv infus each addl
                                     seq.                                               seq.
98940.............................  Chiropract manj 1-2         98940................  chiropract manj 1-2
                                     regions.                                           regions.
98941.............................  Chiropract manj 3-4         98941................  chiropract manj 3-4
                                     regions.                                           regions.
98942.............................  Chiropractic manj 5         98942................  chiropractic manj 5
                                     regions.                                           regions.
98943.............................  Chiropract manj xtrspinl 1/ 98943................  chiropract manj xtrspinl
                                     >.                                                 1/>.
99170.............................  Anogenital exam child w     99170................  anogenital exam child w
                                     imag.                                              imag.
70450 26..........................  Ct head/brain w/o dye.....  70450 26.............  ct head/brain w/o dye.
70450 TC..........................  Ct head/brain w/o dye.....  70450 TC.............  ct head/brain w/o dye.
70460 26..........................  Ct head/brain w/dye.......  70460 26.............  ct head/brain w/dye.
70460 TC..........................  Ct head/brain w/dye.......  70460 TC.............  ct head/brain w/dye.
70551 26..........................  Mri brain stem w/o dye....  70551 26.............  mri brain stem w/o dye.
70551 TC..........................  Mri brain stem w/o dye....  70551 TC.............  mri brain stem w/o dye.
70552 26..........................  Mri brain stem w/dye......  70552 26.............  mri brain stem w/dye.
70552 TC..........................  Mri brain stem w/dye......  70552 TC.............  mri brain stem w/dye.
70553 26..........................  Mri brain stem w/o & w/dye  70553 26.............  mri brain stem w/o & w/
                                                                                        dye.

[[Page 74379]]

 
70553 TC..........................  Mri brain stem w/o & w/dye  70553 tc.............  mri brain stem w/o & w/
                                                                                        dye.
72141 26..........................  Mri neck spine w/o dye....  72141 26.............  mri neck spine w/o dye.
72141 TC..........................  Mri neck spine w/o dye....  72141 TC.............  mri neck spine w/o dye.
72142 26..........................  Mri neck spine w/dye......  72142 26.............  mri neck spine w/dye.
72142 TC..........................  Mri neck spine w/dye......  72142 TC.............  mri neck spine w/dye.
72146 26..........................  Mri chest spine w/o dye...  72146 26.............  mri chest spine w/o dye.
72146 TC..........................  Mri chest spine w/o dye...  72146 TC.............  mri chest spine w/o dye.
72147 26..........................  Mri chest spine w/dye.....  72147 26.............  mri chest spine w/dye.
72147 TC..........................  Mri chest spine w/dye.....  72147 TC.............  mri chest spine w/dye.
72148 26..........................  Mri lumbar spine w/o dye..  72148 26.............  mri lumbar spine w/o dye.
72148 TC..........................  Mri lumbar spine w/o dye..  72148 TC.............  mri lumbar spine w/o dye.
72149 26..........................  Mri lumbar spine w/dye....  72149 26.............  mri lumbar spine w/dye.
72149 TC..........................  Mri lumbar spine w/dye....  72149 TC.............  mri lumbar spine w/dye.
72156 26..........................  Mri neck spine w/o & w/dye  72156 26.............  mri neck spine w/o & w/
                                                                                        dye.
72156 TC..........................  Mri neck spine w/o & w/dye  72156 TC.............  mri neck spine w/o & w/
                                                                                        dye.
72157 26..........................  Mri chest spine w/o & w/    72157 26.............  mri chest spine w/o & w/
                                     dye.                                               dye.
72157 TC..........................  Mri chest spine w/o & w/    72157 TC.............  mri chest spine w/o & w/
                                     dye.                                               dye.
72158 26..........................  Mri lumbar spine w/o & w/   72158 26.............  mri lumbar spine w/o & w/
                                     dye.                                               dye.
72158 TC..........................  Mri lumbar spine w/o & w/   72158 TC.............  mri lumbar spine w/o & w/
                                     dye.                                               dye.
72191 26..........................  Ct angiograph pelv w/o&w/   72191 26.............  ct angiograph pelv w/o&w/
                                     dye.                                               dye.
72191 TC..........................  Ct angiograph pelv w/o&w/   72191 TC.............  ct angiograph pelv w/o&w/
                                     dye.                                               dye.
74174 26..........................  Ct angio abd&pelv w/o&w/    74174 26.............  ct angio abd&pelv w/o&w/
                                     dye.                                               dye.
74174 TC..........................  Ct angio abd&pelv w/o&w/    74174 TC.............  ct angio abd&pelv w/o&w/
                                     dye.                                               dye.
74175 26..........................  Ct angio abdom w/o & w/dye  74175 26.............  ct angio abdom w/o & w/
                                                                                        dye.
74175 TC..........................  Ct angio abdom w/o & w/dye  74175 TC.............  ct angio abdom w/o & w/
                                                                                        dye.
77001 26..........................  Fluoroguide for vein        77001 26.............  fluoroguide for vein
                                     device.                                            device.
77001 TC..........................  Fluoroguide for vein        77001 TC.............  fluoroguide for vein
                                     device.                                            device.
77002 26..........................  Needle localization by      77002 26.............  needle localization by
                                     xray.                                              xray.
77002 TC..........................  Needle localization by      77002 TC.............  needle localization by
                                     xray.                                              xray.
77003 26..........................  Fluoroguide for spine       77003 26.............  fluoroguide for spine
                                     inject.                                            inject.
77003 TC..........................  Fluoroguide for spine       77003 TC.............  fluoroguide for spine
                                     inject.                                            inject.
77280 26..........................  Set radiation therapy       77280 26.............  set radiation therapy
                                     field.                                             field.
77280 TC..........................  Set radiation therapy       77280 TC.............  set radiation therapy
                                     field.                                             field.
77285 26..........................  Set radiation therapy       77285 26.............  set radiation therapy
                                     field.                                             field.
77285 TC..........................  Set radiation therapy       77285 TC.............  set radiation therapy
                                     field.                                             field.
77290 26..........................  Set radiation therapy       77290 26.............  set radiation therapy
                                     field.                                             field.
77290 TC..........................  Set radiation therapy       77290 TC.............  set radiation therapy
                                     field.                                             field.
77293 26..........................  Respirator motion mgmt      77470 26.............  special radiation
                                     simul.                                             treatment.
77293 TC..........................  Respirator motion mgmt      77470 TC.............  special radiation
                                     simul.                                             treatment.
77295 26..........................  3-d radiotherapy plan.....  77295 26.............  3-d radiotherapy plan.
77295 TC..........................  3-d radiotherapy plan.....  77295 TC.............  3-d radiotherapy plan.
77301 26..........................  Radiotherapy dose plan      77301 26.............  radiotherapy dose plan
                                     imrt.                                              imrt.
77301 TC..........................  Radiotherapy dose plan      77301 TC.............  radiotherapy dose plan
                                     imrt.                                              imrt.
77338 26..........................  Design mlc device for imrt  77338 26.............  design mlc device for
                                                                                        imrt.
77338 TC..........................  Design mlc device for imrt  77338 TC.............  design mlc device for
                                                                                        imrt.
77600 26..........................  Hyperthermia treatment....  77600 26.............  hyperthermia treatment.
77600 TC..........................  Hyperthermia treatment....  77600 TC.............  hyperthermia treatment.
77785 26..........................  Hdr brachytx 1 channel....  77785 26.............  hdr brachytx 1 channel.
77785 TC..........................  Hdr brachytx 1 channel....  77785 TC.............  hdr brachytx 1 channel.
77786 26..........................  Hdr brachytx 2-12 channel.  77786 26.............  hdr brachytx 2-12
                                                                                        channel.
77786 TC..........................  Hdr brachytx 2-12 channel.  77786 TC.............  hdr brachytx 2-12
                                                                                        channel.
77787 26..........................  Hdr brachytx over 12 chan.  77787 26.............  hdr brachytx over 12
                                                                                        chan.
77787 TC..........................  Hdr brachytx over 12 chan.  77787 TC.............  hdr brachytx over 12
                                                                                        chan.
88112 26..........................  Cytopath cell enhance tech  88112 26.............  cytopath cell enhance
                                                                                        tech.
88112 TC..........................  Cytopath cell enhance tech  88112 TC.............  cytopath cell enhance
                                                                                        tech.
88365 26..........................  Insitu hybridization        88365 26.............  insitu hybridization
                                     (fish).                                            (fish).
88365 TC..........................  Insitu hybridization        88365 TC.............  insitu hybridization
                                     (fish).                                            (fish).
88367 26..........................  Insitu hybridization auto.  88367 26.............  insitu hybridization
                                                                                        auto.
88367 TC..........................  Insitu hybridization auto.  88367 TC.............  insitu hybridization
                                                                                        auto.
88368 26..........................  Insitu hybridization        88368 26.............  insitu hybridization
                                     manual.                                            manual.
88368 TC..........................  Insitu hybridization        88368 TC.............  insitu hybridization
                                     manual.                                            manual.
91065 26..........................  Breath hydrogen/methane     91065 26.............  breath hydrogen/methane
                                     test.                                              test.
91065 TC..........................  Breath hydrogen/methane     91065 TC.............  breath hydrogen/methane
                                     test.                                              test.
93880 26..........................  Extracranial bilat study..  93880 26.............  extracranial bilat study.
93880 TC..........................  Extracranial bilat study..  93880 TC.............  extracranial bilat study.
93882 26..........................  Extracranial uni/ltd study  93882 26.............  extracranial uni/ltd
                                                                                        study.
93882 TC..........................  Extracranial uni/ltd study  93882 TC.............  extracranial uni/ltd
                                                                                        study.
95816 26..........................  Eeg awake and drowsy......  95816 26.............  eeg awake and drowsy.
95816 TC..........................  Eeg awake and drowsy......  95816 TC.............  eeg awake and drowsy.
95819 26..........................  Eeg awake and asleep......  95819 26.............  eeg awake and asleep.
95819 TC..........................  Eeg awake and asleep......  95819 TC.............  eeg awake and asleep.
95822 26..........................  Eeg coma or sleep only....  95822 26.............  eeg coma or sleep only.
95822 TC..........................  Eeg coma or sleep only....  95822 TC.............  eeg coma or sleep only.

[[Page 74380]]

 
95928 26..........................  C motor evoked uppr limbs.  95928 26.............  c motor evoked uppr
                                                                                        limbs.
95928 TC..........................  C motor evoked uppr limbs.  95928 TC.............  c motor evoked uppr
                                                                                        limbs.
95929 26..........................  C motor evoked lwr limbs..  95929 26.............  c motor evoked lwr limbs.
95929 TC..........................  C motor evoked lwr limbs..  95929 TC.............  c motor evoked lwr limbs.
G0453.............................  Cont intraop neuro monitor  95920................  intraop nerve test add-
                                                                                        on.
G0455.............................  Fecal microbiota prep       91065................  breath hydrogen/methane
                                     instil.                                            test.
G0461.............................  Immunohistochemistry, init  88342................  immunohisto antibody
                                                                                        slide.
G0462.............................  Immunohistochemistry, addl  88342................  immunohisto antibody
                                                                                        slide
----------------------------------------------------------------------------------------------------------------

F. 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 MP). The 
89 total PFS localities are discussed in section II.F.3. of this final 
rule with comment period. Although requiring that the PE and MP GPCIs 
reflect the full relative cost differences, section 1848(e)(1)(A)(iii) 
of the Act requires that the 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 permanent 1.5 work 
GPCI floor for services furnished in Alaska beginning January 1, 2009, 
and section 1848(e)(1)(I) of the Act sets a permanent 1.0 PE GPCI floor 
for services furnished in frontier states (as defined in section 
1848(e)(1)(I) of the Act) beginning January 1, 2011. Additionally, 
section 1848(e)(1)(E) of the Act provided for a 1.0 floor for the work 
GPCIs, which was set to expire at the end of 2012. Section 602 of the 
ATRA amended the statute to extend the 1.0 floor for the work GPCIs 
through CY 2013 (that is, for services furnished no later than December 
31, 2013).
    Section 1848(e)(1)(C) of the Act requires us to review and, if 
necessary, adjust the GPCIs at least every 3 years. Section 
1848(e)(1)(C) of the Act requires that ``if more than 1 year has 
elapsed since the date of the last previous GPCI adjustment, the 
adjustment to be applied in the first year of the next adjustment shall 
be 1/2 of the adjustment that otherwise would be made.'' Therefore, 
since the previous GPCI update was implemented in CY 2011 and CY 2012, 
we proposed to phase in 1/2 of the latest GPCI adjustment in CY 2014.
    We completed a review of the GPCIs and proposed new GPCIs, as well 
as a revision to the cost share weights that correspond to all three 
GPCIs in the CY 2014 proposed rule. We also calculated a corresponding 
geographic adjustment factor (GAF) for each PFS locality. The GAFs are 
a weighted composite of each area's work, PE and MP GPCIs using the 
national GPCI cost share weights. Although the GAFs are not used in 
computing the fee schedule payment for a specific service, we provide 
them because they are useful in comparing overall areas costs and 
payments. The actual effect on payment for any actual service will 
deviate from the GAF to the extent that the proportions of work, PE and 
MP RVUs for the service differ from those of the GAF.
    As noted above, section 602 of the ATRA extended the 1.0 work GPCI 
floor only through December 31, 2013. Therefore, the proposed CY 2014 
work GPCIs and summarized GAFs do not reflect the 1.0 work floor. 
However, as required by sections 1848(e)(1)(G) and 1848(e)(1)(I) of the 
Act, the 1.5 work GPCI floor for Alaska and the 1.0 PE GPCI floor for 
frontier states are permanent, and therefore, applicable in CY 2014
2. GPCI Update
    As discussed in the CY 2014 PFS proposed rule (78 FR 43322), the 
proposed updated GPCI values were calculated by a contractor to CMS. 
There are three GPCIs (work, PE, and MP), and all GPCIs are calculated 
through comparison to a national average for each type. Additionally, 
each of the three GPCIs relies on its own data source(s) and 
methodology for calculating its value as described below. Additional 
information on the proposed CY 2014 GPCI update may be found in our 
contractor's draft report, ``Draft Report on the CY 2014 Update of the 
Geographic Practice Cost Index for the Medicare Physician Fee 
Schedule,'' which is available on the CMS Web site. It is located under 
the supporting documents section of the CY 2014 PFS proposed rule 
located at http://www.cms.gov/Medicare/Medicare-Fee-for-Service-
Payment/PhysicianFeeSched/PFS-Federal-Regulation-Notices.html. Note: 
Our contractor's final report and associated analysis will be posted on 
the CMS Web site after publication of this final rule with comment 
period (under the downloads section of the CY 2014 PFS final rule.
a. Work GPCIs
    The physician work GPCIs are designed to reflect the relative costs 
of physician labor by Medicare PFS locality. As required by statute, 
the physician work GPCI reflects one quarter of the relative wage 
differences for each locality compared to the national average.
    To calculate the physician work GPCIs, we use wage data for seven 
professional specialty occupation categories, adjusted to reflect one-
quarter of the relative cost differences for each locality compared to 
the national average, as a proxy for physicians' wages. Physicians' 
wages are not included in the occupation categories used in calculating 
the work GPCI because Medicare payments are a key determinant of 
physicians' earnings. Including physician wage data in calculating the 
work GPCIs would potentially introduce some circularity to the 
adjustment since Medicare payments typically contribute to or influence 
physician wages. That is, including physicians' wages in the physician 
work GPCIs would, in effect, make the indices, to some extent, 
dependent upon Medicare payments.
    The physician work GPCI updates in CYs 2001, 2003, 2005, and 2008 
were based on professional earnings data from the 2000 Census. However, 
for the CY 2011 GPCI update (75 FR 73252), the 2000 data were outdated 
and wage and earnings data were not available from the more recent 
Census because the ``long form'' was discontinued. Therefore, we used 
the median hourly earnings from the 2006 through 2008 Bureau of Labor 
Statistics (BLS) Occupational Employment Statistics (OES) wage data as 
a replacement for the 2000 Census data. The BLS OES data meet several 
criteria that we consider to be important for selecting a data source 
for purposes of calculating

[[Page 74381]]

the GPCIs. For example, the BLS OES wage and employment data are 
derived from a large sample size of approximately 200,000 
establishments of varying sizes nationwide from every metropolitan area 
and can be easily accessible to the public at no cost. Additionally, 
the BLS OES is updated regularly, and includes a comprehensive set of 
occupations and industries (for example, 800 occupations in 450 
industries).
    Because of its reliability, public availability, level of detail, 
and national scope, we believe the BLS OES continues to be the most 
appropriate source of wage and employment data for use in calculating 
the work GPCIs (and as discussed in section II.F.2.b the employee wage 
component and purchased services component of the PE GPCI). Therefore, 
for the proposed CY 2014 GPCI update, we used updated BLS OES data 
(2009 through 2011) as a replacement for the 2006 through 2008 data to 
compute the work GPCIs.
b. Practice Expense GPCIs
    The PE GPCIs are designed to measure the relative cost difference 
in the mix of goods and services comprising practice expenses (not 
including malpractice expenses) among the PFS localities as compared to 
the national average of these costs. Whereas the physician work GPCIs 
(and as discussed later in this section, the MP GPCIs) are comprised of 
a single index, the PE GPCIs are comprised of four component indices 
(employee wages; purchased services; office rent; and equipment, 
supplies and other miscellaneous expenses). The employee wage index 
component measures geographic variation in the cost of the kinds of 
skilled and unskilled labor that would be directly employed by a 
physician practice. Although the employee wage index adjusts for 
geographic variation in the cost of labor employed directly by 
physician practices, it does not account for geographic variation in 
the cost of services that typically would be purchased from other 
entities, such as law firms, accounting firms, information technology 
consultants, building service managers, or any other third-party 
vendor. The purchased services index component of the PE GPCI (which is 
a separate index from employee wages) measures geographic variation in 
the cost of contracted services that physician practices would 
typically buy. (For more information on the development of the 
purchased service index, we refer readers to the CY 2012 PFS final rule 
with comment period (76 FR 73084 through 73085).) The office rent index 
component of the PE GPCI measures relative geographic variation in the 
cost of typical physician office rents. For the medical equipment, 
supplies, and miscellaneous expenses component, we believe there is a 
national market for these items such that there is not significant 
geographic variation in costs. Therefore, the ``equipment, supplies and 
other miscellaneous expense'' cost index component of the PE GPCI is 
given a value of 1.000 for each PFS locality.
    For the previous update to the GPCIs (implemented in CY 2011 and CY 
2012) we used 2006 through 2008 BLS OES data to calculate the employee 
wage and purchased services indices for the PE GPCI. As we discussed in 
the proposed rule because of its reliability, public availability, 
level of detail, and national scope, we continue to believe the BLS OES 
is the most appropriate data source for collecting wage and employment 
data. Therefore, in calculating the proposed CY 2014 GPCI update, we 
used updated BLS OES data (2009 through 2011) as a replacement for the 
2006 through 2008 data for purposes of calculating the employee wage 
component and purchased service index of the PE GPCI.
Office Rent Index Discussion
    Since the inception of the PFS, we have used residential rent data 
(primarily the two-bedroom residential apartment rent data produced by 
the Department of Housing and Urban Development (HUD) at the 50th 
percentile) as the proxy to measure the relative cost difference in 
physician office rents. As discussed in the CY 2012 PFS final rule with 
comment period (76 FR 73084), we had concerns with the continued use of 
the HUD rental data because the data were not updated frequently and 
the Census ``long form,'' which was used to collect the necessary base 
year rents for the HUD Fair Market Rent (FMR) data, was discontinued in 
CY 2010 and would no longer be available for future updates. Therefore, 
we examined the suitability of using 3-year (2006-2008) U.S. Census 
Bureau American Community Survey (ACS) rental data as a proxy for 
physician office rents to replace the HUD data. We determined that the 
ACS is one of the largest nationally representative surveys of 
household rents in the United States conducted annually by the U.S. 
Census Bureau, sampling approximately 3 million addresses with a recent 
response rate above 97 percent, and that it reports rental information 
for residences at the county level. Given that the ACS rental data 
provided a sufficient degree of reliability, is updated annually, and 
was expected to be available for future updates, we used the 2006 
through 2008 ACS 3-year residential rent data as a replacement for the 
HUD data to create the office rent index for the CY 2012 PFS final rule 
with comment (76 FR 73084). For all the same reasons that we used the 
ACS data for the last GPCI update, we proposed to use updated ACS 
residential rent data (2008 through 2010) to calculate the office rent 
component of the PE GPCI. We noted in the proposed rule that when 
responding to the ACS survey, individuals also report whether utilities 
are included in their rent. Thus, the cost of utilities cannot be 
separated from ``gross rents'' since some individuals monthly rent also 
covers the cost of utilities. As discussed in section II.F.2.d., we 
combined the cost weights for fixed capital and utilities when 
assigning a proposed weight to the office rent component of the PE 
GPCI.
    For many years, we have received requests from stakeholders to use 
commercial rent data instead of residential rent data to measure the 
relative cost differences in physician office rent. Additionally, in a 
report entitled ``Geographic Adjustment in Medicare Payment, Phase I: 
Improving Accuracy,'' prepared for CMS under contract and released on 
September 28, 2011, the Institute of Medicine recommended that ``a new 
source of data should be developed to determine the variation in the 
price of commercial office rent per square foot.'' The Institute of 
Medicine report did not identify any new data source and did not 
suggest how a new source of data might be developed. Because we could 
not identify a reliable commercial rental data source that is available 
on a national basis and includes data for non-metropolitan areas, we 
continued to use residential rent data for the CY 2012 GPCI update.
    For the CY 2014 GPCI update, we continued our efforts to identify a 
reliable source of commercial rent data that could be used in 
calculating the rent index. We could not identify a nationally 
representative commercial rent data source that is available in the 
public sector. However, we identified a proprietary commercial rent 
data source that has potential for use in calculating the office rent 
indices in future years. To that end, we are attempting to negotiate an 
agreement with the proprietor to use the data for purposes of 
calculating the office rent component of the PE GPCI.
    One of the challenges of using a proprietary data source is our 
ability to make information available to the public. When using 
government data,

[[Page 74382]]

we are able to release all data for public consideration. However, when 
using a proprietary data source, it is likely that restrictions will be 
imposed on its use and our ability to disclose data. In such a 
situation, those wishing to replicate our calculations based on 
detailed data would also need to purchase the underlying proprietary 
data. We also believe that, generally speaking, a proprietary ``for 
profit'' data source is more susceptible to periodic changes in the 
criteria used for data collection, including possible changes in the 
data collected, the frequency at which the data is updated, changes in 
ownership, and the potential for termination of the survey vehicle 
entirely as changes are made to address economic pressures or 
opportunities. As such, we cannot predict that a given proprietary data 
source will be available in the format needed to develop office rent 
indices in the future. Since we have not identified a nationally 
representative commercial rent data source that is available in the 
public sector, we believe it would be necessary to use a proprietary 
data source for commercial office rent data. That is, in the absence of 
using a proprietary data source, it is unlikely that we would be able 
to use commercial rent data to calculate the office rent index 
component of the PE GPCI. In the proposed rule we requested comments on 
the use of a proprietary commercial rent data source as well as whether 
there is a source for these data that is not proprietary.
c. Malpractice Expense (MP) GPCIs
    The MP GPCIs measure the relative cost differences among PFS 
localities for the purchase of professional liability insurance (PLI). 
The MP 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). 
For the CY 2011 GPCI update (sixth update) we used 2006 and 2007 
malpractice premium data (75 FR 73256). The proposed CY 2014 MP GPCI 
update was developed using 2011 and 2012 premium data.
    Additionally, for the past several GPCI updates, we were not able 
to collect MP premium data from insurer rate filings for the Puerto 
Rico payment locality. For the CY 2014 (seventh) GPCI update, we worked 
directly with the Puerto Rico Insurance Commissioner and Institute of 
Statistics to obtain data on MP insurance premiums that were used to 
calculate an updated MP GPCI for Puerto Rico. We noted in the proposed 
rule that using updated MP premium data would result in a 17 percent 
increase in MP GPCI for the Puerto Rico payment locality under the 
proposed fully phased-in seventh GPCI update, which would be effective 
CY 2015.
d. GPCI Cost Share Weights
    To determine the cost share weights for the proposed CY 2014 GPCIs, 
we used the weights we proposed to use for the CY 2014 value for the 
revised 2006-based MEI as discussed in section II.D. of this final rule 
with comment period. As discussed in detail in that section, the MEI 
was rebased and revised in the CY 2011 PFS final rule with comment 
period (75 FR 73262 through 73277) to reflect the weighted-average 
annual price change for various inputs needed to provide physicians' 
services. We have historically updated the GPCI cost share weights to 
make them consistent with the most recent update to the MEI, and 
proposed to do so again for CY 2014. We would note that consistent with 
this approach, in the CY 2011 proposed rule, the last time the MEI was 
revised, we proposed to update the GPCI cost share weights to reflect 
these revisions to the MEI. However, in response to public comments we 
did not finalize the proposal in the CY 2011 PFS final rule with 
comment period (75 FR 73258 and 73260), so that we could explore public 
comments received suggesting the reallocation of labor related costs 
from the medical equipment, supplies and miscellaneous component to the 
employee compensation component and comments received on the cost share 
weight for the rent index of the PE GPCI as well as to continue our 
analysis of the cost share weights attributed to the PE GPCIs as 
required by section 1848(e)(1)(H)(iv) of the Act.
    In the CY 2012 PFS final rule (76 FR 73085 through 73086) we 
addressed commenter concerns regarding the inclusion of the cost share 
weight assigned to utilities within the office rent component of the PE 
GPCI and to geographically adjust wage related industries contained 
within the medical equipment, supplies and miscellaneous component of 
the PE GPCI. As a result, to accurately capture the utility measurement 
present in the ACS two bedroom gross rent data, the cost share weight 
for utilities was combined with the fixed capital portion to form the 
office rent index. Additionally, we developed a purchased service index 
to geographically adjust the labor-related components of the ``All 
Other Services'' and ``Other Professional Expenses'' categories of the 
2006-based MEI market basket. Upon completing our analysis of the GPCI 
cost share weights (as required by the Act) and addressing commenters' 
concerns regarding the office rent and labor related industries 
previously contained in the medical equipment, supplies and other 
miscellaneous components of the PE GCPI, we updated the GPCI cost share 
weights consistent with the weights established in the 2006-based MEI 
in the CY 2012 PFS final rule (76 FR 73086).
    The proposed revised 2006-based MEI cost share weights reflect our 
actuaries' best estimate of the weights associated with each of the 
various inputs needed to provide physicians' services. Use of the 
current MEI cost share weights also provides consistency across the PFS 
in the use of this data. Given that we have addressed previous 
commenters' concerns about the allocation of labor related costs (as 
discussed earlier in this section) and that we have completed our 
analysis of the GPCI cost share weights (as required by the Act) we 
proposed to adopt the weights we proposed to use for the revised 2006-
based MEI as the GPCI cost share weights for CY 2014.
    Specifically, we proposed to change the cost share weights for the 
work GPCI (as a percentage of the total) from 48.266 percent to 50.866 
percent, and the cost share weight for the PE GPCI from 47.439 percent 
to 44.839 percent. In addition we proposed to change the employee 
compensation component of the PE GPCI from 19.153 to 16.553 percentage 
points. The proposed cost share weights for the office rent component 
(10.223 percent), purchased services component (8.095 percent), and the 
medical equipment, supplies, and other miscellaneous expenses component 
(9.968 percent) of the PE GPCI and the cost share weight for the MP 
GPCI (4.295 percent) remained unchanged. A discussion of the specific 
MEI cost centers and the respective weights used to calculate each GPCI 
component (and subcomponent) is provided below.
(1) Work GPCIs
    We proposed to adopt the proposed revised weight of 50.866 for the 
physician compensation cost category as the proposed work GPCI cost 
share weight.
(2) Practice Expense GPCIs
    For the cost share weight for the PE GPCIs, we used the revised 
2006-based MEI proposed weight for the PE category of 49.134 percent 
minus the PLI category weight of 4.295 percent (because the relative 
costs differences in malpractice expenses are measured by its own 
GPCI). Therefore, the proposed cost share weight for the PE GPCIs is 
44.839 percent.

[[Page 74383]]

(a) Employee Compensation
    For the employee compensation portion of the PE GPCIs, we used the 
proposed non-physician employee compensation category weight of 16.553 
percent reflected in the revised 2006-based MEI.
(b) Office Rent
    We set the PE GPCI office rent portion at 10.223 percent, which 
includes the proposed revised 2006-based MEI cost weights for fixed 
capital (reflecting the expenses for rent, depreciation on medical 
buildings and mortgage interest) and utilities. As discussed previously 
in this section, we proposed to use 2008-2010 ACS rental data as the 
proxy for physician office rent. As mentioned previously, these data 
represent a gross rent amount and include data on utility expenditures. 
Since it is not possible to separate the utilities component of rent 
for all ACS survey respondents, we combined these two components to 
calculate office rent values that were used to calculate the office 
rent index component of the proposed PE GPCI. For purposes of 
consistency, we combined those two cost categories when assigning a 
proposed weight to the office rent component.
(c) Purchased Services
    As discussed in section II.A. of this final rule with comment 
period, to be consistent with the purchased services index, we proposed 
to combine the current MEI cost share weights for ``All Other 
Services'' and ``Other Professional Expenses'' into a component called 
``All Other Professional Services.'' The proposed weight for ``All 
Other Professional Services'' is 8.095. As noted in the CY 2012 PFS 
final rule with comment period (76 FR 73084), we only adjust for 
locality cost differences of the labor-related share of the purchased 
services index. We determined that only 5.011 percentage points of the 
total 8.095 proposed weight are labor-related and, thus, would be 
adjusted for locality cost differences (5.011 adjusted purchased 
service + 3.084 non-adjusted purchased services = 8.095 total cost 
share weight). Therefore, only 62 percent (5.011/8.095) of the 
purchased service index is adjusted for geographic cost differences 
while the remaining 38 percent (3.084/8.095) of the purchased service 
index is not adjusted for geographic variation.
(d) Equipment, Supplies, and Other Miscellaneous Expenses
    To calculate the medical equipment, supplies, and other 
miscellaneous expenses component, we removed PLI (4.295 percentage 
points), non-physician employee compensation (16.553 percentage 
points), fixed capital/utilities (10.223 percentage points), and 
purchased services (8.095 percentage points) from the total proposed PE 
category weight (49.134 percent). Therefore, the proposed cost share 
weight for the medical equipment, supplies, and other miscellaneous 
expenses component is 9.968 percent (49.134 - (4.295 + 16.553 + 10.223 
+ 8.095) = 9.968). As explained above, because we believe there is a 
national market for these items, costs that fall within this component 
of the PE GPCI are not adjusted for geographic variation.
(3) Malpractice GPCIs
    We proposed to use the PLI weight of 4.295 percent for the MP GPCI 
cost share weight. The proposed GPCI cost share weights for CY 2014 are 
displayed in Table 31.

      Table 31--Proposed Cost Share Weights for CY 2014 GPCI Update
------------------------------------------------------------------------
                                       Current cost     Proposed CY 2014
         Expense category              share weight    cost share weight
                                        (percent)          (percent)
------------------------------------------------------------------------
Work..............................             48.266             50.866
Practice Expense (less PLI).......             47.439             44.839
    - Employee Compensation.......             19.153             16.553
    - Office Rent.................             10.223             10.223
    - Purchased Services..........              8.095              8.095
    - Equipment, Supplies, Other..              9.968              9.968
Malpractice Insurance.............              4.295              4.295
                                   -------------------------------------
    Total.........................            100.000            100.000
------------------------------------------------------------------------

e. PE GPCI Floor for Frontier States
    Section 10324(c) of the Affordable Care Act 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 
effective January 1, 2011. In accordance with section 1848(e)(1)(I) of 
the Act, beginning in CY 2011, we applied a 1.0 PE GPCI floor for 
physicians' services furnished in states determined to be frontier 
states. In general, a frontier state is one in which at least 50 
percent of the counties are ``frontier counties,'' which are those that 
have a population per square mile of less than 6. For more information 
on the criteria used to define a frontier state, we refer readers to 
the FY 2011 Inpatient Prospective Payment System final rule (75 FR 
50160 through 50161). There are no changes in the states identified as 
``frontier states'' for CY 2014. The qualifying states are reflected in 
Table 32. In accordance with the Act, we will apply a 1.0 PE GPCI floor 
for these states in CY 2014.

                        Table 32--Frontier States Under Section 1848(E)(1)(I) of the Act
                            [As added by section 10324(c) of the Affordable Care Act]
----------------------------------------------------------------------------------------------------------------
                                                                                             Percent frontier
                                                                                          counties (relative to
                State                       Total counties         Frontier counties      counties in the State)
                                                                                                (percent)
----------------------------------------------------------------------------------------------------------------
Montana..............................                       56                       45                       80
Wyoming..............................                       23                       17                       74

[[Page 74384]]

 
North Dakota.........................                       53                       36                       68
Nevada...............................                       17                       11                       65
South Dakota.........................                       66                       34                       52
----------------------------------------------------------------------------------------------------------------

f. Proposed GPCI Update
    As explained above, 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 to provide an 
opportunity for public comment and further revisions in response to 
comments prior to implementation. The proposed CY 2014 updated GPCIs 
for the first and second year of the 2-year transition, along with the 
GAFs, were displayed in Addenda D and E to the CY 2014 proposed rule 
available on the CMS Web site under the supporting documents section of 
the CY 2014 PFS proposed rule Web page at http://www.cms.gov/Medicare/
Medicare-Fee-for-Service-Payment/PhysicianFeeSched/PFS-Federal-
Regulation-Notices.html.
3. Payment Locality Discussion
a. Background
    The current PFS locality structure was developed and implemented in 
1997. There are currently 89 total PFS localities; 34 localities are 
statewide areas (that is, only one locality for the entire state). 
There are 52 localities in the other 16 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).
    Prior to 1992, Medicare payments for physicians' services were made 
under the reasonable charge system. Payments were based on the charging 
patterns of physicians. This resulted in large differences in payment 
for physicians' services among types of services, geographic payment 
areas, and physician specialties. Recognizing this, the Congress 
replaced the reasonable charge system with the Medicare PFS in the 
Omnibus Budget Reconciliation Act (OBRA) of 1989, and the PFS went into 
effect January 1, 1992. Payments under the PFS are based on the 
relative resources involved with furnishing services, and are adjusted 
to account for geographic variations in resource costs as measured by 
the GPCIs.
    Payment localities originally were established under the reasonable 
charge system by local Medicare carriers based on their knowledge of 
local physician charging patterns and economic conditions. These 
localities changed little between the inception of Medicare in 1967 and 
the beginning of the PFS in 1992. Shortly after the PFS took effect, 
CMS undertook a study in 1994 that culminated in a comprehensive 
locality revision that was implemented in 1997 (61 FR 59494).
    The revised locality structure reduced the number of localities 
from 210 to the current 89, and the number of statewide localities 
increased from 22 to 34. The revised localities were based on locality 
resource cost differences as reflected by the GPCIs. For a full 
discussion of the methodology, see the CY 1997 PFS final rule with 
comment period (61 FR 59494). The current 89 fee schedule areas are 
defined alternatively by state boundaries (for example, Wisconsin), 
metropolitan areas (for example, Metropolitan St. Louis, MO), portions 
of a metropolitan area (for example, Manhattan), or rest-of-state areas 
that exclude metropolitan areas (for example, rest of Missouri). This 
locality configuration is used to calculate the GPCIs that are in turn 
used to calculate payments for physicians' services under the PFS.
    As stated in the CY 2011 PFS final rule with comment period (75 FR 
73261), we require that changes to the PFS locality structure be done 
in a budget neutral manner within a state. For many years, before 
making any locality changes, we have sought consensus from among the 
professionals whose payments would be affected. In recent years, we 
have also considered more comprehensive changes to locality 
configuration. In 2008, we issued a draft comprehensive report 
detailing four different locality configuration options (www.cms.gov/
physicianfeesched/downloads/ReviewOfAltGPCIs.pdf). The alternative 
locality configurations in the report are described below.
     Option 1: CMS Core-Based Statistical Area (CBSA) Payment 
Locality Configuration: CBSAs are a combination of Office of Management 
and Budget (OMB's) Metropolitan Statistical Areas (MSAs) and 
Micropolitan Statistical Areas. Under this option, MSAs would be 
considered as urban CBSAs. Micropolitan Statistical 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 areas used in 
the Inpatient Prospective Payment System (IPPS) pre-reclassification 
wage index, which is the hospital wage index for a geographic area 
(CBSA or non-CBSA) calculated from submitted hospital cost report data 
before statutory adjustments reconfigure, or ``reclassify'' a hospital 
to an area other than its geographic location, to adjust payments for 
differences in local resource costs in other Medicare payment systems. 
Based on data used in the 2008 locality report, 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.

[[Page 74385]]

     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.
    For a detailed discussion of the public comments on the 
contractor's 2008 draft report detailing four different locality 
configurations, we refer readers to the CY 2010 PFS proposed rule (74 
FR 33534) and subsequent final rule with comment period (74 FR 61757). 
There was no public consensus on the options, although a number of 
commenters expressed support for Option 3 (separate MSAs from statewide 
localities) because the commenters believed this alternative would 
improve payment accuracy and could mitigate potential reductions to 
rural areas compared to Option 1 (CMS CBSAs).
    In response to some public comments regarding the third of the four 
locality options, we had our contractor conduct an analysis of the 
impacts that would result from the application of Option 3. Those 
results were displayed in the final locality report released in 2011. 
The final report, entitled ``Review of Alternative GPCI Payment 
Locality Structures--Final Report,'' may be accessed directly from the 
CMS Web site at www.cms.gov/PhysicianFeeSched/downloads/Alt_GPCI_
Payment_Locality_Structures_Review.pdf.
    Moreover, at our request, the Institute of Medicine conducted a 
comprehensive empirical study of the Medicare GAFs established under 
sections 1848(e) (PFS GPCI) and 1886(d)(3)(E) (IPPS hospital wage 
index) of the Act. These adjustments are designed to ensure Medicare 
payments reflect differences in input costs across geographic areas. 
The first of the Institute of Medicine's two reports entitled, 
``Geographic Adjustment in Medicare Payment, Phase I: Improving 
Accuracy'' recommended that the same labor market definition should be 
used for both the hospital wage index and the physician geographic 
adjustment factor. Further, the Institute of Medicine recommended that 
MSAs and statewide non-metropolitan statistical areas should serve as 
the basis for defining these labor markets.
    Under the Institute of Medicine's recommendations, MSAs would be 
considered as urban CBSAs. Micropolitan Areas (as defined by the OMB) 
and rural areas would be considered as non-urban (rest of state) CBSAs. 
This approach would be consistent with the areas used in the IPPS pre-
reclassification wage index to make geographic payment adjustments in 
other Medicare payment systems. For more information on the Institute 
of Medicine's recommendations on the PFS locality structure, see the CY 
2013 PFS final rule with comment period (77 FR 68949). We also provided 
our technical analyses of the Institute of Medicine Phase I 
recommendations in a report released on the PFS Web site at http://
www.cms.gov/Medicare/Medicare-Fee-for-Service-Payment/
PhysicianFeeSched/PFS-Federal-Regulation-Notices.html.
    Additionally, the Phase I report can be accessed on the Institute 
of Medicine's Web site at http://www.iom.edu/Reports/2011/Geographic-
Adjustment-in-Medicare-Payment-Phase-I-Improving-Accuracy.aspx.
b. Institute of Medicine Phase II Report Discussion
    The Institute of Medicine's second report, entitled ``Geographic 
Adjustment in Medicare Payment--Phase II: Implications for Access, 
Quality, and Efficiency'' was released July 17, 2012 and can be 
accessed on the Institute of Medicine's Web site at http://www.iom.edu/
Reports/2011/Geographic-Adjustment-in-Medicare-Payment-Phase-I-
Improving-Accuracy.aspx.
    The Phase II report evaluated the effects of geographic adjustment 
factors (hospital wage index and GPCIs) on the distribution of the 
health care workforce, quality of care, population health, and the 
ability to provide efficient, high value care. The Institute of 
Medicine's Phase II report also included an analysis of the impacts of 
implementing its recommendations for accuracy in geographic adjustments 
which include a CBSA-based locality structure under the PFS. The 
Institute of Medicine analysis found that adopting a CBSA-based 
locality structure under the PFS creates large changes in county GAF 
values; for example, approximately half of all U.S. counties would 
experience a payment reduction. The Institute of Medicine also found 
that GPCIs calculated under a CBSA-based locality structure would 
result in lower GAFs in rural areas (relative to the national average) 
because the GPCI values for rural areas would no longer include 
metropolitan practice costs within the current ``rest-of-state'' or 
``statewide'' localities.
(1) Institute of Medicine Phase II Report Recommendations
    The Institute of Medicine developed recommendations for improving 
access to and quality of medical care. The recommendations included in 
the Institute of Medicine's Phase II report are summarized as follows:
     Recommendation 1: The Medicare program should develop and 
apply policies that promote access to primary care services in 
geographic areas where Medicare beneficiaries experience persistent 
access problems.
     Recommendation 2: The Medicare program should pay for 
services that improve access to primary and specialty care for 
beneficiaries in medically underserved urban and rural areas, 
particularly telehealth technologies.
     Recommendation 3: To promote access to appropriate and 
efficient primary care services, the Medicare program should support 
policies that would allow all qualified practitioners to practice to 
the full extent of their educational preparation.
     Recommendation 4: The Medicare program should reexamine 
its policies that provide location-based adjustments for specific 
groups of hospitals, and modify or discontinue them based on their 
effectiveness in ensuring adequate access to appropriate care.
     Recommendation 5: Congress should fund an independent 
ongoing entity, such as the National Health Care Workforce Commission, 
to support data collection, research, evaluations, and strategy 
development, and make actionable recommendations about workforce 
distribution, supply, and scope of practice.
     Recommendation 6: Federal support should facilitate 
independent external evaluations of ongoing workforce programs intended 
to provide access to adequate health services for underserved 
populations and Medicare beneficiaries. These programs include the 
National Health Services Corps, Title VII and VIII programs under the 
Public Health Service Act, and related programs intended to achieve 
these goals.
(2) Institute of Medicine Phase II Report Conclusions
    The Institute of Medicine committee concluded that geographic 
payment adjustments under the PFS are not a strong determinant of 
access problems and not an appropriate mechanism for improving the 
distribution of the healthcare workforce, quality of care, population 
health, and the ability to provide efficient, high value care. 
Specifically, the Institute of Medicine

[[Page 74386]]

committee stated ``that there are wide discrepancies in access to and 
quality of care across geographic areas particularly for racial and 
ethnic minorities. However, the variations do not appear to be strongly 
related to differences in or potential changes to fee for service 
payment'' (Page. 6). The committee also concluded ``that Medicare 
beneficiaries in some geographic pockets face persistent access and 
quality problems, and many of these pockets are in medically 
underserved rural and inner-city areas. However, geographic adjustment 
of Medicare payment is not an appropriate approach for addressing 
problems in the supply and distribution of the health care workforce. 
The geographic variations in the distribution of physicians, nurses and 
physician assistants, and local shortages that create access problems 
for beneficiaries should be addressed through other means'' (Page 7). 
Moreover, the committee concluded that ``geographic [payment] 
adjustment is not an appropriate tool for achieving policy goals such 
as improving quality of expanding the pool of providers available to 
see Medicare beneficiaries'' (Page 9).
(3) CMS Summary Response to Institute of Medicine Phase II Report
    The Institute of Medicine's Phase II report recommendations are 
broad in scope, do not propose specific recommendations for making 
changes to the GPCIs or PFS locality structure, or are beyond the 
statutory authority of CMS.
    We agree with the Institute of Medicine's assessment that many 
counties would experience a payment reduction and that large payment 
shifts would occur as a result of implementing a CBSA-based locality 
configuration under the PFS. Based on our contractor's analysis, there 
would be significant redistributive impacts if we were to implement a 
policy that would reconfigure the PFS localities based on the Institute 
of Medicine's CBSA-based locality recommendation. Many rural areas 
would see substantial decreases in their corresponding GAF and GPCI 
values as higher cost counties are removed from current ``rest of 
state'' payment areas. Conversely, many urban areas, especially those 
areas that are currently designated as ``rest of state'' but are 
located within higher cost MSAs, would experience increases in their 
applicable GPCIs and GAFs. That is, given that urban and rural areas 
would no longer be grouped together (for example, as in the current 34 
statewide localities), many rural areas would see a reduction in 
payment under a CBSA-based locality configuration.
    As noted earlier in this section, we are assessing a variety of 
approaches to changing the locality structure under the PFS and will 
continue to study options for revising the locality structure. However, 
to fully assess the implications of proposing a nationwide locality 
reconfiguration under the PFS, we must also assess and analyze the 
operational changes necessary to implement a revised locality 
structure. Given that all options under consideration (including the 
Institute of Medicine's CBSA-based approach) would expand the number of 
current localities and result in payment reductions to primarily rural 
areas, presumably any nationwide locality reconfiguration could 
potentially be transitioned over a number of years (to phase-in the 
impact of payment reductions gradually, from year-to-year, instead of 
all at once). As such, transitioning from the current locality 
structure to a nationwide reconfigured locality structure would present 
operational and administrative challenges that need to be identified 
and addressed. Therefore, we have begun to assess the broad operational 
changes that would be involved in implementing a nationwide locality 
reconfiguration under the PFS. Accordingly, we believe that it would be 
premature to make any statements about potential changes we would 
consider making to the PFS localities at this time. Any changes to PFS 
fee schedule areas would be made through future notice and comment 
rulemaking.
    The following is a summary of the comments we received regarding 
our proposed CY 2014 GPCI update and summary response to the Institute 
of Medicine's Phase II report recommendations.
    Comment: A few commenters including a national medical association 
and state medical society expressed support for using more current data 
in calculating the GPCIs. Another commenter stated that the BLS OES 
provides the best data for calculating the work GPCI and the employee 
wage component and purchased service component of the PE GPCI.
    Response: For the reasons outlined in the proposed rule, we agree 
with the commenters.
    Comment: One state medical association expressed support for our 
proposal to use BLS OES data for calculating the geographic variation 
in physician work. The commenter stated that the BLS OES includes a 
large sample of data on wages and should be very reliable. However, the 
commenter raised concerns about using multi-year averages of wages in 
years that large demographic and economic changes may have occurred. 
The commenter contends that because the BLS OES data are so robust, 
using three-year averages is not necessary or appropriate. The 
commenter suggested that GPCI updates based on BLS OES data should be 
based on the most recent annual data available, rather than multi-year 
averages.
    Response: We agree with the commenter that the BLS OES data are a 
reliable and robust source of wage and earnings data. The BLS OES wage 
and earnings data released in any given year are aggregated using 6 
semi-annual panels of data collected over 3 years (2 panels per year). 
The BLS does not produce 1-year wage and earnings data. According to 
the Occupational Employment Statistics Frequently Asked Questions: 
``Significant reductions in sampling error can be achieved by taking 
advantage of a full 3 years of data, covering 1.2 million 
establishments and about 62 percent of the employment in the United 
States. This feature is particularly important in improving the 
reliability of estimates for detailed occupations in small geographical 
areas. Combining multiple years of data is also necessary to obtain 
full coverage of the largest establishments. In order to reduce 
respondent burden, the OES survey samples these establishments with 
virtual certainty only once every three years.'' We also note that the 
BLS recognizes that labor costs change over time. To make the data from 
all 6 semi-annual panels comparable, the OES program uses the 
Employment Cost Index (ECI) to translate the occupation-level wages 
from previous years into a wage number for the most recent year. The 
Occupational Employment Statistics Frequently Asked Questions may be 
accessed from the Bureau of Labor Statistics Web site at: http://
www.bls.gov/oes/oes_ques.htm. As discussed above, the OES FAQs explain 
that the use of multi-year averages improves reliability of the data 
and reduces sampling error. We agree with this assessment, and 
therefore, we will continue to use the BLS OES wage and earnings data 
that reflect multi-year averaging.
    Comment: A few commenters stated that the proposed GPCI update 
results in lowering payment amounts to rural areas, which threatens 
patient access to physician services, including treatments for complex 
conditions such as cancer and lupus. Another commenter expressed 
support for the elimination of all geographic adjustment factors under

[[Page 74387]]

the PFS. The commenter believes that lower GPCIs discourage physicians 
and practitioners from practicing in rural and underserved areas.
    Response: As discussed previously, section 1848(e)(1)(A) of the Act 
requires us to develop separate GPCIs to measure resource cost 
differences among localities compared to the national average for each 
of the three fee schedule components. We do not have the authority to 
eliminate geographic payment adjustments under the PFS. We note that 
the GPCI values for many rural PFS areas, including many single state 
localities (and rest of state localities), will increase as a result of 
the CY 2014 GPCI update. However, because the statutory 1.0 work GPCI 
floor expires at the end of CY 2013, beginning January 1, 2014, PFS 
payment amounts will be calculated based upon the actual work GPCI for 
the locality rather than using the 1.0 work GPCI floor (except in 
Alaska where the statutory 1.5 work GPCI floor will continue to apply). 
Accordingly, the summarized GAFs, provided as noted above for purposes 
of illustration and comparison, demonstrate decreases in the work GPCIs 
for these same PFS localities.
    Comment: A few commenters requested an extension of the 
statutorily-mandated 1.0 work GPCI floor, which expires on December 31, 
2013.
    Response: As discussed above, the 1.0 work GPCI floor is 
established by statute and expires on December 31, 2013. We do not have 
authority to extend the 1.0 work GPCI floor beyond December 31, 2013.
    Comment: A few commenters urged us to reassess the professional 
occupational categories used to determine the relative cost differences 
in physician earnings for purposes of calculating the work GPCI. The 
commenters believe that the current inputs do not adequately measure 
the relative cost differences in physician salary across PFS 
localities. The commenters also mentioned a recent report published by 
MedPAC on the work GPCI, which recommended changes to the proxy 
occupations used in calculating the work GPCI. The commenters stated 
that the MedPAC study found that the data sources we currently rely 
upon for determining the work GPCI bear no correlation to physician 
earnings and that rural primary care physicians have higher wages than 
their urban counterparts. One commenter suggested that we use actual 
physician salaries (instead of proxy occupations) to determine the 
relative differences in physician wages. Another commenter urged us to 
modify the work GPCI to include ``reference occupations that will 
accurately reflect the higher input costs of rural physician 
earnings.''
    Response: We appreciate the comments regarding the professional 
occupations used to determine the relative cost differences in 
physician earnings for purposes of calculating the work GPCI. As noted 
previously in this section, physicians' wages are not included in the 
occupation categories used in calculating the work GPCI because 
Medicare payments are a key determinant of physicians' earnings. 
Including physician wage data in calculating the work GPCIs would 
potentially introduce some circularity to the adjustment since Medicare 
payments typically contribute to or influence physician wages. In other 
words, including physicians' wages in the physician work GPCIs would, 
in effect, make the indices, to some extent, dependent upon Medicare 
payments, which in turn are affected by the indices. Additionally, as 
noted in the proposed rule the MedPAC was required by section 3004 of 
the MCTRJCA to submit a report to the Congress by June 15, 2013, 
assessing whether any adjustment under section 1848 of the Act to 
distinguish the difference in work effort by geographic area is 
appropriate and, if so, what that level should be and where it should 
be applied. In the report, MedPAC was required to also assess the 
impact of the work geographic adjustment under the Act, including the 
extent to which the floor on such adjustment impacts access to care. We 
also noted in the proposed rule that we did not have sufficient time to 
review this report, which was issued on June 14, 2013, in order to take 
the report into consideration for the proposed rule. We will be 
assessing the findings and recommendations from the MedPAC report and, 
and we will consider whether to make recommendations or proposals for 
changes in future rulemaking.
    Comment: Several commenters noted that they appreciated our efforts 
to obtain more recent malpractice premium data from Puerto Rico for 
purposes of calculating the MP GPCIs. The commenters stated that a MP 
GPCI update for the Puerto Rico payment locality is long overdue.
    Response: We agree with the commenters. By obtaining more recent 
malpractice premium insurance data, we were able to calculate an 
updated MP GPCI for the Puerto Rico payment locality using recent 
market share and rate filings data, as we were able to do for most 
other PFS localities.
    Comment: One commenter stated that we did not use the most recent 
ACS residential rent data available (2009 through 2011) when 
calculating the rent index and encouraged us to use the most recent ACS 
residential rent data if it does not decrease the PE GPCI for Puerto 
Rico.
    Response: We appreciate the commenter's suggestion to use 2009 
through 2011 ACS data for the CY 2014 GPCI update. We note that there 
was insufficient time between the release of the 2009 through 2011 ACS 
data and the CY 2014 PFS proposed rule to allow us to use these data 
for the calculation of the proposed office rent component of the PE 
GPCI.
    Comment: Many commenters requested an increase to the PE GPCI 
values for the Puerto Rico payment locality. The commenters believe it 
is necessary to increase payments to Puerto Rico to prevent the 
continued exodus of physicians to the U.S. mainland, as well as to 
maintain the quality of care, reflect inflation, and modernize 
equipment and supplies in Puerto Rico. The commenters also argue that 
doctors in Puerto Rico are required to provide the same services for 
lower reimbursement than those practicing in the U.S. mainland).
    One commenter acknowledged that the work, PE and malpractice GPCIs 
for the Puerto Rico locality were increased as a result of the CY 2014 
GPCI update, but noted that, even with the increases, Puerto Rico 
continues to be the lowest paid PFS locality and that its ``neighboring 
locality,'' the Virgin Islands, unjustifiably receives a MP GPCI and PE 
GPCI of 1.0. The commenter also requested specific increases to the 
proposed PE GPCI for the Puerto Rico locality, most notably the rent 
component and medical equipment and supplies component, and referenced 
a previous study entitled ``Cost of Medical Services in Puerto Rico,'' 
which included physician survey information on the costs of operating a 
medical practice in Puerto Rico.
    In addition, the same commenter stated that the methodology used to 
determine the equipment and supplies component of the PE GPCI is unfair 
to Puerto Rico. For example, the commenter noted that the medical 
equipment and supplies component of the PE GPCI is currently not 
adjusted for geographic cost differences; therefore all PFS localities 
receive an index of 1.0 for the equipment and supplies component. The 
commenter stated that medical equipment and supplies cost more in 
Puerto Rico because of the higher cost of shipping, noting, for 
example, that air and maritime shipping is more

[[Page 74388]]

expensive than ground shipping. Because Puerto Rico is dependent on air 
and maritime shipping, the commenter believes that our presumption that 
most medical equipment and supplies are sold through a national market 
does not adequately capture the higher cost of shipping medical 
equipment and medical supplies to the Puerto Rico locality. The 
commenter urged us to increase the PE GPCI calculated for the Puerto 
Rico locality, ``so that it is equal to, or more closely approximates, 
the PE GPCI calculated for the state with the lowest PE GPCI (in this 
case, West Virginia).''
    Response: As noted previously in this section, we are required by 
section 1848(e)(1)(A) of the Act to develop separate GPCIs to measure 
relative resource cost differences among localities compared to the 
national average for each of the three fee schedule components: work, 
PE and MP expense and to update the GPCIs at least every 3 years. In 
the CY 2014 PFS proposed rule, we proposed to update the GPCIs for each 
Medicare PFS locality using updated data. For the CY 2014 GPCI update, 
we calculated updated GPCIs for the Puerto Rico locality using the same 
data sources and methodology as used for other PFS localities. To 
calculate the work GPCI and the employee compensation and purchased 
service components of the PE GPCI, we used 2009 through 2011 BLS OES 
data. To calculate the office rent component of the PE GPCI we used 
updated ACS data (2008 through 2010) as replacement for 2006 through 
2008. With respect to the comment suggesting we assign the PE GPCI 
calculated for West Virginia to the Puerto Rico payment locality, we 
note that we are required to calculate GPCIs based upon the geographic 
cost differences between a specific PFS payment locality and the 
national average. As noted above, we have sufficient cost data to 
calculate GPCI values specific to the Puerto Rico payment locality. It 
would not be appropriate to assign a PE GPCI calculated for the West 
Virginia payment locality (based on data specific to West Virginia) to 
the Puerto Rico payment locality. Additionally, with respect to the 
comment on the differential between the GPCI values assigned to the 
Virgin Islands payment locality (as compared to the calculated GPCI 
values for the Puerto Rico payment locality), we note that when a 
locality has sufficient locality-specific data, we use those data to 
calculate GPCI values according to the established methodology. Given 
that there are sufficient locality-specific data for Puerto Rico, we 
calculated the GPCI values for the Puerto Rico payment locality based 
upon data from Puerto Rico.
    As previously mentioned, we continue to believe that the BLS OES 
and ACS are reliable data sources for measuring the relative cost 
differences in wages and rents. In preparation for the CY 2014 GPCI 
update, we reviewed the study previously submitted by stakeholders 
entitled ``Cost of Medical Services in Puerto Rico.'' The study aimed 
to analyze medical practice costs as well as physicians' perceptions of 
cost trends in Puerto Rico. Broadly, many of the study's findings are 
not directly relevant to the GPCIs because the study largely measured 
increases in the cost of practicing medicine in the Puerto Rico 
locality over time, but did not compare Puerto Rico cost trends to 
those across other PFS localities. We note that updates to the GPCIs 
are based upon changes in the relative costs of operating a medical 
practice among all PFS localities and not changes in the costs within a 
specific locality. Further, the survey methodology did not claim to be 
representative of all physicians furnishing services in the Puerto Rico 
payment locality. The physician responses do not appear to be weighted 
to represent the population of physicians across the Puerto Rico 
payment locality.
    Moreover, the study claimed (as did many of the commenters) that 
shipping and transportation expenses increase the cost of medical 
equipment and supplies in Puerto Rico relative to the U.S. mainland. In 
developing the proposed CY 2014 GPCI update, we evaluated the premise 
that Puerto Rico physicians incur higher shipping costs when purchasing 
medical equipment and supplies that should be reflected in the GPCIs. 
At our request, our contractor attempted to locate data sources 
specific to geographic variation in shipping costs for medical 
equipment and supplies. However, there does not appear to be a 
comprehensive national data source available. In light of the comment 
that shipping costs are more expensive for the Puerto Rico payment 
locality (and rural areas, as discussed later in this section by other 
commenters) we are requesting specific information regarding potential 
data sources for shipping costs for medical equipment and supplies that 
are accessible to the public, available on a national basis for both 
urban and rural areas, and updated regularly.
    Comment: One commenter asserted that residential rents are an 
inaccurate proxy for commercial (office) rents in Puerto Rico because 
the residential rental market is less developed in Puerto Rico as 
compared to the commercial rental market. The commenter noted that 
Puerto Rico's residential rental market is largely skewed towards the 
very low (and extremely low) end of the income scale. For example, the 
commenter stated that 30 percent of renters in Puerto Rico are 
subsidized by a HUD program, compared to a national average of about 12 
percent. The commenter also mentioned that the ACS residential rent 
data (which are used to calculate the office rent index) includes 
utilities. The commenter stated that the cost of one utility, 
electricity, in Puerto Rico, is more than double the national average. 
However, the commenter believes the high cost of electricity and other 
utilities that physicians in Puerto Rico incur is not adequately 
captured in the ACS residential rental data, because nearly one third 
of all the renters in Puerto Rico receive utility allowances and 
therefore are not responsible for their utility costs.
    Response: The ACS is designed to capture the total actual costs of 
both rent and utilities (i.e. gross rent) regardless of whether either 
or both are subsidized and regardless of whether utility costs are 
included in rent or paid separately. According to the American 
Community Survey and Puerto Rico Community Survey (PRCS) 2010 Subject 
Definitions: ``Gross rent is the contract rent plus the estimated 
average monthly cost of utilities (electricity, gas, and water and 
sewer) and fuels (oils, coal, kerosene, wood, etc.) if these are paid 
by the renter (or paid for the renter by someone else).'' (Page 17.) 
The rent portion of gross rent is ``the monthly rent agreed to or 
contracted for, regardless of any furnishings, utilities, fees, meals, 
or services that may be included.'' (Page 15.) Contract rent data were 
obtained from Housing Question 15a of the 2010 American Community 
Survey and Puerto Rico Community Survey. Utility costs included in the 
rent payment were also captured in this question while utility costs 
paid separately from contract rent were obtained from a different set 
of questions in the survey. For instance, according to the American 
Community Survey and Puerto Rico Community Survey 2010 Subject 
Definitions: ``The data on utility costs were obtained from Housing 
Questions 11a through 11d in the 2010 American Community Survey. The 
questions were asked of occupied housing units. The questions about 
electricity and gas asked for the monthly costs, and the questions 
about water/sewer and other fuels (oil, coal, wood,

[[Page 74389]]

kerosene, etc.) asked for the yearly costs. Costs are recorded if paid 
by or billed to occupants, a welfare agency, relatives, or friends 
[emphasis added]. Costs that are paid by landlords, included in the 
rent payment, or included in condominium or cooperative fees are 
excluded'' (Page 37). Therefore, it is correct to say the ACS estimates 
of residential rent and utility costs account for subsidized utilities. 
The American Community Survey and Puerto Rico Community Survey 2010 
Subject Definitions publication may be accessed from the Bureau of 
Census Web site at http://www.census.gov/acs/www/Downloads/data_
documentation/SubjectDefinitions/2010_ACSSubjectDefinitions.pdf.
    Comment: One commenter stated that ``our region's office rental 
rates are, by GPCI measurement, supposedly only one-third of the 
highest (cost) regions'' and that Medical Group Management Association 
(MGMA) survey data do not support these findings. The commenter 
requested that relative cost differences be accurately determined 
before making any adjustment to the PE GPCI.
    Response: We do not believe the MGMA rental information on 
physician office rent is an adequate source for calculating the office 
rent index component of the PE GPCI for the following reasons. First, 
although MGMA invites about 11,000 medical practices to complete each 
of the two surveys it conducts (cost survey and compensation survey), 
the response rates for these surveys are typically below 20 percent and 
responses primarily capture information for physician practices 
operating in metropolitan areas. Second, in addition to the low 
response rates, MGMA has uneven response rates across regions due to 
the fact that MGMA relies on a convenience sample rather than a random 
sample. For example, almost twice as many Colorado practices completed 
the surveys compared to those in California; the survey also includes 
more provider responses from Minnesota (ranked 21st in population) than 
any other state. Finally, there are few observations for many small 
states; in fact, ten states have fewer than 10 observations each.
    For the reasons discussed above, we do not believe the MGMA survey 
is a viable data source for determining the relative cost differences 
in rents across PFS localities. As discussed previously in this 
section, given its national representation, reliability, high response 
rate and frequent updates we continue to believe that the ACS 
residential rent data is the most appropriate data source available at 
this time for purposes of calculating the rent index of the PE GPCI.
    Comment: We received mixed comments regarding the potential use of 
a proprietary commercial rent data source for purposes of calculating 
the rent index of the PE GPCI. For instance, a few commenters stated 
that we should continue to explore the possibility of using a 
commercial rent data source (but did not comment specifically on the 
potential use of proprietary data). One medical association stated that 
it would be helpful if we could ``elucidate how incorporating the 
commercial rent data would impact the practice expense GPCI and payment 
rates in each Medicare payment locality.'' In contrast, three other 
commenters did not support the use of a proprietary commercial rent 
data source and urged us to continue using publicly available data. One 
association suggested that we ``should use the most accurate publicly 
available datasets to set the GPCI adjustments . . . because . . . it 
is important for the public to have an opportunity to comment on 
proposed changes, and they need access to information to provide 
meaningful comments.'' Another commenter stated that there is not a 
more reliable source of data for calculating physician office rents 
(than the ACS residential rent data) and that the ACS data serve as a 
reasonable proxy for the relative differences in rents across PFS 
localities. The same commenter expressed concern about the cost to the 
public of purchasing proprietary data and suggested that a commercial 
rent data source might be used to validate relative cost differences 
calculated from the ACS data (but not replace the ACS data).
    Response: We appreciate the comments received on the potential use 
of a proprietary commercial rent data source. In the event we make a 
specific proposal to incorporate a commercial rent data source (either 
proprietary or publicly available) for calculating the office rent 
index of the PE GPCI, we would provide locality level impacts of such 
proposal and the opportunity for public comment as afforded through the 
rulemaking process.
    Comment: A few commenters supported the continuation of the 1.0 PE 
GPCI floor for frontier states.
    Response: The 1.0 PE GPCI floor will continue to be applied for 
states identified as ``frontier states'' in accordance with 
1848(e)(1)(I) of the Act.
    Comment: Two commenters stated that many rural areas that do not 
fall within the statutory definition of a frontier state also face 
challenges associated with patient access to ``physician-furnished 
services.'' The commenters stated that, even if the 1.0 work GPCI floor 
is extended, the updates to the PE GPCIs disadvantage rural providers, 
most notably in the provision of drugs and biologicals administered in 
a physician's office. The commenters assert that rural practices have 
``low purchasing power'' (because of lower patient volumes) and higher 
shipping costs (in comparison to urban areas). The same commenters 
urged us to take into account the ``unique challenges faced by rural 
physicians in non-designated frontier states'' and to fully recognize 
the significant costs of providing health care in rural communities 
when updating the GPCIs.
    Response: We appreciate the comments received on the PE GPCI for 
rural areas. As discussed previously in this section, we are required 
to update the GPCIs at least every 3 years to reflect the relative cost 
differences of operating a medical practice in each locality compared 
to the national average costs. We do not have authority to apply the 
1.0 PE GPCI floor to states that do not meet the statutory definition 
of a frontier state. As discussed above in response to another 
commenter, we are requesting specific information regarding potential 
data sources for shipping costs for medical equipment and supplies--
especially sources that are publicly available, collect data nationally 
with sufficient coverage in both urban and rural areas, and are updated 
at regular intervals.
    Comment: Several state medical associations strongly opposed the 
proposed revised 2006-based MEI that moved compensation for 
nonphysician practitioners from the practice expense category to the 
physician compensation category, and the implications of that proposed 
change for the GPCIs. Because of those concerns, the commenters 
strongly objected to our proposal to update the GPCI cost share weights 
to make them consistent with the most recent update to the MEI. 
Additionally, the commenters expressed concern that the proposed 
changes in cost share weights used in calculating updated GPCIs would 
alone cause significant changes in CY 2014 PFS payment amounts.
    Response: As discussed in section II.B. revisions to the MEI are 
used to adjust the RVUs under the PFS so that the work RVUs and PE RVUs 
(in the aggregate) are in the same proportions as in the MEI. We also 
make the necessary adjustments to achieve budget neutrality for the 
year under the PFS. A discussion of how our adoption of the proposed 
MEI cost weight revisions affects the

[[Page 74390]]

adjustment of work RVUs and PE RVUs is provided in section II.B. of 
this final rule with comment period.
    With regard to the GPCIs, as noted in section II.F.2.d., we 
historically have updated the GPCI cost share weights (and more 
generally, as noted above, the RVUs under the PFS) to make them 
consistent with the most recent update to the MEI because the MEI cost 
share weights reflect our actuaries' best estimate of the weights 
associated with each of the various inputs needed to provide physician 
services. Use of the revised MEI weights for purposes of the GPCIs does 
not represent a change to the data sources or methodology used to 
calculate the GPCIs. For purposes of calculating GPCI values, the 
revised MEI weights only result in changes to the relative weighting 
within the PE GPCI (because there are no subcomponent cost share 
weights for the work GPCI or malpractice GPCI). Since the MEI weight 
only changed for the employee compensation subcomponent (for instance, 
the MEI weights for office rent, purchased services and equipment and 
supplies remained unchanged), the revised MEI affected the relative 
weight of all PE subcomponents (as a percentage of total PE GPCI). In 
other words, using the revised MEI cost share weights results in a 
lower weight for the employee compensation component as a percentage of 
the total PE GPCI and higher weights for office rents, purchased 
services, and medical equipment and supplies as a percentage of the 
total PE GPCI. Use of the revised MEI cost share weights has no 
implications for calculating the work GPCI values or malpractice GPCI 
values. Thus, we believe the comments on our proposal to adopt the 
revised 2006-based MEI weights predominately reflect concerns about the 
impact of the revised weights in terms of RVU redistribution and 
conversion factor adjustment, which is discussed in section II.B.2.f., 
rather than on their use in the calculation of GPCI values. An analysis 
isolating the impact of the changes in the subcomponent weighting of 
the PE GPCIs is available on the CMS Web site under the supporting 
documents section of the CY 2014 PFS final rule Web page at http://
www.cms.gov/Medicare/Medicare-Fee-for-Service-Payment/
PhysicianFeeSched/PFS-Federal-Regulation-Notices.html.
    We note that the MEI cost share weights are also used to calculate 
a geographic adjustment factor (GAF) for each PFS locality, weighting 
each locality's GPCIs (work, PE, and MP) by the corresponding national 
MEI cost share weight. However, as mentioned previously, we calculate 
the GAFs for purposes of comparing the approximate aggregate geographic 
payment adjustments among localities. The GAF is not used to calculate 
the geographically adjusted payment amount for individual services. 
Rather, the geographically adjusted payment amount is calculated by 
applying the actual GPCI values (for work, PE and malpractice) for the 
particular PFS locality to adjust the RVUs (for work, PE and MP) for a 
specific service.
    Comment: A few national medical associations requested that CMS 
respond to the Institute of Medicine's ``Recommendation 3'' as 
contained in its Phase II report. The commenters noted that the 
Institute of Medicine recommended that the Medicare program should 
support policies that would allow all qualified practitioners to 
practice to the full extent of their educational preparation. The 
commenters believe ``that there are numerous barriers in Medicare 
regulations, procedures, and instructions that prevent nurse 
practitioners and other health care providers from performing the full 
range of services they are educated and clinically prepared to 
deliver.'' However, the commenter did not provide specific examples as 
part of their submitted comments on the CY 2014 PFS proposed rule. 
Moreover, the commenter urged us to develop proposals to revise 
Medicare regulations and policies to address the need for primary care, 
including women's health and pediatric services, in underserved areas.
    Response: The Institute of Medicine's Phase II report summary 
analysis indicates: ``There are many inconsistencies in state laws 
regarding scope of practice and many NPs are more likely to locate in 
rural areas in states with more progressive, less restrictive 
regulations.'' Additionally, the Institute of Medicine recommended that 
``given the shortage of primary care providers in the United States and 
specifically in rural areas, the committee agrees that it would be 
reasonable to remove barriers in Medicare and state licensing language 
so all qualified practitioners are able to practice to the full extent 
of their educational preparation in providing needed services for 
Medicare beneficiaries'' (Page 10). We did not include any proposals 
based on this Institute of Medicine recommendation in the CY 2014 PFS 
proposed rule. Therefore, we believe the comments relating to this 
recommendation are beyond the scope of the CY 2014 PFS proposed rule.
    Comment: We received several comments on the PFS locality structure 
that were not within the scope of the CY 2014 proposed rule. For 
example, several commenters requested a locality change for a specific 
county. Another commenter requested that we consider the operational 
impact of a locality reconfiguration on the provider community, 
including non-physician practitioners, before making changes to the PFS 
locality structure. Two state medical associations emphasized the need 
to reform PFS localities, preferring an MSA-based approach. One 
national association was opposed to locality changes resulting in 
payment reductions to rural areas and a rural physician clinic 
recommended that we do not make any changes to the PFS locality 
structure because increasing the number of localities would lower 
payments to rural physicians.
    Response: We appreciate the suggestions for making revisions to the 
PFS locality structure. As discussed above, we did not propose changes 
to the PFS locality structure.
Result of Evaluation of Comments
    After consideration of the public comments received on the CY 2014 
GPCI update, we are finalizing the CY 2014 GPCI update as proposed. 
Specifically, we are using updated BLS OES data (2009 through 2011) as 
a replacement for 2006 through 2008 data for purposes of calculating 
the work GPCI and the employee compensation component and purchased 
services component of the PE GPCI. We are also using updated ACS data 
(2008 through 2010) as a replacement for 2006 through 2008 data for 
calculating the office rent component of the PE GPCI, and updated 
malpractice premium data (2011 and 2012) as a replacement for 2006 
through 2007 data to calculate the MP GPCI. We also note that we do not 
adjust the medical equipment, supplies and other miscellaneous expenses 
component of the PE GPCI because we continue to believe there is a 
national market for these items such that there is not a significant 
geographic variation in costs. However, in light of comments suggesting 
that there are geographic differences in shipping costs for medical 
equipment and supplies, we are requesting specific information 
regarding potential data sources for these shipping costs--especially 
sources that are publicly available, nationally representative with 
sufficient coverage in both urban and rural areas, and updated at 
regular intervals. Additionally, we are finalizing our proposal to 
update the GPCI cost share weights consistent with the revised

[[Page 74391]]

2006-based MEI cost share weights finalized in section II.D. of this 
final rule with comment period. As discussed above in response to 
comments, use of the revised GPCI cost share weights changed the 
weighting of the subcomponents within the PE GPCI (employee wages, 
office rent, purchased services, and medical equipment and supplies).
    The CY 2014 updated GPCIs and summarized GAFs by Medicare PFS 
locality may be found in Addenda D and E to the CY 2014 final rule 
available on the CMS Web site under the supporting documents section of 
the CY 2014 proposed rule Web page at http://www.cms.gov/Medicare/
Medicare-Fee-for-Service-Payment/PhysicianFeeSched/PFS-Federal-
Regulation-Notices.html.
    Additional information on the CY 2014 GPCI update may be found in 
our contractor's report, ``Report on the CY 2014 Update of the 
Geographic Practice Cost Index for the Medicare Physician Fee 
Schedule,'' which is available on the CMS Web site. It is located under 
the supporting documents section of the CY 2014 PFS final rule with 
comment period located at http://www.cms.gov/Medicare/Medicare-Fee-for-
Service-Payment/PhysicianFeeSched/PFS-Federal-Regulation-Notices.html.

G. Allowed Expenditures for Physicians' Services and the Sustainable 
Growth Rate

1. Medicare Sustainable Growth Rate (SGR)
    The SGR is an annual growth rate that applies to physicians' 
services paid by Medicare. The use of the SGR is intended to control 
growth in aggregate Medicare expenditures for physicians' services. 
Payments for services are not withheld if the percentage increase in 
actual expenditures exceeds the SGR. Rather, the PFS update, as 
specified in section 1848(d)(4) of the Act, is adjusted based on a 
comparison of allowed expenditures (determined using the SGR) and 
actual expenditures. If actual expenditures exceed allowed 
expenditures, the update is reduced. If actual expenditures are less 
than allowed expenditures, the update is increased.
    Section 1848(f)(2) of the Act specifies that the SGR for a year 
(beginning with CY 2001) is equal to the product of the following four 
factors:
    (1) The estimated change in fees for physicians' services;
    (2) The estimated change in the average number of Medicare fee-for-
service beneficiaries;
    (3) The estimated projected growth in real Gross Domestic Product 
per capita; and
    (4) The estimated change in expenditures due to changes in statute 
or regulations.
    In general, section 1848(f)(3) of the Act requires us to determine 
the SGRs for 3 different time periods], using the best data available 
as of September 1 of each year. Under section 1848(f)(3) of the Act, 
(beginning with the FY and CY 2000 SGRs) the SGR is estimated and 
subsequently revised twice based on later data. (The Act also provides 
for adjustments to be made to the SGRs for FY 1998 and FY 1999. See the 
February 28, 2003 Federal Register (68 FR 9567) for a discussion of 
these SGRs). Under section 1848(f)(3)(C)(ii) of the Act, there are no 
further revisions to the SGR once it has been estimated and 
subsequently revised in each of the 2 years following the preliminary 
estimate. In this final rule with comment, we are making our 
preliminary estimate of the CY 2014 SGR, a revision to the CY 2013 SGR, 
and our final revision to the CY 2012 SGR.
a. Physicians' Services
    Section 1848(f)(4)(A) of the Act defines the scope of physicians' 
services covered by the SGR. The statute indicates that ``the term 
`physicians' services' includes other items and services (such as 
clinical diagnostic laboratory tests and radiology services), specified 
by the Secretary, that are commonly performed or furnished by a 
physician or in a physician's office, but does not include services 
furnished to a Medicare+Choice plan enrollee.''
    We published a definition of physicians' services for use in the 
SGR in the November 1, 2001 Federal Register (66 FR 55316). We defined 
physicians' services to include many of the medical and other health 
services listed in section 1861(s) of the Act. Since that time, the 
statute has been amended to add new Medicare benefits. As the statute 
changed, we modified the definition of physicians' services for the SGR 
to include the additional benefits added to the statute that meet the 
criteria specified in section 1848(f)(4)(A).
    As discussed in the CY 2010 PFS final rule with comment period (74 
FR 61961), the statute provides the Secretary with clear discretion to 
decide whether physician-administered drugs should be included or 
excluded from the definition of ``physicians' services.'' Exercising 
this discretion, we removed physician-administered drugs from the 
definition of physicians' services in section 1848(f)(4)(A) of the Act 
for purposes of computing the SGR and the levels of allowed 
expenditures and actual expenditures beginning with CY 2010, and for 
all subsequent years. Furthermore, in order to effectuate fully the 
Secretary's policy decision to remove drugs from the definition of 
physicians' services, we removed physician-administered drugs from the 
calculation of allowed and actual expenditures for all prior years.
    Thus, for purposes of determining allowed expenditures, actual 
expenditures for all years, and SGRs beginning with CY 2010 and for all 
subsequent years, we specified that physicians' services include the 
following medical and other health services if bills for the items and 
services are processed and paid by Medicare carriers (and those paid 
through intermediaries where specified) or the equivalent services 
processed by the Medicare Administrative Contractors:
     Physicians' services.
     Services and supplies furnished incident to physicians' 
services, except for the expenditures for ``drugs and biologicals which 
are not usually self-administered by the patient.''
     Outpatient physical therapy services and outpatient 
occupational therapy services,
     Services of PAs, certified registered nurse anesthetists, 
certified nurse midwives, clinical psychologists, clinical social 
workers, nurse practitioners, and certified nurse specialists.
     Screening tests for prostate cancer, colorectal cancer, 
and glaucoma.
     Screening mammography, screening pap smears, and screening 
pelvic exams.
     Diabetes outpatient self-management training (DSMT) 
services.
     Medical Nutrition Therapy (MNT) services.
     Diagnostic x-ray tests, diagnostic laboratory tests, and 
other diagnostic tests (including outpatient diagnostic laboratory 
tests paid through intermediaries).
     X-ray, radium, and radioactive isotope therapy.
     Surgical dressings, splints, casts, and other devices used 
for the reduction of fractures and dislocations.
     Bone mass measurements.
     An initial preventive physical exam.
     Cardiovascular screening blood tests.
     Diabetes screening tests.
     Telehealth services.
     Physician work and resources to establish and document the 
need for a power mobility device.
     Additional preventive services.

[[Page 74392]]

     Pulmonary rehabilitation.
     Cardiac rehabilitation.
     Intensive cardiac rehabilitation.
     Kidney disease education (KDE) services.
     Personalized prevention plan services
b. Preliminary Estimate of the SGR for 2014
    Our preliminary estimate of the CY 2014 SGR is -16.7 percent. We 
first estimated the CY 2014 SGR in March 2013, and we made the estimate 
available to the MedPAC and on our Web site. Table 33 shows the March 
2013 estimate and our current estimates of the factors included in the 
2014 SGR. The majority of the difference between the March estimate and 
our current estimate of the CY 2014 SGR is explained by changes in 
estimated enrollment after our March estimate was prepared. Estimates 
of 2014 real per capita GDP are also higher than were included in our 
March 2013 estimate of the SGR.

                                        Table 33--CY 2014 SGR Calculation
----------------------------------------------------------------------------------------------------------------
          Statutory factors                    March estimate                      Current estimate
----------------------------------------------------------------------------------------------------------------
Fees.................................  0.5 percent (1.005)..........  0.6 percent (1.006).
Enrollment...........................  4.5 percent (1.045)..........  2.2 percent (1.022).
Real per Capita GDP..................  0.6 percent (1.006)..........  0.8 percent (1.008).
Law and Regulation...................  -19.7 percent (0.803)........  -19.6 percent (0.804).
                                      --------------------------------------------------------------------------
    Total............................  -15.2 percent (0.848)........  -16.7 percent (0.833).
----------------------------------------------------------------------------------------------------------------
Note: Consistent with section 1848(f)(2) of the Act, the statutory factors are multiplied, not added, to produce
  the total (that is, 1.006 x 1.022 x 1.008 x 0.804 = 0.833). A more detailed explanation of each figure is
  provided in section II.G.1.e. of this final rule with comment period.

c. Revised Sustainable Growth Rate for CY 2013
    Our current estimate of the CY 2013 SGR is 1.8 percent. Table 34 
shows our preliminary estimate of the CY 2013 SGR, which was published 
in the CY 2013 PFS final rule with comment period, and our current 
estimate. The majority of the difference between the preliminary 
estimate and our current estimate of the CY 2013 SGR is explained by 
adjustments to reflect intervening legislative changes that have 
occurred since publication of the CY 2013 final rule with comment 
period.

                                        Table 34--CY 2013 SGR Calculation
----------------------------------------------------------------------------------------------------------------
                                        Estimate from CY 2013 final
          Statutory factors                         rule                           Current estimate
----------------------------------------------------------------------------------------------------------------
Fees.................................  0.3 percent (1.003)..........  0.4 Percent (1.004).
Enrollment...........................  3.6 percent (1.036)..........  1.0 Percent (1.01).
Real per Capita GDP..................  0.7 percent (1.007)..........  0.9 Percent (1.009).
Law and Regulation...................  -23.3 percent (0.767)........  -0.5 Percent (0.995).
                                      --------------------------------------------------------------------------
    Total............................  -19.7 percent (0.803)........  1.8 Percent (1.018).
----------------------------------------------------------------------------------------------------------------
Note: Consistent with section 1848(f)(2) of the Act, the statutory factors are multiplied, not added, to produce
  the total (that is, 1.004 x 1.01 x 1.009 x 0.995 = 1.018). A more detailed explanation of each figure is
  provided in section II.G.1.e. of this final rule with comment period.

d. Final Sustainable Growth Rate for CY 2012
    The SGR for CY 2012 is 5.1 percent. Table 35 shows our preliminary 
estimate of the CY 2012 SGR from the CY 2012 PFS final rule with 
comment period, our revised estimate from the CY 2013 PFS final rule 
with comment period, and the final figures determined using the best 
available data as of September 1, 2013.

                                        Table 35--CY 2012 SGR Calculation
----------------------------------------------------------------------------------------------------------------
                                    Estimate from CY     Estimate from CY
       Statutory  factors           2012 final rule      2013 final rule                    Final
----------------------------------------------------------------------------------------------------------------
Fees............................  0.6 percent (1.006)  0.6 percent (1.006)  0.6 Percent (1.006).
Enrollment......................  3.5 percent (1.035)  1.6 percent (1.016)  0.9 Percent (1.009).
Real per Capita GDP.............  0.6 percent (1.006)  0.7 percent (1.007)  0.9 Percent (1.009).
Law and Regulation..............  -20.7 percent        0.0 percent (1.000)  2.6 Percent (1.026).
                                   (0.793).
                                 -------------------------------------------------------------------------------
    Total.......................  -16.9 percent        2.3 percent (1.023)  5.1 Percent (1.051).
                                   (0.831).
----------------------------------------------------------------------------------------------------------------
Note: Consistent with section 1848(f)(2) of the Act, the statutory factors are multiplied, not added, to produce
  the total (that is, 1.006 x 1.009 x 1.009 x 1.026 = 1.051). A more detailed explanation of each figure is
  provided in section II.G.1.e. of this final rule with comment period.

e. Calculation of CYs 2014, 2013, and 2012 SGRs
(1) Detail on the CY 2014 SGR
    All of the figures used to determine the CY 2014 SGR are estimates 
that will be revised based on subsequent data. Any differences between 
these estimates and the actual measurement of these figures will be 
included in future revisions of the SGR and allowed expenditures and 
incorporated into subsequent PFS updates.

[[Page 74393]]

(a) Factor 1- Changes in Fees for Physicians' Services (Before Applying 
Legislative Adjustments) for CY 2014
    This factor is calculated as a weighted average of the CY 2014 
changes in fees for the different types of services included in the 
definition of physicians' services for the SGR. Medical and other 
health services paid using the PFS are estimated to account for 
approximately 87.7 percent of total allowed charges included in the SGR 
in CY 2014 and are updated using the percent change in the MEI. As 
discussed in section A of this final rule with comment period, the 
percent change in the MEI for CY 2014 is 0.8 percent. Diagnostic 
laboratory tests are estimated to represent approximately 12.3 percent 
of Medicare allowed charges included in the SGR for CY 2014. Medicare 
payments for these tests are updated by the Consumer Price Index for 
Urban Areas (CPI-U), which is 1.8 percent for CY 2014. Section 
1833(h)(2)(A)(iv) of the Act requires that the CPI-U update applied to 
clinical laboratory tests be reduced by a multi-factor productivity 
adjustment (MFP adjustment) and, for each of years 2011 through 2015, 
by 1.75 percentage points (percentage adjustment). The MFP adjustment 
will not apply in a year where the CPI-U is zero or a percentage 
decrease for a year. Further, the application of the MFP adjustment 
shall not result in an adjustment to the fee schedule of less than zero 
for a year. However, the application of the percentage adjustment may 
result in an adjustment to the fee schedule 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 applicable productivity 
adjustment for CY 2014 is -0.8 percent. Adjusting the CPI-U update by 
the productivity adjustment results in a 1.0 percent (1.8 percent (CPI-
U) minus 0.8 percent (MFP adjustment)) update for CY 2014. 
Additionally, the percentage reduction of 1.75 percent is applied for 
CYs 2011 through 2015, as discussed previously. Therefore, for CY 2014, 
diagnostic laboratory tests will receive an update of -0.8 percent 
(rounded). Table 36 shows the weighted average of the MEI and 
laboratory price changes for CY 2014.

 Table 36--Weighted-Average of the MEI and Laboratory Price Changes for
                                 CY 2014
------------------------------------------------------------------------
                                                                 Update
                                                      Weight      (%)
------------------------------------------------------------------------
Physician.........................................      0.877        0.8
Laboratory........................................      0.123       -0.8
Weighted-average..................................      1.000        0.6
------------------------------------------------------------------------

    We estimate that the weighted average increase in fees for 
physicians' services in CY 2014 under the SGR (before applying any 
legislative adjustments) will be 0.6 percent.
(b) Factor 2--Percentage Change in the Average Number of Part B 
Enrollees From CY 2013 to CY 2014
    This factor is our estimate of the percent change in the average 
number of fee-for-service enrollees from CY 2013 to CY 2014. Services 
provided to Medicare Advantage (MA) plan enrollees are outside the 
scope of the SGR and are excluded from this estimate. We estimate that 
the average number of Medicare Part B fee-for-service enrollees will 
increase by 2.2 percent from CY 2013 to CY 2014. Table 37 illustrates 
how this figure was determined.

  Table 37--Average Number of Medicare Part B Fee-for-Service Enrollees
                         From CY 2013 to CY 2014
             [Excluding beneficiaries enrolled in MA plans]
------------------------------------------------------------------------
                                     CY 2013               CY 2014
------------------------------------------------------------------------
Overall.....................  47.982 million......  49.459 million.
Medicare Advantage (MA).....  14.837 million......  15.569 million.
Net.........................  33.144 million......  33.890 million.
Percent Increase............  1 percent...........  2.2 percent.
------------------------------------------------------------------------

    An important factor affecting fee-for-service enrollment is 
beneficiary enrollment in MA plans. Because it is difficult to estimate 
the size of the MA enrollee population before the start of a CY, at 
this time we do not know how actual enrollment in MA plans will compare 
to current estimates. For this reason, the estimate may change 
substantially as actual Medicare fee-for-service enrollment for CY 2014 
becomes known.
(c) Factor 3--Estimated Real Gross Domestic Product per Capita Growth 
in CY 2014
    We estimate that the growth in real GDP per capita from CY 2013 to 
CY 2014 will be 0.8 percent (based on the annual growth in the 10 year 
moving average of real GDP per capita 2005 through 2014). Our past 
experience indicates that there have also been changes in estimates of 
real GDP per capita growth made before the year begins and the actual 
change in real GDP per capita growth computed after the year is 
complete. Thus, it is possible that this figure will change as actual 
information on economic performance becomes available to us in CY 2014.
    (d) Factor 4--Percentage Change in Expenditures for Physicians' 
Services Resulting From Changes in Statute or Regulations in CY 2014 
Compared With CY 2013
    The statutory and regulatory provisions that will affect 
expenditures in CY 2014 relative to CY 2013 are estimated to have an 
impact on expenditures of -19.6 percent. The impact is primarily due to 
the expiration of the physician fee schedule update specified in 
statute for CY 2013 only.
(2) Detail on the CY 2013 SGR
    A more detailed discussion of our revised estimates of the four 
elements of the CY 2013 SGR follows.
(a) Factor 1--Changes in Fees for Physicians' Services (Before Applying 
Legislative Adjustments) for CY 2013
    This factor was calculated as a weighted-average of the CY 2013 
changes in fees that apply for the different types of services included 
in the definition of physicians' services for the SGR in CY 2013.
    We estimate that services paid using the PFS account for 
approximately 90.1 percent of total allowed charges included in the SGR 
in CY 2013. These services were updated using the CY 2013 percent 
change in the MEI of 0.8 percent. We estimate that diagnostic 
laboratory tests represent approximately 9.9 percent of total allowed 
charges

[[Page 74394]]

included in the SGR in CY 2013. For CY 2013, diagnostic laboratory 
tests received an update of -3.0 percent.
    Table 38 shows the weighted-average of the MEI and laboratory price 
changes for CY 2013.

 Table 38--Weighted-Average of the MEI, and Laboratory Price Changes for
                                 CY 2013
------------------------------------------------------------------------
                                                      Weight     Update
------------------------------------------------------------------------
Physician.........................................      0.901        0.8
Laboratory........................................      0.099       -3.0
Weighted-average..................................      1.000        0.4
------------------------------------------------------------------------

    After considering the elements described in Table 38, we estimate 
that the weighted-average increase in fees for physicians' services in 
CY 2013 under the SGR was 0.4 percent. Our estimate of this factor in 
the CY 2013 PFS final rule with comment period was 0.3 percent (77 FR 
69133).
(b) Factor 2--Percentage Change in the Average Number of Part B 
Enrollees From CY 2012 to CY 2013
    We estimate that the average number of Medicare Part B fee-for-
service enrollees (excluding beneficiaries enrolled in Medicare 
Advantage plans) increased by 1.0 percent in CY 2013. Table 39 
illustrates how we determined this figure.

  Table 39--Average Number of Medicare Part B Fee-for-Service Enrollees
                         From CY 2012 to CY 2013
             [Excluding beneficiaries enrolled in MA plans]
------------------------------------------------------------------------
                                     CY 2012               CY 2013
------------------------------------------------------------------------
Overall.....................  46.405 million......  47.982 million.
Medicare Advantage (MA).....  13.586 million......  14.837 million.
Net.........................  32.818 million......  33.144 million.
Percent Increase............  0.9 percent.........  1.0 percent.
------------------------------------------------------------------------

    Our estimate of the 1.0 percent change in the number of fee-for-
service enrollees, net of Medicare Advantage enrollment for CY 2013 
compared to CY 2012, is different than our original estimate of an 
increase of 3.6 percent in the CY 2013 PFS final rule with comment 
period (77 FR 69133). While our current projection based on data from 8 
months of CY 2013 differs from our original estimate of 0.4 percent 
when we had no actual data, it is still possible that our final 
estimate of this figure will be different once we have complete 
information on CY 2013 fee-for-service enrollment.
(c) Factor 3--Estimated Real GDP per Capita Growth in CY 2013
    We estimate that the growth in real GDP per capita will be 0.9 
percent for CY 2013 (based on the annual growth in the 10-year moving 
average of real GDP per capita (2004 through 2013)). Our past 
experience indicates that there have also been differences between our 
estimates of real per capita GDP growth made prior to the year's end 
and the actual change in this factor. Thus, it is possible that this 
figure will change further as complete actual information on CY 2013 
economic performance becomes available to us in CY 2014.
(d) Factor 4--Percentage Change in Expenditures for Physicians' 
Services Resulting From Changes in Statute or Regulations in CY 2013 
Compared With CY 2012
    The statutory and regulatory provisions that affected expenditures 
in CY 2013 relative to CY 2012 are estimated to have an impact on 
expenditures of -0.5 percent. This impact is primarily due to the 
expiration of the PFS update specified in statute for CY 2013 only.
(3) Detail on the CY 2012 SGR
    A more detailed discussion of our final revised estimates of the 
four elements of the CY 2012 SGR follows.
(a) Factor 1--Changes in Fees for Physicians' Services for CY 2012
    This factor was calculated as a weighted average of the CY 2012 
changes in fees that apply for the different types of services included 
in the definition of physicians' services for the SGR in CY 2012.
    We estimate that services paid under the PFS account for 
approximately 90 percent of total allowed charges included in the SGR 
in CY 2012. These services were updated using the CY 2012 percent 
change in the MEI of 0.6 percent. We estimate that diagnostic 
laboratory tests represent approximately 10 percent of total allowed 
charges included in the SGR in CY 2012. For CY 2012, diagnostic 
laboratory tests received an update of 0.7 percent.
    Table 40 shows the weighted-average of the MEI and laboratory price 
changes for CY 2012.

    Table 40--Weighted-Average of the MEI, Laboratory, and Drug Price
                            Changes for 2012
------------------------------------------------------------------------
                                                     Weight      Update
------------------------------------------------------------------------
Physician........................................       0.900        0.6
Laboratory.......................................       0.100        0.7
Weighted-average.................................       1.00         0.6
------------------------------------------------------------------------

    After considering the elements described in Table 40, we estimate 
that the weighted-average increase in fees for physicians' services in 
CY 2012 under the SGR (before applying any legislative adjustments) was 
0.6 percent. This figure is a final one based on complete data for CY 
2012.
(b) Factor 2--Percentage Change in the Average Number of Part B 
Enrollees From CY 2011 to CY 2012
    We estimate the change in the number of fee-for-service enrollees 
(excluding beneficiaries enrolled in MA plans) from CY 2011 to CY 2012 
was 0.9 percent. Our calculation of this factor is based on complete 
data from CY 2012. Table 41 illustrates the calculation of this factor.

  Table 41--Average Number of Medicare Part B Fee-for-Service Enrollees
                         From CY 2011 to CY 2012
             [Excluding beneficiaries enrolled in MA Plans]
------------------------------------------------------------------------
                                                     CY 2011    CY 2012
------------------------------------------------------------------------
Overall...........................................     44.906     46.405
Medicare Advantage (MA)...........................     12.382     13.586
Net...............................................     32.524     32.818

[[Page 74395]]

 
Percent Change....................................  .........       0.9%
------------------------------------------------------------------------

(c) Factor 3--Estimated Real GDP per Capita Growth in CY 2012
    We estimate that the growth in real per capita GDP was 0.9 percent 
in CY 2012 (based on the annual growth in the 10-year moving average of 
real GDP per capita (2003 through 2012)). This figure is a final one 
based on complete data for CY 2012.
(d) Factor 4--Percentage Change in Expenditures for Physicians' 
Services Resulting From Changes in Statute or Regulations in CY 2012 
Compared With CY 2011
    Our final estimate for the net impact on expenditures from the 
statutory and regulatory provisions that affect expenditures in CY 2012 
relative to CY 2011 is 2.6 percent. This is primarily an effect of the 
statutory requirements surrounding the temporary physician fee schedule 
update in CY 2012.
2. The Update Adjustment Factor (UAF)
    Section 1848(d) of the Act provides that the PFS update is equal to 
the product of the MEI and the UAF. The UAF is applied to make actual 
and target expenditures (referred to in the statute as ``allowed 
expenditures'') equal. As discussed previously, allowed expenditures 
are equal to actual expenditures in a base period updated each year by 
the SGR. The SGR sets the annual rate of growth in allowed expenditures 
and is determined by a formula specified in section 1848(f) of the Act.
    The calculation of the UAF is not affected by sequestration. 
Pursuant to 2 U.S.C. 906(d)(6), ``The Secretary of Health and Human 
Services shall not take into account any reductions in payment amounts 
which have been or may be effected under [sequestration], for purposes 
of computing any adjustments to payment rates under such title XVIII''. 
Therefore, allowed charges, which are unaffected by sequestration, were 
used to calculate physician expenditures in lieu of Medicare payments 
plus beneficiary cost-sharing. As a result, neither actual expenditures 
or allowed expenditures were adjusted to reflect the impact of 
sequestration.
a. Calculation Under Current Law
    Under section 1848(d)(4)(B) of the Act, the UAF for a year 
beginning with CY 2001 is equal to the sum of the following--
     Prior Year Adjustment Component. An amount determined by--
    ++ Computing the difference (which may be positive or negative) 
between the amount of the allowed expenditures for physicians' services 
for the prior year (the year prior to the year for which the update is 
being determined) and the amount of the actual expenditures for those 
services for that year;
    ++ Dividing that difference by the amount of the actual 
expenditures for those services for that year; and
    ++ Multiplying that quotient by 0.75.
     Cumulative Adjustment Component. An amount determined by--
    ++ Computing the difference (which may be positive or negative) 
between the amount of the allowed expenditures for physicians' services 
from April 1, 1996, through the end of the prior year and the amount of 
the actual expenditures for those services during that period;
    ++ Dividing that difference by actual expenditures for those 
services for the prior year as increased by the SGR for the year for 
which the UAF is to be determined; and
    ++ Multiplying that quotient by 0.33.
    Section 1848(d)(4)(E) of the Act requires the Secretary to 
recalculate allowed expenditures consistent with section 1848(f)(3) of 
the Act. As discussed previously, section 1848(f)(3) specifies that the 
SGR (and, in turn, allowed expenditures) for the upcoming CY (CY 2014 
in this case), the current CY (that is, CY 2013) and the preceding CY 
(that is, CY 2012) are to be determined on the basis of the best data 
available as of September 1 of the current year. Allowed expenditures 
for a year generally are estimated initially and subsequently revised 
twice. The second revision occurs after the CY has ended (that is, we 
are making the second revision to CY 2012 allowed expenditures in this 
final rule with comment).
    Table 42 shows the historical SGRs corresponding to each period 
through CY 2014.

  Table 42--Annual and Cumulative Allowed and Actual Expenditures for Physicians' Services From April 1, 1996 Through the End of the Upcoming Calendar
                                                                          Year
--------------------------------------------------------------------------------------------------------------------------------------------------------
                                                                                                     Cumulative
                                                             Annual allowed     Annual actual         allowed       Cumulative actual
                          Period                            expenditures ($    expenditures ($    expenditures ($    expenditures ($       FY/CY SGR
                                                              in billions)       in billions)       in billions)       in billions)
--------------------------------------------------------------------------------------------------------------------------------------------------------
4/1/96-3/31/97...........................................               47.0               47.0               47.0               47.0  .................
4/1/97-3/31/98...........................................               48.5               47.2               95.6               94.3                3.2
4/1/98-3/31/99...........................................               50.6               48.1              146.2              142.4                4.2
1/1/99-3/31/99...........................................               12.7               12.5              146.2              142.4  .................
4/1/99-12/31/99..........................................               40.5               37.2              186.7              179.6                6.9
1/1/99-12/31/99..........................................               53.2               49.7              186.7              179.6  .................
1/1/00-12/31/00..........................................               57.1               54.4              243.7              234.0                7.3
1/1/01-12/31/01..........................................               59.7               61.5              303.4              295.5                4.5
1/1/02-12/31/02..........................................               64.6               64.8              368.0              360.3                8.3
1/1/03-12/31/03..........................................               69.3               70.4              437.3              430.7                7.3
1/1/04-12/31/04..........................................               73.9               78.5              511.2              509.1                6.6
1/1/05-12/31/05..........................................               77.0               83.8              588.2              593.0                4.2
1/1/06-12/31/06..........................................               78.2               85.1              666.4              678.1                1.5
1/1/07-12/31/07..........................................               80.9               85.1              747.2              763.1                3.5
1/1/08-12/31/08..........................................               84.5               87.3              831.8              850.4                4.5
1/1/09-12/31/09..........................................               89.9               91.1              921.7              941.5                6.4
1/1/10-12/31/10..........................................               97.9                 96           1,019.60           1,037.40                8.9
1/1/11-12/31/11..........................................              102.5               99.6           1,122.20           1,137.10                4.7
1/1/12-12/31/12..........................................              107.8               99.5           1,230.00           1,236.60                5.1

[[Page 74396]]

 
1/1/13-12/31/13..........................................              109.7              102.2           1,339.70           1,338.80                1.8
1/1/14-12/31/14..........................................               91.4                N/A           1,431.10                N/A              -16.7
--------------------------------------------------------------------------------------------------------------------------------------------------------
\1\ Allowed expenditures in the first year (April 1, 1996-March 31, 1997) are equal to actual expenditures. All subsequent figures are equal to
  quarterly allowed expenditure figures increased by the applicable SGR. Cumulative allowed expenditures are equal to the sum of annual allowed
  expenditures. We provide more detailed quarterly allowed and actual expenditure data on our Web site at the following address: http://www.cms.hhs.gov/
  SustainableGRatesConFact/. We expect to update the Web site with the most current information later this month.
\2\ Allowed expenditures for the first quarter of 1999 are based on the FY 1999 SGR.
\3\ Allowed expenditures for the last three quarters of 1999 are based on the FY 2000 SGR.

    Consistent with section 1848(d)(4)(E) of the Act, Table 42 includes 
our second revision of allowed expenditures for CY 2012, a 
recalculation of allowed expenditures for CY 2013, and our initial 
estimate of allowed expenditures for CY 2014. To determine the UAF for 
CY 2014, the statute requires that we use allowed and actual 
expenditures from April 1, 1996 through December 31, 2013 and the CY 
2014 SGR. Consistent with section 1848(d)(4)(E) of the Act, we will be 
making revisions to the CY 2013 and CY 2014 SGRs and CY 2013 and CY 
2014 allowed expenditures. Because we have incomplete actual 
expenditure data for CY 2013, we are using an estimate for this period. 
Any difference between current estimates and final figures will be 
taken into account in determining the UAF for future years.
    We are using figures from Table 42 in the following statutory 
formula:
[GRAPHIC] [TIFF OMITTED] TR10DE13.000

UAF14 = Update Adjustment Factor for CY 2014 = 3.0 
percent
Target13 = Allowed Expenditures for CY 2013 = $109.7 
billion
Actual13 = Estimated Actual Expenditures for CY 2013 = 
$102.2 billion
Target4/96-12/13 = Allowed Expenditures from 4/1/1996-12/
31/2013 = $1,339.70 billion
Actual4/96-12/13 = Estimated Actual Expenditures from 4/
1/1996-12/31/2013 = $1,338.80 billion
SGR14 = -16.7 percent (0.833)

[GRAPHIC] [TIFF OMITTED] TR10DE13.001

    Section 1848(d)(4)(D) of the Act indicates that the UAF determined 
under section 1848(d)(4)(B) of the Act for a year may not be less than 
-0.07 or greater than 0.03. Since 0.059 (5.9 percent) is greater than 
0.03, the UAF for CY 2014 will be 3 percent.
    Section 1848(d)(4)(A)(ii) of the Act indicates that 1.0 should be 
added to the UAF determined under section 1848(d)(4)(B) of the Act. 
Thus, adding 1.0 to 0.03 makes the UAF equal to 1.03.
3. Percentage Change in the MEI for CY 2014
    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, that 
the higher level is justified by year-to-year economic changes. The 
current form of the MEI was detailed in the CY 2010 PFS final rule (75 
FR 73262), which updated the cost structure of the index from a base 
year of 2000 to 2006. Additional updates to the MEI are discussed in 
section II.D of this final rule with comment period.
    The MEI measures the weighted-average annual price change for 
various inputs needed to produce physicians' services. The MEI is a 
fixed-weight input price index, with an adjustment for the change in 
economy-wide multifactor productivity. This index, which has CY 2006 
base year weights, is comprised of two broad categories: (1) 
Physician's own time; and (2) physician's practice expense (PE).
    The physician's compensation (own time) component represents the 
net income portion of business receipts and primarily reflects the 
input of the physician's own time into the production of physicians' 
services in physicians' offices. This category consists of two 
subcomponents: (1) Wages and salaries; and (2) fringe benefits.
    The physician's practice expense (PE) category represents 
nonphysician inputs used in the production of services in physicians' 
offices. This category consists of wages and salaries and fringe 
benefits for nonphysician staff (who cannot bill independently) and 
other nonlabor inputs. The physician's PE component also includes the 
following categories of nonlabor inputs: Office expenses; medical 
materials and supplies; professional liability insurance; medical 
equipment; medical materials and supplies; and other professional 
expenses.
    Table 43 lists the MEI cost categories with associated weights and 
percent changes for price proxies for the CY 2014 update. The CY 2014 
final MEI update is 0.8 percent and reflects a 1.9 percent increase in 
physician's own time and a 1.4 percent increase in physician's PE. 
Within the physician's PE, the largest increase occurred in postage, 
which increased 4.9 percent.
    For CY 2014, the increase in the MEI is 0.8 percent, which reflects 
an increase in the non-productivity adjusted MEI of 1.7 percent and a 
productivity adjustment of 0.9 percent (which is based on the 10-year 
moving average of economy-wide private nonfarm business

[[Page 74397]]

multifactor productivity). The BLS is the agency that publishes the 
official measure of private non-farm business MFP. Please see http://
www.bls.gov/mfp, which is the link to the BLS historical published data 
on the measure of MFP.

Table 43--Increase in the Medicare Economic Index Update for CY 2014 \1\
------------------------------------------------------------------------
                                           2006 revised
          Revised cost category             cost weight     CY14 Update
                                           \2\ (percent)     (percent)
------------------------------------------------------------------------
MEI Total, productivity adjusted........         100.000             0.8
Productivity: 10[dash]year moving                \5\ N/A             0.9
 average of MFP \1\.....................
MEI Total, without productivity                  100.000             1.7
 adjustment.............................
Physician Compensation \3\..............          50.866             1.9
    Wages and Salaries..................          43.641             1.9
    Benefits............................           7.225             2.2
Practice Expense........................          49.134             1.4
    Non-physician compensation..........          16.553             1.7
    Non-physician wages.................          11.885             1.7
        Non-health, non-physician wages.           7.249             1.8
            Professional & Related......           0.800             1.9
            Management..................           1.529             1.8
            Clerical....................           4.720             1.8
            Services....................           0.200             1.5
        Health related, non-physician              4.636             1.4
         wages..........................
    Non-physician benefits..............           4.668             1.9
    Other Practice Expense..............          32.581             1.2
        Utilities.......................           1.266             0.7
        Miscellaneous Office Expenses...           2.478             0.3
            Chemicals...................           0.723            -1.2
            Paper.......................           0.656             1.1
            Rubber & Plastics...........           0.598             0.5
            All other products..........           0.500             1.9
        Telephone.......................           1.501             0.0
        Postage.........................           0.898             4.9
        All Other Professional Services.           8.095             1.8
            Professional, Scientific,              2.592             1.7
             and Tech. Services.........
            Administrative and support &           3.052             1.9
             waste......................
            All Other Services..........           2.451             1.6
        Capital.........................          10.310             0.7
            Fixed.......................           8.957             0.7
            Moveable....................           1.353             0.7
        Professional Liability Insurance           4.295             1.5
         \4\............................
        Medical Equipment...............           1.978             1.2
        Medical supplies................           1.760             1.0
------------------------------------------------------------------------
\1\ The forecasts are based upon the latest available Bureau of Labor
  Statistics data on the 10-year average of BLS private nonfarm business
  multifactor productivity published on June 28, 2013. (http://
  www.bls.gov/news.release/prod3.nr0.htm.)
\2\ The weights shown for the MEI components are the 2006 base-year
  weights, which may not sum to subtotals or totals because of rounding.
  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.
\5\ Productivity is factored into the MEI categories as an adjustment;
  therefore, no explicit weight exists for productivity in the MEI.

4. Physician and Anesthesia Fee Schedule Conversion Factors for CY 2014
    The CY 2014 PFS CF is $27.2006. The CY 2014 national average 
anesthesia CF is $17.2283.
a. Physician Fee Schedule Update and Conversion Factor
(1) CY 2014 PFS Update
    The formula for calculating the PFS update is set forth in section 
1848(d)(4)(A) of the Act. In general, the PFS update is determined by 
multiplying the CF for the previous year by the percentage increase in 
the MEI less productivity times the UAF, which is calculated as 
specified under section 1848(d)(4)(B) of the Act.
(2) CY 2014 PFS Conversion Factor
    Generally, the PFS CF for a year is calculated in accordance with 
section 1848(d)(1)(A) of the Act by multiplying the previous year's CF 
by the PFS update.
    We note section 101 of the Medicare Improvements and Extension Act, 
Division B of the Tax Relief and Health Care Act of 2006 (MIEA-TRHCA) 
provided a 1-year increase in the CY 2007 CF and specified that the CF 
for CY 2008 must be computed as if the 1-year increase had never 
applied.
    Section 101 of the Medicare, Medicaid, and SCHIP Extension Act of 
2007 (MMSEA) provided a 6-month increase in the CY 2008 CF, from 
January 1, 2008, through June 30, 2008, and specified that the CF for 
the remaining portion of CY 2008 and the CFs for CY 2009 and subsequent 
years must be computed as if the 6-month increase had never applied.

[[Page 74398]]

    Section 131 of the MIPPA extended the increase in the CY 2008 CF 
that applied during the first half of the year to the entire year, 
provided for a 1.1 percent increase to the CY 2009 CF, and specified 
that the CFs for CY 2010 and subsequent years must be computed as if 
the increases for CYs 2007, 2008, and 2009 had never applied.
    Section 1011(a) of the DODAA and section 5 of the TEA specified a 
zero percent update for CY 2010, effective January 1, 2010 through 
March 31, 2010.
    Section 4 of the Continuing Extension Act of 2010 (CEA) extended 
the zero percent update for CY 2010 through May 31, 2010.
    Subsequently, section 101(a)(2) of the PACMBPRA provided for a 2.2 
percent update to the CF, effective from June 1, 2010 to November 30, 
2010.
    Section 2 of the Physician Payment and Therapy Relief Act of 2010 
(Pub. L. No. 111-286) extended the 2.2 percent through the end of CY 
2010.
    Section 101 of the MMEA provided a zero percent update for CY 2011, 
effective January 1, 2011 through December 31, 2011, and specified that 
the CFs for CY 2012 and subsequent years must be computed as if the 
increases in previous years had never applied.
    Section 301 of the Temporary Payroll Tax Cut Continuation Act of 
2011 (TPTCCA) provided a zero percent update effective January 1, 2012 
through February 29, 2012, and specified that the CFs for subsequent 
time periods must be computed as if the increases in previous years had 
never applied.
    Section 3003 of the Middle Class Tax Relief and Job Creation Act of 
2012 (Job Creation Act) provided a zero percent update effective March 
1, 2012 through December 31, 2012, and specified that the CFs for 
subsequent time periods must be computed as if the increases in 
previous years had never applied.
    Section 601 of the American Taxpayer Relief Act (ATRA) of 2012 
(Pub. L. 112-240) provided a zero percent update for CY 2013, effective 
January 1, 2013 through December 31, 2013, and specified that the CFs 
for subsequent time periods must be computed as if the increases in 
previous years had not been applied.
    Therefore, under current law, the CF that would be in effect in CY 
2013 had the prior increases specified above not applied is $25.0070.
    In addition, when calculating the PFS CF for a year, section 
1848(c)(2)(B)(ii)(II) of the Act requires that increases or decreases 
in RVUs may not cause the amount of expenditures for the year to differ 
more than $20 million from what it would have been in the absence of 
these changes. If this threshold is exceeded, we must make adjustments 
to preserve budget neutrality. We estimate that CY 2014 RVU changes 
would result in a decrease in Medicare physician expenditures of more 
than $20 million. Accordingly, we are increasing the CF by 0.046 
percent to offset this estimated decrease in Medicare physician 
expenditures due to the CY 2014 RVU changes. Furthermore, as discussed 
in section A of this final rule with comment period, we are increasing 
the CF by 4.72 percent in order to offset the decrease in Medicare 
physician payments due to the CY 2014 rescaling of the RVUs so that the 
proportions of total payments for the work, PE, and malpractice RVUs 
match the proportions in the final revised MEI for CY 2014. 
Accordingly, we calculate the CY 2014 PFS CF to be $27.2006. This final 
rule with comment period announces a reduction to payment rates for 
physicians' services in CY 2014 under the SGR formula. These payment 
rates are currently scheduled to be reduced under the SGR system on 
January 1, 2014. The total reduction in the MPFS conversion factor 
between CY 2013 and CY 2014 under the SGR system will be 20.1 percent. 
By law, we are required to make these reductions in accordance with 
section 1848(d) and (f) of the Act, and these reductions can only be 
averted by an Act of Congress. While Congress has provided temporary 
relief from these reductions every year since 2003, a long-term 
solution is critical. We will continue to work with Congress to fix 
this untenable situation so doctors and beneficiaries no longer have to 
worry about the stability and adequacy of payments from Medicare under 
the Physician Fee Schedule.
    We illustrate the calculation of the CY 2014 PFS CF in Table 44.

               Table 44--Calculation of the CY 2014 PFS CF
------------------------------------------------------------------------
 
------------------------------------------------------------------------
Conversion Factor in effect in CY    ......................     $34.0230
 2013.
CY 2013 Conversion Factor had        ......................     $25.0070
 statutory increases not applied.
CY 2014 Medicare Economic Index....  0.8 percent (1.008)...  ...........
CY 2014 Update Adjustment Factor...  3.0 percent (1.03)....  ...........
CY 2014 RVU Budget Neutrality        0.046 percent           ...........
 Adjustment.                          (1.00046).
CY 2014 Rescaling to Match MEI       4.718 percent           ...........
 Weights Budget Neutrality            (1.04718).
 Adjustment.
CY 2014 Conversion Factor..........  ......................     $27.2006
Percent Change from Conversion       ......................       -20.1%
 Factor in effect in CY 2013 to CY
 2014 Conversion Factor.
------------------------------------------------------------------------

    We note payment for services under the PFS will be calculated as 
follows:

Payment = [(Work RVU x Work GPCI) + (PE RVU x PE GPCI) + 
(Malpractice RVU x Malpractice GPCI)] x CF.

b. Anesthesia Conversion Factor
    We calculate the anesthesia CF as indicated in Table 45. Anesthesia 
services do not have RVUs like other PFS services. Therefore, we 
account for any necessary RVU adjustments through an adjustment to the 
anesthesia CF to simulate changes to RVUs. More specifically, if there 
is an adjustment to the work, PE, or malpractice RVUs, these 
adjustments are applied to the respective shares of the anesthesia CF 
as these shares are proxies for the work, PE, and malpractice RVUs for 
anesthesia services. Information regarding the anesthesia work, PE, and 
malpractice shares can be found at the following: https://www.cms.gov/
center/anesth.asp.
    The anesthesia CF in effect in CY 2013 is $ 21.9243. As explained 
previously, in order to calculate the CY 2014 PFS CF, the statute 
requires us to calculate the CFs for all previous years as if the 
various legislative changes to the CFs for those years had not 
occurred. Accordingly, under current law, the anesthesia CF in effect 
in CY 2013 had statutory increases not applied is $16.1236. The percent 
change from the anesthesia CF in effect in CY 2013 to the CF for CY 
2014 is -21.4 percent. We illustrate the calculation of the CY 2014 
anesthesia CF in Table 45.

[[Page 74399]]

           Table 45--Calculation of the CY 2014 Anesthesia CF
------------------------------------------------------------------------
 
------------------------------------------------------------------------
2013 National Average Anesthesia     ......................     $21.9243
 Conversion Factor in effect in CY
 2013.
2013 National Anesthesia Conversion  ......................     $16.1236
 Factor had Statutory Increases Not
 Applied.
CY 2014 Medicare Economic Index....  0.8 (1.008)...........  ...........
CY 2014 Update Adjustment Factor...  3.0 (1.003)...........  ...........
CY 2014 Budget Neutrality Work and   0.046 (1.00046).......  ...........
 Malpractice Adjustment.
CY 2014 Rescaling to Match MEI       4.718 percent (1.4718)  ...........
 Weights Budget Neutrality
 Adjustment.
CY 2014 Anesthesia Fee Schedule      .9823 (.9823).........  ...........
 Practice Expense Adjustment.
CY 2014 Anesthesia Conversion        ......................     $17.2283
 Factor.
Percent Change from 2013 to 2014...  ......................       -21.4%
------------------------------------------------------------------------

H. Medicare Telehealth Services for the Physician Fee Schedule

1. Billing and Payment for Telehealth Services
a. History
    Prior to January 1, 1999, Medicare coverage for services delivered 
via a telecommunications system was limited to services that did not 
require a face-to-face encounter under the traditional model of medical 
care. Examples of these services included interpretation of an x-ray, 
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 that would 
have been made to the consultant for the service furnished. 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 (BIPA) (Pub. L. 
106-554) added 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) of 
the Act 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 Sec.  410.78(b), we generally 
require that a telehealth service be furnished via an interactive 
telecommunications system. Under Sec.  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 distant site physician or practitioner. 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 Act allows the 
use of asynchronous ``store-and-forward'' technology when the 
originating site is a federal telemedicine demonstration program in 
Alaska or Hawaii. As specified in regulations at Sec.  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 furnished to an eligible 
telehealth individual notwithstanding the fact that the practitioner 
furnishing 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. Under the BIPA, originating sites were limited under 
section 1834(m)(3)(C) of the Act to specified medical facilities 
located in specific geographic areas. The initial list of telehealth 
originating sites included the office of a practitioner, CAH, a rural 
health clinic (RHC), a federally qualified health center (FQHC) and a 
hospital (as defined in section 1861(e) of the Act). More recently, 
section 149 of the Medicare Improvements for Patients and Providers Act 
of 2008 (Pub. L. 110-275) (MIPPA) expanded the list of telehealth 
originating sites to include a hospital-based renal dialysis center, a 
skilled nursing facility (SNF), and a community mental health center 
(CMHC). To serve as a telehealth originating site, the Act requires 
that a site must also be located in an area designated as a rural HPSA, 
in a county that is not in a 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 as of 
December 31, 2000. Finally, section 1834(m) of the Act does not require 
the eligible telehealth individual to be with a telepresenter at the 
originating site.
b. Current Telehealth Billing and Payment Policies
    As noted previously, Medicare telehealth services can only be 
furnished to an eligible telehealth beneficiary in a qualifying 
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. 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;

[[Page 74400]]

     Individual and group medical nutrition therapy (MNT);
     Neurobehavioral status exam;
     Individual and group health and behavior assessment and 
intervention (HBAI);
     Subsequent hospital care;
     Subsequent nursing facility care;
     Individual and group kidney disease education (KDE);
     Individual and group diabetes self-management training 
(DSMT);
     Smoking cessation services;
     Alcohol and/or substance abuse and brief intervention 
services;
     Screening and behavioral counseling interventions in 
primary care to reduce alcohol misuse;
     Screening for depression in adults;
     Screening for sexually transmitted infections (STIs) and 
high intensity behavioral counseling (HIBC) to prevent STIs;
     Intensive behavioral therapy for cardiovascular disease; 
and
     Behavioral counseling for obesity.
    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 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 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 certifies 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 as of December 31, 2000 as specified in section 
1834(m)(4)(C)(i)(III) of the Act.
    As previously described, 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) of the 
Act. 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).
c. Geographic Criteria for Originating Site Eligibility
    Section 1834(m)(4)(C)(i)(I)-(III) of the Act specifies three 
criteria for the location of eligible telehealth originating sites. One 
of these is for entities participating in federal telemedicine 
demonstration projects as of December 31, 2000, and the other two are 
geographic. One of the geographic criteria is that the site is located 
in a county that is not in an MSA and the other is that the site is 
located in an area that is designated as a rural HPSA under section 
332(a)(1)(A) of the Public Health Service Act (PHSA) (42 U.S.C. 
254e(a)(1)(A)). Section 332(a)(1)(A) of the PHSA provides for the 
designation of various types of HPSAs, but does not provide for 
``rural'' HPSAs. In the absence of guidance in the PHSA, CMS has in the 
past interpreted the term ``rural'' under section 1834(m)(4)(C)(i)(I) 
to mean an area that is not located in an MSA. As such, the current 
geographic criteria for telehealth originating sites limits eligible 
sites to those that are not in an MSA.
    To determine rural designations with more precision for other 
purposes, HHS and CMS have sometimes used methods that do not rely 
solely on MSA designations. For example, the Office of Rural Health 
Policy (ORHP) uses the Rural Urban Commuting Areas (RUCAs) to determine 
rural areas within MSAs. RUCAs are a census tract-based classification 
scheme that utilizes the standard Bureau of Census Urbanized Area and 
Urban Cluster definitions in combination with work commuting 
information to characterize all of the nation's census tracts regarding 
their rural and urban status and relationships. They were developed 
under a collaborative project between ORHP, the U.S. Department of 
Agriculture's Economic Research Service (ERS), and the WWAMI Rural 
Health Research Center (RHRC). A more comprehensive description is 
available at the USDA ERS Web site at: www.ers.usda.gov/data-products/
rural-urban-commuting-area-codes/documentation.aspx#.UcsKfZwzZKE. The 
RUCA classification scheme contains 10 primary and 30 secondary codes. 
The primary code numbers (1 through 10) refer to the primary, or single 
largest, commuting share. Census tracts with RUCA codes of 4 through 10 
refer to areas with a primary commuting share outside of a metropolitan 
area. In addition to counties that are not in an MSA, ORHP considers 
some census tracts in MSA counties to be rural.

[[Page 74401]]

Specifically, census tracts with RUCA codes 4 through 10 are considered 
to be rural, as well as census tracts with RUCA codes 2 and 3 that are 
also at least 400 square miles and have a population density of less 
than 35 people per square mile.
    We proposed to modify our regulations regarding originating sites 
to define rural HPSAs as those located in rural census tracts as 
determined by ORHP stating that by defining ``rural'' to include 
geographic areas located in rural census tracts within MSAs we would 
allow for the appropriate inclusion of additional HPSAs as areas for 
telehealth originating sites. We also noted that by adopting the more 
precise definition of ``rural'' for this purpose we would expand access 
to health care services for Medicare beneficiaries located in rural 
areas.
    We also proposed to change our policy so that geographic 
eligibility for an originating site would be established and maintained 
on an annual basis, consistent with other telehealth payment policies. 
Absent this proposed change, the status of a geographic area's 
eligibility for telehealth originating site payment is effective at the 
same time as the effective date for changes in designations that are 
made outside of CMS. This proposed change would reduce the likelihood 
that mid-year changes to geographic designations would result in sudden 
disruptions to beneficiaries' access to services, unexpected changes in 
eligibility for established telehealth originating sites, and avoid the 
operational difficulties associated with administering mid-year 
Medicare telehealth payment changes. We proposed to establish 
geographic eligibility for Medicare telehealth originating sites for 
each calendar year based upon the status of the area as of December 
31st of the prior calendar year.
    Accordingly, we proposed to revise our regulations at Sec.  
410.78(b)(4) to conform with both of these proposed policies.
    The following is a summary of the comments we received regarding 
our proposed changes regarding geographic eligibility for serving as a 
Medicare telehealth originating site.
    Comment: Commenters supported our proposal to modify the geographic 
criteria for originating site eligibility to define rural HPSAs as 
those located in rural census tracts, as determined by ORHP. In 
addition, commenters supported our proposal to establish and maintain 
geographic eligibility on an annual basis. Commenters noted that these 
modifications will:
     Expand access to health care services for Medicare 
beneficiaries by allowing some rural areas within MSAs to be eligible 
for Medicare telehealth services.
     Provide greater clarity and consistency for those involved 
in telehealth.
     Allow for better continuity of care in rural areas by 
avoiding sudden disruptions to beneficiaries' access to telehealth 
services.
     Restore eligibility for some counties that were affected 
by the updated MSAs based on the 2010 census.
    Response: We appreciate the broad support for revising the 
geographic criteria for originating site eligibility and for 
establishing and maintaining geographic eligibility for an originating 
site on an annual basis. We are finalizing our CY 2014 proposals (1) to 
define rural HPSAs as those located in rural census tracts as 
determined by ORHP, and (2) to establish and maintain geographic 
eligibility for an originating site on an annual basis. Consistent with 
these proposals, we are also revising our regulations at Sec.  
410.78(b)(4) to conform to these policies.
    Comment: Commenters expressed concern that our proposed definition 
of a rural HPSA does not conform to the definition of a rural HPSA used 
for rural health clinic qualification, that is, a federally designated 
shortage area or a non-urbanized area, as defined by the U.S. Census 
Bureau. As a result, existing RHCs may be excluded from providing 
telehealth services to Medicare beneficiaries. To avoid this 
discrepancy, the commenters requested further expansion of the 
geographic criteria for originating site eligibility to include both 
non-urbanized areas, as defined by the U.S. Census Bureau, and those 
rural HPSAs located in rural census tracts, as determined by ORHP. A 
commenter also recommended that CMS work with the Health Resources and 
Services Administration (HRSA) to update all data with 2010 census 
information.
    Other commenters recommended expansion of the geographic criteria 
for originating site to urban and suburban areas. A commenter 
recommended including sites that are located in (1) areas other than 
rural HPSAs and (2) counties that are included in MSAs. The commenter 
noted that beneficiaries in both urban and rural areas face significant 
barriers in accessing care, including access to certain specialists, 
such as gerontologists, and access to transportation.
    A commenter noted that urban and suburban areas do not have 
appropriate access to acute stroke care, noting that 77 percent of U.S. 
counties did not have a hospital with neurological services. As a 
result of these and other barriers, only a small fraction of patients 
receive the treatment recommended by the latest scientific guidelines 
for acute stroke. The commenter concluded that our policy of limiting 
payment for telehealth services to those originating in rural areas has 
hampered the development of sufficient stroke consultation coverage and 
recommend eliminating the rural originating site requirement. Another 
commenter made similar points concerning cancer patients living in 
small urban areas without access to complex subspecialty care. A 
commenter proposed using RUCAs to determine eligible originating sites, 
to ensure greater access to telemedicine services.
    Response: Telehealth originating sites are defined in section 
1834(m)(4)(C) of the Act. Only a site that meets one of these 
requirements can qualify as an originating site:
    (1) Located in an area that is designated as a rural health 
professional shortage area under section 332(a)(1)(A) of the Public 
Health Service Act (42 U.S.C. 254e(a)(1)(A));
    (2) Located in a county that is not included in a Metropolitan 
Statistical Area; or
    (3) From 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.
    Although RHCs are among the types of locations that are statutorily 
authorized to serve as originating sites for telehealth services, they 
also must meet the geographic requirements specified in the statute in 
order to serve as a telehealth originating site. While most RHCs would 
meet at least one of the geographic requirements to serve as a 
telehealth originating site, the separate statutory provisions that 
establish geographic requirements for telehealth originating sites and 
for RHCs are sufficiently different that they do not necessarily 
overlap. We do not have the authority to waive the geographic 
telehealth requirements for those RHCs that do not meet any of the 
requirements to serve as an originating site.
    Accordingly, we are not modifying our proposal to expand the scope 
of telehealth originating sites to include all RHCs, and we are 
finalizing our proposed regulation without change. We agree with the 
commenter that the data that are used to determine which areas are 
rural should be updated to reflect the 2010 census information.
    Comment: Several commenters expressed that the complexity involved

[[Page 74402]]

in determining geographic eligibility to serve as an originating site 
to provide telehealth services may deter providers from offering 
telehealth services. Commenters indicated that due to recent changes in 
the 2010 census there have been numerous changes in all rural 
designations. Commenters noted that RUCAs are a census tract-based 
classification scheme and there is no single source to determine one's 
census tract. Commenters recommended that CMS provide an online tool to 
allow beneficiaries and providers to determine what specific geographic 
areas are eligible as telehealth originating sites. One commenter 
suggested simplifying the process in future years by considering using 
postal ZIP codes or ZIP+4.
    Response: We share the commenters' concern that expanding the 
geographic definition of ``rural'' to include more telehealth 
originating sites has increased the complexity in determining the 
eligibility of a particular location to serve as an originating site. 
We are working with HRSA to develop a Web site tool to provide 
assistance to potential originating sites to determine their 
eligibility. As it becomes available, we will post further information 
about this on the CMS Web site at www.cms.gov/teleheath/.
    Comment: A commenter expressed concern about the annual changes in 
coverage within census tracts that may occur under the proposal. The 
commenter recommended that CMS use its authority under the statute to 
avoid annual on/off/on/off coverage to reduce constant fluctuations in 
coverage of telehealth services. The commenter concluded that once 
covered for telehealth services, a beneficiary should not lose coverage 
because of accidental circumstances of geographic location and 
administrative designation.
    Response: This regulation addresses which providers can qualify to 
be an originating site to furnish telehealth services. Beneficiaries do 
not have to meet specialized criteria for telehealth services. 
Beneficiaries who are covered under Medicare Part B can receive 
services on the list of Medicare telehealth services from providers 
that meet the criteria to serve as an originating site (and other 
criteria to furnish telehealth services). We recognize that 
beneficiaries may experience disruptions in service or challenges in 
accessing services when a provider that has been an originating site is 
not eligible in a future year. As discussed above, we believe our 
proposed policy mitigates the disruptions caused by mid-year changes in 
geographic status and expands the scope of providers eligible to serve 
as telehealth originating sites. However, as noted above, we believe it 
is necessary to use updated information regarding whether a site meets 
the statutory criteria for originating site eligibility. We do not 
believe we have authority to continue treating a site as a telehealth 
originating site if it ceases to meet the statutory criteria. Thus, we 
are finalizing the regulations regarding originating sites, as proposed 
to define rural HPSAs as those located in rural census tracts as 
determined by ORHP and to establish and maintain geographic eligibility 
for an originating site on an annual basis.
2. Adding Services to the List of Medicare Telehealth Services
    As noted previously, 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 
telehealth services to one of two categories. In the November 28, 2011 
Federal Register (76 FR 73102), we finalized revisions to criteria that 
we use to review requests in the second category. The two categories 
are:
     Category 1: Services that are similar to professional 
consultations, office visits, and office psychiatry services that are 
currently on the list of telehealth 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 service is accurately described by the 
corresponding code when delivered via telehealth and whether the use of 
a telecommunications system to deliver the service produces 
demonstrated clinical benefit to the patient. In reviewing these 
requests, we look for evidence indicating that the use of a 
telecommunications system in delivering the candidate telehealth 
service produces clinical benefit to the patient. Submitted evidence 
should include both a description of relevant clinical studies that 
demonstrate the service furnished by telehealth to a Medicare 
beneficiary improves the diagnosis or treatment of an illness or injury 
or improves the functioning of a malformed body part, including dates 
and findings, and a list and copies of published peer reviewed articles 
relevant to the service when furnished via telehealth. Our evidentiary 
standard of clinical benefit does not include minor or incidental 
benefits.
    Some examples of clinical benefit include the following:
     Ability to diagnose a medical condition in a patient 
population without access to clinically appropriate in-person 
diagnostic services.
     Treatment option for a patient population without access 
to clinically appropriate in-person treatment options.
     Reduced rate of complications.
     Decreased rate of subsequent diagnostic or therapeutic 
interventions (for example, due to reduced rate of recurrence of the 
disease process).
     Decreased number of future hospitalizations or physician 
visits.
     More rapid beneficial resolution of the disease process 
treatment.
     Decreased pain, bleeding, or other quantifiable symptom.
     Reduced recovery time.
    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 and group 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 to examine the vascular access site); 
individual and group MNT; neurobehavioral status exam; initial and 
follow-up inpatient telehealth consultations for beneficiaries in 
hospitals and SNFs; subsequent hospital care (with the limitation of 
one telehealth visit every 3 days); subsequent nursing facility care 
(with the limitation of one telehealth visit every 30 days); individual 
and group KDE; and individual and group DSMT (with a minimum of 1 hour 
of in-person instruction to ensure effective injection training), 
smoking cessation services; alcohol and/or substance abuse and brief 
intervention services; screening and behavioral counseling 
interventions in primary care to reduce alcohol misuse; screening for 
depression in adults; screening for sexually transmitted infections 
(STIs) and high intensity behavioral counseling (HIBC) to prevent STIs; 
intensive behavioral therapy for cardiovascular disease; and behavioral 
counseling for obesity.

[[Page 74403]]

    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 2013 will be 
considered for the CY 2015 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 www.cms.gov/telehealth/.
3. Submitted Requests and Other Additions to the List of Telehealth 
Services for CY 2014
    We received a request in CY 2012 to add online assessment and E/M 
services as Medicare telehealth services effective for CY 2014. The 
following presents a discussion of this request, and our proposals for 
additions to the CY 2014 telehealth list.
a. Submitted Requests
    The American Telemedicine Association (ATA) submitted a request to 
add CPT codes 98969 (Online assessment and management service provided 
by a qualified nonphysician health care professional to an established 
patient, guardian, or health care provider not originating from a 
related assessment and management service provided within the previous 
7 days, using the Internet or similar electronic communications 
network) and 99444 (Online evaluation and management service provided 
by a physician to an established patient, guardian, or health care 
provider not originating from a related E/M service provided within the 
previous 7 days, using the Internet or similar electronic 
communications network) to the list of Medicare telehealth services.
    As we explained in the CY 2008 PFS final rule with comment period 
(72 FR 66371), we assigned a status indicator of ``N'' (Non-covered 
service) to these services because: (1) these services are non-face-to-
face; and (2) the code descriptor includes language that recognizes the 
provision of services to parties other than the beneficiary and for 
whom Medicare does not provide coverage (for example, a guardian). 
Under section 1834(m)(2)(A) of the Act, Medicare pays the physician or 
practitioner furnishing a telehealth service an amount equal to the 
amount that would have been paid if the service was furnished without 
the use of a telecommunications system. Because CPT codes 98969 and 
99444 are currently noncovered, there would be no Medicare payment if 
these services were furnished without the use of a telecommunications 
system. Since these codes are noncovered services for which no payment 
may be made under Medicare, we did not propose to add online evaluation 
and management services to the list of Medicare Telehealth Services for 
CY 2014.
b. Other Additions
    Under our existing policy, we add services to the telehealth list 
on a category 1 basis when we determine that they are similar to 
services on the existing telehealth list with respect to the roles of, 
and interactions among, the beneficiary, physician (or other 
practitioner) at the distant site and, if necessary, the telepresenter. 
As we stated in the CY 2012 proposed rule (76 FR 42826), we believe 
that the category 1 criteria not only streamline our review process for 
publically requested services that fall into this category, the 
criteria also expedite our ability to identify codes for the telehealth 
list that resemble those services already on this list.
    For CY 2013, CMS finalized a payment policy for new CPT code 99495 
(Transitional care management services with the following required 
elements: Communication (direct contact, telephone, electronic) with 
the patient and/or caregiver within 2 business days of discharge 
medical decision making of at least moderate complexity during the 
service period face-to-face visit, within 14 calendar days of 
discharge) and CPT code 99496 (Transitional care management services 
with the following required elements: Communication (direct contact, 
telephone, electronic) with the patient and/or caregiver within 2 
business days of discharge medical decision making of high complexity 
during the service period face-to-face visit, within 7 calendar days of 
discharge). These services are for a patient whose medical and/or 
psychosocial problems require moderate or high complexity medical 
decision making during transitions in care from an inpatient hospital 
setting (including acute hospital, rehabilitation hospital, long-term 
acute care hospital), partial hospitalization, observation status in a 
hospital, or skilled nursing facility/nursing facility, to the 
patient's community setting (home, domiciliary, rest home, or assisted 
living). Transitional care management is comprised of one face-to-face 
visit within the specified time frames following a discharge, in 
combination with non-face-to-face services that may be performed by the 
physician or other qualified health care professional and/or licensed 
clinical staff under his or her direction.
    We believe that the interactions between the furnishing 
practitioner and the beneficiary described by the required face-to-face 
visit component of the transitional care management (TCM) services are 
sufficiently similar to services currently on the list of Medicare 
telehealth services for these services to be added under category 1. 
Specifically, we believe that the required face-to-face visit component 
of TCM services is similar to the office/outpatient evaluation and 
management visits described by CPT codes 99201-99205 and 99211-99215. 
We note that like certain other non-face-to-face PFS services, the 
other components of the TCM service are commonly furnished remotely 
using telecommunications technology, and do not require the patient to 
be present in-person with the practitioner when they are furnished. As 
such, we do not need to consider whether the non-face-to-face aspects 
of the TCM service are similar to other telehealth services. Were these 
components of the TCM services separately billable, they would not need 
to be on the telehealth list to be covered and paid in the same way as 
services delivered without the use of telecommunications technology. 
Therefore, we proposed to add CPT codes 99495 and 99496 to the list of 
telehealth services for CY 2014 on a category 1 basis. Consistent with 
this proposal, we revised our regulations at Sec.  410.78(b) and Sec.  
414.65(a)(1) to include TCM services as Medicare telehealth services.
4. Telehealth Frequency Limitations
    The ATA asked that we remove the telehealth frequency limitation 
for subsequent nursing facility services reported by CPT codes 99307 
through 99310. Subsequent nursing facility services were added to the 
list of Medicare telehealth services in the CY 2011 PFS final rule (75 
FR 73317 through 73318), with a limitation of one telehealth subsequent 
nursing facility care service every 30 days. In the CY 2011 PFS final 
rule (75 FR 73615) we noted that, as specified in our regulation at 
Sec.  410.78(e)(2), the federally mandated periodic SNF visits required 
under

[[Page 74404]]

Sec.  483.40(c) could not be furnished through telehealth.
    The ATA requested that the frequency limitation be removed due to 
``recent federal telecommunications policy changes'' and newly 
available information from recent studies. Specifically, the ATA 
pointed to the Federal Communications Commission (FCC) pilot funding of 
a program to facilitate the creation of a nationwide broadband network 
dedicated to health care, connecting public and private non-profit 
health care providers in rural and urban locations, and a series of 
studies that demonstrated the value to patients of telehealth 
technology.
    In considering this request, we began with the analysis contained 
in the CY 2011 proposed rule (75 FR 73318), when we proposed to add SNF 
subsequent care, to the list of Medicare telehealth services. We 
discussed our complementary commitments to ensuring that SNF residents, 
given their potential clinical acuity, continue to receive in-person 
visits as appropriate to manage their complex care and to make sure 
that Medicare pays only for medically reasonable and necessary care. To 
meet these commitments, we believed it was appropriate to limit the 
provision of subsequent nursing facility care services furnished 
through telehealth to once every 30 days.
    We then reviewed the publicly available information regarding both 
the FCC pilot program and the ATA-referenced studies in light of the 
previously stated commitments to assess whether these developments 
warrant a change in 30-day frequency limitation policy. Based on our 
review of the FCC demonstration project and the studies referenced in 
the request, we found no information regarding the relative clinical 
benefits of SNF subsequent care when furnished via telehealth more 
frequently than once every 30 days. We did note that the FCC 
information reflected an aim to improve access to medical specialists 
in urban areas for rural health care providers, and that medical 
specialists in urban areas can continue to use the inpatient telehealth 
consultation HCPCS G-codes (specifically G0406, G0407, G0408, G0425, 
G0426, or G0427) when reporting medically reasonable and necessary 
consultations furnished to SNF residents via telehealth without any 
frequency limitation.
    We also reviewed the studies referenced by the ATA to assess 
whether they provided evidence that more frequent telehealth visits 
would appropriately serve this particular population given the 
potential medical acuity and complexity of patient needs. We did not 
find any such evidence in the studies. Three of the studies identified 
by the ATA were not directly relevant to SNF subsequent care services. 
One of these focused on using telehealth technology to treat patients 
with pressure ulcers after spinal cord injuries. The second focused on 
the usefulness of telehealth technology for patients receiving home 
health care services. A third study addressed the use of interactive 
communication technology to facilitate the coordination of care between 
hospital and SNF personnel on the day of hospital discharge. The ATA 
also mentioned a peer-reviewed presentation delivered at its annual 
meeting related to SNF patient care, suggesting that the presentation 
demonstrated that telehealth visits are better for SNF patients than 
in-person visits to emergency departments or, in some cases, visits to 
physician offices. Although we did not have access to the full 
presentation it does not appear to address subsequent nursing facility 
services, so we do not believe this is directly relevant to the 
clinical benefit of SNF subsequent care furnished via telehealth. More 
importantly, none of these studies addresses the concerns we have 
expressed about the possibility that nursing facility subsequent care 
visits furnished too frequently through telehealth rather than in-
person could compromise care for this potentially acute and complex 
patient population.
    We remain committed to ensuring that SNF inpatients receive 
appropriate in-person visits and that Medicare pays only for medically 
reasonable and necessary care. We are not persuaded by the information 
submitted by the ATA that it would be beneficial or advisable to remove 
the frequency limitation we established for SNF subsequent care when 
furnished via telehealth. Because we want to ensure that nursing 
facility patients with complex medical conditions have appropriately 
frequent, medically reasonable and necessary encounters with their 
admitting practitioner, we continue to believe that it is appropriate 
for some subsequent nursing facility care services to be furnished 
through telehealth. At the same time, because of the potential acuity 
and complexity of SNF inpatients, we remain committed to ensuring that 
these patients continue to receive in-person, hands-on visits as 
appropriate to manage their care. Therefore, we did not propose any 
changes to the limitations regarding SNF subsequent care services 
furnished via telehealth for CY 2014.
    The following is summary of the comments we received regarding 
adding services to the list of Medicare telehealth services.
    Comment: All commenters expressed support for our proposals to add 
transitional care management (CPT codes 99495 and 99496) to the list of 
Medicare telehealth services for CY 2014. A commenter suggested that 
CMS allow the required E/M visit component of the two CPT codes to be 
delivered via telehealth.
    Response: We appreciate the support for the proposed additions to 
the list of Medicare telehealth services. In response to the commenter 
asking that the required E/M visit component be allowed to be furnished 
via telehealth, adding TCM CPT codes 99495 and 99496 to the list of 
Medicare telehealth services allows the E/M portion of these services 
to be furnished via telehealth. After consideration of the public 
comments received, we are finalizing our CY 2014 proposal to add TCM 
CPT codes 99495 and 99496 to the list of telehealth services for CY 
2014 on a category 1 basis.
    Comment: Another commenter recommended that the originating site be 
required to conduct a physical examination of a patient's mental and 
physical condition following a care transaction, and transmit the 
results to the consulting physician before or during the telehealth 
session, as a condition for coverage of transitional care management 
services provided via telehealth.
    Response: Concerning the conduct of a physical examination, nothing 
would preclude such an in person, face-to-face examination from 
occurring at the originating site; and the TCM codes describe 
communication between practitioners, when appropriate. We are not 
adopting this recommendation as we do not believe there is a reason to 
treat these new additions to the list of telehealth services 
differently than services already on the list.
    Comment: A commenter asked whether providing transitional care 
management via telehealth applies to services furnished in private 
homes and assisted living facilities.
    Response: No, in furnishing TCM services as telehealth services, 
all other conditions for telehealth services still apply. In addition 
to geographic criteria, the statutory criteria for eligible originating 
sites include only certain types of locations specified in section 
1834(m)(4)(C)(ii) of the Act, and those do not include private homes 
and assisted living facilities.
    Comment: A commenter supported our decision not to remove the 
telehealth frequency limitation for subsequent nursing facility 
services

[[Page 74405]]

reported by CPT codes 99307 through 99310. The commenter noted that 
telehealth occupational therapy services are just beginning to be 
provided and evaluated, and indicated that it is important to ensure 
that care for the acute and complex patients found in SNFs is not 
compromised, regardless of the mode used to provide services.
    Another commenter disagreed with our determination that there is no 
relative clinical benefit from allowing SNF services to be provided via 
telehealth more than once every 30 days. The commenter indicated that 
CMS recently issued Survey and Certification Memo 13-35-NH, which put 
additional emphasis on the survey process for managing behavioral or 
psychological symptoms of dementia and limiting the use of 
antipsychotic medications in SNFs. The commenter concluded that having 
this medical/behavioral evaluation performed by the primary care 
provider or a psychiatrist using telehealth could help reduce the need 
to transfer the patient to the emergency department, which could 
possibly exacerbate dementia symptoms.
    A commenter stated that the frequency limitation can result in 
additional unnecessary transports for office or emergency department 
visits, additional opportunities for patient injury, and significant 
transportation costs especially for the immobile and disabled patient. 
In light of the evolving mobile health technologies, robotics, and 
miniaturization of telecommunications tools and medical devices, as 
well as the increasing complexity and co-morbidities of SNF patients, 
the commenter recommended setting the limit at one visit per 10 days.
    A commenter suggested that subsequent nursing facility care 
services furnished through telehealth should not be limited to one 
service every 30 days, as long as the federally mandated SNF visits are 
conducted on an in-person basis.
    Response: We appreciate the comment in support of maintaining the 
30-day limit. Commenters opposed to the 30-day limit offered no 
clinically persuasive evidence to support their positions. Survey and 
Certification Memo 13-35-NH addresses dementia care in nursing homes 
and unnecessary drug use. The memo does not address telehealth 
services, and does not represent clinical evidence supporting removal 
of the telehealth frequency limitation for subsequent nursing facility 
services. Therefore, we are maintaining the 30-day frequency limitation 
for subsequent nursing facility services due to the absence of evidence 
regarding the relative clinical benefits of SNF subsequent care when 
furnished via telehealth more frequently than once every 30 days, and 
to ensure that SNF patients continue to receive in-person, hands-on 
visits as appropriate to manage their care.
    Comment: A commenter urged CMS to reconsider its decision to not 
include CPT codes 98969 (Online assessment and management service 
provided by a qualified nonphysician health care professional to an 
established patient, guardian, or health care provider not originating 
from a related assessment and management service provided within the 
previous 7 days, using the Internet or similar electronic 
communications network) and 99444 (Online evaluation and management 
service provided by a physician to an established patient, guardian, or 
health care provider not originating from a related E/M service 
provided within the previous 7 days, using the Internet or similar 
electronic communications network) on the list of Medicare telehealth 
services. The commenter noted that such services can serve as a 
valuable preventive benefit in the treatment and care of Medicare 
beneficiaries; that such services are often are unavailable to 
beneficiaries who reside in very rural areas; and that telehealth 
services should be expanded in view of the increasing number of 
beneficiaries and the projected physician shortage.
    Response: As noted previously, we did not propose to add the 
subject codes to the list of telehealth services because they are 
noncovered services for which no payment may be made under Medicare. 
Accordingly we are finalizing our proposal.
    In summary, after consideration of the comments we received we are 
finalizing the changes to our regulation at Sec.  410.78 to add 
``transitional care management'' to the list of services in paragraph 
(b) as proposed.
    We remind all interested stakeholders that we are currently 
soliciting public requests to add services to the list of Medicare 
telehealth services. To be considered during PFS rulemaking for CY 
2015, these requests must be submitted and received by December 31, 
2013, or the close of the comment period for this final rule with 
comment period. Each request to add 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. 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 www.cms.gov/telehealth/.
5. Telehealth Originating Site Facility Fee Payment Amount Update
    Section 1834(m)(2)(B) of the Act establishes the payment amount for 
the Medicare telehealth originating site facility fee for telehealth 
services provided from October 1, 2001, through December 31 2002, at 
$20.00. For telehealth services provided on or after January 1 of each 
subsequent calendar year, the telehealth originating site facility fee 
is increased by the percentage increase in the MEI as defined in 
section 1842(i)(3) of the Act. The MEI increase for 2014 is 0.8 
percent. Therefore, for CY 2014, the payment amount for HCPCS code 
Q3014 (Telehealth originating site facility fee) is 80 percent of the 
lesser of the actual charge or $24.63. The Medicare telehealth 
originating site facility fee and MEI increase by the applicable time 
period is shown in Table 46.

 Table 46--The Medicare Telehealth Originating Site Facility Fee and MEI
                 Increase by the Applicable Time Period
------------------------------------------------------------------------
                                          MEI
             Facility fee              increase           Period
                                          (%)
------------------------------------------------------------------------
$20.00...............................       N/A  10/01/2001-12/31/2002
$20.60...............................       3.0  01/01/2003-12/31/2003
$21.20...............................       2.9  01/01/2004-12/31/2004
$21.86...............................       3.1  01/01/2005-12/31/2005
$22.47...............................       2.8  01/01/2006-12/31/2006
$22.94...............................       2.1  01/01/2007-12/31/2007
$23.35...............................       1.8  01/01/2008-12/31/2008
$23.72...............................       1.6  01/01/2009-12/31/2009
$24.00...............................       1.2  01/01/2010-12/31/2010
$24.10...............................       0.4  01/01/2011-12/31/2011
$24.24...............................       0.6  01/01/2012-12/31/2012
$24.43...............................       0.8  01/01/2013-12/31/2013
$24.63...............................       0.8  01/01/2014-12/31/2014
------------------------------------------------------------------------

I. Therapy Caps

1. Outpatient Therapy Caps for CY 2014
    Section 1833(g) of the Act applies annual, per beneficiary, 
limitations on expenses that can be considered as incurred expenses for 
outpatient therapy services under Medicare Part B, commonly referred to 
as ``therapy caps.''

[[Page 74406]]

There is one therapy cap for outpatient occupational therapy (OT) 
services and another separate therapy cap for physical therapy (PT) and 
speech-language pathology (SLP) services combined.
    Until October 1, 2012, the therapy caps applied to all outpatient 
therapy services except those under section 1833(a)(8)(B) of the Act, 
which describes services furnished by a hospital or another entity 
under an arrangement with a hospital. For convenience, we will refer to 
the exemption from the caps for services described under section 
1833(a)(8)(B) of the Act as the ``outpatient hospital services 
exemption.'' Section 3005(b) of the MCTRJCA added section 1833(g)(6) of 
the Act to temporarily suspend the outpatient hospital services 
exemption, thereby requiring that the therapy caps apply to services 
described under section 1833(a)(8)(B) of the Act from October 1, 2012 
to December 31, 2012 for services furnished beginning January 1, 2012. 
This broadened application of the therapy caps was extended through 
December 31, 2013, by section 603(a) of the ATRA. In addition, section 
603(b) of the ATRA amended section 1833(g)(6) of the Act to specify 
that during CY 2013, for outpatient therapy services paid under section 
1834(g) of the Act (those furnished by a CAH), we must count towards 
the therapy caps the amount that would be payable for the services 
under Medicare Part B if the services were paid as outpatient therapy 
services under section 1834(k)(1)(B) of the Act, which describes 
payment for outpatient therapy services furnished by hospitals and 
certain other entities, instead of as CAH outpatient therapy services 
under section 1834(g) of the Act. Payment for outpatient therapy 
services under section 1834(k)(1)(B) of the Act is made at 80 percent 
of the lesser of the actual charge for the services or the applicable 
fee schedule amount as defined in section 1834(k)(3) of the Act. 
Section 1834(k)(3) of the Act defines applicable fee schedule to mean 
the payment amount determined under a fee schedule established under 
section 1848 of the Act, which refers to the PFS, or an amount under a 
fee schedule for comparable services as the Secretary specifies. The 
PFS is the applicable fee schedule to be used as the payment basis 
under section 1834(k)(3) of the Act. Section 603(b) of the ATRA 
specified that nothing in the amendments to section 1833(g)(6) of the 
Act ``shall be construed as changing the method of payment for 
outpatient therapy services under 1834(g) of the Act.''
    Since CY 2011, a therapy multiple procedure payment reduction 
(MPPR) policy has applied to the second and subsequent ``always 
therapy'' services billed on the same date of service for one patient 
by the same practitioner or facility under the same NPI. Prior to April 
1, 2013, the therapy MPPR reduced the practice expense portion of 
office-based services by 20 percent and reduced the practice expense 
portion of institutional-based services by 25 percent. As of April 1, 
2013, section 633(a) of the ATRA amended sections 1848(b)(7) and 
1834(k) of the Act to increase the therapy MPPR to 50 percent for all 
outpatient therapy services furnished in office-based and institutional 
settings. (For more information on the MPPR and its history, see 
section II.C.4 of this final rule with comment period.)
    Section 1833(g) of the Act applies the therapy caps to incurred 
expenses for outpatient therapy services on a calendar year basis, and 
section 603(b) of the ATRA requires that we accrue toward the therapy 
caps a proxy value for a beneficiary's incurred expenses for outpatient 
therapy services furnished by a CAH during CY 2013. Since payment for 
outpatient therapy services under section 1834(k)(1)(B) of the Act is 
made at the PFS rate and includes any applicable therapy MPPR, the 
proxy amounts accrued toward the caps for therapy services furnished by 
a CAH also reflect any applicable therapy MPPR.
    We believe that this is consistent with the statutory amendments 
made by the ATRA. Including the therapy MPPR in calculating incurred 
expenses for therapy services furnished by CAHs treats CAH services 
consistently with services furnished in other applicable settings. 
Therefore, therapy services furnished by CAHs during CY 2013 count 
towards the therapy caps using the amount that would be payable under 
section 1834(k)(1)(B) of the Act, which includes an applicable MPPR. 
For a list of the ``always therapy'' codes subject to the therapy MPPR 
policy, see Addendum H of this final rule with comment period.
    The therapy cap amounts under section 1833(g) of the Act are 
updated each year based on the MEI. Specifically, the annual caps are 
calculated by updating the previous year's cap by the MEI for the 
upcoming calendar year and rounding to the nearest $10 as specified in 
section 1833(g)(2)(B) of the Act. Increasing the CY 2013 therapy cap of 
$1,900 by the CY 2014 MEI of 0.8 percent, results in a therapy cap 
amount for CY 2014 of $1,920.
    An exceptions process for the therapy caps has been in effect since 
January 1, 2006. Originally required by section 5107 of the Deficit 
Reduction Act of 2005 (DRA), which amended section 1833(g)(5) of the 
Act, the exceptions process for the therapy caps has been continuously 
extended several times through subsequent legislation (MIEA-TRHCA, 
MMSEA, MIPPA, the Affordable Care Act, MMEA, TPTCCA, and MCTRJCA). Last 
amended by section 603(a) of the ATRA, the Agency's current authority 
to provide an exceptions process for therapy caps expires on December 
31, 2013. After expenses incurred for the beneficiary's services for 
the year have exceeded the therapy caps, therapy suppliers and 
providers use the KX modifier on claims for services to request an 
exception to the therapy caps. By use of the KX modifier, the therapist 
is attesting that the services above the therapy caps are reasonable 
and necessary and that there is documentation of medical necessity for 
the services in the beneficiary's medical record.
    Under section 1833(g)(5)(C) of the Act, which was added by the 
MCTRJCA and extended through 2013 by the ATRA, we are required to apply 
a manual medical review process to therapy claims when a beneficiary's 
incurred expenses exceed a threshold amount of $3,700. There are two 
separate thresholds of $3,700, just as there are two therapy caps, and 
incurred expenses are counted towards the thresholds in the same manner 
as the caps. Under the statute, the required application of the manual 
medical review process expires December 31, 2013. For information on 
the manual medical review process, go to www.cms.gov/Research-
Statistics-Data-and-Systems/Monitoring-Programs/Medical-Review/
TherapyCap.html.
2. Application of Therapy Caps to Services Furnished by CAHs
    Section 4541 of the BBA amended section 1833(g) of the Act to 
create the therapy caps discussed above. This BBA provision applied the 
therapy caps to outpatient therapy services described at section 
1861(p) of the Act except for the outpatient therapy services described 
in section 1833(a)(8)(B) of the Act. Section 1833(a)(8)(B) of the Act 
refers to therapy services furnished by a hospital to an outpatient; to 
services furnished to a hospital inpatient who has exhausted, or is not 
entitled to, benefits under Part A; and to these same services when 
furnished by an entity under arrangements with a hospital. Payment for 
the services described under section

[[Page 74407]]

1833(a)(8)(B) of the Act is made under section 1834(k)(1)(B) of the 
Act.
    Section 4201 of the BBA amended section 1820 of the Act to require 
a process for establishment of CAHs. Payment for CAH outpatient 
services is described under section 1834(g) of the Act.
    When we proposed language to implement the BBA provision 
establishing therapy caps in the CY 1999 PFS proposed rule, we 
indicated in the preamble that the therapy caps do not apply to therapy 
services furnished directly or under arrangements by a hospital or CAH 
to an outpatient or to an inpatient who is not in a covered Part A stay 
(63 FR 30818, 30858). We included a similar statement in the preamble 
to the final rule; however, we did not include the same reference to 
CAHs in that sentence in the CY 1999 PFS final rule with comment period 
(63 FR 58814, 58865). In the CY 1999 PFS final rule with comment 
period, we also stated generally that the therapy caps apply only to 
items and services furnished by nonhospital providers and therapists 
(63 FR 58865). In the CY 1999 proposed rule, we proposed to include 
provisions at Sec.  410.59(e)(3) and Sec.  410.60(e)(3) to describe, 
respectively, the outpatient therapy services that are exempt from the 
statutory therapy caps for outpatient OT services, and for outpatient 
PT and SLP services combined. Specifically, in the CY 1999 PFS proposed 
rule, we proposed to add the following regulatory language for OT and 
for PT at Sec.  410.59(e)(3) and Sec.  410.60(e)(3): ``For purposes of 
applying the limitation, outpatient [occupational therapy/physical 
therapy] excludes services furnished by a hospital or CAH directly or 
under arrangements'' (63 FR 30880). However, in the CY 1999 PFS final 
rule with comment period, the phrase ``or CAH'' was omitted from the 
final regulation text for OT in Sec.  410.59(e)(3), but was included in 
the final regulation text for PT in Sec.  410.60(e)(3). We note that 
for purposes of the therapy cap, outpatient PT services under our 
regulation at Sec.  410.60 include outpatient SLP services described 
under Sec.  410.62. As such, SLP services are included in the 
references to PT under Sec.  410.60. Although the rulemaking history 
and regulations appear inconclusive as to whether outpatient therapy 
services furnished by CAHs were intended to be subject to the therapy 
caps between January 1, 1999 and October 1, 2012, we believe that we 
inadvertently omitted the phrase ``or CAH'' in the CY 1999 final 
regulation for the occupational therapy cap. Moreover, we have 
consistently excluded all outpatient therapy services furnished by CAHs 
from the therapy caps over this time frame, whether the services were 
PT, SLP, or OT.
    Accordingly, from the outset of the therapy caps under section 
1833(g) of the Act, therapy services furnished by CAHs have not been 
subject to the therapy caps. Thus, CAHs have not been required to use 
the exceptions process (including the KX modifier and other 
requirements) when furnishing medically necessary therapy services 
above the therapy caps; and therapy services furnished by CAHs above 
the threshold amounts have not been subject to the manual medical 
review process. Similarly, until section 603(b) of the ATRA amended the 
statute to specify the amount that must be counted towards the therapy 
caps and thresholds for outpatient therapy services furnished by CAHs 
in CY 2013, we did not apply towards the therapy caps or thresholds any 
amounts for therapy services furnished by CAHs. Therefore, we have 
consistently interpreted the statutory exclusion for outpatient therapy 
services furnished by hospital outpatient departments also to apply to 
CAHs and implemented the therapy caps accordingly.
    As noted above, section 3005(b) of the MCTRJCA temporarily 
suspended the outpatient hospital services exemption from October 1, 
2012 through December 31, 2012 (which has subsequently been extended 
through December 31, 2013 by the ATRA). As a result, from October 1, 
2012 to the present, CAH services have been treated differently than 
services furnished in other outpatient hospital settings. In 
implementing this change required by the MCTRJCA, we had reason to 
assess whether, as a result of the amendment, the therapy caps should 
be applied to outpatient therapy services furnished by CAHs. We 
concluded that the MCTRJCA amendment did not make the therapy caps 
applicable to services furnished by CAHs for which payment is made 
under section 1834(g) of the Act because it affected only the 
outpatient hospital services described under section 1833(a)(8)(B) of 
the Act for which payment is made under section 1834(k)(1)(B) of the 
Act. With the enactment in section 603(b) of the ATRA of specific 
language requiring us to count amounts towards the therapy caps and 
thresholds for services furnished by CAHs, we again had reason to 
assess whether the therapy caps apply to services furnished by CAHs. We 
concluded that the ATRA amendment did not explicitly make the therapy 
caps applicable to services furnished by CAHs, but directed us to count 
CAH services towards the caps. However, after reflecting on the 
language of section 1833(g) of the Act, we have concluded based upon 
the language of the Act that the therapy caps should be applied to 
outpatient therapy services furnished by CAHs.
    To explain further, under section 1833(g)(1) and (3) of the Act, 
the therapy caps are made applicable to all services described under 
section 1861(p) of the Act except those described under the outpatient 
hospital services exemption. Section 1861(p) of the Act establishes the 
benefit category for outpatient PT, SLP and OT services, (expressly for 
PT services and, through section 1861(ll)(2) of the Act, for outpatient 
SLP services and, through section 1861(g) of the Act, for outpatient OT 
services). Section 1861(p) of the Act defines outpatient therapy 
services in the three disciplines as those furnished by a provider of 
services, a clinic, rehabilitation agency, or a public health agency, 
or by others under an arrangement with, and under the supervision of, 
such provider, clinic, rehabilitation agency, or public health agency 
to an individual as an outpatient; and those furnished by a therapist 
not under arrangements with a provider of services, clinic, 
rehabilitation agency, or a public health agency. As such, section 
1861(p) of the Act defines outpatient therapy services very broadly to 
include those furnished by providers and other institutional settings, 
as well as those furnished in office settings. Under section 1861(u) of 
the Act, a CAH is a ``provider of services.'' As such, unless the 
outpatient therapy services furnished by a CAH fit within the 
outpatient hospital services exemption under section 1833(a)(8)(B) of 
the Act, the therapy caps would be applicable to PT, SLP, OT services 
furnished by a CAH. As noted above, section 1833(a)(8)(B) of the Act 
describes only outpatient therapy services for which payment is made 
under section 1834(k) of the Act. Payment for CAH services is made 
under section 1834(g) of the Act. Thus, the outpatient hospital 
services exemption to the therapy caps under section 1833(a)(8)(B) of 
the Act does not apply, and the therapy caps are applicable, to 
outpatient therapy services furnished by a CAH.
    However, we recognize that our current regulation specifically 
excludes PT and SLP services furnished by CAHs from the therapy caps, 
and our consistent practice since 1999 has been to exclude PT, SLP and 
OT services furnished by CAHs from the therapy caps. As such, in order 
to apply the therapy caps and related policies to services furnished by 
CAHs for CY 2014

[[Page 74408]]

and subsequent years, we believe we would need to revise our 
regulations.
    We proposed to apply the therapy cap limitations and related 
policies to outpatient therapy services furnished by a CAH beginning on 
January 1, 2014. In the proposed rule, we noted that not only do we 
believe this is the proper statutory interpretation, but we also 
believe it is the appropriate policy. Under the existing regulations, 
with the suspension of the outpatient hospital services exemption 
through 2013, the therapy caps apply to outpatient therapy services 
paid under Medicare Part B and furnished in all applicable settings 
except CAHs. We believe that outpatient therapy services furnished by a 
CAH should be treated consistently with outpatient therapy services 
furnished in all other settings. Therefore, we proposed to revise the 
therapy cap regulation at Sec.  410.60(e)(3) to remove the exemption 
for services furnished by a CAH and make conforming amendments.
    CAH outpatient therapy services are distinct from other outpatient 
therapy services in that outpatient therapy services furnished in 
office-based or other institutional settings are paid at the rates 
contained in the PFS, whereas CAHs are paid for outpatient therapy 
services under the methodology described under section 1834(g) of the 
Act. Because the CAH reasonable cost-based payment amounts are 
reconciled at cost reporting year-end, and are different from the fee 
schedule-based payments for other outpatient therapy services, it might 
have been difficult to identify the amounts that we should have accrued 
towards the therapy caps for services furnished by CAHs. Therefore, 
prior to 2013, not only did CMS not apply any caps to services provided 
by a CAH, but also did not count CAH services towards the caps. 
However, the ATRA amended the statute to require for outpatient therapy 
services furnished by CAHs during 2013 that we count towards the caps 
and the manual medical review thresholds the amount that would be 
payable for the services under Medicare Part B as if the services were 
paid as outpatient therapy services under section 1834(k)(1)(B) of the 
Act instead of as CAH services under section 1834(g) of the Act. We 
proposed to continue this methodology of counting the amount payable 
under section 1834(k)(1)(B) of the Act towards the therapy cap and 
threshold for services furnished by CAHs in CY 2014 and subsequent 
years.
    We recognize that the outpatient hospital services exemption is 
suspended under current law only through December 31, 2013. If this 
provision is not extended, with our proposal to apply the therapy caps 
to services furnished by CAHs, effective January 1, 2014, therapy 
services furnished by CAHs would be treated differently than services 
furnished in other outpatient hospital settings. We recognize that the 
exceptions and manual medical review processes expire on December 31, 
2013, and we would apply those polices to therapy services furnished by 
a CAH only if they are extended by statute. The exceptions process 
described above, including use of the KX modifier to attest to the 
medical necessity of therapy services above the caps and other 
requirements, if extended by legislation, would apply for services 
furnished by a CAH in the same way that it applies to outpatient 
therapy services furnished by other facilities (except for any that are 
expressly exempted). Similarly, the manual medical review process for 
claims that exceed the $3,700 thresholds, if extended by legislation, 
would apply to therapy services furnished by a CAH in the same way that 
they apply for outpatient therapy services furnished by certain other 
facilities.
    We proposed to amend the regulations establishing the conditions 
for PT, OT, and SLP services by removing the exemption of CAH services 
from the therapy caps and specifying that the therapy caps apply to 
such services. Specifically, we proposed to amend the regulations, 
which pertain to the OT therapy cap and the combined PT and SLP therapy 
cap, respectively, by including paragraph (e)(1)(iv) under Sec.  410.59 
and (e)(1)(iv) under Sec.  410.60 to specify that (occupational/
physical) therapy services furnished by a CAH directly or under 
arrangements shall be counted towards the annual limitation on incurred 
expenses as if such services were paid under section 1834(k)(1)(B) of 
the Act. We also proposed to add new paragraph (e)(2)(v) to Sec.  
410.59 and (e)(2)(vi) to Sec.  410.60. These new paragraphs would 
expressly include outpatient (occupational/physical) therapy services 
furnished by a CAH directly or under arrangements under the description 
of services to which the annual limitation applies. Further, we 
proposed to amend the regulation at Sec.  410.60(e)(3), which currently 
excludes services furnished by a CAH from the therapy cap for PT and 
SLP services, to remove the phrase ``or CAH.''
    The following is a summary of the comments we received regarding 
the proposal to apply the therapy cap limitations and related policies 
to outpatient therapy services furnished by a CAH beginning on January 
1, 2014. We received many comments from professional therapy 
associations, hospital associations, health systems, nonprofit health 
care organizations, and specialty provider groups regarding our 
proposal, all of which opposed the application of the therapy caps to 
CAH services. A summary of the reasons stated for opposition follow.
    Comment: Most of the comments we received argued that due to the 
critical role that CAHs play in furnishing healthcare services in 
underserved or rural areas, imposing the financial and administrative 
burden of the therapy caps on CAHs would result in Medicare 
beneficiaries having fewer, if any, options for accessing needed 
therapy services in CAH service areas. A few commenters noted that 
Congress established the CAH designation in order to make health care 
services accessible to Medicare beneficiaries in rural areas who would 
otherwise be unable to access hospital services and argued that our 
proposed policy would be contrary to Congress's goal. Commenters noted 
that those most affected by this policy are beneficiaries living in 
rural areas who are on average older, sicker, poorer, and more 
geographically isolated compared to individuals in urban areas. 
Commenters pointed out that in rural or underserved areas therapy 
services enable beneficiaries to recover and reconstruct their lives 
after experiencing medical emergencies such as a stroke. Commenters 
also noted that if a therapy cap exceptions process is not in place, 
our proposed policy would result in Medicare beneficiaries either being 
financially liable for additional services or foregoing medically 
necessary services. Several commenters stated that this proposal would 
place an unnecessary burden on CAHs since it was unlikely that applying 
the therapy caps to CAHs would result in significant cost savings or 
reduce unnecessary care; and some even said that our proposed policy 
would actually increase costs for the Medicare program.
    Response: After reassessing our interpretation of section 1833(g) 
of the Act under our proposed policy, we continue to conclude that the 
proper statutory interpretation would be to apply the therapy caps and 
related provisions to outpatient therapy services furnished by CAHs. We 
agree with commenters that CAHs provide important access to medically 
necessary therapy services for Medicare beneficiaries; however, we do 
not believe that application of the therapy caps and related policies 
to services furnished by CAHs will lead to significant new impediments 
for

[[Page 74409]]

Medicare beneficiaries. Under our proposed policy, CAHs would be 
subject to the therapy caps, as well as any potential extension of the 
therapy caps exceptions and manual medical review processes, in the 
same manner as other providers of therapy services except for those 
that are specifically exempted by statute from application of the caps 
and related provisions. As such, the therapy caps and related 
provisions would affect therapy services furnished by a CAH and other 
providers of such services in a comparable degree. We also do not 
believe that applying the therapy caps to services furnished by CAHs 
would negatively affect the ability of CAHs to furnish therapy services 
to Medicare beneficiaries. We believe that any increase in the 
administrative burden presented by the therapy caps and, if extended by 
legislation, the exceptions and manual medical review processes, will 
be only minor. As we explained in the proposed rule and noted above, we 
believe the proper interpretation of the statute requires us to apply 
the therapy caps to services furnished by CAHs.
    Comment: We received a few comments stating that the drawbacks of 
the therapy caps would be exacerbated by applying this policy to 
additional provider settings. Most of these commenters argued that the 
therapy cap has been problematic since its inception. One commenter 
suggested that, instead of applying the therapy caps to CAHs, we should 
develop an alternative policy to replace the cap.
    Response: The therapy caps are mandated by statute and we do not 
have authority to repeal the caps. As such, we will continue to apply 
the statutorily mandated therapy caps as specified under the statute 
which, as we have discussed above, includes applying the therapy caps 
policy to CAHs.
    Comment: We received several comments stating that our current 
policies, in addition to our proposed regulations, overly control the 
utilization of therapy services. Most of these commenters noted that 
under Sec.  409.17 of the regulations, therapy services are required to 
be ordered by a physician prior to a qualified professional initiating 
a plan of care, and these commenters argued that the requirement for an 
order can control utilization of therapy services in CAHs. One 
commenter noted that the direct supervision policy expressed in the CY 
2014 OPPS proposed rule coupled with our proposal would cause services 
in CAHs to be overregulated.
    Response: We disagree with commenters that CAHs are overregulated 
with respect to outpatient therapy services. We do not believe our 
proposed policy overregulates CAH services as compared to other 
providers of therapy services. We also do not believe that Sec.  409.17 
requires an order for outpatient therapy services in a CAH as suggested 
by the commenters. This regulation requires that a qualified 
professional pursuant to a plan of care furnish PT, OT, or SLP 
services, which is not the same as an order. Section 409.17 does not 
provide for any utilization control or limits on the quantity of 
outpatient therapy services furnished by CAHs, but rather assures that 
therapy is furnished under a plan of care by a qualified professional. 
Further, as explained above, we believe that proper interpretation of 
the statute requires us to apply the therapy caps and related 
provisions to therapy services furnished by CAHs. As such, the therapy 
caps and related provisions would have a comparable effect on therapy 
services furnished by a CAH and those furnished by other therapy 
services providers (unless they are exempted by statute from the 
application of the caps).
    Comment: We received numerous comments stating that our proposal 
resulted from a misinterpretation of the ATRA, and that it is 
preferable policy to treat CAHs and hospitals similarly for the purpose 
of the therapy caps. Several commenters believed that we have 
misinterpreted the language of the ATRA to conclude that the therapy 
caps should be applied to services furnished by CAHs. Commenters noted 
that the ATRA specifies a proxy value to accrue therapy services 
furnished by CAHs toward the caps, but does not indicate that we should 
count this value beyond December 31, 2013, or that we should generally 
subject services furnished by CAHs to the therapy caps. Most of these 
commenters argued that if Congress had intended to apply the therapy 
cap to CAHs, it would have explicitly indicated in the ATRA that CAHs 
should be subject to the therapy caps. One commenter raised concern 
that ``the proposed change is unlawful'' since the ATRA neither 
requires, nor allows the Secretary to revise the federal regulations to 
permanently subject to the caps outpatient therapy services furnished 
by CAHs.
    Most commenters said that we should treat CAHs and outpatient 
hospital departments similarly with regard to the therapy caps by 
continuing to exclude services furnished by CAHs (presumably to the 
extent such exclusion is required by statute). Commenters argued that a 
CAH is intended to be ``provider of services'' by furnishing inpatient 
and outpatient hospital services in areas where care is severely 
limited and thereby acts as a ``hospital'' in the areas that it serves. 
One commenter believed that our interpretation of the exemption from 
the therapy caps of outpatient therapy services described under section 
1833(a)(8)(B) of the Act and paid under section 1834(k)(1)(B) of the 
Act is misguided since the exemption only describes the provider type 
rather than the provider type and payment methodology for those 
services. As evidence for this reasoning, the commenter noted that 
skilled nursing facilities (SNFs), comprehensive outpatient 
rehabilitation facilities (CORFs), rehabilitation agencies, and home 
health agencies, described under section 1833(a)(8)(A) of the Act and 
paid under section 1834(k)(1)(B) of the Act, are not exempt from the 
therapy caps. The commenter suggested that we make a determination 
that, based on the statutory definition in section 1861(e) of the Act, 
a CAH is a hospital in the context of applying the therapy caps, and 
interpret the hospital services exemption from the therapy caps to 
include CAHs.
    Response: We agree with commenters that the ATRA does not direct or 
require us to apply the therapy caps to services furnished by CAHs. As 
noted above, we agree that the ATRA only directed us to count therapy 
services furnished by CAHs towards the caps. However, the ATRA is not 
the basis of the proposed change to our regulations. Rather, we based 
our proposed change on our reassessment of language of section 1833(g) 
of the Act as added by the BBA.
    After considering the comments concerning our interpretation of 
section 1833(g) of the Act, we again reassessed the statute and 
reviewed the rationale for our proposal. We continue to conclude that 
our proposal to revise our regulations to apply the therapy caps to 
services furnished by CAHs reflects the proper interpretation of 
section 1833(g) of the statute. We continue to believe that therapy 
services furnished by a CAH and paid under section 1834(g) of the Act 
are not described under section 1833(a)(8)(B) of the Act and thus do 
not meet the requirements of the outpatient hospital exemption. Rather, 
as we explained in the proposed rule, the outpatient hospital services 
exemption relates to the specific services described under section 
1833(a)(8)(B) of the Act, which delineates both the entities that 
furnish the services and the manner in which those services are paid. 
We acknowledge the commenter's recognition that therapy services 
furnished by rehabilitation agencies, CORFs, SNFs, and home health 
agencies

[[Page 74410]]

(some of which are also considered ``providers of services'' along with 
CAHs under section 1861(u) of the statute) are subject to the therapy 
caps even though they are paid under 1834(k)(1)(B) of the Act, as are 
hospitals. However, the providers mentioned by the commenters are 
described under section 1833(a)(8)(A) of the Act rather than section 
1833(a)(8)(B) of the Act. The outpatient hospital services exemption 
only applies to services described under section 1833(a)(8)(B) of the 
Act. We believe that the statute explicitly exempts only services 
described under section 1833(a)(8)(B) of the Act, which does not 
include any services for which payment is not made under section 
1834(k)(1)(B) of the Act. We continue to believe that neither services 
furnished by CAHs, nor those furnished by SNFs, CORFs, rehabilitation 
agencies, and home health agencies, fall under that exemption. 
Regardless of whether we consider a CAH as a ``hospital'' for purposes 
of the therapy caps, therapy services furnished by CAHs are not 
described under section 1833(a)(8)(B) of the Act and, as such, do not 
fall within the scope of the outpatient hospital services exemption 
from the therapy caps. Therefore, we continue to believe that the 
outpatient hospital services exemption to the therapy caps under 
section 1833(g)(1) and (3) of the Act does not apply to outpatient 
therapy services furnished by a CAH.
    Comment: Commenters expressed concern that therapy services 
furnished by CAHs after January 1, 2014 would be treated differently 
than therapy services furnished by outpatient hospital departments 
although both entities are subject to the same regulations regarding 
outpatient therapy services.
    Response: Although we believe it would be preferable policy to 
treat all outpatient therapy services furnished in all settings 
consistently, we continue to believe the proper interpretation of the 
statute requires application of the therapy caps and related policies 
to services furnished by CAHs. As a result, if the outpatient hospital 
services exemption is no longer suspended by legislation, there may be 
differences in the application of the statutory therapy caps and 
related provisions between outpatient hospitals and CAHs.
    After consideration of all comments, we are finalizing our 
proposal. As proposed, we are including paragraph (e)(1)(iv) under both 
Sec.  410.59 and Sec.  410.60 to specify that outpatient occupational 
therapy, physical therapy and speech-language pathology services 
furnished by a CAH directly or under arrangements shall be counted 
towards the annual limitation on incurred expenses as if such services 
were paid under section 1834(k)(1)(B) of the Act. In order to improve 
clarity that PT and SLP services are combined for the purposes of 
applying the cap, but not to change the substance of the current 
regulations or the proposed changes to the regulations, we are making a 
modification to the proposal. Specifically, we are adding the phrase 
``and speech-language pathology'' to the text in Sec.  
410.60(e)(1)(iv). Also as proposed, we are adding new paragraph 
(e)(2)(v) to Sec.  410.59 and (e)(2)(vi) to Sec.  410.60. These new 
paragraphs will expressly include outpatient occupational therapy, 
physical therapy and speech-language pathology services furnished by a 
CAH directly or under arrangements in the description of services to 
which the annual limitation applies. Lastly, as proposed, we are 
amending the regulation at Sec.  410.60(e)(3), which currently excludes 
services furnished by a CAH from the therapy cap for PT and SLP 
services, to remove the phrase ``or CAH.''
    We received a number of comments that were not related to our 
proposal to amend our regulations to specify that the therapy caps and 
related provisions are applicable to therapy services furnished by a 
CAH. These comments pertained to repeal of the therapy caps, the 
therapy caps exceptions process, the manual medical review process, the 
therapy MPPR, and Functional Reporting. Because we made no proposals 
regarding these subjects, these comments are outside of the scope of 
the proposed rule and, therefore, are not addressed in this final rule 
with comment period.

J. Requirements for Billing ``Incident To'' Services

1. Background
    Section 1861(s)(2)(A) of the Act establishes the benefit category 
for services and supplies furnished as incident to the professional 
services of a physician. The statute specifies that ``incident to'' 
services and supplies are ``of kinds which are commonly furnished in 
physicians' offices and are commonly either rendered without charge or 
included in physicians' bills.''
    In addition to the requirements of the statute, our regulation at 
Sec.  410.26 sets forth specific requirements that must be met in order 
for physicians and other practitioners to bill Medicare for incident to 
physicians' services. Section 410.26(a)(7) limits ``incident to'' 
services to those included under section 1861(s)(2)(A) of the Act and 
that are not covered under another benefit category. Section 410.26(b) 
specifies (in part) that in order for services and supplies to be paid 
as ``incident to'' services under Medicare Part B, the services or 
supplies must be:
     Furnished in a noninstitutional setting to 
noninstitutional patients.
     An integral, though incidental, part of the service of a 
physician (or other practitioner) in the course of diagnosis or 
treatment of an injury or illness.
     Furnished under direct supervision (as specified under 
Sec.  410.26(a)(2)) of a physician or other practitioner eligible to 
bill and directly receive Medicare payment.
     Furnished by a physician, a practitioner with an 
``incident to'' benefit, or auxiliary personnel.
    In addition to Sec.  410.26, there are regulations specific to each 
type of practitioner who is allowed to bill for ``incident to'' 
services. These are found at Sec.  410.71(a)(2) (clinical psychologist 
services), Sec.  410.74(b) (physician assistants' services), Sec.  
410.75(d) (nurse practitioners' services), Sec.  410.76(d) (clinical 
nurse specialists' services), and Sec.  410.77(c) (certified nurse-
midwives' services). When referring to practitioners who can bill for 
services furnished incident to their professional services, we are 
referring to physicians and these practitioners.
    ``Incident to'' services are treated as if they were furnished by 
the billing practitioner for purposes of Medicare billing and payment. 
Consistent with this terminology, in this discussion when referring to 
the practitioner furnishing the service, we are referring to the 
practitioner who is billing for the ``incident to'' service. When we 
refer to the ``auxiliary personnel'' or the person who ``provides'' the 
service, we are referring to an individual who is personally performing 
the service or some aspect of it as distinguished from the practitioner 
who bills for the ``incident to'' service.
    Since we treat ``incident to'' services as services furnished by 
the billing practitioner for purposes of Medicare billing and payment, 
payment is made to the billing practitioner under the PFS, and all 
relevant Medicare rules apply including, but not limited to, 
requirements regarding medical necessity, documentation, and billing. 
Those practitioners who can bill Medicare for ``incident to'' services 
are paid at their applicable Medicare payment rate as if they furnished 
the service. For example, when ``incident to'' services are billed by a 
physician, they are paid at 100 percent of the fee schedule amount, and 
when the services are billed by a nurse practitioner or clinical nurse 
specialist, they are paid at

[[Page 74411]]

85 percent of the fee schedule amount. Payments are subject to the 
usual deductible and coinsurance amounts.
    As the services commonly furnished in physicians' offices and other 
nonfacility settings have expanded to include more complicated 
services, the types of services that can be furnished ``incident to'' 
physicians' services have also expanded. States have increasingly 
adopted standards regarding the delivery of health care services in all 
settings, including physicians' offices, in order to protect the health 
and safety of their citizens. These state standards often include 
qualifications for the individuals who are permitted to furnish 
specific services or requirements about the circumstances under which 
services may actually be furnished. For example, since 2009, New York 
has required that offices in which surgery is furnished must be 
accredited by a state-approved accredited agency or organization. 
Similarly, Florida requires certain standards be met when surgery is 
furnished in offices, including that the surgeon must ``examine the 
patient immediately before the surgery to evaluate the risk of 
anesthesia and of the surgical procedure to be performed'' and 
``qualified anesthesia personnel shall be present in the room 
throughout the conduct of all general anesthetics, regional anesthetics 
and monitored anesthesia care.''
    Over the past years, several situations have come to our attention 
where Medicare was billed for ``incident to'' services that were 
provided by auxiliary personnel who did not meet the state standards 
for those services in the state in which the services were furnished. 
The physician or practitioner billing for the services would have been 
permitted under state law to personally furnish the services, but the 
services were provided by auxiliary personnel who were not in 
compliance with state law in providing the particular service (or 
aspect of the service).
    Practitioners authorized to bill Medicare for services that they 
furnish to Medicare beneficiaries are required to comply with state law 
when furnishing services for which Medicare will be billed. For 
example, section 1861(r) of the Act specifies that an individual can be 
considered a physician in the performance of any function or action 
only when legally authorized to practice in the particular field by the 
state in which he performs such function or action. Section 410.20(b) 
of our regulations provides that payment is made for services only if 
furnished by a doctor who is ``. . . legally authorized to practice by 
the State in which he or she performs the functions or actions, and who 
is acting within the scope of his or her license.'' Similar statutory 
and regulatory requirements exist for nonphysician practitioners. For 
example, section 1861(s)(2)(K)(i) of the Act, which provides a benefit 
category for services of a physician assistant (PA), includes only 
services that the PA is ``. . . legally authorized to perform by the 
State in which the services are performed . . .'', and Sec.  
410.74(a)(2)(ii) of our regulations provides that the services of a PA 
are covered only if the PA is ``. . . legally authorized to perform the 
services in the State in which they are performed. . .'' There are 
similar statutory and regulatory provisions for nurse practitioner 
services (1861(s)(2)(K)(ii), Sec.  410.75(b)), certified nurse 
specialist services (1861(s)(2)(K)(ii), Sec.  410.76(b)), qualified 
psychologist services (1861(s)(2)(M), Sec.  410.71(a)), and certified 
nurse-midwife services (1861(s)(2)(L), Sec.  410.77(a)(1)).
    However, the Medicare requirements for services and supplies 
incident to a physician's professional services (Sec.  410.26 discussed 
above), do not specifically make compliance with state law a condition 
of payment for services (or aspects of services) and supplies furnished 
and billed as ``incident to'' services. Nor do any of the regulations 
regarding services furnished incident to the services of other 
practitioners contain this requirement. Thus, Medicare has had limited 
recourse when services furnished incident to a physician's or 
practitioner's services are not furnished in compliance with state law.
    In 2009, the Office of Inspector General issued a report entitled 
``Prevalence and Qualifications of Nonphysicians Who Performed Medicare 
Physician Services'' (OEI-09-06-00430) that considered in part the 
qualifications of auxiliary personnel who provided incident to 
physician services. This report found that services being billed to 
Medicare were provided by auxiliary personnel. After finding that 
services were being provided by auxiliary personnel ``. . . who did not 
possess the required licenses or certifications according to State 
laws, regulations, and/or Medicare rule'' and billed to Medicare the 
OIG recommended that we revise the ``incident to'' rules to, among 
other things, ``. . . require that physicians who do not personally 
perform the services they bill to Medicare ensure that no persons 
except . . . nonphysicians who have the necessary training, 
certification, and/or licensure, pursuant to State laws, State 
regulations, and Medicare regulations personally perform the services 
under the direct supervision of a licensed physician.''
2. Compliance With State Law
    To ensure that auxiliary personnel providing services to Medicare 
beneficiaries incident to the services of other practitioners do so in 
accordance with the requirements of the state in which the services are 
furnished and to ensure that Medicare payments can be denied or 
recovered when such services are not furnished in compliance with the 
state law, we proposed to add a requirement to the ``incident to'' 
regulations at Sec.  410.26, Services and supplies incident to a 
physician's professional services: Conditions. Specifically, we 
proposed to amend Sec.  410.26(b) by redesignating paragraphs (b)(7) 
and (b)(8) as paragraphs (b)(8) and (b)(9), respectively, and by adding 
a new paragraph (b)(7) to state that ``Services and supplies must be 
furnished in accordance with applicable State law.'' We also proposed 
to amend the definition of auxiliary personnel at Sec.  410.26(a)(1) to 
require that the individual providing ``incident to'' services ``meets 
any applicable requirements to provide the services, including 
licensure, imposed by the State in which the services are being 
furnished.''
3. Elimination of Redundant Language
    In addition, we proposed to eliminate redundant and potentially 
incongruent regulatory language by replacing the specific ``incident 
to'' requirements currently contained in the regulations relating to 
each of the various types of practitioners with a reference to the 
requirements of Sec.  410.26. Specifically, we proposed to:
     Revise Sec.  410.71(a)(2) regarding clinical 
psychologists' services to read ``Medicare Part B covers services and 
supplies incident to the services of a clinical psychologist if the 
requirements of Sec.  410.26 are met.''
     Revise Sec.  410.74(b) regarding physician assistants' 
services to read ``Medicare Part B covers services and supplies 
incident to the services of a physician assistant if the requirements 
of Sec.  410.26 are met.''
     Revise Sec.  410.75(d) regarding nurse practitioners' 
services to read ``Medicare Part B covers services and supplies 
incident to the services of a nurse practitioner if the requirements of 
Sec.  410.26 are met.''
     Revise Sec.  410.76(d) regarding certified nurse 
specialists' services to read ``Medicare Part B covers services and 
supplies incident to the services of a clinical nurse specialist if the 
requirements of Sec.  410.26 are met.''

[[Page 74412]]

     Revise the language in Sec.  410.77(c) regarding certified 
nurse-midwives' services to read ``Medicare Part B covers services and 
supplies incident to the services of a certified nurse-midwife if the 
requirements of Sec.  410.26 are met.''
    We noted in the proposed rule that these practitioners are, and 
would continue to be under this proposal, required to comply with the 
regulation at Sec.  410.26 for services furnished incident to their 
professional services. We believe it is redundant and potentially 
confusing to have separate regulations that generally restate the 
requirements for ``incident to'' services of Sec.  410.26 using 
slightly different terminology. We stated that our goal in proposing 
the revisions to refer to Sec.  410.26 in the regulation for each 
practitioner's ``incident to'' services was to reduce the regulatory 
burden and make it less difficult for practitioners to determine what 
is required. Reconciling these regulatory requirements for physicians 
and all other practitioners who have the authority to bill Medicare for 
``incident to'' services is also consistent with our general policy to 
treat nonphysician practitioners similarly to physicians unless there 
is a compelling reason for disparate treatment. We noted that we 
believed that this proposal made the requirements clearer for 
practitioners furnishing ``incident to'' services without eliminating 
existing regulatory requirements or imposing new ones and welcomed 
comments on any requirements that we may have inadvertently overlooked 
in our proposed revisions, or any benefit that accrues from continuing 
to carry these separate regulatory requirements.
4. Rural Health Clinics and Federal Qualified Health Centers
    The regulations applicable to Rural Health Clinics (RHCs) and 
Federally Qualified Health Centers (FQHCs) have similar ``incident to'' 
rules, and we proposed to make conforming changes to these regulations. 
Specifically, we proposed to revise Sec.  405.2413(a), which addresses 
services and supplies incident to physicians' services for RHCs and 
FQHCs, by redesignating paragraphs (a)(4) and (a)(5) as paragraphs 
(a)(5) and (a)(6), respectively and by adding a new paragraph (a)(4) 
that states services and supplies must be furnished in accordance with 
applicable state law. Additionally, we proposed to amend Sec.  
405.2415(a), which addresses services incident to nurse practitioner 
and physician assistant services by redesignating paragraphs (a)(4) and 
(a)(5) as paragraphs (a)(5) and (a)(6), respectively and by adding a 
new paragraph (a)(4), which specifies services and supplies must be 
furnished in accordance with applicable state law. We proposed to amend 
Sec.  405.2452(a), which addresses services and supplies incident to 
clinical psychologist and clinical social worker services by 
redesignating paragraphs (a)(4) and (a)(5) as paragraphs (a)(5) and 
(a)(6), respectively and by adding a new paragraph (a)(4), which states 
services and supplies must be furnished in accordance applicable state 
law. Finally, we also proposed the removal of the word ``personal'' in 
Sec.  405.2413, Sec.  405.2415, and Sec.  405.2452 to be consistent 
with the ``incident to'' provisions in Sec.  410.26.
    The following is a summary of the comments we received regarding 
the proposal to amend our regulations to include the requirement that 
``incident to'' services must be furnished in accordance with 
applicable state law.
    Comment: The vast majority of commenters supported requiring 
compliance with applicable state law as a condition of payment for 
``incident to'' services. Many of these commenters noted that adoption 
of this regulation would increase quality of care and safety for 
Medicare beneficiaries and ensure that funds dedicated to services and 
supplies are appropriately utilized. We received only two comments 
opposing the adoption of a condition of payment requiring compliance 
with state laws. One of these stated that since at least 1997, Medicare 
has had a ``demonstration project'' that has tested the effects of 
lifting state scope of practice restrictions, and that with this 
proposed regulation we are abruptly ending this demonstration without 
an assessment of the effects of such action. The other stated that this 
regulation was unnecessary because section 1156 of the Act requires 
health care practitioners to ensure that ``. . . the services it 
furnishes are of a quality that meets professional standards of care. . 
. .'' Some who supported the concept of our proposal suggested that the 
condition of payment only require compliance with state laws relating 
to training, certification, and/or licensure. In support of this 
suggestion, a commenter noted that the broader requirement of 
compliance with any applicable state laws would allow CMS to deny 
Medicare payment for technical violations of state laws that are not 
targeted at patient health or safety, even when care was appropriately 
delivered and the quality of care not affected. One commenter pointed 
out that our regulations if revised as proposed would put providers at 
risk of having to defend False Claims Act actions brought on the theory 
that the provider improperly billed for services based on a minor 
defect with the physician or other practitioner's license or 
certification; and, in turn that this minor defect is unrelated to the 
quality of care furnished and outside the scope of practice and should 
therefore not result in the risk of possible False Claims Act 
allegations.
    Response: After consideration of the comments, we are finalizing 
our proposal to adopt a new condition of payment imposing a requirement 
to comply with state laws for services furnished incident to a 
physician's or other practitioner's professional services. We believe 
this requirement will protect the health and safety of Medicare 
beneficiaries and enhance our ability to recover federal dollars when 
care is not delivered in accordance with state laws. In response to 
concerns that the proposal should be limited to state laws relating to 
who could perform the services, such as scope of practice or licensure 
laws, we believe that there are many and varied state laws that would 
protect the safety and health of Medicare beneficiaries. As such, we do 
not believe it would be prudent to limit the applicability as 
suggested. In response to the commenter's concern regarding technical 
and unintended violations of state laws, it is important that CMS only 
pays for services furnished in accordance with state law. In an effort 
to ensure that services are furnished in accordance with state law, it 
is expected that practitioners are cognizant of the qualifications of 
any individuals who provide services incident to the physician (or 
other practitioner). With regard to the comment stating that this 
regulation is unnecessary based on section 1156 of the Act, we note 
that compliance with section 1156 is a condition of eligibility and not 
an explicit basis for CMS to deny or recover payments for services 
furnished incident to services of a physician (or other practitioner) 
where services are not furnished in accordance with state law. After 
reviewing the comments we conclude that it is beneficial to make 
explicit as a condition of payment for ``incident to'' services the 
requirement to comply with state law. The fact that another provision 
of the law might also be relevant to the situation does not mean that 
both are not appropriate or beneficial to the program. With regard to 
the comment that we are ending a demonstration project that has existed 
since at least 1997 without an assessment, we disagree. We are unaware 
of any such demonstration

[[Page 74413]]

project either currently underway, or undertaken in the past. Moreover, 
as we noted in the proposed rule, practitioners furnishing services to 
Medicare beneficiaries are not exempt from complying with state law.
    Comment: Several commenters, including some who supported our 
proposal, expressed concern about enforcement and expanding the 
administrative burden on Medicare practitioners. Suggestions were made 
that we be transparent in implementing the provision and provide ample 
education on the policy and how it will be enforced. One commenter 
asked that we ``. . . take into account the already significant 
administrative burden that physicians face under Medicare, and avoid 
adding to that burden.'' Another commenter urged us to work with 
medical societies, particularly those representing practitioners in 
rural communities, to ensure the policy is well understood and does not 
impede beneficiary access to care. It was further suggested that we 
should know who is actually providing services or at least when 
services are provided ``incident to'' the billing professional's 
services, and that we consider implementing the OIG's recommendation to 
require the use of modifiers on the claim when reporting ``incident 
to'' services.
    Response: We do not believe that this condition of payment would 
increase the administrative burden on practitioners as practitioners 
are already expected to comply with state law. As we have discussed 
above, we believe that this provision enhances our ability to deny or 
recover payments when the condition is not met. With regard to the 
suggestion that we impose a requirement for practitioners to bill 
``incident to'' services using a modifier, we do not believe that a 
modifier requirement would assist in implementing or enforcing this 
condition of payment. Since a modifier requirement would not assist us 
in implementing this provision, we are not adopting one at this time. 
We would also note that there are impediments to imposing a modifier 
requirement at this time, including that a modifier and required 
definitions for use of a modifier do not exist. With regard to 
informing those affected by this change in regulations, we will use our 
usual methods to alert stakeholders of this new condition of payment 
and feel confident that the information will be efficiently and 
effectively disseminated to those who need it.
    Comment: One commenter pointed out that states can and do punish 
individuals for furnishing services inappropriately, and that CMS 
should therefore leave it to the states to determine whether or when 
services are provided by an unlicensed professional.
    Response: We agree with this commenter that it is primarily the 
responsibility of states to develop and enforce compliance with 
licensure laws for health care professionals, and note that nothing in 
this proposal would impede the states' ability to do so. Nor would 
anything in this proposal duplicate the states' activities in this 
arena. Rather, this proposal would reinforce the states' laws by 
providing explicit authority to limit Medicare payment for ``incident 
to'' services to those furnished in accordance with state laws. As 
noted above, in the absence of our proposed regulation, situations 
could arise where Medicare would otherwise make payment for services 
not furnished in accordance with state law. Such situations are not 
consistent with our recognition of states as principle regulators of 
health care practices for the protection and benefit of their citizens. 
The adoption of compliance with state law as a condition of Medicare 
payment allows us to deny, or if already paid, recover payment when 
services are not furnished in compliance with state law and thus 
supports state activities.
    Comment: A commenter suggested that we eliminate the new proposed 
Sec.  410.26(b)(7), which requires that ``incident to'' services be 
provided in compliance with applicable state law, because it was 
redundant with Sec.  410.26(a)(1).
    Response: Section 410.26(a)(1) defines ``Auxiliary personnel'' 
whereas Sec.  410.26(b)(7) provides the conditions that must be met for 
Medicare Part B to pay for services and supplies. It is therefore not 
redundant, but instead necessary, to both define auxiliary personnel 
and to include the specific requirements that must be met.
    In addition to the comments discussed above, we received several 
comments regarding the ``incident to'' benefit that were not within the 
scope of our proposal. Specifically, we received requests to expand the 
types of practitioners who are allowed to bill Medicare for ``incident 
to'' services and to limit auxiliary personnel under our ``incident 
to'' regulations to those who cannot bill Medicare directly for their 
services. Not only are these comments outside the scope of this 
regulation, but in most respects they are addressed by the Medicare 
statute and outside our discretion to change.
    After consideration of public comments regarding our proposed rule, 
we are finalizing the changes to our regulations as proposed. The 
specific regulatory changes being made are described below.
    Specifically, we are amending Sec.  410.26(a)(7), which defines 
``auxiliary personnel'' to add ``and meets any applicable requirements 
to provide the services, including licensure, imposed by the State in 
which the services are being furnished.'' In Sec.  410.26(b) we are 
redesignating paragraphs (b)(7) and (b)(8) as paragraphs (b)(8) and 
(b)(9), respectively, and adding a new paragraph (b)(7) to state that 
``Services and supplies must be furnished in accordance with applicable 
State laws;''.
    In addition, we are finalizing our proposal to eliminate redundant 
and potentially incongruent regulatory language by replacing the 
specific ``incident to'' requirements currently contained in the 
regulations relating to each of the various types of practitioners with 
a reference to the requirements of Sec.  410.26. Specifically, we are:
     Revising Sec.  410.71(a)(2) regarding clinical 
psychologist services to read ``Medicare Part B covers services and 
supplies incident to the services of a clinical psychologist if the 
requirements of Sec.  410.26 are met.''
     Revising Sec.  410.74(b) regarding physician assistants' 
services to read ``Medicare Part B covers services and supplies 
incident to the services of a physician assistant if the requirements 
of Sec.  410.26 are met.''
     Revising Sec.  410.75(d) regarding nurse practitioners' 
services to read ``Medicare Part B covers services and supplies 
incident to the services of a nurse practitioner if the requirements of 
Sec.  410.26 are met.''
     Revising Sec.  410.76(d) regarding clinical nurse 
specialists' services to read ``Medicare Part B covers services and 
supplies incident to the services of a clinical nurse specialist if the 
requirements of Sec.  410.26 are met.''
     Revising the language in Sec.  410.77(c) regarding 
certified nurse-midwives' services to read ``Medicare Part B covers 
services and supplies incident to the services of a certified nurse-
midwife if the requirements of Sec.  410.26 are met.''
    We are also revising the regulations applicable to RHCs and FQHCs 
to make similar changes. Specifically, we are revising Sec.  
405.2413(a), which addresses services and supplies incident to 
physicians' services for RHCs and FQHCs, by redesignating paragraphs 
(a)(4) and (a)(5) as paragraphs (a)(5) and (a)(6), respectively and by 
adding a new paragraph (a)(4) that states ``Services and supplies must 
be furnished in accordance with applicable State laws;''. Additionally, 
we are amending Sec.  405.2415(a), which addresses services incident to 
nurse practitioner and

[[Page 74414]]

physician assistant services by redesignating paragraphs (a)(4) and 
(a)(5) as paragraphs (a)(5) and (a)(6), respectively and by adding a 
new paragraph (a)(4) that ``Services and supplies must be furnished in 
accordance with applicable State laws;''. We are amending Sec.  
405.2452(a), which addresses services and supplies incident to clinical 
psychologist and clinical social worker services by redesignating 
paragraphs (a)(4) and (a)(5) as paragraphs (a)(5) and (a)(6), 
respectively and by adding a new paragraph (a)(4) that states 
``Services and supplies must be furnished in accordance with applicable 
State laws.''
    Finally, we are removing the word ``personal'' in Sec.  405.2413, 
Sec.  405.2415, and Sec.  405.2452 to be consistent with the ``incident 
to'' provisions in Sec.  410.26 Services and supplies incident to a 
physician's professional services: Conditions.
    The changes being adopted in this final rule with comment period 
are consistent with the traditional approach of relying primarily on 
the states to regulate the health and safety of their residents in the 
delivery of health care services. Throughout the Medicare program, and 
as evidenced by several examples above, the qualifications required for 
the delivery of health care services are generally determined with 
reference to state law. As discussed above, our current regulations 
governing practitioners billing Medicare for services personally 
furnished include a basic requirement to comply with state law when 
furnishing Medicare covered services. However, the Medicare regulations 
for ``incident to'' services and supplies did not specifically make 
compliance with state law a condition of payment for services and 
supplies furnished and billed as incident to a practitioner's services. 
In addition to health and safety benefits that we believe will accrue 
to Medicare beneficiaries, these changes will help to assure that 
federal dollars are not expended for services that do not meet the 
standards of the states in which they are being furnished while 
providing the ability for the federal government to recover funds paid 
where services and supplies are not furnished in accordance with these 
requirements.

K. Chronic Care Management (CCM) Services

    As we discussed in the CY 2013 PFS final rule with comment period, 
we are committed to supporting primary care and we have increasingly 
recognized care management as one of the critical components of primary 
care that contributes to better health for individuals and reduced 
expenditure growth (77 FR 68978). Accordingly, we have prioritized the 
development and implementation of a series of initiatives designed to 
improve payment for, and encourage long-term investment in, care 
management services. These initiatives include the following programs 
and demonstrations:
     The Medicare Shared Savings Program (described in 
``Medicare Program; Medicare Shared Savings Program: Accountable Care 
Organizations; Final Rule'' which appeared in the November 2, 2011 
Federal Register (76 FR 67802)).
     The testing of the Pioneer ACO model, designed for 
experienced health care organizations (described on the Center for 
Medicare and Medicaid Innovation's (Innovation Center's) Web site at 
innovations.cms.gov/initiatives/ACO/Pioneer/index.html).
     The testing of the Advance Payment ACO model, designed to 
support organizations participating in the Medicare Shared Savings 
Program (described on the Innovation Center's Web site at 
innovations.cms.gov/initiatives/ACO/Advance-Payment/index.html).
     The Primary Care Incentive Payment (PCIP) Program 
(described on the CMS Web site at www.cms.gov/Medicare/Medicare-Fee-
for-Service-Payment/PhysicianFeeSched/Downloads/PCIP-2011-
Payments.pdf).
     The patient-centered medical home model in the Multi-payer 
Advanced Primary Care Practice (MAPCP) Demonstration designed to test 
whether the quality and coordination of health care services are 
improved by making advanced primary care practices more broadly 
available (described on the CMS Web site at www.cms.gov/Medicare/
Demonstration-Projects/DemoProjectsEvalRpts/downloads/mapcpdemo_
Factsheet.pdf).
     The Federally Qualified Health Center (FQHC) Advanced 
Primary Care Practice demonstration (described on the CMS Web site at 
www.cms.gov/Medicare/Demonstration-Projects/DemoProjectsEvalRpts/
downloads/mapcpdemo_Factsheet.pdf and the Innovation Center's Web site 
at innovations.cms.gov/initiatives/FQHCs/index.html).
     The Comprehensive Primary Care (CPC) initiative (described 
on the Innovation Center's Web site at innovations.cms.gov/initiatives/
Comprehensive-Primary-Care-Initiative/index.html). The CPC initiative 
is a multi-payer initiative fostering collaboration between public and 
private health care payers to strengthen primary care in certain 
markets across the country.
    In addition, HHS leads a broad initiative focused on optimizing 
health and quality of life for individuals with multiple chronic 
conditions. HHS' Strategic Framework on Multiple Chronic Conditions 
outlines specific objectives and strategies for HHS and private sector 
partners centered on strengthening the health care and public health 
systems; empowering the individual to use self-care management; 
equipping care providers with tools, information, and other 
interventions; and supporting targeted research about individuals with 
multiple chronic conditions and effective interventions. Further 
information on this initiative can be found on the HHS Web site at 
http://www.hhs.gov/ash/initiatives/mcc/index.html.
    In coordination with all of these initiatives, we also have 
continued to explore potential refinements to the PFS that would 
appropriately value care management within Medicare's statutory 
structure for fee-for-service physician payment and quality reporting. 
For example, in the CY 2013 PFS final rule with comment period, we 
adopted a policy to pay separately for care management involving the 
transition of a beneficiary from care furnished by a treating physician 
during a hospital stay to care furnished by the beneficiary's primary 
physician in the community (77 FR 68978 through 68993). We view 
potential refinements to the PFS such as these as part of a broader 
strategy that relies on input and information gathered from the 
initiatives described above, research and demonstrations from other 
public and private stakeholders, the work of all parties involved in 
the potentially misvalued code initiative, and from the public at 
large.
1. Patient Eligibility for Separately Payable Non-Face-to-Face Chronic 
Care Management Services
    Under current PFS policy, the payment for non-face-to-face care 
management services is bundled into the payment for face-to-face E/M 
visits because care management is a component of those E/M services. 
The pre- and post-encounter non-face-to-face care management work is 
included in calculating the total work for the typical E/M services, 
and the total work for the typical service is used to develop RVUs for 
the E/M services. In the CY 2012 PFS proposed rule, we highlighted some 
of the E/M services that include substantial care management work. 
Specifically, we noted that the vignettes that describe a typical 
service for mid-

[[Page 74415]]

level office/outpatient services (CPT codes 99203 and 99213) include 
furnishing care management, communication, and other necessary care 
management related to the office visit in the post-service work (76 FR 
42917).
    However, the physician community continues to tell us that the care 
management included in many of the E/M services, such as office visits, 
does not adequately describe the typical non-face-to-face care 
management work involved for certain categories of beneficiaries. In 
addition, there has been substantial growth in medical practices that 
are organized as medical homes and devote significant resources to care 
management as one of the keys to improve the quality and coordination 
of health care services. Practitioners in these medical homes have also 
indicated that the care management included in many of the E/M services 
does not adequately describe the typical non-face-to-face care 
management work that they furnish to patients.
    Because the current E/M office/outpatient visit CPT codes were 
designed to support all office visits and reflect an overall 
orientation toward episodic treatment, we agree that these E/M codes 
may not reflect all the services and resources required to furnish 
comprehensive, coordinated care management for certain categories of 
beneficiaries. For example, we currently pay physicians separately for 
the non face-to-face care plan oversight services furnished to 
beneficiaries under the care of home health agencies or hospices and we 
currently pay separately for care management services furnished to 
beneficiaries transitioning from care furnished by a treating physician 
during a hospital stay to care furnished by the beneficiary's primary 
physician in the community.
    Similar to these situations, we believe that the resources required 
to furnish chronic care management services to beneficiaries with 
multiple (that is, two or more) chronic conditions are not adequately 
reflected in the existing E/M codes. Therefore, for CY 2015, we 
proposed to establish a separate payment under the PFS for chronic care 
management services furnished to patients with multiple chronic 
conditions that are expected to last at least 12 months or until the 
death of the patient, and that place the patient at significant risk of 
death, acute exacerbation/decompensation, or functional decline.
    We also stated our intent to develop standards for furnishing 
chronic care management services to ensure that the physicians and 
practitioners who bill for these services have the capability to 
provide them.
    Comment: The vast majority of commenters overwhelmingly supported 
the broad policy of paying separately for non-face-to-face chronic care 
management services, but submitted comments on many specific aspects of 
our proposal.
    Response: We appreciate the widespread support expressed by 
commenters for our proposed policy. We address the more specific 
comments below in this section.
    Comment: Some commenters supported our proposed patient eligibility 
for chronic care management services, at least for the initial 
implementation of separate payment for the services. Typical of these 
comments was this statement by one commenter:

    ``CMS should initially offer these services to patients with 
multiple chronic conditions that are expected to last at least 12 
months or until the death of the patient, and that place the patient 
at significant risk of death, acute exacerbation/decompensation, or 
functional decline.''

    We also received comments indicating that the patient eligibility 
should be broadened, for example, to allow eligibility for patients 
with one condition or for all patients in a practice that meets the 
practice standards we establish.
    On the other hand, some commenters believed that the eligible 
patient population should be narrowed. Many of these commenters 
indicated that the benefits of chronic care management are likely to 
increase with thethe patient's acuity and risk. Many commenters 
indicated that the criteria described in the prefatory language for the 
complex chronic care coordination CPT codes 99487-99489 describes a 
narrower and more appropriate patient population. The CPT criteria for 
CY 2014 currently state:

    ``Patients who require complex chronic care coordination 
services may be identified by practice-specific or other published 
algorithms that recognize multiple illnesses, multiple medication 
use, inability to perform activities of daily living, requirement 
for a caregiver, and/or repeat admissions or emergency department 
visits. Typical adult patients take or receive three or more 
prescription medications and may also be receiving other types of 
therapeutic interventions (eg, physical therapy, occupational 
therapy) and have two or more chronic continuous or episodic health 
conditions expected to last at least 12 months, or until the death 
of the patient, that place the patient at significant risk of death, 
acute exacerbation/decompensation, or functional decline. Typical 
pediatric patients receive three or more therapeutic interventions 
(eg, medications, nutritional support, respiratory therapy) and have 
two or more chronic continuous or episodic health conditions 
expected to last at least 12 months, or until the death of the 
patient, that place the patient at significant risk of death, acute 
exacerbation/decompensation, or functional decline. Because of the 
complex nature of their diseases and morbidities, these patients 
commonly require the coordination of a number of specialties and 
services. In some cases, due to inability to perform IADL/ADL and/or 
cognitive impairment the patient is unable to adhere to the 
treatment plan without substantial assistance from a caregiver. For 
example, patients may have medical and psychiatric behavioral co-
morbidities (eg, dementia and chronic obstructive pulmonary disease 
or substance abuse and diabetes) that complicate their care. Social 
support requirements or access to care difficulties may cause a need 
for these services. Medical, functional, and/or psychosocial 
problems that require medical decision making of moderate or high 
complexity and extensive clinical staff support are required.''

    MedPAC and other some commenters did not recommend specific 
alternative patient eligibility criteria, but stated that CMS should 
develop such criteria to better target the beneficiaries requiring 
significant management. One commenter recommended that the eligible 
patient population be narrowed to patients with four or more chronic 
conditions.
    Response: As we stated in the proposed rule, we believe that the 
resources required tofurnish chronic care management services to 
beneficiaries with two or more chronic conditions are not adequately 
reflected in the existing E/M codes. Furnishing care management to 
beneficiaries with multiple chronic conditions requires 
multidisciplinary care modalities that involve: regular physician 
development and/or revision of care plans; subsequent reports of 
patient status; review of laboratory and other studies; communication 
with other health professionals not employed in the same practice who 
are involved in the patient's care; integration of new information into 
the care plan; and/or adjustment of medical therapy. Our proposal was 
also supported by an analysis of Medicare claims for patients with 
selected multiple chronic conditions (see http://www.cms.gov/Research-
Statistics-Data-and-Systems/Statistics-Trends-and-Reports/Chronic-
Conditions/Downloads/2012Chartbook.pdf). This analysis indicated that 
patients with these selected multiple chronic conditions are at 
increased risk for hospitalizations, use of post-acute care services, 
and emergency department visits. We continue to believe these findings 
would hold in general for patients with

[[Page 74416]]

multiple chronic conditions that are expected to last at least 12 
months or until the death of the patient, and that place the patient at 
significant risk of death, acute exacerbation/decompensation, or 
functional decline. (We note that we did not propose to limit the 
eligible chronic conditions to those contained in our Medicare data 
analysis.) We continue to believe that successful efforts to improve 
chronic care management for these patients could improve the quality of 
care while simultaneously decreasing costs (for example, through 
reductions in hospitalizations, use of post-acute care services, and 
emergency department visits.) Therefore, we agree with the commenters 
who supported our proposed patient eligibility criteria.
    While we also agree with the commenters who stated that the 
benefits from chronic care management are likely to increase the 
greater the acuity and risk to the patient, we disagree that the 
benefits and higher resource requirements for furnishing the service 
are limited to those even higher risk patients within the population of 
patients with two or more chronic conditions. Therefore, we disagree 
that the eligible patient population should be narrowed.
    We also disagree with commenters who indicated that we should 
immediately expand the eligible patient population, for example, to 
include some patients with a single chronic condition or all the 
patients in a practice that meets future standards. It is not clear at 
this time that the resources required to provide typical chronic care 
management to these patients are not reflected adequately in the 
existing E/M codes. However, as we indicated in the proposed rule, we 
have over time recognized certain categories of beneficiaries for whom 
we allow separate payment for care management. We have not indicated 
that we have exhaustively identified all such categories of 
beneficiaries. We will continue to carefully consider whether there are 
categories of patients for whom the resources required to provide 
chronic care management services are not adequately reflected in the 
existing E/M codes. We may consider changes to the patient eligibility 
in future rulemaking.
    In summary, we are finalizing without modification our proposed 
patient eligibility for chronic care management services to be patients 
with multiple chronic conditions that are expected to last at least 12 
months or until the death of the patient, and that place the patient at 
significant risk of death, acute exacerbation/decompensation, or 
functional decline.
    We note that although we are finalizing our proposed eligibility 
criteria, since we agree with commenters that the benefits from chronic 
care management are likely to increase with the greater the acuity and 
risk to the patient, we expect that physicians and other practitioners 
will particularly focus on higher acuity and higher risk patients (for 
example, patients with four or more chronic conditions as suggested by 
one commenter) when furnishing chronic care management services to 
eligible patients.
    Comment: Many commenters found our use of the term ``complex'' to 
describe these services to be confusing in light of the number of 
Medicare beneficiaries within a practice potentially meeting our 
proposed eligibility criteria, and suggested that the word could be 
interpreted to significantly narrow the appropriate patient population 
eligible for chronic care management services.
    Response: We regret any confusion generated by our proposed use of 
the term ``complex'' to describe the chronic care management services 
that are not adequately reflected in the existing E/M codes. Although 
the provision of these services is complex relative to the care 
management reflected in the existing E/M codes, we understand the 
confusion on the part of commenters regarding the number of patients 
within a practice that are potentially eligible for the service versus 
those that would be considered ``complex.'' Therefore, to reduce 
potential confusion, we will revise the code description for these 
services to describe ``chronic care management'' services rather than 
complex chronic care management services. We note that we have revised 
references throughout this preamble to remove the word ``complex'' from 
the description of these services.
2. Scope of Chronic Care Management Services
    We proposed that the scope of chronic care management services 
includes:
     The provision of 24-hour- a-day, 7-day- a-week access to 
address a patient's acute chronic care needs. To accomplish these 
tasks, we would expect that the patient would be provided with a means 
to make timely contact with health care providers in the practice to 
address urgent chronic care needs regardless of the time of day or day 
of the week. Members of the chronic care team who are involved in the 
after-hours care of a patient must have access to the patient's full 
electronic medical record even when the office is closed so they can 
continue to participate in care decisions with the patient.
     Continuity of care with a designated practitioner or 
member of the care team with whom the patient is able to get successive 
routine appointments.
     Care management for chronic conditions including 
systematic assessment of patient's medical, functional, and 
psychosocial needs; system-based approaches to ensure timely receipt of 
all recommended preventive care services; medication reconciliation 
with review of adherence and potential interactions; and oversight of 
patient self-management of medications. In consultation with the 
patient and other key practitioners treating the patient, the 
practitioner furnishing chronic care management services should create 
a patient-centered plan of care document to assure that care is 
provided in a way that is congruent with patient choices and values. A 
plan of care is based on a physical, mental, cognitive, psychosocial, 
functional and environmental (re)assessment and an inventory of 
resources and supports. It is a comprehensive plan of care for all 
health issues. It typically includes, but is not limited to, the 
following elements: problem list, expected outcome and prognosis, 
measurable treatment goals, symptom management, planned interventions, 
medication management, community/social services ordered, how the 
services of agencies and specialists unconnected to the practice will 
be directed/coordinated, identify the individuals responsible for each 
intervention, requirements for periodic review and, when applicable, 
revision, of the care plan. The provider should seek to reflect a full 
list of problems, medications and medication allergies in the 
electronic health record to inform the care plan, care coordination and 
ongoing clinical care.
     Management of care transitions within health care 
including referrals to other clinicians, visits following a patient 
visit to an emergency department, and visits following discharges from 
hospitals and skilled nursing facilities. The practice must be able to 
facilitate communication of relevant patient information through 
electronic exchange of a summary care record with other health care 
providers regarding these transitions. The practice must also have 
qualified personnel who are available to deliver transitional care 
services to a patient in a timely way so as to reduce the need for 
repeat visits to emergency departments and re-admissions to hospitals 
and skilled nursing facilities.

[[Page 74417]]

     Coordination with home and community based clinical 
service providers required to support a patient's psychosocial needs 
and functional deficits. Communication to and from home and community 
based providers regarding these clinical patient needs must be 
documented in practice's medical record system.
     Enhanced opportunities for a patient to communicate with 
the provider regarding their care through not only the telephone but 
also through the use of secure messaging, internet or other 
asynchronous non face-to-face consultation methods.
    Comment: Some commenters supported our proposed scope of services, 
indicating that the requirements are consistent with what is expected 
in a primary care medical home. Other commenters, while generally 
supportive of the proposed scope of services, provided comments on 
specific aspects of the proposed scope.
    Response: We agree with the commenters who supported our proposed 
scope of services and agree that the requirements are consistent with 
what is expected in a primary care medical home. We summarize and 
respond to comments on specific aspects of the proposed scope below.
    Comment: Some commenters indicated that while they agreed with the 
goal of having members of the chronic care team who are involved in the 
after-hours care of a patient having access to the patient's full EHR, 
that this was not currently possible for too many physicians who would 
otherwise be able to provide this service. Some commenters indicated 
that many practices will be using EHR systems that qualify for 
Meaningful Use Stage 2, but that do not support 24/7 remote access. 
Some commenters suggested that the 24/7 EHR access requirement be 
changed to require that members of the chronic care team have access to 
timely EHR information (that is, through the EHR or other formats.)
    Response: Given that the comments on our proposed policy to require 
24/7 access to the EHR were generally part of broader comments on the 
role of EHRs in the standards that must be met in order to furnish 
chronic care management services, we intend to address this issue in 
future rulemaking to establish the standards. Summaries of these 
broader comments can be found below in the standards section.
    Comment: Some commenters stated that it was not feasible in many 
practices for a patient's personal practitioner or another clinical 
team member to be available on a 24/7 basis for every patient. Other 
commenters recommended gradually phasing in this requirement over time.
    Response: The evolving medical literature on chronic care 
management and patient centered medical homes emphasizes the central 
importance of members of the care team being available 24/7 to address 
a patient's acute chronic care needs. Moreover, we believe the 24/7 
availability of the care team is an important factor contributing to 
higher resource costs for these services that are not currently 
reflected in E/M services. Therefore, we disagree with commenters who 
requested that we relax or phase in the 24/7 requirement.
    Comment: Some commenters requested that we clarify the scope of 
services with respect to caregivers for patients with chronic care 
needs. Some of these commenters recommended that we require providers 
to address the needs of caregivers, especially caregivers who are 
Medicare beneficiaries, since caregivers are at elevated risk of health 
issues from emotional and physical stresses.
    Response: As with transitional care management (77 FR 68989), 
communication that is within the scope of services for chronic care 
management includes communication with the patient and caregiver. We 
also agree with commenters that caregivers who are Medicare 
beneficiaries, as with any Medicare beneficiary, should be provided 
with needed high quality, efficient care congruent with the patient's 
choices and values. We note, however, that we do not have the statutory 
authority to extend Medicare benefits to individuals who are not 
eligible for those benefits.
    Comment: While the majority of commenters expressed support for our 
proposal to require a patient-centered plan of care, some commenters 
believed that this requirement was not necessary in all cases. These 
commenters suggested that the requirement be changed to require a plan 
of care document as needed.
    Response: We disagree with these comments. As we indicated in the 
propose rule, we believe that patients with multiple chronic conditions 
are at increased risk for hospitalizations, use of post-acute care 
services, and emergency department visits. Given this increased risk, 
we believe that a patient-centered plan of care document is a critical 
tool to help ensure appropriate care management for these patients. In 
the absence of such of document, we believe there would be 
significantly greater potential for gaps in care coordination. In 
addition, we received many comments supporting active involvement of 
the patient and caregiver in chronic care management. We believe our 
requirement that a written or electronic copy of the patient-centered 
plan of care document be provided to the patient facilitates this 
involvement.
    Comment: Some commenters expressed concern regarding our proposal 
to include enhanced opportunities for a patient to communicate with the 
provider regarding their care through not only the telephone but also 
through the use of secure messaging, internet or other asynchronous non 
face-to-face consultation methods. They indicated that many patients 
and/or caregivers may not be capable of using this type of 
communication, even if the practice is equipped to provide it.
    Response: We disagree with these comments. Recognizing the growing 
use of, and patient and caregiver interest in, asynchronous 
communication through secure email, text and other modalities to 
support access to health care, we believe that it is reasonable for 
beneficiaries and their caregivers who would receive non-face-to-face 
chronic care management services to be able to communicate with the 
practice not only by telephone but through asynchronous communication 
modalities. We note that although the expectation is for the practice 
to provide these communication options, there is no requirement that 
the practice ensure that every patient and caregiver makes use of these 
options.
    Comment: Some commenters requested that we explicitly require the 
chronic care management practitioner to consider various specific 
services or disease specific services when furnishing the scope of 
chronic care management services.
    Response: In our proposed scope of services, we stated that, ``A 
plan of care is based on a physical, mental, cognitive, psychosocial, 
functional and environmental (re)assessment and an inventory of 
resources and supports. It is a comprehensive plan of care for all 
health issues (emphasis added).'' Since the plan of care, as we 
described it, is to be comprehensive, we do not believe it is necessary 
for the scope of services to exhaustively list specific possible 
services that the chronic care management practitioner should consider 
when furnishing the scope of chronic care management services.
    In summary, we are finalizing the following as the scope of chronic 
care management services.
     The provision of 24-hour- a-day, 7-day- a-week access to 
address a patient's acute chronic care needs. To accomplish these 
tasks, we would expect that the

[[Page 74418]]

patient and caregiver would be provided with a means to make timely 
contact with health care providers in the practice to address the 
patient's urgent chronic care needs regardless of the time of day or 
day of the week.
     Continuity of care with a designated practitioner or 
member of the care team with whom the patient is able to get successive 
routine appointments.
     Care management for chronic conditions including 
systematic assessment of patient's medical, functional, and 
psychosocial needs; system-based approaches to ensure timely receipt of 
all recommended preventive care services; medication reconciliation 
with review of adherence and potential interactions; and oversight of 
patient self-management of medications. In consultation with the 
patient, caregiver, and other key practitioners treating the patient, 
the practitioner furnishing chronic care management services should 
create a patient-centered plan of care document to assure that care is 
provided in a way that is congruent with patient choices and values. A 
plan of care is based on a physical, mental, cognitive, psychosocial, 
functional and environmental (re)assessment and an inventory of 
resources and supports. It is a comprehensive plan of care for all 
health issues. It typically includes, but is not limited to, the 
following elements: problem list, expected outcome and prognosis, 
measurable treatment goals, symptom management, planned interventions, 
medication management, community/social services ordered, how the 
services of agencies and specialists unconnected to the practice will 
be directed/coordinated, identify the individuals responsible for each 
intervention, requirements for periodic review and, when applicable, 
revision, of the care plan. The provider should seek to reflect a full 
list of problems, medications and medication allergies in the 
electronic health record to inform the care plan, care coordination and 
ongoing clinical care.
     Management of care transitions within health care 
including referrals to other clinicians, visits following a patient 
visit to an emergency department, and visits following discharges from 
hospitals and skilled nursing facilities. The practice must be able to 
facilitate communication of relevant patient information through 
electronic exchange of a summary care record with other health care 
providers regarding these transitions. The practice must also have 
qualified personnel who are available to deliver transitional care 
services to a patient in a timely way so as to reduce the need for 
repeat visits to emergency departments and re-admissions to hospitals 
and skilled nursing facilities.
     Coordination with home and community based clinical 
service providers required to support a patient's psychosocial needs 
and functional deficits. Communication to and from home and community 
based providers regarding these clinical patient needs must be 
documented in practice's medical record system.
     Enhanced opportunities for a patient and caregiver to 
communicate with the provider regarding the patient's care through not 
only the telephone but also through the use of secure messaging, 
internet or other asynchronous non face-to-face consultation methods.
    We also note that we continue to assess the potential impact of the 
scope of our chronic care management policy on our current programs and 
demonstrations designed to improve payment for, and encourage long-term 
investment in, care management services. Likewise, to assure that there 
are not duplicate payments for delivery of care management services, we 
continue to consider whether such payments are appropriate for 
providers participating in other programs and demonstrations.
3. Standards for Furnishing Chronic Care Management Services
    Not all physicians and nonphysician practitioners who wish to 
furnish chronic care management services currently have the capability 
to fully furnish the scope of these services without making additional 
investments in technology, staff training, and the development and 
maintenance of systems and processes to furnish the services. We stated 
in the proposed rule that we intended to establish standards that would 
be necessary to furnish high quality, comprehensive and safe chronic 
care management services. We also stated that one of the primary 
reasons for our 2015 implementation date was to provide sufficient time 
to develop and obtain public input on the standards. Since we continue 
to believe that practice standards are one of the most critical 
components of our chronic care management policy. We are developing the 
standards in 2014 and will implement them in 2015. They will be 
established through notice and comment rulemaking for CY 2015 PFS.
    In the proposed rule (78 FR 43338-43339), we solicited public 
comments for suggestions regarding standards for furnishing chronic 
care management. Although we solicited comments, we did not propose to 
adopt any specific standards and are, therefore, not finalizing a 
policy relating to this issue in this final rule with comment period.
    Below are our responses to public comments received. As stated 
above, the public comments received for these potential standards for 
chronic care management are beyond the scope of the proposed rule, and 
therefore, the adoption of any such standards would be addressed 
through separate notice-and-comment rulemaking.
    Comment: Some commenters were in favor of establishing standards 
for furnishing chronic care management services, generally supporting 
CMS's acknowledgement of the critical importance of managing care for 
these Medicare beneficiaries with chronic conditions. Commenters also 
believe that care coordination is an integral part of improving patient 
care.
    Many commenters expressed concerns and did not support establishing 
standards for furnishing chronic care management services as we 
discussed in the proposed rule (78 FR 43338-43339). Some commenters 
stated the standards we suggested were too aggressive, needed 
clarification and/or refinement, and were overly burdensome citing that 
adoption should be delayed, perhaps for years or indefinitely. 
Commenters suggested that practice capabilities as outlined could 
exclude many physicians from furnishing these services, despite the 
physicians being specially trained in chronic care management and 
having demonstrated the ability to furnish significant quality of care. 
Many commenters suggested that CMS partner (through an advisory group, 
workgroups, etc.) with interested stakeholders, obtain public input, 
and work with the CMS Innovation Center to continue developing and 
refining more reasonable potential future standards for furnishing 
chronic care management in order to ensure that the physicians who bill 
for these services have the capabilities to furnish them. Some 
commenters suggested integration of chronic care management standards 
with the State laws governing the practice of medicine. Commenters also 
urged CMS not to impose requirements that would preclude specialists 
from furnishing these critical services.
    Response: We appreciate commenters' suggestions and will consider 
these comments for any future rulemaking on this topic.
    As discussed in the proposed rule, potential standards (78 FR 
43338-43339) could include the following:
     The practice must be using a certified Electronic Health 
Record (EHR) for beneficiary care that meets the most

[[Page 74419]]

recent HHS regulatory standard for meaningful use. The EHR must be 
integrated into the practice to support access to care, care 
coordination, care management, and communication.
    Comment: Commenters generally supported the value of EHRs in regard 
to the capabilities to enhance the quality of care for chronic care 
management. Commenters requested that CMS clarify the following issues 
if CMS were to move forward with meaningful use as a standard for 
chronic care management: how a provider new to Medicare or new to a 
practice would be treated, and how a provider would be treated who 
formerly met meaningful use but failed to do so in a subsequent year 
(specifically, whether the practice would be required to repay the 
chronic care management payment, and whether the practice would have to 
stop providing these services to beneficiaries in the future). Other 
commenters noted that while EHRs may facilitate documentation, they are 
being replaced by ``cloud-based'' data repositories for beneficiary 
medical records and social media is being used for communication 
solutions.
    Many commenters did not support requiring the practice to use a 
certified EHR, some questioning whether an EHR is really essential to 
providing these services. These commenters discouraged CMS from 
including meaningful use as a standard for chronic care management, 
noting that it is premature to link these services to meaningful use, 
and that requiring meaningful use as a standard should be delayed until 
the meaningful use policy has been stabilized and more practices have 
achieved it. Commenters generally expressed concern regarding linking 
the provision of chronic care management to meaningful use as practices 
would have to delay furnishing care management for a full year until 
they have met meaningful use, denying their patients the benefit of 
those services. Commenters urged CMS not to require a specific stage of 
meaningful use certification. Commenters urged elimination of this 
requirement noting it interfered with the physician's prerogatives and 
practice; and suggesting that it has nothing to do with how effectively 
a physician manages patients with chronic conditions. Some commenters 
suggested that the notion that there should be immediate online access 
to every patient's complete EHR is unrealistic for many practices (that 
is, internet access issues, 24/7 availability of the full EHR, on-call 
health professional being from a different practice and not having 
access, etc.), particularly those who would most benefit from the 
potential chronic care management reimbursement. Commenters also noted 
EHR interoperability is not yet attainable by the vast majority of 
physicians across the country. Many commenters suggested CMS consider 
flexibility (that is, a phased-in approach) in requiring EHRs to avoid 
excluding otherwise qualified practices in areas of need. Some 
commenters noted that phasing in EHR requirements would aid those 
smaller practices, or rural areas, that do not currently utilize EHRs 
and thus would not be able to be reimbursed for furnishing 
beneficiaries with chronic care management services. Other commenters 
expressed concern that this requirement could pose a problem for small 
practices (that is, economically depressed, medically underserved, 
etc.) for which the expense of obtaining and implementing EHR systems 
could be prohibitive despite the fact they could meet the remainder of 
the requirements for chronic care management. Commenters raised 
concerns that language in the preamble suggests that all practitioners 
participating in the care of a beneficiary receiving chronic care 
management services would need to be able to share information related 
to the care plan electronically, and that it would be very difficult to 
meet this requirement as not all practices have access to electronic 
means of communication.
    Response: We appreciate commenters' suggestions and will consider 
these comments for any future rulemaking on this topic.
     The practice must employ one or more advanced practice 
registered nurses or physicians assistants whose written job 
descriptions indicate that their job roles include and are 
appropriately scaled to meet the needs for beneficiaries receiving 
services in the practice who require chronic care management services 
furnished by the practice.
    Comment: Some commenters supported the requirement to employ non-
physician professionals, and encouraged CMS to expand this list to 
include registered nurses, pharmacists (particularly hematology/
oncology clinical specialist pharmacists), social workers, Emergency 
Department physicians, ``caregivers'' (that is, those that help with 
Alzheimer's disease and dementia patients), ``direct-care worker,'' and 
other specialists such as hematologists, cardiologists, and 
nephrologists. Some commenters sought clarification regarding whether 
advanced practice nurse practitioners and physician assistants would 
have to be available 24/7, and what type of chronic care management 
services they must furnish.
    Many commenters, however, were not in support of the requirement 
that advanced practice nurses or physician assistants must be employed 
by the medical practice. Commenters urged elimination of this 
requirement noting that it interfered with the physician's 
prerogatives; indicating that this staffing requirement would have 
little, if anything, to do with how effectively a physician manages 
patients with chronic conditions, and suggesting that it could be 
considered cost prohibitive. Some commenters urged CMS to relax this 
requirement and recognize that these services could be effectively 
performed by appropriately trained, licensed, and, when applicable, 
credentialed clinical staff. Commenters recommended that CMS not 
prescribe the hiring decisions for practices to be eligible to furnish 
chronic care management services. Commenters suggested that the agency 
instead should provide greater flexibility for practices to demonstrate 
that they have the structural capabilities, personnel, and systems to 
coordinate care effectively, through their own engagement with 
patients, as well as by having other qualified health care 
professionals available, either within the practice itself or through 
external arrangements to furnish chronic care management services.
    Some commenters suggested that, under certain circumstances 
independently contracted (but not necessarily employed) personnel could 
participate in furnishing these services under the general supervision 
of a physician or non-physician practitioner, and sought clarification 
on whether ``employ'' could include ``contract'' personnel. Other 
commenters requested that the standards recognize that nurses can 
perform this work under the direction and supervision of physicians, 
especially since many practices employ registered nurses who are well 
qualified to provide care coordination. Some commenters believed that 
this requirement was particularly ill-advised and inappropriate, and 
strongly disagreed that employment of this level of staff should be a 
consideration in furnishing these services. Other commenters noted that 
this requirement would deter small and rural practices from offering 
chronic care management services. Commenters supported care teams/team-
based care, but indicated that a practice should have the discretion to 
hire and develop those care teams, and not be required specifically to 
hire advanced practice nurse practitioners or physician

[[Page 74420]]

assistants. Some commenters suggested that a ``care manager'' concept 
could be used, which could be a registered nurse, social worker, 
advanced practice nurse or physician assistant who has received 
training to perform the service. Commenters also suggested that CMS 
revise the requirement regarding who must employ the care manager to 
also allow the practice, or physician organization on the practice's 
behalf, to be the employer.
    Response: We appreciate commenters' suggestions and will consider 
these comments for any future rulemaking on this topic.
     The practice must be able to demonstrate the use of 
written protocols by staff participating in the furnishing of services 
that describe: (1) The methods and expected ``norms'' for furnishing 
each component of chronic care management services furnished by the 
practice; (2) the strategies for systematically furnishing health risk 
assessments to identify all beneficiaries eligible and who may be 
willing to participate in the chronic care management services; (3) the 
procedures for informing eligible beneficiaries about chronic care 
management services and obtaining their consent; (4) the steps for 
monitoring the medical, functional and social needs of all 
beneficiaries receiving chronic care management services; (5) system 
based approaches to ensure timely furnishing of all recommended 
preventive care services to beneficiaries; (6) guidelines for 
communicating common and anticipated clinical and non-clinical issues 
to beneficiaries; (7) care plans for beneficiaries post-discharge from 
an emergency department or other institutional health care setting, to 
assist beneficiaries with follow up visits with clinical and other 
suppliers or providers, and in managing any changes in their 
medications; (8) a systematic approach to communicate and 
electronically exchange clinical information with and coordinate care 
among all service providers involved in the ongoing care of a 
beneficiary receiving chronic care management services; (9) a 
systematic approach for linking the practice and a beneficiary 
receiving chronic care management services with long-term services and 
supports including home and community-based services; (10) a systematic 
approach to the care management of vulnerable beneficiary populations 
such as racial and ethnic minorities and people with disabilities; and 
(11) patient education to assist the beneficiary to self-manage a 
chronic condition that is considered at least one of his/her chronic 
conditions. These protocols must be reviewed and updated as is 
appropriate based on the best available clinical information at least 
annually.
    Comment: Some commenters expressed support for the outlined written 
protocols. A few commenters suggested that CMS develop educational 
materials to be made available to patients so they better understand 
these services. Commenters suggested the 11th written protocol be 
revised (to be more interactive) to read ``provide written protocols 
that describe collaborative problem solving/decision making that 
supports the patient in self-managing their chronic health 
conditions.'' Other commenters believe that physicians and other 
providers who care for chronically ill patients can be better supported 
with evidence-based guidelines, specialty expertise, and information 
systems; such as, providers encouraging patients (through partnerships 
with community organizations, etc.) to participate in medical systems 
like peer support groups, exercise programs, nurse educators, or 
dieticians.
    Commenters urged CMS to revise this requirement to provide more 
flexibility for practices to demonstrate they have their own protocols 
to ensure that patients with chronic diseases have timely access to 
physicians and other team members within a realistic timeframe (that 
is, practices could be required to demonstrate that their patients have 
access the same or next day by phone, email, telemedicine, or in 
person). Other commenters suggested CMS give more consideration to 
therapy services, medication management, discharge planning, care 
coordination, and caregiver education. Commenters also asked CMS to 
clarify that the practice reporting these chronic care management 
services does not have to perform all care management itself, and that 
other practices or healthcare professionals can perform some services 
in coordination with the reporting practice. Commenters conveyed 
individuals with Alzheimer's and dementias may not be able to 
participate in the development of a care plan in the same capacity as 
individuals who are not cognitively impaired. Some commenters requested 
CMS go a step further in noting the importance of coordination with 
direct-care workers and family caregivers, and requiring that this 
communication be documented as well.
    Response: We appreciate commenters' suggestions and will consider 
these comments for any future rulemaking on this topic.
     All practitioners, including advanced practice registered 
nurses or physicians assistants, involved in the furnishing of chronic 
care management services must have access at the time of service to the 
beneficiary's EHR that includes all of the elements necessary to meet 
the most recent HHS regulatory standard for meaningful use. This 
includes any and all clinical staff furnishing after hours care to 
ensure that the chronic care management services are available with 
this level of EHR support in the practice or remotely through a Virtual 
Private Network (VPN), a secure Web site, or a health information 
exchange (HIE) 24 hours per day and 7 days a week.
    Comment: Commenters were generally in support of the concept that 
24/7 access to the beneficiary's EHR would be a tremendous enhancement 
to furnishing chronic care management. Some commenters noted that many 
physicians practice in more than one setting, which can make it more 
challenging for them to furnish all beneficiaries with 24/7 EHR support 
to providers and care staff. Commenters noted that many of their 
members do not have the resources to evaluate patients 24/7; therefore, 
commenters urged CMS to clarify the 24/7 support can be furnished by 
members of the chronic care team by phone, or allow more flexibility in 
this requirement until the agency can assess the impact it may have on 
beneficiary access to chronic care management services. Some commenters 
noted that many physicians can access their own organization's EHR both 
in and outside typical business hours, but do not currently have 
``real-time'' access to all of the EHR data for beneficiaries under 
their care, especially if they are moving provider settings.
    Response: We appreciate commenters' suggestions and will consider 
these suggestions for any future rulemaking.
    Some have suggested that, to furnish these services, practices 
could be recognized as a medical home by one of the national 
organizations (including the National Committee for Quality Assurance 
(NCQA), the Accreditation Association for Ambulatory Health Care, The 
Joint Commission, URAC, etc.), which are formally recognizing primary 
care practices as a patient-centered medical home. We understand there 
are differences among the approaches taken by national organizations 
that formally recognize medical homes and therefore, we solicited 
comment on these and other potential care coordination standards, and 
the potential for CMS recognizing a formal patient-centered medical 
home designation as one means

[[Page 74421]]

for a practice to demonstrate it has met any final care coordination 
standards for furnishing chronic care management services.
    Comment: Some commenters supported recognizing a patient centered 
medical home model to meet the care coordination standards. Commenters 
recommended that CMS allow for multiple pathways for accreditation 
recognition, and/or certification of patient centered medical homes and 
patient centered medical home neighborhood practices, noting other 
entities offer these programs, such as URAC and The Joint Commission. 
Some commenters supported the specialty practice recognition program, 
under NCQA, to be included to enable specialists to be able to 
participate. Commenters also suggested that CMS include other 
approaches to recognize medical homes as developed by private health 
plans and within CMS via its Innovation Center Comprehensive Primary 
Care Initiative, some of which may not have been formally certified by 
an accreditation entity. Commenters noted medical homes would be good 
candidates to provide chronic care management, but Patient Centered 
Medical Homes represent a relatively small percentage of medical groups 
across the country.
    Other commenters noted they do not support a requirement that 
physician practices be certified as a primary care medical home to 
receive payment for chronic care management. Other commenters urged 
elimination of this requirement, noting it is too burdensome and would 
disqualify many practices furnishing these care coordination services. 
Commenters believe that in general, medical societies have been 
reluctant to accept proposals that would require medical homes or 
patient-centered practices to obtain accreditation/recognition by 
external entities; and therefore, urged CMS to work with the medical 
community to develop an alternative to accreditation as a path for 
furnishing chronic care management services. Other commenters noted 
this approach ignores the fact that many patients--especially the 
poor--do not have a primary care provider and by default, may receive 
substantial services from the Emergency Department, especially when 
other sources of primary care are unavailable or inaccessible. Some 
commenters conveyed that many standards for accreditation as a patient 
centered medical home do not consider the needs of those with dementia; 
adding, accreditation bodies should include quality measures on 
dementia care as a standard for accreditation. Some commenters 
encouraged CMS to consider using QIOs to help determine if a provider 
is meeting the requirements for chronic care management, instead of 
relying on a formal recognition program.
    Some commenters noted that, instead of requiring any particular 
certification or designation, any physician practice should be able to 
qualify for payment of chronic care management services as long as the 
individual practice meets the practice requirements established to 
report these individual codes. Other commenters recommended that CMS 
instead require practices to have certain capabilities (that is, 24/7 
access to care, 24/7 access to the individual's medical record, those 
involved with the care of a patient are identified and accessible, the 
health risk assessment data be addressed in the care of the patient, 
etc.); moreover, commenters suggested that CMS should clearly 
articulate that the ultimate goal is for primary care practices to 
achieve patient-centered medical home certification by a certain date 
(for instance 2019) as this would satisfy the agency's intention 
without being overly restrictive. Commenters also recommended that if 
CMS decides to recognize certified medical homes--through accreditation 
organizations or otherwise--the certification standards should fully 
reflect the Joint Principles for the Patient-Centered Medical Home 
(http://tinyurl.com/ccbhvzz). Some commenters noted that requiring 
practice certification, such as that offered by NCQA for Patient-
Centered Medical Homes, will undoubtedly limit access to chronic care 
management services for many beneficiaries, especially those in smaller 
practices and rural areas; and recommended CMS not make additional 
voluntary certifications mandatory, but rather look to those voluntary 
standards as it collaborates with the medical professional community to 
develop robust standards for chronic care management. Other commenters 
urged CMS to consider allowing practices to self-attest that they meet 
the protocol. Some commenters believe there needs to be an 
accountability mechanism for chronic care management which goes beyond 
``standards,'' such as quality measures that demonstrate improved 
outcomes and benefits for relevant patients.
    Response: We appreciate commenters' suggestions and will consider 
these comments for any future rulemaking on this topic.
4. Billing for Separately Payable Chronic Care Management Services
    To recognize the additional resources required to provide chronic 
care management services to patients with multiple chronic conditions, 
we proposed to create two new separately payable alphanumeric G-codes.

    Complex chronic care management services furnished to patients 
with multiple (two or more) complex chronic conditions expected to 
last at least 12 months, or until the death of the patient, that 
place the patient at significant risk of death, acute exacerbation/
decompensation, or functional decline;

GXXX1, initial services; one or more hours; initial 90 days
GXXX2, subsequent services; one or more hours; subsequent 90 days

    Typically, we would expect the one or more hours of services to be 
provided by clinical staff directed by a physician or other qualified 
health care professional.
    We also proposed that billing for subsequent chronic care 
management services (GXXX2) would be limited to those 90-day periods in 
which the medical needs of the patient require substantial revision of 
the care plan.
    We proposed that the resources required to furnish care management 
services for patients that do not have multiple chronic conditions 
would continue to be reflected in the payment for face-to-face E/M 
services. We also proposed that the resources required to furnish care 
management services consisting of less than one or more hours of 
clinical staff time over a 90-day period, and for patients residing in 
facility settings, would continue to be reflected in the payment for 
face-to-face E/M visits.
    We proposed that chronic care management services would include 
transitional care management services (CPT 99495, 99496), home health 
care supervision (HCPCS G0181), and hospice care supervision (HCPCS 
G0182). If furnished, to avoid duplicate payment, we proposed that 
these services may not be billed separately during the 90 days for 
which either GXXX1 or GXXX2 are billed. For similar reasons, we 
proposed that GXXX1 or GXXX2 cannot be billed separately if ESRD 
services (CPT 90951-90970) are billed during the same 90 days.
    We proposed to pay only one claim for chronic care management 
services billed per beneficiary at the conclusion of each 90-day 
period.
    We proposed that all of our proposed chronic care management 
services that are relevant to the patient must be furnished to bill for 
a 90-day period.
    If a face-to-face visit is provided during the 90-day period by the 
practitioner who is furnishing chronic care management services, we 
proposed that the practitioner should report the appropriate evaluation 
and management

[[Page 74422]]

code in addition to billing for chronic care management.
    We note that to bill for these services, we proposed that at least 
60 minutes of chronic care management services must be provided during 
a 90-day period. Time of less than 60 minutes over the 90 day period 
could not be rounded up to 60 minutes to bill for these services. We 
also proposed that for purposes of meeting the 60-minute requirement, 
the practitioner could count the time of only one clinical staff member 
for a particular segment of time, and could not count overlapping 
intervals such as when two or more clinical staff members are meeting 
about the patient.
    Comment: Many commenters requested that we either adopt the current 
CPT codes (CPT 99487-99489) for complex chronic care coordination 
services or work with the AMA to revise the current CPT codes rather 
than establish G-codes. Commenters also requested that we shorten the 
billing period from 90 days to 30 days, monthly, or weekly out of 
concern that it would be administratively burdensome for some practices 
to keep track of the amount of time they had furnished the service over 
a 90-day period. Many commenters also encouraged us to reconsider the 
need for separate G-codes for the initial delivery of chronic care 
management services versus subsequent delivery of these services since 
these commenters indicated that the resource use is similar. Some 
commenters supported our proposal that if a face-to-face visit is 
provided during the period by the practitioner who is furnishing 
chronic care management services, the practitioner should report the 
appropriate E/M code in addition to billing for chronic care 
management. Some commenters requested that we consider creating codes 
for chronic care management services to reflect different patient 
severity levels or create an add-on code, similar to the current CPT 
add-on code for 30 minutes of additional time (CPT 99489), that 
recognizes additional time for more complex patients within the 
eligible patient population. Some commenters agreed with our proposal 
that time less than the time specified in the code (60 minutes in our 
proposal) could not be rounded up to bill for these services. Some 
commenters also requested that we provide more detailed billing 
information for the services.
    Response: Regarding the suggestion to work with CPT to avoid the 
need to establish G-codes, since we expect to implement payment for 
chronic care management services in 2015, there is time for CPT to 
establish a billing code that sufficiently reflects our policy. We 
would consider using such a new or revised code. The current CPT codes 
do not meet our policy requirements (for example, the eligible patient 
population, the time required for the code); therefore, we are not 
adopting these codes in this final rule.
    We agree with commenters who suggested that we shorten the billing 
period for chronic care management services from 90 days to 30 days to 
reduce the administrative timekeeping burden on practices. We believe 
that a weekly billing interval would increase the administrative 
billing burden and note that very few commenters supported this option 
relative to 30 day or monthly billing.
    We also agree with commenters that the resources required to 
furnish the initial and subsequent services are not sufficiently 
different to require the establishment of separate codes to distinguish 
initial and subsequent services.
    In response to commenters' concerns, we are adopting a 30-day 
billing interval for chronic care management services. Given the 
shorter 30-day period, we are establishing a billing code that 
corresponds to 20 minutes of service during the 30-day period. Similar 
to our proposal, at least 20 minutes of chronic care management 
services must be provided during the 30-day billing interval. Time of 
less than 20 minutes over the 30-day period could not be rounded up to 
20 minutes to bill for these services. For purposes of meeting the 20-
minute requirement, the practitioner could count the time of only one 
clinical staff member for a particular segment of time, and could not 
count overlapping intervals such as when two or more clinical staff 
members are meeting about the patient.
    With respect to comments requesting that we consider creating 
billing codes for chronic care management services to reflect different 
patient severity levels or create an add-on code that recognizes 
additional time for more severe patients within the eligible patient 
population, we are not adopting such a coding structure at this time. 
As recognized by the vast majority of commenters, paying separately for 
non-face-to-face chronic care management services is a significant 
policy change. As we gain more experience with separate payment for 
this service, we may consider additional changes in the coding 
structure in future rulemaking.
    In response to comments asking that we provide more detailed 
billing information for these services, we intend to provide guidance 
to our contractors and make any necessary revisions to the relevant 
manual provisions to implement the chronic care management policy.
    In summary, to recognize the additional resources required to 
provide chronic care management services to patients with multiple 
chronic conditions, we will be creating one new separately payable 
alphanumeric G-code for CY 2015.

    GXXX1 Chronic care management services furnished to patients 
with multiple (two or more) chronic conditions expected to last at 
least 12 months, or until the death of the patient, that place the 
patient at significant risk of death, acute exacerbation/
decompensation, or functional decline; 20 minutes or more; per 30 
days

    Typically, we would expect that the 20 minutes or more of chronic 
care management services to be provided by clinical staff directed by a 
physician or other qualified health care professional.
    At least 20 minutes of chronic care management services must be 
provided during the 30-day period. Time of less than 20 minutes over 
the 30-day period may not be rounded up to 20 minutes in order to bill 
for these services. For purposes of meeting the 20-minute requirement, 
the practitioner could count the time of only one clinical staff member 
for a particular segment of time, and could not count overlapping 
intervals such as when two or more clinical staff members are meeting 
about the patient.
    We would consider using a revised CPT code that meets our policy 
requirements instead of creating a new G-code.
    Comment: Some commenters stated that limiting the use of the 
billing code for subsequent delivery of chronic care management 
services to those circumstances in which the beneficiary requires 
``substantial revision of the care plan'' undervalues the work the 
practitioner and practice care team does in furnishing ongoing 
assistance to beneficiaries in monitoring and implementing their care 
plans. Some commenters indicated that this restriction would reduce the 
potential benefits of chronic care management to the patient since in 
the absence of separate payment the services might be provided too 
intermittently. Other commenters, however, supported the restriction to 
time periods when the care plan has undergone significant revision 
since they believed that separately billable chronic care management 
should be for intense services delivered over a short period of time. 
Generally, these commenters were also ones who also favored narrowing 
the eligible patient population.

[[Page 74423]]

    Response: As we stated in the discussion of the eligible patient 
population, we believe the resources required to furnish chronic care 
management services to beneficiaries with two or more chronic 
conditions are not adequately reflected in the existing E/M codes. We 
agree with commenters who argued that these resources could potentially 
be required during periods of time when the care plan is not undergoing 
substantial revision.
    Therefore, after considering all the comments received, we are 
revising our proposed policy to specify that the chronic care 
management service may be billed for periods in which the medical needs 
of the patient require establishing, implementing, revising, or 
monitoring the care plan, assuming all other billing requirements are 
met.
    Comment: Some commenters objected to our proposal that chronic care 
management services include transitional care management services (CPT 
99495, 99496), home health care supervision (HCPCS G0181), and hospice 
care supervision (HCPCS G0182) and that these services cannot be billed 
separately during the time period when the chronic care management 
services are billed. Some commenters also objected to our proposal that 
chronic care management services cannot be billed separately if certain 
ESRD services (CPT 90951-90970) are billed during the same time period. 
Some commenters believed that there was insufficient overlap between 
the resources required to perform these services and chronic care 
management to justify restricting the billing in the manner we 
proposed. Other commenters indicated that more than one practitioner 
should be allowed to bill for chronic care management services for the 
same time period.
    Response: Given that, in response to comments, we have modified our 
new separately payable alphanumeric G-code for chronic care management 
services to describe services furnished for 20 minutes or more over a 
30-day period, it may not always be the case that the additional 
resources required to provide chronic care management services to 
beneficiaries with multiple chronic conditions are the same as the 
additional resources required provide transitional care management 
services (CPT 99495, 99496), home health care supervision (HCPCS 
G0181), hospice care supervision (HCPCS G0182), or certain ESRD 
services (CPT 90951-90970). Nevertheless, given that care management is 
an integral part of all of these services, we believe there is 
significant overlap, and that paying separately both for chronic care 
management and the care management included in these services would 
result in duplicate payment for the overlapping care management. 
Similarly, allowing multiple practitioners to bill for GXXX1 during a 
particular billing interval would result in duplicate payment for 
overlapping care management. Therefore, we are finalizing our policy 
that GXXX1 and any of CPT 99495-99496, HCPCS G0181-G0182, or CPT 90951-
90970 cannot be billed during the same 30-day period; nor can GXXX1 be 
billed by multiple practitioners for the same time period.
    Comment: Some commenters objected to our proposal that the 
resources required to provide care management services to patients 
residing in facility settings continues to be reflected in the payment 
for face-to-face E/M visits. Commenters believed there was insufficient 
overlap between the scope of these care management services and the 
care management services provided by facilities to justify restricting 
the billing in the manner we proposed.
    Response: We disagree with these comments. The resources required 
to provide care management services to patients residing in facility 
settings significantly overlaps with care management activities by 
facility staff that is included in the associated facility payment. We 
are finalizing this part of our proposal without modification.
    Comment: MedPAC recommended that practitioners employed or 
furnishing services under arrangement with hospice or home health 
agencies should not be eligible to bill for these chronic care 
management services, citing the Medicare claims processing manual 
requirements for care plan oversight services.
    Response: There is a requirement in the Medicare Claims Processing 
Manual (see http://www.cms.gov/Regulations-and-Guidance/Guidance/
Manuals/Downloads/clm104c12.pdf) for hospice care plan oversight (CPO) 
that states:
    ``The attending physician or nurse practitioner (who has been 
designated as the attending physician) may bill for hospice CPO when 
they are acting as an `attending physician.' An `attending physician' 
is one who has been identified by the individual, at the time he/she 
elects hospice coverage, as having the most significant role in the 
determination and delivery of their medical care. They are not employed 
nor paid by the hospice.''
    We will consider MedPAC's comment further, but are not adopting 
this suggestion at the current time. We note that, as stated earlier in 
this section, home health care supervision (HCPCS G0181) and hospice 
care supervision (HCPCS G0182) cannot be billed separately during the 
time period when the chronic care management services are billed.
    Comment: Many commenters requested that we clarify that billing for 
chronic care management is not restricted to primary care physicians 
and that specialist physicians can bill for these services if they meet 
the requirements. Some non-physician practitioners similarly requested 
confirmation that they can bill for these services if they meet the 
requirements.
    Response: We appreciate these comments and take this opportunity to 
confirm that, while we expect the chronic care management code to be 
billed most frequently by primary care physicians, specialists who meet 
the requirements may also bill for these services. As for nonphysician 
qualified health care professionals, we believe only NPs, PAs, CNSs, 
and certified nurse midwives (CNMs) can furnish the full range of these 
services under their Medicare benefit, and only to the extent permitted 
by applicable limits on their state scope of practice. We believe other 
nonphysician practitioners (such as registered dieticians, nutrition 
professionals or clinical social workers) or limited-license 
practitioners, (such as optometrists, podiatrists, doctors of dental 
surgery or dental medicine), would be limited by the scope of their 
state licensing or their statutory Medicare benefit to furnish the 
complete scope of these services such that they would not be able to 
furnish chronic care management services; and there is no Medicare 
benefit category that allows payment under the PFS to some of the other 
health professionals (such as pharmacists and care coordinators) 
mentioned by commenters.
    We also note that given our longstanding restriction on the use of 
E/M codes by clinical psychologists and the fact that payment for these 
chronic care management services is currently included in the payment 
for E/M services, clinical psychologists are also not permitted to bill 
for these services. However, similar to transitional care management, 
we expect practitioners furnishing chronic care management services to 
refer patients to psychologists and other mental health professionals 
as part of chronic care management when doing so is warranted by an 
evaluation of the patient's psychosocial needs.

[[Page 74424]]

5. Obtaining Agreement From the Beneficiary
    We stated in the proposed rule that not all patients who are 
eligible for separately payable chronic care management services may 
necessarily want these services to be provided. Therefore, before the 
practitioner can furnish or bill for these services, we proposed that 
the eligible beneficiary must be informed about the availability of the 
services from the practitioner and provide his or her consent, or 
synonymously in this context ``agreement,'' to have the services 
provided, including the electronic communication of the patient's 
information with other treating providers as part of care coordination. 
This would include a discussion with the patient about what chronic 
care management services are, how these services are accessed, how 
their information will be shared among other providers in the care 
team, and that cost-sharing applies to these services even when they 
are not delivered face-to-face in the practice. To bill for the 
services, the practitioner would be required to document in the 
patient's medical record that all of the chronic care management 
services were explained and offered to the patient, noting the 
patient's decision to accept these services. Also, a written or 
electronic copy of the care plan would be provided to the beneficiary 
and this would also be recorded in the beneficiary's electronic medical 
record.
    We proposed that a practitioner would need to reaffirm with the 
beneficiary at least every 12 months whether he or she wishes to 
continue to receive chronic care management services during the 
following 12-month period.
    We proposed that the agreement for chronic care management services 
could be revoked by the beneficiary at any time. However, if the 
revocation occurs during a current chronic care management period, the 
revocation would not be effective until the end of that period. The 
beneficiary could notify the practitioner either verbally or in 
writing. At the time the agreement is obtained, the practitioner would 
be required to inform the beneficiary of the right to stop the chronic 
care management services at any time and the effect of a revocation of 
the agreement on chronic care management services. Revocation by the 
beneficiary of the agreement must also be noted by recording the date 
of the revocation in the beneficiary's medical record and by providing 
the beneficiary with written confirmation that the practitioner would 
not be providing chronic care management services beyond the current 
period.
    We proposed that a beneficiary who has revoked the agreement for 
chronic care management services from one practitioner may choose 
instead to receive these services from a different practitioner, which 
can begin at the conclusion of the current period. The new practitioner 
would need to fulfill all the requirements for billing these services.
    We proposed that prior to submitting a claim for chronic care 
management services, the practitioner must notify the beneficiary that 
a claim for these services will be submitted to Medicare. The 
notification must indicate: that the beneficiary has been receiving 
these services over the previous period (noting the beginning and end 
dates for the period); the reason(s) why the services were provided; 
and a description of the services provided. The notice may be delivered 
by a means of communication mutually agreed to by the practitioner and 
beneficiary such as mail, email, or facsimile, or in person (for 
example, at the time of an office visit). The notice must be received 
by the beneficiary before the practitioner submits the claim for the 
services. A separate notice must be received by the beneficiary for 
each period for which the services will be billed. A copy of the notice 
should be included in the medical record.
    Comment: While most commenters endorsed the general concept that 
that there should be a process whereby a practitioner would obtain 
agreement from an eligible beneficiary for the delivery of the service, 
we received comments on specific aspects of our proposal.
    Some commenters supported our beneficiary agreement policies as 
proposed. Other commenters believed that notifying the beneficiary 
would be sufficient and that a formal agreement should not be required. 
Some commenters raised concern about the burden of having to obtain an 
annual agreement rather than obtaining just one agreement at the outset 
of furnishing the services. Many commenters recommended that CMS remove 
the requirement that practitioners notify beneficiaries in writing 
prior to each billing for chronic care management services, while other 
commenters supported this requirement. The commenters opposed to the 
pre-billing notification requirement viewed this as administratively 
burdensome and unnecessary given the informed agreement process for 
this service. Some commenters indicated that beneficiary agreement 
would be much easier to obtain if the service were not subject to 
coinsurance. Many commenters requested that we provide beneficiary 
education on this issue.
    Response: We appreciate commenters recognizing the value of our 
requiring practitioners to inform beneficiaries about their eligibility 
to receive chronic care management services. We note that we do not 
have the statutory authority to waive the cost-sharing for these 
services. Since beneficiaries who receive these services will be billed 
for cost-sharing, we believe it is prudent to require their written 
agreement prior to initiating the service. We agree that to reduce 
administrative burden, the informed agreement process need only occur 
once at the outset of furnishing the service, rather than annually as 
we had proposed, and that it only needs to be repeated if the 
beneficiary opts to change the practitioner who is delivering the 
services. We also agree with commenters who suggested that we relax the 
requirement that a practice inform a beneficiary prior to each time a 
bill is submitted. While we believe that this approach could reduce any 
potential confusion around cost-sharing charges, we agree that 
practitioners can address this in the informed agreement process.
    In response to comments recommending that we educate beneficiaries 
about chronic care management services, we note that we provide 
extensive beneficiary education regarding Medicare benefits, including 
Medicare and You and other publications, Medicare.gov, and 1-800-
MEDICARE. We will include information concerning chronic care 
management in our outreach efforts.
    The final beneficiary agreement requirements for CY 2015 are as 
follows. Before the practitioner can furnish or bill for these 
services, the eligible beneficiary must be informed about the 
availability of the services from the practitioner and provide his or 
her written agreement to have the services provided, including agreeing 
to the electronic communication of the patient's information with other 
treating providers as part of care coordination. This would include a 
discussion with the patient, and caregiver when applicable, about what 
chronic care management services are, how these services are accessed, 
how the patient's information will be shared among other providers in 
the care team, and that cost-sharing applies to these services even 
when they are not delivered face-to-face in the practice. To bill for 
the services, the practitioner would be required to document in the 
patient's

[[Page 74425]]

medical record that all of the chronic care management services were 
explained and offered to the patient, noting the patient's decision to 
accept these services. Also, a written or electronic copy of the care 
plan is required to be provided to the beneficiary, and the provision 
of the plan to the patient must also be recorded in the beneficiary's 
electronic medical record.
    The agreement for chronic care management services could be revoked 
by the beneficiary at any time. However, if the revocation occurs 
during a current chronic care management 30-day period, the revocation 
is not effective until the end of that period. The beneficiary could 
notify the practitioner of revocation either verbally or in writing. At 
the time the agreement is obtained, the practitioner is required to 
inform the beneficiary of the right to stop the chronic care management 
services at any time (effective at the end of a 30-day period) and the 
effect of a revocation of the agreement on chronic care management 
services. The practitioner is also required to inform the beneficiary 
that only one practitioner is able to be separately paid for these 
services during the 30-day period. Revocation by the beneficiary of the 
agreement must also be noted by recording the date of the revocation in 
the beneficiary's medical record and by providing the beneficiary with 
written confirmation that the practitioner would not be providing 
chronic care management services beyond the current 30-day period.
    A beneficiary who has revoked the agreement for chronic care 
management services from one practitioner may choose instead to receive 
these services from a different practitioner, which can begin at the 
conclusion of the current 30-day period. If a beneficiary chooses to 
receive these services from a different practitioner, the beneficiary 
should revoke the agreement with the current practitioner. The new 
practitioner would need to fulfill all the requirements for billing 
these services.
5. Chronic Care Management Services and the Annual Wellness Visit (AWV) 
(HCPCS Codes G0438, G0439)
    We proposed that a beneficiary must have received an AWV in the 
past 12 months for a practitioner to be able to bill separately for 
chronic care management services. We believe that the linking of these 
services to the AWV makes sense for several reasons. First, the AWV is 
designed to enable a practitioner to systematically capture information 
that is essential for the development of a care plan. This includes the 
establishment of a list of current practitioners and suppliers that are 
regularly involved in providing medical care to the beneficiary, the 
assessment of the beneficiary's functional status related to chronic 
health conditions, the assessment of whether the beneficiary suffers 
from any cognitive limitations or mental health conditions that could 
impair self-management of chronic health conditions, and an assessment 
of the beneficiary's preventive health care needs including those that 
contribute to or result from a beneficiary's chronic conditions. 
Second, the beneficiary's selection of a practitioner to furnish the 
AWV is a useful additional indicator to assist us in knowing which 
single practitioner a beneficiary has chosen to furnish chronic care 
management services. Although a beneficiary would retain the right to 
choose and change the practitioner to furnish chronic care management 
services, we do not believe that it is in the interest of a beneficiary 
to have more than one practitioner at a time coordinating the 
beneficiary's care and we do not intend to pay multiple practitioners 
for furnishing these services over the same time period. Third, the AWV 
is updated annually which is consistent with the minimal interval for 
reviewing and modifying the care plan required for the chronic care 
management services.
    We would expect that the practitioner the beneficiary chooses for 
the AWV would be the practitioner furnishing the chronic care 
management services. For the less frequent situations when a 
beneficiary chooses a different practitioner to furnish the chronic 
care management services from the practitioner who in the previous year 
furnished the AWV, the practitioner furnishing the chronic are 
management services would need to obtain a copy of the assessment and 
care plan developed between the beneficiary and the practitioner who 
furnished the AWV prior to billing for chronic care management 
services.
    Because a beneficiary is precluded from receiving an AWV within 12 
months after the effective date of his or her first Medicare Part B 
coverage period, for that time period we proposed the Initial 
Preventive Physical Examination (G0402) can substitute for the AWV to 
allow a beneficiary to receive chronic care management services.
    Comment: Although some commenters supported our proposal, there 
were numerous comments recommending that we remove the requirement for 
an Annual Wellness Visit prior to a practitioner being able to furnish 
chronic care management services. While some commenters acknowledged 
that the Annual Wellness visit could provide valuable information for 
establishing a care plan and for ensuring that only one practitioner 
billed for the chronic care management services, many expressed concern 
that this could present a significant barrier to otherwise eligible 
beneficiaries receiving the services.
    Response: We believe that both the practitioner and the beneficiary 
would benefit if an AWV or an Initial Preventive Physical Examination 
(IPPE) occurs at the outset of chronic care management services. It 
would allow the practitioner to systematically gather information that 
can inform the care plan and it would allow the beneficiary the 
opportunity to address questions and concerns about wellness issues 
that may be important for those with multiple chronic conditions. With 
their required services, the IPPE or AWV assures that at least once a 
year there is a focus on the broad wellness aspects of care, which can 
easily be dominated by the more chronic conditions when they exist. In 
addition to the clinical benefits of the AWV or IPPE, these services 
provide administrative benefits as well. They allows us to know the one 
practitioner the beneficiary has chosen to furnish chronic care 
management services and assure that multiple practitioners cannot 
provide the service to the same patient. However, in light of the 
widespread concerns raised by commenters about this requirement, we 
have changed the requirement to a recommendation for a practitioner to 
furnish an AWV or IPPE to a beneficiary prior to billing for chronic 
care management services furnished to that same beneficiary. As an 
alternative, a practitioner who meets the practice standards that will 
be established to bill for chronic care management services may 
initiate services with an eligible beneficiary as a part of an AWV, an 
IPPE, or a comprehensive E/M visit.
6. Chronic Care Management Services Furnished Incident to a Physician's 
Service Under General Physician Supervision
    In the proposed rule, we discussed the requirements for billing for 
services furnished in the office, but not personally and directly 
performed by the physician or qualified nonphysician practitioner 
(referred to as a ``practitioner'' in the following discussion), under 
our ``incident to'' requirements at 410.26 and in section 60, Chapter 
15, of Medicare Benefit Policy Manual (100-02). One key requirement of 
``incident to'' services is

[[Page 74426]]

that a physician directly supervise the provision of services by 
auxiliary personnel by being in the office suite and be immediately 
available to furnish assistance and direction throughout the provision 
of the service. Section 60.4 of the Manual specifically discusses the 
one exception, which allows for general supervision of ``incident to'' 
services furnished to homebound patients in medically underserved 
areas. Under that exception, we identify more specific requirements for 
the personnel who can provide ``incident to'' services under general 
supervision. For example, we require that the personnel must be 
employed by the physician billing the ``incident to'' services.
    One of the required capabilities for a physician to furnish chronic 
care management services is 24-hour-a-day, 7-day-a-week beneficiary 
access to the practice to address the patient's chronic care needs. We 
would expect that the patient would be provided with a means to make 
timely contact with health care providers in the practice when 
necessary to address chronic care needs regardless of the time of day 
or day of the week. If the patient has a chronic care need outside of 
the practice's normal business hours, the patient's initial contact 
with the practice to address that need could be with clinical staff 
employed by the practice, (for example, a nurse) and not necessarily 
with a physician. Those services could be furnished incident to the 
services of the billing physician.
    We also proposed to require a minimum amount of time of chronic 
care services be furnished to a patient during a period for the 
physician to be able to bill separately for the chronic care services. 
The time, if not personally furnished by the physician, must be 
directed by the physician. We proposed that the time spent by a 
clinical staff person providing aspects of chronic care services 
outside of the practice's normal business hours during which there is 
no direct supervision would count towards the time requirement even 
though the services do not meet the direct supervision requirement for 
``incident to'' services.
    We stated our belief that the additional requirements we impose for 
auxiliary personnel under the exception for general supervision for 
homebound patients in medically underserved areas should apply in these 
circumstances where we are allowing a physician to bill Medicare for 
chronic care management services furnished under their general 
supervision and incident to their professional services. In both of 
these unusual cases, these requirements help to ensure that appropriate 
services are being furnished by appropriate personnel in the absence of 
the direct supervision. Specifically, we proposed that if a practice 
meets all the conditions required to bill separately for chronic care 
management services, the time spent by a clinical staff employee 
providing aspects of these services to address a patient's chronic care 
need outside of the practice's normal business hours can be counted 
towards the time requirement when at a minimum the following conditions 
are met:
     The clinical staff person is directly employed by the 
physician.
     The services of the clinical staff person are an integral 
part of the physician's chronic care management services to the patient 
(the patient must be one the physician is treating and for which an 
informed agreement is in effect), and are performed under the general 
supervision of the physician. General supervision means that the 
physician need not be physically present when the services are 
performed; however, the services must be performed under the 
physician's overall supervision and control. Contact is maintained 
between the clinical staff person and the physician (for example, the 
employed clinical staff person contacts the physician directly if 
warranted and the physician retains professional responsibility for the 
service.)
     The services of the employed clinical staff person meet 
all other ``incident to'' requirements, compliance with applicable 
state law, with the exception of direct supervision.
    Comment: The vast majority of commenters supported the idea of 
general rather than direct supervision, although we did receive 
comments on specific aspects of our proposal. A few commenters said 
they recognized the difficulties in making exceptions to the ``incident 
to'' policies. Some commenters supported the proposal as stated in the 
proposed rule. Many commenters objected to the proposed requirement 
that the clinical staff person be directly employed by the physician, 
indicating that this would be a barrier to widespread adoption of the 
policy. Some commenters requested that we remove the employment 
requirement entirely, especially given that eligible practices will 
need to meet certain standards to be able to separately bill for 
chronic care management services. Other commenters indicated that if 
CMS were to keep the employment requirement it should be modified to 
allow the clinical staff person to be an employee of the physician or 
an employee of the practice. Some commenters recommended that the 
policy be modified to allow the clinical staff person be either an 
employee or an independent contractor. These commenters stated a 
distinction between the clinical staff person as an independent 
contractor and having the services provided under arrangement since 
typically the practice would directly supervise the contracted 
individual. A few commenters stated that a requirement to have all 
possible chronic care management services provided by employees would 
undermine access to these services. Some commenters indicated that CMS 
should allow general rather than direct supervision for more 
situations, not just time spent by clinical staff outside of the 
practices normal business hours. For example, one commenter indicated 
that time spent by clinical staff providing chronic care management 
services to homebound patients in the patient's homes should count 
towards the time requirement if provided under general supervision. 
Some commenters expressed concern that our use of the word 
``physician'' in this discussion could potentially create confusion 
that we are not also referring to qualified non-physician 
practitioners.
    Response: We appreciate the general support for our proposal as 
well as the recognition by some commenters of the challenges presented 
by the issue of an exception to ``incident to related requirements,'' 
even for this unusual case. We agree with the commenters who supported 
our policy as stated in the proposed rule since we continue to believe 
that within eligible practices the employment requirement helps ensure 
that appropriate services are being furnished by appropriate personnel 
under the lesser requirement of general supervision. We are clarifying 
that the clinical staff person furnishing the chronic care management 
services could be employed either by the physician or the practice.
    Given the potential risk to the patient that exceptions to the 
direct physician supervision requirement could create, we believe it is 
appropriate to proceed deliberately in this area. We believe that this 
exception in this unusual case should be designed as narrowly as 
possible while still facilitating the chronic care management policy. 
Therefore, we disagree at the current time with commenters who 
requested broader exceptions to the direct physician supervision 
requirement to remove the employment requirement entirely, to include 
independent contractors, or to include other situations for CY 2015.

[[Page 74427]]

    In response to commenters who stated that a requirement to have all 
possible chronic care management services provided by employees would 
undermine access to these services, we note that we did not propose 
such a requirement. Our proposed employment requirement was limited to 
allowing the time spent by a clinical staff employee in providing 
aspects of chronic care management services to address a patient's 
chronic care need outside of the practice's normal business hours to 
count towards the time requirement for these services to be separately 
billed. To bill for ``incident to'' services, practitioners should 
follow all the usual ``incident to'' requirements except when 
furnishing services outside of normal business hours under conditions 
that meet the requirements for the general supervision exception as 
described above.
    We also note that our ``incident to'' policies apply to all 
pracitioners who can bill Medicare directly for services, and thus 
apply to physicians and other nonphysician practitioners. As discussed 
in section II.J, we are aligning the requirements for ``incident to'' 
services to make clear that all practitioners who can bill Medicare for 
``incident to'' services are subject to the same regulations at 410.26. 
We intend that the exception to the direct supervision requirement for 
after-hours chronic care management services furnished on an ``incident 
to'' basis will apply to all practitioners who can bill Medicare for 
services incident to their services and who can provide chronic care 
management services.
    In summary, we are finalizing our proposal for CY 2015 without 
modification except for our clarification that the clinical staff 
person furnishing the chronic care management services could be 
employed either by the physician or the practice.
    In light of the concerns by some commenters that our use of the 
word ``physician'' in this discussion could potentially create 
confusion that we are not also referring to qualified non-physician 
practitioners, we reiterate that, as we stated in the proposed rule, 
``physician'' in this discussion also refers to qualified non-physician 
practitioners.
7. Chronic Care Management Services and the Primary Care Incentive 
Payment Program (PCIP)
    Under section 1833(x) of the Act, the PCIP provides a 10 percent 
incentive payment for primary care services within a specific range of 
E/M services when furnished by a primary care physician. Specific 
physician specialties and qualified nonphysician practitioners can 
qualify as primary care practitioners if 60 percent of their PFS 
allowed charges are primary care services. As we explained in the CY 
2011 PFS final rule (75 FR 73435 through 73436), we do not believe the 
statute authorizes us to add codes (additional services) to the 
definition of primary care services. However, to avoid inadvertently 
disqualifying community primary care physicians who follow their 
patients into the hospital setting, we finalized a policy to remove 
allowed charges for certain E/M services furnished to hospital 
inpatients and outpatients from the total allowed charges in the PCIP 
primary care percentage calculation. In the CY 2013 final rule (77 FR 
68993), we adopted a policy that the TCM code should be treated in the 
same manner as those services for the purposes of PCIP because post-
discharge TCM services are a complement in the community setting to the 
hospital-based discharge day management services already excluded from 
the PCIP denominator. Similar to the codes already excluded from the 
PCIP denominator, we expressed concern that inclusion of the TCM code 
in the denominator of the primary care percentage calculation could 
produce unwarranted bias against ``true primary care practitioners'' 
who are involved in furnishing post-discharge care to their patients.
    Chronic care management services are also similar to the services 
that we have already excluded from the from the PCIP denominator. For 
example, chronic care management includes management of care 
transitions within health care settings including referrals to other 
clinicians, visits following a patient visit to an emergency 
department, and visits following discharges from hospitals and skilled 
nursing facilities. Therefore, while physicians and qualified 
nonphysician practitioners who furnish chronic care management services 
would not receive an additional incentive payment under the PCIP for 
the service itself (because it is not considered a ``primary care 
service'' for purposes of the PCIP), we proposed that the allowed 
charges for chronic care management services would not be included in 
the denominator when calculating a physician's or practitioner's 
percent of allowed charges that were primary care services for purposes 
of the PCIP.
    Comment: Many commenters supported, and no commenters opposed, our 
proposed treatment of chronic care management services in the PCIP 
calculation given that these services are not eligible for the 
incentive payment under the PCIP.
    Response: We agree with the commenters and are finalizing our 
proposal for CY 2015 without modification.

L. Collecting Data on Services Furnished in Off-Campus Provider-Based 
Departments

    As we discussed in the CY 2014 PFS proposed rule (78 FR 43301) and 
CY 2014 OPPS/ASC proposed rule (78 FR 43626), in recent years, the 
research literature and popular press have documented the increased 
trend toward hospital acquisition of physician practices, integration 
of those practices as a department of the hospital, and the resultant 
increase in the delivery of physicians' services in a hospital setting 
(for example, we refer readers to Ostrom, Carol M., ``Why you might pay 
twice for one visit to a doctor,'' Seattle Times, November 3, 2012, and 
O'Malley, Ann, Amelia M. Bond, and Robert Berenson, Rising hospital 
employment of physicians: better quality, higher costs? Issue Brief No. 
136, Center for Studying Health System Change, August 2011).
    When a Medicare beneficiary receives outpatient services in a 
hospital, the total payment amount for outpatient services made by 
Medicare is generally higher than the total payment amount made by 
Medicare when a physician furnishes those same services in a 
freestanding clinic or in a physician's office. As more physician 
practices become hospital-based, news articles have highlighted 
beneficiary liability that is incurred when services are furnished in a 
hospital-based physician practice. MedPAC has questioned the 
appropriateness of increased Medicare payment and beneficiary cost-
sharing when physicians' offices become hospital outpatient departments 
and has recommended that Medicare pay selected hospital outpatient 
services at the MPFS rates (MedPAC March 2012 Report to Congress; 
``Addressing Medicare Payment Differences across Settings,'' 
presentation to the Commission on March 7, 2013).
    The total payment generally is higher when outpatient services are 
furnished in the hospital outpatient setting rather than a freestanding 
clinic or a physician office. When a service is furnished in a 
freestanding clinic or physician office, only one payment is made under 
the MPFS; however when a service is furnished in a hospital-based 
office, Medicare pays the hospital a ``facility fee'' and a payment for 
the physician portion of the service, which is a lower payment than if 
the service would have

[[Page 74428]]

been furnished in a physician's office. Although the physician payment 
is lower when the services are furnished in a hospital, the total 
payment (facility fee and physician fee) is generally more than the 
Medicare payment if the same service was furnished in a freestanding 
clinic or physician office. The beneficiary pays coinsurance for both 
the physician payment and the hospital outpatient payment (facility 
fee). Upon acquisition of a physician practice, hospitals frequently 
treat the practice locations as off-campus provider-based departments 
of the hospital and bill Medicare for services furnished at those 
locations under the OPPS. (For further information on the provider-
based regulations at Sec.  413.65, we refer readers to http://
www.gpo.gov/fdsys/pkg/CFR-2010-title42-vol2/pdf/CFR-2010-title42-vol2-
sec413-65.pdf). Since October 1, 2002, we have not required hospitals 
to seek from CMS a determination of provider-based status for a 
facility that is located off campus. We also do not have a formal 
process for gathering information on the frequency, type, and payment 
of services furnished in off-campus provider-based departments of the 
hospital.
    We stated in the CY 2014 proposed rules that in order to better 
understand the growing trend toward hospital acquisition of physician 
offices and subsequent treatment of those locations as off-campus 
provider-based outpatient departments, we were considering collecting 
information that would allow us to analyze the frequency, type, and 
payment of services furnished in off-campus provider-based hospital 
departments. We stated that we have considered several potential 
methods. Claims-based approaches could include (1) creating a new place 
of service code for off campus departments of a provider under Sec.  
413.65(g)(2) as part of item 24B of the CMS-1500 claim form, comparable 
to current place of service codes such as ``22 Outpatient'' and ``23 
Emergency Room-Hospital'' when physician services are furnished in an 
off-campus provider-based department, or (2) creating a HCPCS modifier 
that could be reported with every code for services furnished in an 
off-campus provider-based department of a hospital on the CMS-1500 
claim form for physician services and the UB-04 (CMS form 1450) for 
hospital outpatient claims. In addition, we have considered asking 
hospitals to break out the costs and charges for their provider-based 
departments as outpatient service cost centers on the Medicare hospital 
cost report, form 2552-10. We noted that some hospitals already break 
out these costs voluntarily or because of cost reporting requirements 
for the 340B Drug Discount Program, but this practice is not consistent 
or standardized. In the proposed rules, we invited public comments on 
the best means for collecting information on the frequency, type, and 
payment of services furnished in off-campus provider-based departments 
of hospitals.
    Comment: Although most commenters agreed on the need to collect 
information on the frequency, type, and payment for services furnished 
in off-campus provided-based departments of hospitals, opinions 
differed on how to best collect this additional data. Some commenters 
preferred identifying services furnished in provider-based departments 
on the cost report, while others preferred one of the claims-based 
approaches. Some commenters supported either approach, noting the 
trade-offs in terms of the type of data that could be collected 
accurately and the administrative burden involved. Some suggested we 
convene a group of stakeholders to develop consensus on the best 
approach. Commenters generally recommended that CMS choose the least 
administratively burdensome approach that would ensure accurate data, 
but did not necessarily agree on what approach would optimally achieve 
that result. For example, limiting the data collection to cost report 
approaches results in little administrative burden for physicians since 
they do not file cost reports, but could result in varying degrees of 
administrative effort for hospitals depending on the specific cost 
reporting requirements.
    Several commenters noted that some hospitals already voluntarily 
identify costs specific to provider-based departments on their cost 
reports. Since cost and charge information is already reported 
separately, these commenters asserted there would be no additional 
burden, although additional variables or changes to the structure of 
the cost report may be required. In addition, the commenters noted that 
cost report information would be transparent and audited for accuracy. 
One commenter recommended aggregate reporting of all off-campus 
provider-based departments as one or several cost centers, and another 
indicated that CMS should consider assigning separate sub-provider 
numbers for off-campus departments similar to those used for 
rehabilitation and psychiatric units.
    However, other commenters believed that a HCPCS modifier would more 
clearly identify specific services provided and would provide better 
information about the type and level of care furnished. Some commenters 
believed a HCPCS modifier would be the least administratively 
burdensome as hospitals and physicians already report a number of 
claims-based modifiers. However, other commenters used this same fact 
about the number of existing claims-based modifiers to argue that 
additional modifiers would increase administrative burden since it 
would increase the number of modifiers that needed to be considered 
when billing. These commenters and others recommended that CMS should 
consider the establishment of a new Place of Service (POS) code since 
they believed it would be less administratively burdensome than 
attaching a modifier to each service on the claim that was furnished in 
an off-campus provider-based department. Some commenters stated that 
establishing a new POS code would work better under the PFS than the 
OPPS since under the OPPS a single claim was more likely to contain 
lines for services furnished in both on-campus and off-campus parts of 
the hospital on the same day for the same beneficiary.
    MedPAC believes there may be some limited value in collecting data 
on services furnished in off-campus provider-based departments to 
validate the accuracy of site-of-service reporting when the physician 
office is off-campus but billing as an outpatient department, but did 
not recommend a particular data collection approach. MedPAC emphasized 
that any data collection effort should not prevent the development of 
policies to align payment rates across settings.
    Response: We appreciate the public feedback in response to our 
comment solicitation in the proposed rules. We will take the comments 
received into consideration as we continue to consider approaches to 
collecting data on services furnished in off-campus provider-based 
departments.

M. Chiropractors Billing for Evaluation & Management Services

    Section 1861(r)(5) of the Act includes chiropractors in its 
definition of ``physician'' with language limiting chiropractors to 
``treatment by means of manual manipulation of the spine (to correct a 
subluxation).'' In accordance with the statute as we noted on page 
43342 of the CY2014 proposed rule, chiropractic coverage, therefore, is 
limited to treatment of subluxation of the spine and payment can only 
be made for that purpose. Specifically, we make payment for only the 
following

[[Page 74429]]

three codes listed in the chiropractic section of the CPT Manual:

98940--Chiropractic manipulation treatment (CMT), spinal, 1-2 
regions
98941--CMT spinal, 3-4 regions
98942--CMT spinal, 5 regions

    We solicited comments in the CY2014 proposed rule regarding the 
appropriateness of the billing of E/M services by chiropractors 
although we did not propose to pay chiropractors for E/M services in 
2014. We wanted to determine whether there are situations in which E/M 
services not included in Chiropractic Manipulative Treatment (CMT) 
codes 98940-98942 would meet the statutory requirements for 
chiropractic services and therefore, could be appropriately billed.
    To achieve that goal, we asked that information be submitted 
regarding the following: the services that would be provided; the 
benefits that would accrue including whether access to chiropractic 
services for Medicare beneficiaries would be expanded; the 
justification for E/M services beyond those included in the CMT codes; 
the appropriateness of allowing billing for all office E/M codes for 
new or existing patients; the specific creation of one or a set of 
codes for chiropractic E/M services; the frequency that chiropractors 
should be allowed to bill E/M services; and the volume that could be 
expected.
    Although very few commenters submitted comments that addressed all 
of the information we requested in the proposed rule, we do thank all 
the commenters for their input. Any possible changes to our current 
policy on allowing chiropractors to bill E/M services will be addressed 
in future notice and comment rulemaking.

III. Other Provisions of the Proposed Regulations

A. Medicare Coverage of Items and Services in FDA-Approved 
Investigational Device Exemption Clinical Studies--Revisions of 
Medicare Coverage Requirements

1. Background and Statutory Authority
a. General
    Section 1862(m) of the Act (established by section 731(b) of the 
Medicare Prescription Drug, Improvement, and Modernization Act of 2003 
(MMA) (Pub. L. 108-173, enacted on December 8, 2003)) allows for 
payment of the routine costs of care furnished to Medicare 
beneficiaries in a Category A investigational device exemption (IDE) 
trial and authorizes the Secretary to establish criteria to ensure that 
Category A IDE trials conform to appropriate scientific and ethical 
standards. By providing Medicare coverage of routine costs in Category 
A trials, the Congress removed a financial barrier that may have 
discouraged beneficiaries from participating in these trials. It also 
gives Medicare beneficiaries the opportunity to have earlier access to 
new medical devices. However, the statute does not require Medicare to 
cover the Category A device itself. We note that throughout this 
section of the preamble, the words study and trial are used 
interchangeably.
(1) Category A IDE Devices
    For Category A IDE devices, existing Sec.  405.201(b) defines an 
``experimental/investigational (Category A) device'' as an innovative 
device believed to be in Class III for which ``absolute risk'' of the 
device type has not been established (that is, initial questions of 
safety and effectiveness have not been resolved and the FDA is unsure 
whether the device type can be safe and effective). Existing Sec.  
405.207(b)(2) states that payment may be made for the routine care 
services related to Category A IDE devices if, among other things, the 
services are furnished in conjunction with an FDA-approved clinical 
trial, and that the trial is required to meet criteria established 
through the Medicare national coverage determination process.
(2) Category B IDE Devices
    Existing Sec.  405.201(b) defines a ``non-experimental/
investigational (Category B) device'' as a device believed to be in 
Class I or Class II, or a device believed to be in Class III for which 
the incremental risk is the primary risk in question (that is, 
underlying questions of safety and effectiveness of that device type 
have been resolved), or it is known that the device type can be safe 
and effective because, for example, other manufacturers have obtained 
FDA approval for that device type. Existing Sec.  405.211 allows 
Medicare contractors to make coverage decisions for non-experimental/
investigational (Category B) devices if certain requirements are met. 
If a Medicare contractor determines that a Category B device is 
covered, Medicare also covers routine care services related to a non-
experimental/investigational (Category B) device furnished in 
conjunction with an FDA-approved clinical trial, per Sec.  
405.207(b)(3). Based on our rulemaking authority in section 1871 of the 
Act, we proposed to apply the same Medicare coverage requirements and 
scientific and ethical standards to Medicare coverage related to 
Category B IDE studies/trials that would be applicable to Category A 
IDE studies/trials.
b. Background
    We sought and received input from stakeholders (for example: 
manufacturers, study sponsors, and hospitals) regarding the Medicare 
coverage approval process for Category B IDE devices. The majority of 
stakeholders told us that obtaining Medicare coverage of the Category B 
IDE device and the costs of routine items and services is inefficient 
since local Medicare contractors have differing processes for reviewing 
IDE studies for purposes of Medicare coverage, which result in 
inconsistent Medicare coverage of Category B IDE devices and associated 
routine care services across the Medicare contractor jurisdictions. 
Stakeholders also suggested that these factors contribute to their 
reluctance to enroll Medicare beneficiaries in IDE trials and studies, 
and that Medicare coverage variability between Medicare contractors 
made it difficult to conduct national IDE trials.
    We also requested input from local Medicare contractors regarding 
their existing processes for determining coverage of Category B IDE 
devices and associated routine care services. They reported that they 
review pertinent available evidence and the FDA-approved IDE trial 
protocol as factors in their decision-making process to ensure that the 
device is reasonable and necessary for Medicare beneficiaries and 
furnished in appropriate settings. Local Medicare contractors apply 
varying levels of scrutiny to these factors. While most Medicare 
contractors extensively review IDE study protocols, other contractors 
may review them less extensively. Although there is variability among 
contractors, in many cases the review processes are duplicative in that 
multiple Medicare contractors are reviewing the same materials in the 
same way.
2. Summary of Provisions of the Proposed Regulation
    We proposed to modify our regulations related to Medicare coverage 
of routine care items and services in Category A IDE studies and 
trials, and Medicare coverage of Category B IDE devices and routine 
care items and services. We proposed to establish criteria for IDE 
studies so that Category A IDE trials conform to appropriate scientific 
and ethical standards for Medicare coverage consistent with our 
authority under section 1862(m)(2)(B) of the Act. We proposed to extend 
the same Medicare coverage requirements to Medicare coverage of 
Category B IDE

[[Page 74430]]

device trials, using our general rulemaking authority under section 
1871 of the Act. We proposed that Medicare coverage decisions related 
to coverage of items and services in Category A and B IDE trials and 
studies be made by CMS centrally.
a. Proposed Definitions
    We proposed to replace the definitions in Sec.  405.201(b) with the 
following:
     Category A (Experimental) device: A device for which 
``absolute risk'' of the device type has not been established (that is, 
initial questions of safety and effectiveness have not been resolved) 
and the FDA is unsure whether the device type can be safe and 
effective.
     Category B (Nonexperimental/investigational) device: A 
device for which the incremental risk is the primary risk in question 
(that is, initial questions of safety and effectiveness of that device 
type have been resolved) or it is known that the device type can be 
safe and effective because, for example, other manufacturers have 
obtained FDA approval for that device type.
    ClinicalTrials.gov: The National Institutes of Health's 
National Library of Medicine's online registry and results database of 
publicly and privately supported clinical studies of human participants 
conducted around the world.
     Contractors: Medicare Administrative Contractors and other 
entities that contract with CMS to review and adjudicate claims for 
Medicare items and services.
     IDE stands for investigational device exemption: An FDA-
approved IDE application permits a device, which would otherwise be 
subject to marketing approval or clearance, to be shipped lawfully for 
the purpose of conducting a clinical study in accordance with 21 U.S.C. 
360j(g) and 21 CFR parts 812.
     Pivotal studies or trials: Clinical investigations 
designed to collect definitive evidence of the safety and effectiveness 
of a device for a specified intended use, typically in a statistically 
justified number of subjects. It may or may not be preceded by an early 
and/or a traditional feasibility study.
     Routine care items and services: Items and services that 
are otherwise generally available to Medicare beneficiaries (that is, a 
benefit category exists, it is not statutorily excluded, and there is 
not a national noncoverage decision) that are furnished in either the 
experimental or the control arms of a clinical trial and that would be 
otherwise furnished even if the beneficiary were not enrolled in a 
clinical trial.
     Superiority studies or trials: Studies or trials that are 
intended to demonstrate at some prespecified level of confidence that 
the effect of an investigational treatment is superior to that of an 
active control by more than a prespecified margin.
b. Proposed Provisions for Medicare Coverage of Items and Services in 
FDA-Approved IDE Studies
    To ensure that Medicare coverage of items and services in Category 
A and B IDE studies is more consistent across Medicare administrative 
regions, we proposed that IDE coverage decisions be made by CMS 
centrally. We proposed a centralized IDE coverage review process for 
Category A and Category B IDEs, by adding Sec.  405.201(a)(3) stating 
that CMS identifies criteria for coverage of items and services 
furnished in IDE studies. We proposed to replace existing Sec.  405.211 
with the following Medicare coverage requirements for items and 
services in Category A and Category B FDA-approved IDE studies.
     CMS will review the following items and supporting 
materials as needed: (1) the FDA approval letter, (2) IDE study 
protocol, (3) IRB approval letter(s), (4) ClinicalTrials.gov 
identifier.
     Medicare may cover routine care items and services 
furnished in any FDA-approved Category A IDE study if the criteria in 
proposed new Sec.  405.212(a) and (b) are met.
     Medicare covers a Category B IDE device and routine care 
items and services furnished in any FDA-approved Category B IDE study 
if the criteria in proposed new Sec.  405.212(a) and (c) are met.
     If an IDE device is furnished in an FDA-approved IDE study 
that does not wholly fall under proposed new Sec.  405.212(b) or (c), 
CMS considers whether the study's attainment of the criteria in 
proposed new Sec.  405.212(a) are sufficient to mitigate the failure to 
meet the criteria in proposed new Sec.  405.212(b) or (c).
    We also proposed to notify the public of Medicare covered Category 
A and B IDE studies by posting the IDE study title and 
ClinicalTrials.gov identifier on the CMS coverage Web site and 
publishing a list of trials in the Federal Register. We stated that a 
centralized review process would be more efficient by reducing the 
burden for stakeholders interested in seeking Medicare coverage related 
to nationwide IDE studies or trials. Having a single entity making 
Medicare coverage decisions would enhance administrative efficiency by 
eliminating the need for duplicative submissions from stakeholders to 
different Medicare contractors and duplicative reviews by Medicare 
contractors. In the preamble to the proposed rule, we stated that we 
did not believe that the proposed coverage requirements would 
significantly change the number of items and services covered compared 
to coverage under existing requirements.
    We stated in the preamble to the proposed rule that any interested 
party who seeks Medicare coverage related to a Category A or B IDE 
study may send us a request letter that describes the scope and nature 
of the Category A or B IDE study, discussing each of the criteria in 
the proposed policy. Requests would be submitted via email to 
clinicalstudynotification@cms.hhs.gov or via hard copy to the following 
address: Centers for Medicare & Medicaid Services; Center for Clinical 
Standards & Quality; Director, Coverage and Analysis Group; ATTN: 
Clinical Study Certification; Mailstop: S3-02-01; 7500 Security Blvd.; 
Baltimore, MD 21244.
c. Proposed Medicare Coverage IDE Study Criteria
    We proposed to add a new Sec.  405.212 that describes the Medicare 
coverage criteria that Category A and B IDE studies or trials must meet 
in order for Medicare to cover routine care items and services in 
Category A IDE studies or trials, and for Medicare to cover Category B 
IDE devices and routine care items and services (per proposed revised 
Sec.  405.207 and Sec.  405.211). We proposed the following Medicare 
coverage IDE study criteria.
    (1) The principal purpose of the study is to test whether the item 
or service meaningfully improves health outcomes of patients who are 
represented by the Medicare-enrolled subjects.
    (2) The rationale for the study is well supported by available 
scientific and medical information, or it is intended to clarify or 
establish the health outcomes of interventions already in common 
clinical use.
    (3) The study results are not anticipated to unjustifiably 
duplicate existing knowledge.
    (4) The study design is methodologically appropriate and the 
anticipated number of enrolled subjects is adequate to answer the 
research question(s) being asked in the study.
    (5) The study is sponsored by an organization or individual capable 
of completing it successfully.
    (6) The study is in compliance with all applicable Federal 
regulations concerning the protection of human subjects found at 45 CFR 
part 46.
    (7) All aspects of the study are conducted according to appropriate

[[Page 74431]]

standards of scientific integrity set by the International Committee of 
Medical Journal Editors.
    (8) The study has a written protocol that clearly demonstrates 
adherence to the standards listed here as Medicare requirements.
    (9) Where appropriate, the clinical research study is not designed 
to exclusively test toxicity or disease pathophysiology in healthy 
individuals. Trials of all medical technologies measuring therapeutic 
outcomes as one of the objectives may be exempt from this standard only 
if the disease or condition being studied is life threatening as 
defined in 21 CFR 312.81(a) and the patient has no other viable 
treatment options.
    (10) The study is registered on the ClinicalTrials.gov Web site 
and/or the Registry of Patient Registries (RoPR) by the principal 
sponsor/investigator prior to the enrollment of the first study 
subject.
    (11) The study protocol specifies the method and timing of public 
release of results on all pre-specified outcomes, including release of 
negative outcomes. The release should be hastened if the study is 
terminated early. The results must be made public within 24 months of 
the end of data collection. If a report is planned to be published in a 
peer reviewed journal, then that initial release may be an abstract 
that meets the requirements of the International Committee of Medical 
Journal Editors. However, a full report of the outcomes must be made 
public no later than 3 years after the end of data collection.
    (12) The study protocol explicitly discusses subpopulations 
affected by the item or service under investigation, particularly 
traditionally underrepresented groups in clinical studies, how the 
inclusion and exclusion criteria [a]ffect enrollment of these 
populations, and a plan for the retention and reporting of said 
populations in the study. If the inclusion and exclusion criteria are 
expected to have a negative effect on the recruitment or retention of 
underrepresented populations, the protocol must discuss why these 
criteria are necessary.
    (13) The study protocol explicitly discusses how the results are or 
are not expected to be generalizable to subsections of the Medicare 
population to infer whether Medicare patients may benefit from the 
intervention. Separate discussions in the protocol may be necessary for 
populations eligible for Medicare due to age, disability, or Medicaid 
eligibility.
    We stated in the preamble to the proposed rule that all IDE 
investigational device studies where Medicare coverage is sought should 
conform to rigorous scientific and ethical standards. We believe that 
these criteria are essential to protecting Medicare study participants 
in Category A and Category B trials. Studies that have high scientific 
and ethical standards lead to generalizable and reliable knowledge for 
the Medicare program including, providers, practitioners, and 
beneficiaries.
    We believe that additional Medicare coverage criteria are needed 
for Category A and B IDE studies where Medicare coverage for items and 
services is sought, to ensure that the study design is appropriate to 
answer questions of importance to the Medicare program and its 
beneficiaries. Although an item or service may be considered 
appropriate when used by a clinician for the benefit of an individual 
patient, it may not be reasonable and necessary when used in the 
context of an IDE study or trial for purposes of Medicare coverage. The 
use of such a device in an IDE study or trial may expose study 
participants to increased risks that must be balanced by other factors, 
including the likelihood that the study would add important information 
to the body of medical knowledge relevant to the Medicare program.
    While most studies are undertaken only after a detailed protocol 
has been developed, some are not. The protocol is the primary source of 
knowledge on the proposed design and management of the study. Without 
this document, reviewers and funding entities are unable to ascertain 
the quality and validity of the study, and whether the study is 
appropriate to answer questions of importance to the Medicare program. 
The exercise of committing to paper all the aspects of the study is 
crucial to ensuring that all potential concerns have been addressed.
    We proposed these 13 Medicare coverage IDE study criteria because 
we believe they must be integral to any study that is approved for 
purposes of Medicare coverage. The proposed first four criteria and the 
seventh criterion were developed because they embody ethical values. 
The fifth and sixth proposed criteria were developed in response to 
reports of egregious misconduct in the past in endeavors to conduct 
clinical research by placing individuals at the risk of harm for the 
good of others.
    In Sec.  405.211, we proposed that if the following two 
characteristics are also met, in addition to the IDE study criteria 
listed in proposed new Sec.  405.212(a)(1) through (a)(13), we would 
automatically cover the costs of routine items and services in the 
Category A study or trial, and the costs of the investigational device 
and the routine items and services in a Category B study or trial as 
follows:
     The study is a pivotal study.
     The study has a superiority study design.
    Existing Sec.  405.207(b)(2) requires that for Medicare coverage of 
related routine care services, all Category A IDE studies and trials 
must meet the criteria established through the NCD process. We proposed 
to modify Sec.  405.207(b) to remove the NCD process requirement and 
state that payment may be made for routine care items and services 
related to experimental/investigational (Category A) devices as defined 
in Sec.  405.201(b), and furnished in conjunction with an FDA-approved 
clinical trial that meets the Medicare coverage IDE study criteria in 
proposed new Sec.  405.212. We proposed to modify Sec.  411.15(o)(2) to 
specify that the exclusions from Medicare coverage include experimental 
or investigational devices, except for certain devices furnished in 
accordance with the Medicare coverage requirements proposed in revised 
Sec.  405.21l.
3. Summary of Public Comments
    We received 48 comments from various entities including the medical 
device industry, academic medical centers, health care systems, 
consultants, and medical societies. Regarding centralization of the IDE 
review process, commenters' opinions were mixed with the majority 
requesting additional details about the centralized review process, 
clarification of the IDE study criteria, and delayed implementation of 
the rule. Commenters expressed concerns about the proposed IDE study 
criteria, believing that they were duplicative of FDA review activities 
and suggested that CMS allow for additional input from stakeholders 
before the rule is finalized. The following is a summary of the 
comments we received and our responses.
a. Definitions
    Comment: Commenters were concerned that our proposed definition of 
routine care items and services would limit Medicare coverage of 
routine care items and services related to Category A or Category B IDE 
studies. The comments suggested that we align this definition with 
section 310.1 of the Medicare NCD Manual (Clinical Trials).
    Response: We appreciate the commenters' feedback. While we believe 
that this definition of routine care items and services is aligned with 
section 310.1 of the Medicare National

[[Page 74432]]

Coverage Determinations Manual, for purposes of clarity, we are 
modifying this definition to refer to items and services that are 
otherwise generally available to Medicare beneficiaries (that is, a 
benefit category exists, it is not statutorily excluded, and there is 
no national noncoverage decision) that are furnished during a clinical 
study and that would be otherwise furnished even if the beneficiary 
were not enrolled in a clinical study.
b. Provisions for Medicare Coverage of Items and Services in FDA-
approved Category A or B IDE Studies or Trials
    Comment: Several commenters were generally supportive of the 
concept of a centralized Medicare review process for Category A and B 
IDE studies for purposes of Medicare coverage. However, the commenters 
requested additional information regarding submission format and review 
timeframes, with some commenters concerned about the availability of 
appropriate staff at CMS to complete reviews and issue approvals. 
Commenters also asked for clarification regarding appeals of Medicare 
coverage decisions related to Category A or B IDE studies and 
evaluation/oversight of the CMS Medicare coverage review process.
    Response: Seeking Medicare coverage related to Category A or B IDE 
studies is voluntary. While we are finalizing this rule, we are 
delaying implementation of these changes until January 1, 2015. Upon 
implementation of these changes, interested parties, such as the study 
sponsor, that wish to seek Medicare coverage in Category A or B IDE 
studies must submit their requests via email to 
clinicalstudynotification@cms.hhs.gov or via hard copy to the following 
address: Centers for Medicare and Medicaid Services; Center for 
Clinical Standards and Quality; Director, Coverage and Analysis Group; 
ATTN: Clinical Study Certification; Mail Stop S3-02-01; 7500 Security 
Blvd.; Baltimore, MD 21244.
    Requests must include the following information:
     A request letter that describes the scope and nature of 
the IDE study, discussing how the interested party believes that the 
IDE study meets each Medicare Coverage IDE Study Criteria.
     FDA approval letter of the IDE.
     IDE study protocol.
     IRB approval letter.
     National Clinical Trial (NCT) number.
     Supporting materials, as appropriate.
    We understand and appreciate commenters' concerns regarding review 
time and the availability of appropriate staff to complete the reviews. 
Once a complete request is received by CMS (or its designated entity), 
we expect that the review timeframe will be approximately 30 days. 
While we believe that we have sufficient resources to process Medicare 
coverage reviews of the IDE studies, we are modifying the provisions of 
section 405.211 to allow for reviews by a CMS-designated entity if 
future needs arise.
    We anticipate that claims for routine care items and services 
related to Category A or B IDE studies and claims for Category B IDE 
devices will continue to be submitted to local Medicare contractors who 
will identify routine costs for which Medicare payment is made for each 
related claim. We plan to issue appropriate manual instructions to 
Medicare contractors. Additional information regarding Medicare claim 
appeals is available on the CMS Web site at http://www.cms.gov/
Medicare/Appeals-and-Grievances/OrgMedFFSAppeals/index.html.
    Comment: A few commenters opposed a centralized Medicare coverage 
process for Category A or B IDE studies and believed that the current 
local Medicare contractor review process is sufficient, that 
centralization could increase approval time, and may not have the 
intended impact of eliminating inconsistencies in coverage. Several 
commenters suggested that CMS focus on streamlining claims processing 
for routine costs incurred by Medicare beneficiaries participating in 
clinical trials. One commenter was concerned that local Medicare 
contractors may impose additional coverage requirements.
    Response: While some stakeholders may be satisfied with the current 
localized coverage review process, we believe that centralizing the 
submission, review and determination of Medicare coverage IDE study 
requests enhances administrative efficiency by eliminating the need for 
duplicative submission of requests by providers and duplicative reviews 
by local Medicare contractors. For example, under existing procedures, 
each provider that participates in an IDE trial and that anticipates 
filing Medicare claims must notify the Medicare contractor and furnish 
the contractor with certain information about the IDE trial. Once the 
contractor notifies the provider that all required information for the 
IDE study has been furnished, the provider may bill related Category A 
or B IDE claims.
    Effective January 1, 2015, interested parties (such as study 
sponsors) that wish to seek Medicare coverage related to Category A or 
B IDE studies, will have a centralized point of contact for submission, 
review and determination of Medicare coverage IDE study requests. 
Providers will no longer need to notify individual contractors 
regarding IDE studies for which they plan to submit claims since CMS-
approved Category A and B IDE studies will be listed on the CMS Web 
site and in the Federal Register. We encourage providers to check the 
CMS Web site to see if an IDE study has been approved for coverage 
before submitting IDE related claims.
    Comment: Some commenters believed that the Medicare coverage 
requirements duplicate the responsibilities of the FDA (such as review 
of scientific and ethical standards) with commenters suggesting that 
CMS deem coverage for Category A or B IDE studies that have received 
FDA and IRB approval.
    Response: CMS and FDA operate under different statutory authorities 
and have distinct authorities and responsibilities. FDA approves IDE 
studies or trials when, among other things, the risks to the subjects 
are outweighed by the anticipated benefits and the importance of the 
knowledge to be gained. For purposes of Medicare coverage, we seek 
evidence that an item or service is reasonable and necessary. The 
disease burden borne by elderly individuals and the important health 
care interventions unique to the Medicare population are important 
areas of focus for the Medicare program; we would not expect the FDA 
review to include substantive consideration of these Medicare 
priorities. Thus, we believe that Medicare coverage standards are 
needed for IDE studies for which Medicare coverage is sought. We wish 
to ensure that Medicare beneficiaries who volunteer to participate in 
studies are protected, that the study design is appropriate to answer 
questions of importance to the Medicare program, and to ensure that the 
information gained from important clinical trials could be used to 
inform Medicare coverage decisions.
    There are numerous studies that may be considered scientifically 
valid but are of little benefit to Medicare beneficiaries or to the 
Medicare program. We believe that this policy establishes Medicare 
coverage requirements that need to be met to best support a body of 
clinical knowledge that is relevant to the Medicare program and its 
beneficiaries. It is essential that IDE studies where Medicare coverage 
is sought serve the best interests of the Medicare program and its 
beneficiaries; and that they be useful in improving healthcare delivery 
to Medicare beneficiaries, and informing Medicare coverage.
    Comment: Commenters suggested that the proposed coverage 
requirements

[[Page 74433]]

would increase burden and create access barriers for Medicare coverage 
of Category A IDE routine care items and services and Category B IDE 
devices and routine care items and services, particularly in small or 
localized studies or trials. Commenters suggested that these changes 
may decelerate medical device innovation and that many sponsors may 
choose not to seek Medicare coverage for IDE trials due to possible 
delays during the transition to these new coverage requirements. Other 
commenters suggested that we pilot a voluntary centralized coverage 
review process for at least a year, or establish separate review 
processes for small and large studies since commenters believed that 
the existing review process by local Medicare contractors is 
appropriate for small, single-site studies, and that centralized review 
should only be applied to large, national studies. Some commenters 
requested clarification regarding whether Medicare would automatically 
cover items and services related to Category A or B IDE studies, if the 
studies met the criteria in proposed new Sec.  405.212.
    Response: Seeking Medicare coverage related to Category A or B IDE 
studies is voluntary under existing procedures and will continue to be 
voluntary under the provisions of this final rule. Study sponsors are 
not required to seek Medicare coverage in order to conduct their 
studies or trials. Establishing separate Medicare coverage for IDE 
study review processes for large and small studies would create 
unnecessary infrastructure. Similarly, piloting the centralized 
Medicare coverage IDE study review process would create more 
duplication and variation in reviews and coverage of items and 
services, in addition to the variation currently present under the 
existing local Medicare contractor review process.
    In this final rule, we are revising Sec.  405.211(a) to specify 
that Medicare covers routine care items and services that are furnished 
in FDA-approved Category A IDE studies if CMS (or its designated 
entity) determines that the IDE study criteria in Sec.  405.212 are 
met. We are also revising Sec.  405.211(b) to specify that Medicare may 
make payment for Category B IDE devices and routine care items and 
services furnished in FDA-approved Category B IDE studies if CMS (or 
its designated entity) determines that the IDE study criteria in Sec.  
405.212 are met.
    Comment: One commenter expressed concern that beneficiaries could 
be at risk of losing Medicare coverage for medical emergencies and 
other health care items and services that would otherwise be available 
to Medicare beneficiaries outside of an IDE study or trial.
    Response: We do not believe this policy will have an impact on 
coverage for treatment of an individual trial participant with a 
medical emergency because this policy does not address Medicare 
coverage provisions outside the context of a Category A or B IDE study 
or trial. We would not expect to make a separate review of the IDE 
study information submitted to CMS (or its designated entity) for each 
enrolled subject or each related claim submitted to Medicare 
contractors for adjudication. Additionally, we are unaware of any 
current paradigm by which an FDA approved IDE trial would be conceived, 
developed, reviewed and approved in such a short timeframe, that is, a 
few minutes or hours, to address a beneficiary's medical emergency.
    Comment: Commenters requested information about what role, if any, 
the FDA would serve in the proposed centralized IDE review process for 
purposes of Medicare coverage of Category A IDE routine care items and 
services and Category B IDE devices and routine care items and 
services.
    Response: We did not propose any changes to Sec.  405.203, which 
addresses FDA categorization of IDE devices and subsequent FDA 
notification to CMS regarding such categorization.
c. Medicare Coverage IDE Study Criteria
    Comment: Many commenters believed that proposed criterion 1 (the 
principal purpose of the study is to test whether the item or service 
meaningfully improves health outcomes in patients who are represented 
by the Medicare-enrolled subjects), was too specific to the Medicare 
population and should more closely align with FDA requirements since 
IDE studies are designed to answer FDA regulatory questions, not 
Medicare or other insurer coverage questions. Some commenters suggested 
that we modify the standard to indicate that measuring meaningful 
outcomes in Medicare beneficiaries need not be the principal purpose, 
but only one of the purposes.
    Response: As discussed in the preamble to the proposed rule, we 
believe that this criterion is necessary because it embodies important 
scientific and ethical considerations needed to ensure that the study 
design is appropriate to answer questions of importance to Medicare and 
its beneficiaries. We expect that the results of all approved studies 
will specifically benefit the Medicare population and, as such, covered 
studies or trials must address how the study will affect Medicare 
beneficiaries if it desires to receive Medicare payment for services 
provided to Medicare beneficiaries within that study. However, based on 
the comments received, we are modifying this criterion to state that 
the principal purpose of the study is to test whether the device 
improves health outcomes of appropriately selected patients, since a 
discussion of the potential benefit of the device being studied to the 
applicable Medicare population is implicit in other criteria.
    Comment: Commenters suggested that we remove or modify the second 
proposed criterion (the rationale for the study is well supported by 
available scientific and medical information, or it is intended to 
clarify or establish the health outcomes of interventions already in 
common clinical use). Commenters believed that there is already well 
established government oversight, and self-governance through IRBs and 
scientific review committees. The commenters requested additional 
guidance regarding how this criterion would align with FDA requirements 
and oversight through the IRBs and scientific committees.
    Response: Study protocols typically have a section that describes 
the scientific rationale for the research. We believe that this 
criterion reflects a fundamental principle of research and does not 
require something that would otherwise be absent from a bona fide 
clinical study protocol. We seek assurance of compliance with this 
criterion because it is needed to ensure that the study or trial 
focuses on health outcomes important to the Medicare program and its 
beneficiaries. Therefore, we are not making changes to this criterion.
    Comment: Some commenters were concerned about how proposed 
criterion 3 (the study results are not anticipated to unjustifiably 
duplicate existing knowledge) would affect IDE device studies that are 
versions of devices already on the market. A commenter believed that 
this criterion should not be used to restrict Medicare coverage of IDE 
studies that build on an existing body of evidence or that provide 
confirmatory data on new devices.
    Response: We realize that FDA reviews many new devices being tested 
in IDE trials that may be similar to devices already on the market, and 
that this process is a necessary part of competition and innovation. 
However, because we are not assured that all devices of a similar class 
will necessarily have identical benefits and harms, we do not believe, 
as a general principle, that IDE studies or trials addressing new 
device versions always duplicate prior knowledge. We expect

[[Page 74434]]

that knowledge about new devices or significantly changed devices will 
add to, rather than duplicate, existing knowledge. We believe this 
criterion is necessary to ensure that the study focuses on health 
outcomes important to the Medicare program and its beneficiaries. 
Therefore, we are not making changes to this criterion.
    Comment: Commenters stated that proposed criterion 4 (the study 
design is methodologically appropriate and the anticipated number of 
enrolled subjects is adequate to answer the research question(s) being 
asked in the study) is duplicative of the FDA's role. One commenter 
asked how we would determine if a study design is methodologically 
appropriate.
    Response: Fundamentally, bona fide clinical research depends on the 
use of study designs that are appropriate to address the study 
questions. Otherwise there is no real production of generalizable 
knowledge, which is the hallmark of research, and enrolled subjects 
encounter risk without a realistic expectation that their participation 
will result in personal or societal benefit relevant to the Medicare 
program. The use of such a device in an IDE study may expose the study 
participants to increased risks that must be balanced by other factors 
including the likelihood that the study would add important information 
to the body of medical knowledge relevant to the Medicare program. 
There are numerous studies that may be considered scientifically valid 
but are of little benefit to the Medicare program. We are sensitive to 
the unique needs of Medicare beneficiaries, particularly the elderly. A 
trial design that may be adequate for a generally younger population 
may be comparatively insensitive to clinical factors commonly found in 
the elderly that may adversely impact the potential benefit or 
tolerability of a device, which is of particular importance to the 
Medicare program.
    Comment: A few commenters requested information on how proposed 
criterion 5 (the study is sponsored by an organization or individual 
capable of completing it successfully) will be used to determine that 
the sponsoring organization or individual is capable of completing a 
study successfully.
    Response: Institutional capabilities and scientific expertise are 
typically described in study protocols, which will be reviewed by CMS. 
Robust clinical studies depend on a supporting infrastructure to assure 
protocol adherence and that intended patient protections are actually 
in place. Clinical trials that are not completed successfully expose 
enrolled subjects to the risks of research participation without the 
benefit of producing generalizable knowledge applicable to the Medicare 
program. We believe that this criterion reflects a fundamental 
principle of research and does not require something that would 
otherwise be absent from a bona fide clinical study protocol. 
Therefore, we are finalizing this criterion as proposed.
    Comment: One commenter suggested that for proposed criterion 6 (the 
study is in compliance with all applicable Federal regulations 
concerning the protection of human subjects found at 45 CFR part 46) 
that we also require compliance with FDA regulations at 21 CFR 50 
(Informed Consent) and 21 CFR 56 (Institutional Review Board oversight) 
since 45 CFR 46 only refers to government funded research.
    Response: We agree with the commenter's suggestions and are 
modifying this criterion in this final rule to require that the study 
is in compliance with all applicable Federal regulations concerning the 
protection of human subjects found at 21 CFR parts 50, 56, and 812, and 
45 CFR part 46.
    Comment: Commenters recommended that we delete the reference to the 
International Committee of Medical Journal Editors in proposed 
criterion 7 (all aspects of the study are conducted according to 
appropriate standards of scientific integrity set by the International 
Committee of Medical Journal Editors.
    Response: In response to the comments received, we are removing 
proposed criterion 7. We believe that the intent of proposed criterion 
7 can be largely accomplished by adherence to the remaining CMS IDE 
study criteria.
    We are also removing proposed criterion 8 (the study has a written 
protocol that clearly demonstrates adherence to the standards listed 
here as Medicare requirements) because the intent of proposed criterion 
8 is implicit in the CMS coverage criteria and requirements.
    Comment: One commenter suggested that proposed criterion 9 (where 
appropriate, the clinical research study is not designed to exclusively 
test toxicity or disease pathophysiology in healthy individuals. Trials 
of all medical technologies measuring therapeutic outcomes as one of 
the objectives may be exempt from this standard only if the disease or 
condition being studied is life threatening and the patient has no 
other viable treatment options), since the commenter believed that 
Medicare would only be furnishing coverage for ``conventional'' care.
    Response: As discussed in the preamble to the proposed rule, the 
intent of this criterion is to limit Medicare coverage to IDE studies 
that do not exclusively test toxicity or disease pathophysiology in 
healthy individuals, but also have a therapeutic outcome. However, a 
study that exclusively tests toxicity or disease pathophysiology may 
still be covered if the disease or condition being studied is life-
threatening or a severely-debilitating illness, and the patient has no 
other viable treatment options. We recognize that many research 
projects could be considered to have varying degrees of contributions 
towards understanding interventions that improve health outcomes for 
the Medicare program. While we agree that in some cases, safety and 
toxicity studies may assess the benefits of the interventions they 
examine, and in limited circumstances may be considered appropriate to 
inform the clinical knowledge base applicable to the Medicare program, 
we are maintaining this criterion without change.
    Comment: Commenters expressed interest in the possible impact of 
the rule on ClinicalTrials.gov reporting, and suggested that we require 
that proposed criterion 10 (the study is registered on the 
ClinicalTrials.gov Web site and/or the Registry of Patient Registries 
(RoPR) by the principal sponsor/investigator prior to the enrollment of 
the first study subject) comply with section 801 of the Food and Drug 
Administration Amendments Act of 2007 (FDAAA) (Pub. L. 110-85, enacted 
on September 27, 2007), which requires registration on 
ClinicalTrials.gov within 21 days of enrollment of the first subject.
    Response: As discussed in the preamble to the proposed rule, we 
believe that all studies seeking Medicare coverage under this policy 
should be registered with ClinicalTrials.gov. Registrants at 
ClinicalTrials.gov must submit a standardized set of data elements to 
describe the study design, eligible populations, outcome measures, and 
other parameters and results. Registration, for some studies, serves as 
a vehicle for Medicare beneficiaries to learn about, and identify 
studies in which they may want to participate. When results reporting 
is required, it also offers an assurance of quality because, generally, 
public access to information enables a higher level of accountability 
in the accurate reporting of the clinical study protocol and results, 
and in the conduct of the trial itself. This accountability derives 
both from public access to information about studies and from the risk 
of penalty for

[[Page 74435]]

submitting false or misleading clinical trial information. We recognize 
that, for some studies of unapproved devices, FDAAA prohibits the 
public display of information on registration and results until after 
the device is approved or cleared for marketing. We have revised our 
regulation to avoid indicating that Medicare coverage of such IDE 
studies would require public display of all information in 
ClinicalTrials.gov for these unapproved devices. However, we believe 
that delayed display for this subset of studies, should the device be 
cleared or approved for marketing, will not significantly undermine our 
goals. For some studies, we expect public access to ClinicalTrials.gov 
data will not be delayed and therefore our requirement will immediately 
lead to greater public transparency for many of the studies supported 
by Medicare. For those studies about which information cannot be 
displayed publicly prior to marketing approval, we believe that the 
possibility of future public access and the risk of liability for the 
submission of false or misleading clinical trial information to 
ClinicalTrials.gov remain valuable. Registration with 
ClinicalTrials.gov also assures that Medicare beneficiaries and their 
treating healthcare professionals will, for those devices ultimately 
approved or cleared by FDA, eventually have pertinent information about 
these IDE studies. We note that clinical trials of devices that 
register for purposes of this regulation are subject to any applicable 
requirements under FDAAA. Finally, we have modified the criteria to 
simply require registration on ClinicalTrials.gov.
    Comment: In summary, proposed criterion 11 stated that the study 
protocol must specify the method and timing of public release of 
results on all pre-specified outcomes, including release of negative 
outcomes. One commenter stated that time to publication may not be in 
the control of the sponsors and that some studies may not be published 
at all for various reasons. Commenters suggested that we modify this 
criterion to be consistent with section 801 of the FDAAA.
    Response: Based on the comments received, we are modifying this 
criterion to state that the study protocol describes the method and 
timing of release of results on all pre-specified outcomes, including 
release of negative outcomes and that the release should be hastened if 
the study is terminated early.
    Comment: In summary, proposed criteria 12 and 13 stated that the 
study protocol must explicitly discuss the subpopulations affected by 
the items or services under investigation and discuss how the study 
results would be expected to be generalizable to the Medicare 
population. Commenters believed that explicitly requiring this 
information in the study protocol was inappropriate, with other 
commenters indicating that this information could be provided in the 
request for coverage submission package versus explicitly requiring it 
in the study protocol. A commenter stated that generalizability to 
populations beyond those which are studied in the trial may be 
difficult to articulate, especially when the class of device is new. 
Commenters opined that if the device class is the subject of a Medicare 
national or local coverage decision, the criterion is redundant and may 
create undue burden on a trial being conducted in a least burdensome 
environment.
    One commenter suggested that for devices that represent a device 
improvement, the existing body of knowledge and other supporting 
documents will likely address sub- and special populations. The 
commenter also stated that for truly new devices, safety and efficacy 
at a baseline level are not yet established and that a mandate to 
include special populations and under-represented groups is likely to 
be prohibitive to completion of the trial.
    Response: We want to support and encourage the conduct of research 
studies that add to the knowledge base about efficient, appropriate, 
and effective use of products and technologies in the Medicare 
population, thus improving the quality of care that Medicare 
beneficiaries receive. We understand the commenters' concerns; however, 
we expect that the results of studies or trials approved for purposes 
of Medicare coverage will specifically benefit the Medicare population.
    It is not our intention to require enrollment of all 
subpopulations. It is, however, our intention that study protocols for 
which Medicare coverage is sought address all populations affected by 
the technology under investigation, specifically those of interest to 
the Medicare program (populations due to age, disability, or other 
eligibility status). We expect that protocols describe the potential 
for subgroup differences and discuss how the study will evaluate any 
differences found.
    In this final rule, we are combining and modifying proposed 
criteria 11 and 12 to state that for purposes of Medicare coverage, 
Category A or Category B IDE study protocols must discuss how Medicare 
beneficiaries may be affected by the device under investigation, how 
the study results are or are not expected to be generalizable to the 
Medicare population, and must include separate discussions for 
populations eligible for Medicare due to age, disability, or other 
eligibility status.
    Comment: Commenters suggested that we remove the proposed Medicare 
coverage requirements that a Category A or B IDE study must be a 
pivotal study and have a superiority study design. Commenters expressed 
concern that noninferiority studies were not specifically discussed. 
One commenter recommended that IDE studies conducted as part of the FDA 
premarket approval (PMA) process be deemed as meeting the pivotal trial 
definition and be eligible for automatic coverage. Commenters stated 
that noninferiority studies and studies without an active comparator 
are designed to address important research questions and ultimately 
improve patient care, and cited the following concerns about including 
this requirement:
     Requiring that the study be either a superiority or 
pivotal study may undermine innovation.
     Not all clinical questions require superiority designs.
     Development of devices that are similar to devices already 
on the market may only require evidence of equivalence or 
noninferiority to a preexisting device while offering an expanded 
treatment option and lower healthcare costs through competition in the 
market.
     Medical device development may follow less well-defined 
paths of clinical study with individual studies not always easily 
characterized by a specific Phase, but still providing important 
evidence on a device's safety and effectiveness.
     In many cases, the protocol is not changed between the 
pilot and pivotal phases and including this requirement may make 
studies in the pilot phase ineligible for coverage.
     Investigator-initiated studies often evaluate novel 
approaches in small studies and are unlikely to be pivotal.
    Response: We appreciate the commenters' concerns about the proposed 
pivotal study and superiority study design Medicare coverage criteria. 
We believe that noninferiority trial designs are recognized to have 
certain risks of bias that are mitigated in superiority trial designs. 
These criteria were intended as specific positive factors that could 
have streamlined the Medicare coverage review of IDE study protocols. 
We did not intend that these proposals would be absolute requirements 
or that IDE studies that are not pivotal or studies with noninferiority 
designs could not be

[[Page 74436]]

approved for Medicare coverage. Therefore, we are modifying the 
Medicare coverage IDE study criteria in new Sec.  405.212 by removing 
the proposed pivotal study and superiority study design coverage 
requirements and removing the proposed definitions of pivotal studies 
or trials and superiority studies or trials in revised Sec.  
405.201(b).
d. Additional Issues
    Comment: Commenters stated that submitting IRB letters for every 
site involved in a multi-site clinical trial would create significant 
burden for stakeholders and is duplicative of the FDA's review process.
    Response: We believe that Medicare beneficiaries should be enrolled 
in studies that have been vetted by IRBs. However, we recognize 
commenters' concerns regarding the potential burden of submitting IRB 
letters for every site involved in a multi-site clinical trial. 
Therefore, we are clarifying in this final rule that interested 
parties, such as the study sponsor, that wish to seek Medicare coverage 
related to Category A or B IDE studies need only submit one IRB 
approval letter with their request.
    Comment: Commenters requested assurance that information provided 
by the study sponsor will be kept confidential.
    Response: Seeking Medicare coverage for Category A or B IDE trials 
is voluntary. Medicare coverage is not a requirement for study sponsors 
to conduct research. Effective January 1, 2015, interested parties 
(such as the study sponsor) that wish to seek Medicare coverage in 
Category A or B IDE studies must submit a request to CMS for review and 
approval of a Category A or B IDE study in order to meet the Medicare 
coverage requirements for Category A or B IDE routine care items and 
services, and Category B devices.
    Upon CMS approval of a Category A or B IDE study, we will post on 
the CMS Web site and periodically in the Federal Register limited 
information supplied by the interested party as part of their Medicare 
coverage IDE study review request (study title, sponsor name, NCT 
number, and the IDE number), along with the CMS approval date. We note 
that the same type of information is currently posted on the CMS Web 
site for other clinical study approvals related to Medicare coverage 
under the coverage with evidence development (CED) paradigm. We note 
that we did not propose any changes to Sec.  405.215, which addresses 
confidential commercial and trade secret information by specifying 
that, to the extent that we rely on confidential commercial or trade 
secret information in any judicial proceeding, we will maintain 
confidentiality of the of the information in accordance with Federal 
law.
    Comment: Commenters requested information about appropriate 
procedures for notification of trial revisions, protocol changes, and 
review of consent forms. One commenter requested that we align with the 
ClinicalTrials.gov registry, so that sponsors and researchers can 
provide updates to both systems. Other commenters suggested that 
instead of notifying the public of CMS-approved IDE studies in the 
Federal Register, that we post this information to the CMS Web site.
    Response: We do not believe that the creation of a shared registry 
with the National Library of Medicine's ClinicalTrials.gov registry to 
include information regarding CMS approval of Category A or B IDE 
studies could be accomplished before the effective date of this 
regulation. As previously discussed, limited information regarding CMS-
approved Category A and B IDE studies will be posted on the CMS Web 
site and in the Federal Register.
    Comment: A few commenters asked how the proposed changes to the 
coverage requirements would impact or interact with the NCD process, 
including CED.
    Response: Medicare coverage of Category A IDE routine care items 
and services, and Medicare coverage of Category B IDE devices and 
routine care items and services do not predict nor directly lead to 
Medicare coverage outside of the context of an IDE study, nor does it 
necessarily lead to consideration under the Medicare national coverage 
determination (NCD) process. The NCD process is separate and distinct 
with its own statutory basis and requirements. Additional information 
regarding the Medicare national coverage determination process can be 
found on the CMS coverage Web site at http://www.cms.gov/Center/
Special-Topic/Medicare-Coverage-Center.html?redirect=/center/
coverage.asp.
    Comment: Commenters requested clarification about Medicare coverage 
of Category A IDE related routine care items and services and Category 
B IDE devices and related routine care items and services, when the 
Medicare beneficiary is enrolled in a Medicare Advantage plan or 
Medicare health plan.
    Response: Medicare Advantage plans must abide by the IDE study 
payment policy as instructed in the Medicare Managed Care Manual, 
Chapter 4, Section 10.7.2.
4. Summary of Changes to Proposed Provisions
    As a result of the comments received, we are making the following 
changes in this final rule.
     For the purpose of clarity, we are modifying the following 
definitions to state:
    ++ Category B (Nonexperimental/investigational) device refers to a 
device for which the incremental risk is the primary risk in question 
(that is, initial questions of safety and effectiveness of that device 
type have been resolved), or it is known that the device type can be 
safe and effective because, for example, other manufacturers have 
obtaind FDA premarket approval or clearance for that device type.
    ++ Routine care items and services refers to items and services 
that are otherwise generally available to Medicare beneficiaries (that 
is, a beneficiary category exists, it is not statutorily excluded, and 
there is no national noncoverage decision) that are furnished during a 
clinical study and that would be otherwise furnished even if the 
beneficiary were not enrolled in a clinical study.
     We are revising Sec.  405.207(b)(3) to state ``Routine 
care items and services related to Category A (Experimental) devices as 
defined in Sec.  405.211.''
     We are revising Sec.  405.207(b)(3) to state ``Routine 
care items and services related to Category B (Nonexperimental/
investigational) devices as defined in Sec.  405.201(b), and furnished 
in conjunction with FDA-approved clinical studies that meet the 
coverage requirements in Sec.  405.211.''
     We are modifying Sec.  405.211 so that--
    ++ Medicare covers routine care items and services furnished in an 
FDA-approved Category A IDE study if CMS (or its designated entity) 
determines that the Medicare coverage IDE study criteria in Sec.  
405.212 are met.
    ++ Medicare may make payment for a Category B (Nonexperimental/
investigational) IDE device and routine care items and services 
furnished in an FDA-approved Category B (Nonexperimental/
investigational) IDE study if CMS (or its designated entity) determines 
that the Medicare coverage IDE study criteria in Sec.  405.212 are met.
    ++ CMS (or its designated entity) must review the following to 
determine if the Medicare coverage IDE study criteria in Sec.  405.212 
are met (that is, FDA approval letter of the IDE, IDE study protocol, 
IRB approval letter, NCT

[[Page 74437]]

number, and supporting materials, if needed).
    ++ A listing of all CMS-approved Category A IDE studies and 
Category B IDE studies shall be posted on the CMS Web site and 
published in the Federal Register.
     We modified new Sec.  405.212 (IDE study criteria) to 
require that, for Medicare coverage of items and services described in 
Sec.  405.211, a Category A (Experimental) or Category B 
(Nonexperimental/investigational) IDE study must meet all of the 
following criteria.
    ++ The principal purpose of the study is to test whether the device 
improves health outcomes of appropriately selected patients.
    ++ The rationale for the study is well supported by available 
scientific and medical information or it is intended to clarify or 
establish the health outcomes of interventions already in common 
clinical use.
    ++ The study results are not anticipated to unjustifiably duplicate 
existing knowledge.
    ++ The study design is methodologically appropriate and the 
anticipated number of enrolled subjects is adequate to confidently 
answer the research question(s) being asked in the study.
    ++ The study is sponsored by an organization or individual capable 
of successfully completing the study.
    ++ The study is in compliance with all applicable Federal 
regulations concerning the protection of human subjects found at 21 CFR 
parts 50, 56, and 812, and 45 CFR part 46.
    ++ Where appropriate, the study is not designed to exclusively test 
toxicity or disease pathophysiology in healthy individuals. Studies of 
all medical technologies measuring therapeutic outcomes as one of the 
objectives may be exempt from this criterion only if the disease or 
condition being studied is life threatening and the patient has no 
other viable treatment options.
    ++ The study is registered with the National Institutes of Health's 
National Library of Medicine's ClinicalTrials.gov.
    ++ The study protocol describes the method and timing of release of 
results on all pre-specified outcomes, including release of negative 
outcomes and that the release should be hastened if the study is 
terminated early.
    ++ The study protocol must describe how Medicare beneficiaries may 
be affected by the device under investigation, and how the study 
results are or are not expected to be generalizable to the Medicare 
beneficiary population. Generalizability to populations eligible for 
Medicare due to age, disability, or other eligibility status must be 
explicitly described.
    We are also making the following conforming changes to 42 CFR 405 
subpart B.
     To reflect changes in Sec.  405.201(b), we are making 
conforming changes to the following sections: Sec.  405.201(a)(2); 
Sec.  405.203(a)(1) and (a)(2); Sec.  405.203(b); Sec.  405.205(a)(1); 
Sec.  405.209; Sec.  405.213(a)(1); and Sec.  411.15(o)(1), by 
replacing the term experimental/investigational (Category A) device 
with Category A (Experimental) device, and the term Non-experimental/
investigational (Category B) device with Category B (Nonexperimental/
investigational) device, as applicable.
     In Sec.  405.201(b), we are changing the term IDE to 
investigational device exemption (IDE) for clarity purposes.
     In Sec.  405.207(b)(2), we are making conforming changes 
to reflect changes to the definitions in Sec.  405.201(b) and revised 
Sec.  405.211.
     In Sec.  411.15(o)(2), we are making conforming changes to 
reflect revised Sec.  405.211.

B. Ultrasound Screening for Abdominal Aortic Aneurysms

1. Background and Statutory Authority
    Section 1861(s)(2)(AA) of the Act authorizes Medicare coverage 
under Part B of ultrasound screening for abdominal aortic aneurysms 
(``AAA screening''), as defined in section 1861(bbb) of the Act. Our 
implementing regulations for AAA screening are at Sec.  410.19. AAA 
screening is covered for a beneficiary that meets certain criteria 
including that he or she must receive a referral during the initial 
preventive physical examination (IPPE) and has not previously had an 
AAA screening covered under the Medicare program. The IPPE, as 
described in section 1861(ww) of the Act (and regulations at Sec.  
410.16), includes a time restriction and must be furnished not more 
than 1 year after the effective date of the beneficiary's first Part B 
coverage period (see section 1862(a)(1)(K) of the Act). This time 
limitation for the IPPE effectively reduces a Medicare beneficiary's 
ability to obtain a referral for AAA screening.
    Section 1834(n) of the Act, added by section 4105 of the Affordable 
Care Act, grants the Secretary the discretion and authority to modify 
coverage of certain preventive services identified in section 
1861(ddd)(3) of the Act, which in turn cross-references section 
1861(ww)(2) of the Act (including AAA screening at section 
1861(ww)(2)(L)). The Secretary may modify coverage to the extent that 
such modification is consistent with the recommendations of the United 
States Preventive Services Task Force (USPSTF) per section 
1834(n)(1)(A) of the Act. In 2005, the USPSTF recommended ``one-time 
screening for [AAA] by ultrasonography in men aged 65 through 75 who 
have ever smoked. (Grade: B Recommendation)'' (Screening for Abdominal 
Aortic Aneurysm: Recommendation Statement. http://
www.uspreventiveservicestaskforce.org/uspstf05/aaascr/aaars.htm). The 
USPSTF recommendation does not include a time limit with respect to the 
referral for this test.
2. Provisions of the Regulations for Final Rule With Comment Period
    We proposed to exercise our discretion and authority under section 
1834(n) of the Act to modify coverage of AAA screening consistent with 
the recommendations of the USPSTF to eliminate the one-year time limit 
with respect to the referral for this service. This modification will 
allow coverage of AAA screening for eligible beneficiaries without 
requiring them to receive a referral as part of the IPPE. Specifically 
for purposes of coverage of AAA screening, we proposed to modify the 
definition of ``eligible beneficiary'' in Sec.  410.19(a) by removing 
paragraph (1) of the definition of ``eligible beneficiary'' and 
redesignating paragraphs (2) and (3) of the definition of ``eligible 
beneficiary'' as paragraphs (1) and (2), respectively.
    The IPPE is a one-time benefit available to beneficiaries under 
Part B that receive the IPPE not more than 1 year after the effective 
date of the beneficiary's first Medicare Part B coverage period. Many 
beneficiaries were either not eligible to receive an IPPE (which did 
not become effective until January 1, 2005) or may not have taken 
advantage of the IPPE when they were eligible, which limited 
beneficiary access to coverage of AAA screening. We believe that our 
modification is consistent with current USPSTF recommendations for one-
time screening and allows for expanded access to this important 
preventive service.
    We received 12 public comments from various entities including 
physician specialty societies, a manufacturer and a manufacturer 
advocacy group, a beneficiary advocacy organization, a medical group 
management association, and a health insurer. All of the comments 
supported our proposal to modify coverage of AAA screening to eliminate 
the one-year time limit with respect to the referral for this service. 
Below is a summary of comments received and our response.

[[Page 74438]]

    Comment: Two commenters believed that the proposed modification to 
eliminate the one-year time limit with respect to the referral for AAA 
screening would only apply to men aged 65-75 who are smokers, and that 
individuals with a family history would continue to be required to 
receive a referral from the IPPE in order to be eligible for coverage 
of AAA screening.
    Response: This modification eliminates the one-year time limit with 
respect to referral for this service and allows coverage of AAA 
screening for all beneficiaries that meet the eligibility requirements 
for this benefit without requiring them to receive a referral as part 
of the IPPE. An eligible beneficiary, for purposes of this covered 
service, is an individual that meets the following criteria:
     Has not been previously furnished AAA screening under the 
Medicare program; and
     Is included in at least one of the following risk 
categories: (1) has a family history of an abdominal aortic aneurysm; 
or (2) is a man aged 65 to 75 who has smoked at least 100 cigarettes in 
his lifetime.
    After taking into consideration the public comments received, we 
are finalizing this policy as proposed.

C. Colorectal Cancer Screening: Modification to Coverage of Screening 
Fecal Occult Blood Tests

1. Background and Statutory Authority
    Sections 1861(s)(2)(R) and 1861(pp)(1) of the Act authorize 
Medicare coverage of colorectal cancer screening. The statute 
authorizes coverage of screening fecal occult blood tests (FOBT), 
screening flexible sigmoidoscopies, screening colonoscopies, and other 
tests determined to be appropriate, subject to certain frequency and 
payment limits. Our implementing regulations are codified at Sec.  
410.37. Section 410.37(b) (condition for coverage of screening FOBT) 
specifies that Medicare Part B pays for screening FOBT if ordered in 
writing by the beneficiary's attending physician. For purposes of Sec.  
410.37, ``attending physician'' is defined as ``a doctor of medicine or 
osteopathy (as defined in section 1861(r)(1) of the Act) who is fully 
knowledgeable about the beneficiary's medical condition, and who would 
be responsible using the results of any examination performed in the 
overall management of the beneficiary's specific medical problem.''
    The coverage provisions for FOBT screening were established in 1997 
and effective on January 1, 1998 (62 FR 59048, October 31, 1997). In 
the preamble to that final rule, we stated that the requirement for a 
written order from the attending physician was intended to make certain 
that beneficiaries receive appropriate preventive counseling about the 
implications and possible results of having these examinations 
performed (62 FR 59081).
    Since then, Medicare coverage of preventive services has expanded 
to include, among other things, coverage of an annual wellness visit 
(as defined in Sec.  410.15). The annual wellness visit includes 
provisions for furnishing personalized health advice and appropriate 
referrals. In addition to physicians, the annual wellness visit can be 
furnished by certain nonphysician practitioners, including physician 
assistants, nurse practitioners, and clinical nurse specialists.
    We also note that Sec.  410.32, which provides coverage and payment 
rules for diagnostic x-ray tests, diagnostic laboratory tests, and 
other diagnostic tests, states in subsection (a)(2): ``Nonphysician 
practitioners (that is, clinical nurse specialists, clinical 
psychologists, clinical social workers, nurse-midwives, nurse 
practitioners, and physician assistants) who furnish services that 
would be physician services if furnished by a physician, and who are 
operating within the scope of their authority under State law and 
within the scope of their Medicare statutory benefit, may be treated 
the same as physicians treating beneficiaries for the purpose of this 
paragraph.''
2. Provisions of the Regulations for Final Rule With Comment Period
    We proposed to revise Sec.  410.37(b), ``Condition for coverage of 
screening fecal-occult blood tests,'' to allow an attending physician, 
physician assistant, nurse practitioner, or clinical nurse specialist 
to furnish written orders for screening FOBT. These modifications will 
allow for expanded coverage and access to screening FOBT, particularly 
in rural areas.
    We received 8 public comments from various entities including 
physician and practitioner specialty societies, a pharmaceutical 
manufacturer, a beneficiary advocacy organization, a medical center, 
and a health insurer. All of the commenters supported our proposal to 
expand the types of practitioners that are able to furnish written 
orders for screening FOBT, in addition to a beneficiary's attending 
physician. Additionally, we invited public comment regarding whether a 
practitioner permitted to order a screening FOBT must be the 
beneficiary's attending practitioner as described earlier. Below is a 
summary of the comments received and our response.
    Comment: One commenter suggested that the practitioners ordering 
the test function under the direct and responsible supervision of a 
practicing, licensed physician. Another commenter thought that the 
qualified practitioner furnishing the order should be knowledgeable 
about the patient and their plan of care. One commenter opined that the 
limitation of orders from the attending practitioner should be removed 
to prevent unnecessary office visits with the patient, scheduled solely 
to demonstrate compliance with a requirement that the test results be 
used in the practitioner's management of the patient's condition. The 
same commenter suggested that decisions regarding the medical necessity 
of follow-up care be left to the clinical judgment of the practitioner.
    Response: After considering the public comments, we are retaining 
the ``attending'' requirement that provides assurance that the non-
physician practitioner will be knowledgeable about the patient and the 
patient's plan of care. We are not requiring that these practitioners 
act only under the direct supervision of a practicing licensed 
physician as we view this suggestion as contrary to our goal of 
increasing access to this screening test, particularly in rural areas. 
Our expansion of coverage of screening FOBT to include tests ordered by 
an attending physician assistant, nurse practitioner, or clinical nurse 
specialist are consistent with the requirements for tests ordered for 
diagnostic purposes where nonphysician practitioners may be treated the 
same as physicians treating beneficiaries. The attending practitioner 
(physician, physician assistant, nurse practitioner, or clinical nurse 
specialist) would be responsible for using the results of the screening 
test in the overall management of the beneficiary's medical care. We 
leave it to the discretion of the attending practitioner to determine 
what follow-up care may be necessary. After consideration of the public 
comments received, we are implementing this policy as proposed.

D. Ambulance Fee Schedule

1. Amendment to Section 1834(l)(13) of the Act
    Section 146(a) of the Medicare Improvements for Patients and 
Providers Act of 2008 (Pub. L. 110-275, enacted on July 15, 2008) 
(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,

[[Page 74439]]

the ambulance fee schedule amounts for ground ambulance services shall 
be increased as follows:
     For covered ground ambulance transports that 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 that 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 Affordable Care Act further 
amended 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 
applied to covered ground ambulance transports furnished on or after 
January 1, 2010, and before January 1, 2011. In the CY 2011 PFS final 
rule with comment period (75 FR 73385, 73386, 73625), we revised Sec.  
414.610(c)(1)(ii) to conform the regulations to this statutory 
requirement.
    Section 106(a) of the Medicare and Medicaid Extenders Act of 2010 
(Pub. L.111-309, enacted December 15, 2010) (MMEA) again amended 
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 
applied to covered ground ambulance transports furnished on or after 
January 1, 2011, and before January 1, 2012. In the CY 2012 End-Stage 
Renal Disease Prospective Payment System (ESRD PPS) final rule (76 FR 
70228, 70284 through 70285, and 70315), we revised Sec.  
414.610(c)(1)(ii) to conform the regulations to this statutory 
requirement.
    Section 306(a) of the Temporary Payroll Tax Cut Continuation Act of 
2011 (TPTCA) (Pub. L. 112-78, enacted on December 23, 2011) amended 
section 1834(l)(13)(A) of the Act to extend the payment add-ons 
described above through February 29, 2012; and section 3007(a) of the 
Middle Class Tax Relief and Job Creation Act of 2012 (Pub. L. 112-96, 
enacted on February 22, 2012) (MCTRJCA) further amended section 
1834(l)(13)(A) of the Act to extend these payment add-ons through 
December 31, 2012. Thus, these payment add-ons also applied to covered 
ground ambulance transports furnished on or after January 1, 2012 and 
before January 1, 2013. In the CY 2013 PFS final rule (77 FR 69139, 
69368), we revised Sec.  414.610(c)(1)(ii) to conform the regulations 
to this statutory requirement.
    Subsequently, section 604(a) of the ATRA amended section 
1834(l)(13)(A) of the Act to extend the payment add-ons described above 
through December 31, 2013. Thus, these payment add-ons also apply to 
covered ground ambulance transports furnished on or after January 1, 
2013 and before January 1, 2014. In the proposed rule, we proposed to 
revise Sec.  414.610(c)(1)(ii) to conform the regulations to this 
statutory requirement. We did not receive any comments on this 
proposal. Accordingly, we are finalizing our proposal to revise Sec.  
414.610(c)(1)(ii) to conform the regulations to the statutory 
requirement described above.
    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.
2. Amendment to Section 146(b)(1) of MIPPA
    Section 146(b)(1) of MIPPA amended the designation of certain rural 
areas for payment of air ambulance services. This section originally 
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, must continue to 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, 2009.
    Sections 3105(b) and 10311(b) of the Affordable Care Act amended 
section 146(b)(1) of MIPPA to extend this provision for an additional 
year, through December 31, 2010. In the CY 2011 PFS final rule (75 FR 
73385, 73386, and 73625 through 73626), we revised Sec.  414.610(h) to 
conform the regulations to this statutory requirement.
    Section 106(b) of the MMEA amended section 146(b)(1) of MIPPA to 
extend this provision again through December 31, 2011. In the CY 2012 
ESRD PPS final rule (76 FR 70284, 70285, and 70315), we revised Sec.  
414.610(h) to conform the regulations to this statutory requirement.
    Subsequently, section 306(b) of the TPTCCA amended section 
146(b)(1) of MIPPA to extend this provision through February 29, 2012; 
and section 3007(b) of the MCTRJCA further amended section 146(b)(1) of 
MIPPA to extend this provision through December 31, 2012. In the CY 
2013 PFS final rule (77 FR 69139, 69140, and 69368), we revised Sec.  
414.610(h) to conform the regulations to this statutory requirement.
    Subsequently, section 604(b) of the ATRA amended section 146(b)(1) 
of MIPPA to extend this provision through June 30, 2013. Thus, we 
proposed to revise Sec.  414.610(h) to conform the regulations to this 
statutory requirement. We did not receive any comments on this 
proposal. Therefore, we are finalizing our proposal to revise Sec.  
414.610(h) to conform the regulations to the statutory requirement 
described above.
    This statutory requirement is self-implementing. 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. Accordingly, for areas that were 
designated as rural on December 31, 2006, and were subsequently re-
designated as urban, we re-established the ``rural'' indicator on the 
ZIP Code file for air ambulance services through June 30, 2013.
3. Amendment to Section 1834(l)(12) of the Act
    Section 414 of the Medicare Prescription Drug, Improvement and 
Modernization Act of 2003 (Pub. L. 108-173, enacted on December 8, 
2003) (MMA) added section 1834(l)(12) to 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).

[[Page 74440]]

    Sections 3105(c) and 10311(c) of the Affordable Care Act amended 
section 1834(l)(12)(A) of the Act to extend this rural bonus for an 
additional year through December 31, 2010. In the CY 2011 PFS final 
rule with comment period (75 FR 73385, 73386 and 73625), we revised 
Sec.  414.610(c)(5)(ii) to conform the regulations to this statutory 
requirement.
    Section 106(c) of the MMEA amended section 1834(l)(12)(A) of the 
Act to extend the rural bonus described above for an additional year, 
through December 31, 2011. Therefore, in the CY 2012 ESRD PPS final 
rule (76 FR 70284, 70285 and 70315), we revised Sec.  414.610(c)(5)(ii) 
to conform the regulations to this statutory requirement.
    Section 306(c) of the TPTCCA amended section 1834(l)(12)(A) of the 
Act to extend this rural bonus through February 29, 2012; and section 
3007(c) of the MCTRJCA further amended section 1834(l)(12)(A) of the 
Act to extend this rural bonus through December 31, 2012. In the CY 
2013 PFS final rule with comment period (77 FR 69140, 69368), we 
revised Sec.  414.610(c)(5)(ii) to conform the regulations to these 
statutory requirements.
    Subsequently, section 604(c) of the ATRA amended section 
1834(l)(12)(A) of the Act to extend this rural bonus through December 
31, 2013. Therefore, we are continuing to apply the 22.6 percent 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, 
2013 and before January 1, 2014 where transportation originates in a 
qualified rural area.
    This rural bonus is sometimes referred to as the ``Super Rural 
Bonus'' and the qualified rural areas (also known as ``super rural'' 
areas) are identified during the claims adjudicative process via the 
use of a data field included on the CMS-supplied ZIP Code File.
    In the proposed rule, we proposed to revise Sec.  414.610(c)(5)(ii) 
to conform the regulations to the statutory requirement set forth at 
section 604(c) of the ATRA. We did not receive any comments on this 
proposal. Accordingly, we are finalizing our proposal to revise Sec.  
414.610(c)(5)(ii) to conform the regulations to this statutory 
requirement.
    This statutory requirement is self-implementing. This provision 
requires a one-year extension of the rural bonus (which was previously 
established by the Secretary) through December 31, 2013, and does not 
require any substantive exercise of discretion on the part of the 
Secretary.
4. Addition of Section 1834(l)(15) of the Act
    Section 637 of the ATRA, which added section 1834(l)(15) of the 
Act, specifies that the fee schedule amount otherwise applicable under 
the preceding provisions of section 1834(l) of the Act shall be reduced 
by 10 percent for ambulance services furnished on or after October 1, 
2013, consisting of non-emergency basic life support (BLS) services 
involving transport of an individual with end-stage renal disease for 
renal dialysis services (as described in section 1881(b)(14)(B) of the 
Act) furnished other than on an emergency basis by a provider of 
services or a renal dialysis facility. We proposed to revise Sec.  
414.610 by adding paragraph (c)(8) to conform the regulations to this 
statutory requirement. We did not receive any comments on this 
proposal. Accordingly, we are finalizing our proposal to revise Sec.  
414.610 by adding paragraph (c)(8) to conform the regulations to the 
statutory requirement described above.
    This statutory requirement is self-implementing. A plain reading of 
the statute requires only a ministerial application of the mandated 
rate decrease, and does not require any substantive exercise of 
discretion on the part of the Secretary. Accordingly, for the ambulance 
services described in section 637 of the ATRA furnished on or after 
October 1, 2013, the fee schedule amount otherwise applicable (both 
base rate and mileage) is reduced by 10 percent. For further 
information regarding application of this mandated rate decrease, 
please see CR 8269.
5. Studies of Ambulance Costs
    Section 604(d)(1) of the ATRA provides that the Secretary shall 
conduct the following studies:
    (A) A study that analyzes data on existing cost reports for 
ambulance services furnished by hospitals and critical access 
hospitals, including variation by characteristics of such providers of 
services, with a Report to Congress on such study due by October 1, 
2013; and
    (B) A study of the feasibility of obtaining cost data on a periodic 
basis from all ambulance providers of services and suppliers for 
potential use in examining the appropriateness of the Medicare add-on 
payments for ground ambulance services furnished under the fee schedule 
under section 1834(l) of the Act and in preparing for future reform of 
such payment system, with a Report to Congress due on such study by 
July 1, 2014.
    Further, in conducting the study under paragraph (B) above, section 
604(d)(2) of the ATRA directs the Secretary to:
     Consult with industry on the design of such cost 
collection efforts;
     Explore the use of cost surveys and cost reports to 
collect appropriate cost data and the periodicity of such cost data 
collection;
     Examine the feasibility of developing a standard cost 
reporting tool for providers of services and suppliers of ground 
ambulance services; and
     Examine the ability to furnish such cost data by various 
types of ambulance providers of services and suppliers, especially by 
rural and super-rural providers of services and suppliers.
    As noted above, in conducting the study under section 604(d)(1) of 
the ATRA described in paragraph (B) above, the Secretary is required to 
consult with industry on the design of such cost collection efforts 
(see section 604(d)(2)(A) of the ATRA). We used the proposed rule as 
the instrument to collect information, comments, and ideas from the 
industry on the design of such cost collection efforts as described 
above, and on the feasibility of obtaining cost data on a periodic 
basis from all ambulance providers of services and suppliers for 
potential use in examining the appropriateness of the Medicare add-on 
payments for ground ambulance services furnished under the fee schedule 
under section 1834(l) of the Act and in preparing for future reform of 
such payment system. We therefore invited public comment on these 
issues as part of the study we are conducting under section 
604(d)(1)(B) of the ATRA.
    Several organizations provided detailed comments on the issues 
described above. We appreciate the commenters' insights and 
suggestions. We will consider those comments as we perform the study 
required by section 604(d)(1)(B) of the ATRA and prepare the Report to 
Congress.

E. Policies Regarding the Clinical Laboratory Fee Schedule

1. Background on the Clinical Laboratory Fee Schedule
    Under Medicare Part B, clinical diagnostic laboratory tests 
furnished on or after July 1, 1984, in a physician's office, by an 
independent laboratory, or by a hospital laboratory for its outpatients 
and nonpatients are paid on the basis of the Clinical Laboratory Fee 
Schedule (CLFS), with certain exceptions. For each Healthcare

[[Page 74441]]

Common Procedure Coding System (HCPCS) code, payment is the lesser of:
     The amount of charges billed for the test;
     The fee schedule amount for the state or a local 
geographic area; or
     A national limitation amount (NLA)

(see section 1833(a)(1)(D)(i), (a)(2)(D)(i), (h)(1), and (h)(4)(B) of 
the Act). The NLA for a clinical diagnostic laboratory test performed 
after December 31, 1997 is equal to 74 percent of the median of all fee 
schedules established for that test for that laboratory setting or 100 
percent of such median in the case of a clinical diagnostic laboratory 
test performed on or after January 1, 2001 that the Secretary 
determines is a new test for which no limitation amount has previously 
been established (see section 1833(h)(4)(B)(viii) of the Act).
    Currently, we update the CLFS amounts annually to reflect changes 
in the Consumer Price Index for all Urban Consumers (CPI-U) and apply a 
multi-factor productivity adjustment (see section 1833(h)(2)(A) of the 
Act). In the past, we also implemented other adjustments or did not 
apply the change in the CPI-U to the CLFS for certain years in 
accordance with statutory mandates. We do not otherwise update or 
change the payment amounts for tests on the CLFS.
    For any clinical diagnostic laboratory tests where a new or 
substantially revised HCPCS code is assigned on or after January 1, 
2005, we determine the basis for, and amount of, payment for these 
clinical diagnostic laboratory tests (see section 1833(h)(8) of the Act 
and Sec.  414.500 through Sec.  414.509). Once established, however, in 
most cases, we only have the opportunity to reconsider the basis and/or 
amount of payment for new tests for one additional year after the basis 
or payment is initially set. Once the reconsideration process is 
complete, payment is not further adjusted (except by a change in the 
CPI-U, the productivity adjustment, and any other adjustments required 
by statute), regardless of any shift in the actual costs incurred to 
perform the test.
    This lack of an established mechanism to adjust payment amounts is 
unique among the Medicare payment schedules and systems. Generally, 
other fee schedules and prospective payment systems are evaluated each 
year to reflect the changing mix of services provided under that system 
or schedule and then the system or schedule is adjusted to maintain 
budget neutrality. Since there is currently no process to make such 
adjustments for the CLFS, payment amounts are not changed despite 
changes in technology, which affect the cost of performing the tests. 
This potentially results in CMS not paying as accurately for these 
tests. As discussed in the CY 2014 PFS proposed rule (78 FR 43350 
through 43352), we proposed to implement a process to adjust payment 
amounts based on changes in technology. Below, we discuss our proposals 
regarding this process and, at the end of section III.E.2. of this 
final rule with comment period, respond to comments about our proposals 
and finalize our policies.
2. Policies Regarding Technological Changes Under Section 
1833(h)(2)(A)(i) of the Act
a. Background on Technological Changes
    As discussed in the CY 2014 PFS proposed rule (78 FR 43350 through 
43351), there has been a significant amount of technological change in 
the clinical laboratory area since the implementation of the CLFS. This 
technological change has led to the increased use of point-of-care 
testing, brand new tests being developed, and the proliferation of 
laboratory-developed tests. The Institute of Medicine (IOM) dedicated a 
chapter of its 2000 report ``Medicare Laboratory Payment Policy: Now 
and in the Future'' to discussing trends in laboratory technology. The 
report noted rapid and dramatic innovation in the laboratory sector 
since the 1980s and remarkable growth in the range and complexity of 
available tests. The IOM concluded that the introduction of new tests, 
advances in equipment and testing techniques, and the proliferation of 
advanced information technology have all made testing more efficient 
and automated.
    Technology has enabled a significant site-of-service shift for many 
laboratory tests from the laboratory environment to the point of health 
care delivery. This point-of-care testing has increased since the 
1980s, when this type of testing first became available, mainly due to 
changes in technology which resulted in smaller, cheaper, and more 
portable test kits that are simple to use. For example, drug abuse 
testing has become readily available at the point-of-care. Point-of-
care testing can be performed in various institutional and community 
settings but the main objective of such testing is to produce a result 
quickly, at the place where the patient is receiving care, such as at a 
physician's office or at a hospital bedside, in order to facilitate 
decisions about appropriate treatment.
    There also are brand new technologies that did not exist when the 
CLFS was established, most notably the methods that are the basis for 
many genetic and genomic tests. Many of these methods evolved from the 
work of the Human Genome Project and subsequent research and 
development by both the federal government and private firms. The cost 
of sequencing a genome has dropped dramatically since the early 
inception of this technology in 2001 from more than $95 million per 
genome to approximately $5,700 in early 2013 (http://www.genome.gov/
pages/der/sequencing_cost.xlsx). Early tests in this area were less 
likely to be covered by Medicare because they were either screening 
tests or tests for conditions found largely in a pediatric population. 
As this area has expanded over the past several decades, Medicare has 
taken on a more prominent role in payment for these services. We expect 
the number of codes and tests in this area to continue to grow as the 
technology evolves and more tests become available in the areas of 
pharmacogenomics, personalized and predictive medicine, and companion 
diagnostics. Moreover, we expect the costs of these tests to change 
over time, and we believe that the CLFS ought to be able to better 
reflect these changes.
    We also note the growth in laboratory-developed tests (LDTs) over 
the years. These proprietary tests are developed by laboratories, which 
then offer the service of providing the test. Some of the most advanced 
laboratory tests currently being performed are LDTs which use 
sophisticated proprietary technology. Many LDTs do not have their own 
HCPCS codes; instead, they are billed using unlisted codes for which 
Medicare Administrative Contractors (MACs) establish a payment amount 
for their local jurisdictions. Prior to 2012, other LDTs were billed to 
Medicare using ``stacking codes,'' where a laboratory submits a code 
for each step of the testing process. These ``stacking codes'' were 
eliminated at the end of 2012 and replaced with new test-specific 
codes.
    The use of unlisted CPT and ``stacking'' codes provided us with 
limited information about the technology used to perform these tests. 
However, we know that the number of LDTs has been growing over the 
years. We also know that multiple laboratories have developed different 
ways to perform the same test. Further, our recent experience with 
using a gapfilling methodology to price molecular pathology tests, 
which can be LDTs, has shown that the costs of performing these tests 
have decreased since contractors initially established payment amounts 
for the tests, or compared to the code stack previously billed. Our 
experience with gapfilling

[[Page 74442]]

molecular pathology tests also has shown that there is wide variation 
in the cost of performing the same test by different laboratories.
    We believe that, given the technological changes that have occurred 
in the laboratory industry over the past several decades and the growth 
in the number of clinical laboratory tests (for example, we have added 
approximately 800 new test codes to the CLFS since its inception), it 
would be appropriate to establish a process to reexamine payment 
amounts on the CLFS to take into account increased efficiency, changes 
in laboratory personnel and supplies necessary to conduct a test, 
changes in sites of service, and other changes driven by technological 
advances.
    Section 1833(h)(2)(A)(i) of the Act requires the Secretary to set 
the fee schedules for clinical laboratory tests ``for the 12-month 
period beginning July 1, 1984, adjusted annually (to become effective 
on January 1 of each year) by, subject to [the multi-factor 
productivity adjustment], . . . a percentage increase or decrease equal 
to the percentage increase or decrease in the [CPI-U], . . . and 
subject to such other adjustments as the Secretary determines are 
justified by technological changes'' (emphasis added). Under this 
authority, in the CY 2014 PFS proposed rule (78 FR 43350 through 
43352), we proposed a process under which we would systematically 
reexamine the payment amounts established under the CLFS to determine 
if changes in technology for the delivery of that service warrant an 
adjustment to the payment amount.
b. Definition of Technological Changes
    In the CY 2014 PFS proposed rule (78 FR 43351), we proposed to 
define technological changes as changes to the tools, machines, 
supplies, labor, instruments, skills, techniques, and devices by which 
laboratory tests are produced and used. We stated that changes in 
technology could result in changes to, among other things, the 
resources required to perform the test (such as the type, volume, or 
number of supplies or reagents required), the laboratory personnel 
required to perform the test, and/or the frequency of testing, volume 
of testing, or site of service (for example, a shift in service site 
from a specialty laboratory to a physician's office). We believe this 
broad definition would capture all of the technological changes that 
could impact the resource inputs for various tests on the CLFS. As we 
explained in the CY 2014 PFS proposed rule (78 FR 43351 and 43352) and 
as discussed below, the technological changes for a specific test would 
be discussed in the proposed rule in which we are proposing to adjust 
the payment amount for that test, and we would seek public comment on 
our determination of the technological changes and the proposed payment 
adjustment. We respond to any comments on the proposed definition at 
the end of section III.E.2. of this final rule with comment period.
c. The Process
    In the CY 2014 PFS proposed rule (78 FR 43351), we proposed that, 
each year, we would review certain codes on the CLFS, as described in 
the next section, to determine whether we believe that payment for 
these codes should be adjusted due to technological changes. For those 
codes where we determine that payment adjustments should be made, 
beginning with the CY 2015 PFS proposed rule (which will be promulgated 
during 2014 and any finalized payment adjustments would affect payments 
beginning in CY 2015), we would identify the test code, discuss how it 
has been impacted by technological changes, and propose an associated 
adjustment to the payment amount for the test code as appropriate to 
reflect the impact of such technological changes.
    We believe such adjustments could be made both to increase fee 
schedule amounts (for example, in situations where new high cost 
technologies are employed), and to provide for reductions in existing 
amounts (for example in situations where technology reduces costs 
through increased efficiencies). We stated that we expect that most 
payment amounts would decrease due to the changes in technology that 
have occurred over the years since the payment amounts were established 
and the general downward trend of costs once a new technology has had 
an opportunity to diffuse. A key goal in establishing this review 
process is to ensure payment accuracy after technological changes; 
thus, payment amounts could increase or decrease as a result of these 
reviews.
    Under our proposed process, we would list codes that we reviewed 
for which there was insufficient information to support or establish an 
adjustment to the payment amount due to technological changes. We also 
would solicit comment on the technology used to perform any tests we 
reviewed for possible payment changes, and any relevant cost 
information. We stated that we expect that we would finalize any 
payment adjustments in the PFS final rule during 2014, which would 
affect payments beginning in CY 2015. We proposed that the CPI-U and 
multi-factor productivity adjustments would be applied after we 
established the new payment amount through our usual instruction 
process.
    We believe that this proposed process would best allow for the 
greatest amount of transparency in review and the most structured and 
consistent opportunity for the public to provide input into the 
process. We solicited comment on these proposals. We respond to 
comments on this proposed process at the end of section III.E.2. of 
this final rule with comment period.
d. Identification and Prioritization of Codes To Be Reviewed
    In the CY 2014 PFS proposed rule (78 FR 43351 through 43352), we 
proposed to review all codes currently on the CLFS. We proposed to 
start our review by examining the payment amounts for codes that have 
been on the CLFS the longest and then work our way forward, over 
multiple years, until we have reviewed all of the codes on the CLFS. We 
believe that the payment amounts for codes that have been on the CLFS 
the longest amount of time would be most affected by changes in 
technology because, in general, technology is most expensive earliest 
in its life cycle but decreases in cost as the technology matures and 
diffuses. If during the course of reviewing these individual codes we 
find that there are additional, newer codes that are clinically and/or 
technologically similar, we proposed to consider them for review at the 
same time as we review the older codes because we expect that we would 
have the same or similar justifications for making payment adjustments 
to those codes. We stated that we intend to review these codes as 
quickly as possible but we believe there would be a significant 
administrative burden associated with such a comprehensive review of 
the approximately 1,250 codes on the CLFS. We estimated that it would 
take at least 5 years to review all of the existing codes on the CLFS.
    Once we completed our review of the codes currently on the CLFS and 
made any adjustments necessary due to technological changes, we 
proposed to review codes added to the CLFS after 2015 that have been on 
the CLFS for at least 5 years. We also would review codes again that 
have not been reviewed in the previous 5 years, as time and resources 
allow. We believe that tests that are less than 5 years old are likely 
still in their technological infancy and enough time would not have 
passed to adequately assess any change in technology for those 
services. Similarly, for previously reviewed codes, we believe that 
technology likely would not

[[Page 74443]]

have changed dramatically in less than 5 years. We solicited public 
comment on how to prioritize these codes, which we expect to address in 
future rulemaking on this issue.
    After the initial review of the codes currently on the CLFS, we 
also proposed to allow the public to nominate additional codes for 
review, including those that had been previously reviewed for 
technological change. We proposed that the public may nominate only 
codes that have been on the CLFS for at least 5 years and that have not 
been reviewed in the previous 5 years. Further, we proposed that the 
nomination must include an explanation from the nominator of the 
technological change in the service and the way that change affects its 
delivery. We would then consider these nominations and, in the Federal 
Register the following year, either propose a payment change based on 
technological changes or explain why we think such a change is not 
warranted at that time.
    We proposed to codify the proposed definition of technological 
changes and the process at Sec.  414.511.
    We solicited public comment on these proposals. We also solicited 
comment on alternative approaches to achieving our goal of paying 
appropriately for laboratory tests by accounting for changes in 
technology. Finally, we solicited comment on general trends in 
technology change in the laboratory industry and the health care sector 
in general. The following is a summary of the comments we received 
regarding our proposals for the CLFS in the CY 2014 PFS proposed rule:
    Comment: Several commenters recommended that CMS reconsider its 
proposal to review and adjust CLFS payment amounts.
    Response: The existing payment amounts on the CLFS have not been 
changed since they were first implemented (excluding changes for 
inflation and other statutory adjustments). In some cases, payment 
amounts have not changed for over 30 years (excluding changes for 
inflation and other statutory adjustments). Therefore, we believe it is 
necessary and important to review and adjust payment amounts based on 
technological changes for tests on the CLFS.
    Comment: Several commenters were concerned about CMS developing a 
transparent process where the public, specifically laboratories, could 
participate in determining which test codes on the CLFS to revisit for 
payment purposes and provide input on technological changes with 
respect to a code being reviewed for adjustment. These commenters 
suggested that one solution might be some type of advisory committee 
made up of representatives from the laboratory industry and organized 
by CMS.
    Response: We appreciate the comment and agree that the process to 
adjust payment amounts for tests on the CLFS based on technological 
changes should be a transparent one. However, developing a formal 
advisory committee would be a time-consuming and resource intensive 
process. We believe that we can accomplish the same purpose by 
utilizing the annual rulemaking cycle, which includes a comment period 
where the public can provide information on how the technology for 
providing clinical diagnostic laboratory tests has changed over time 
and suggestions for data to support revised payment amounts on 
particular test codes.
    We agree that the public also should participate in determining 
which test codes should be reviewed. We proposed that, after the 
initial review of all of the test codes currently on the CLFS 
concludes, the public could nominate codes for review that have been on 
the CLFS for at least 5 years and that have not been reviewed in the 
previous 5 years. We also proposed that the nomination must include an 
explanation from the nominator of the technological change in the 
service and the way that change affects its delivery. However, based on 
these comments and upon further reflection, we are changing our 
proposal so that nominations are not limited to the time period after 
the initial review period or to certain types of test codes. Under our 
process, the public may nominate test codes that are on the CLFS for 
review during the public comment period to the proposed rule.
    As we proposed for situations where the public nominates test 
codes, the nominator must include an explanation of the technological 
change in the service and the way the change affects its delivery 
because this information will assist us in determining whether the test 
code should move forward through the payment adjustment process. In 
addition, we are changing our proposal to require the nominator to 
provide any relevant cost information, as well because this information 
will assist us in determining an appropriate payment should the test 
code move forward through the payment adjustment process. CMS will 
retain the final authority in determining which test codes move forward 
through the payment revision process because, for example, some test 
codes may be suggested which do not have enough supporting information 
to justify payment rate revisions based on changes in technology or 
more test codes may be suggested for payment rate revisions than can 
possibly be addressed within one rulemaking cycle.
    For those codes identified by the public for review where we 
determine that payment adjustments based on technological changes 
should be made, in the following year's proposed rule, we will identify 
the test code, discuss how it has been impacted by technological 
changes, and propose an associated adjustment to the payment amount for 
the test code as appropriate to reflect the impact of such 
technological changes. We also will list any test codes that the public 
suggested for review but for which we are not proposing to move forward 
through the payment revision process and explain why we are not 
proposing any changes at that time. Finalized payment revisions would 
take effect the following January 1. For example, test codes suggested 
during the comment period to the CY 2015 PFS proposed rule and agreed 
to by CMS for the payment revision process will be addressed through 
the CY 2016 PFS rulemaking process with finalized payment adjustments 
being effective January 1, 2016.
    Comment: Several commenters, along with MedPAC, stated that, if CMS 
does implement changes in payment amounts for test codes on the CLFS, 
CMS should consider data from private insurers, federal insurers, and 
CMS contractors; however, some commenters suggested that contractor 
data not be used.
    Response: It is our intention to consider data from all available 
sources in order to evaluate the impact of technological changes on 
payment amounts. We believe that this will promote fair and equitable 
fee schedules that reflect current and reasonable payments for 
laboratory tests. Therefore, we plan to review all data that can be 
obtained from any source.
    Comment: Some commenters, along with MedPAC, suggested that CMS 
focus on high dollar payments first, while other commenters recommended 
a focus on codes with rapid spending growth. Some commenters 
recommended that a different timeframe be implemented instead of the 
proposed one which limits the ability to review a test code until it 
has been on the CLFS for at least 5 years. These commenters also 
believe that it will take longer than 5 years to review all the test 
codes currently on the CLFS.
    Response: In the CY 2014 PFS proposed rule (78 FR 43351 through 
43352), we proposed to review all codes

[[Page 74444]]

currently on the CLFS and we proposed to start our review by examining 
the payment amounts for codes that have been on the CLFS the longest 
and then work our way forward over multiple years until we reviewed all 
of the codes on the CLFS. We also proposed to review newer codes that 
were clinically and/or technologically similar to the codes being 
reviewed. Once we had completed this initial review, which we estimated 
would take at least 5 years, we proposed to review codes added to the 
CLFS after 2015 that had been on the CLFS for at least 5 years and 
would review codes again that had not been reviewed in the previous 5 
years, as time and resources allowed. Further, as discussed above, we 
proposed that the public could nominate additional codes for review 
after this initial review period that had been on the CLFS for at least 
5 years and had not been reviewed in the previous 5 years. We sought 
comment on these proposals as well as alternative approaches to 
achieving our goal of paying appropriately for laboratory tests by 
accounting for changes in technology. Upon further reflection and based 
on these comments, we are modifying our approach to the identification 
and prioritization of codes for review.
    We agree with the commenters who suggest that our proposal limits 
the ability to review a test code until it has been on the CLFS for at 
least 5 years. While we believe that addressing test codes that have 
been on the CLFS at least 5 years provides ample time for the 
technology to mature and diffuse, we recognize that there are 
circumstances that would warrant examining test codes for the payment 
revision process prior to this time. For example, new technologies 
could be developed that make it more or less costly to perform a test 
within a timeframe that is less than 5 years. Consistent with 
commenters' suggestions, we also believe that we should expand the 
criteria for identifying and prioritizing test codes for review to 
include criteria, such as rapid spending growth, high dollar payment, 
and high volume, as well as the oldest test codes on the CLFS, among 
other considerations, rather than focusing on the oldest codes 
currently on the CLFS and codes that have been on the CLFS for at least 
5 years. We believe that test codes that are most ripe for review will 
be test codes where the current payment amounts do not account for 
changes in technology that have occurred since the test code was added 
to the CLFS and where the adjustments to the payment amounts will have 
a significant impact on payments made under the CLFS. We believe that 
expanding and maintaining flexibility with respect to the criteria will 
assist us in identifying and prioritizing test codes which are most 
ripe for revision. We will determine which test codes are most ripe for 
review based on an analysis of the data for test codes on the CLFS.
    Therefore, upon further reflection and based on these comments, we 
are finalizing a modified approach to identify and prioritize codes 
that will be reviewed every year. Each year, we will conduct a data 
analysis of codes on the CLFS to determine which codes should be 
proposed during the rulemaking cycle for a payment adjustment due to 
technological changes. This review will involve examining test codes in 
several different ways, such as examining those that have been on the 
CLFS the longest, those that are high volume test codes, those that 
have a high dollar payment, or those that have experienced rapid 
spending growth, among other considerations. As proposed, if we 
identify codes that are clinically and/or technologically similar to 
the ones identified through our data analysis process, we will consider 
them for review at the same time as we review the related codes. As 
discussed previously, we also will allow the public to nominate codes 
for review.
    Comment: Some commenters, along with MedPAC, asked that CMS not 
lower all payments and suggested that CMS must take into consideration 
the technological changes that may have added costs over the years.
    Response: We will not be automatically lowering all payment amounts 
on the CLFS. Rather, test codes and corresponding payment amounts will 
be reviewed on a case-by-case basis to determine how changes in 
technology have affected the cost of the test. As we stated in the CY 
2014 PFS proposed rule (78 FR 43351) and above in this final rule with 
comment period, we believe adjustments could be made to increase fee 
schedule amounts for certain tests (for example, in situations where 
new high cost technologies are employed), and to provide for reductions 
in existing amounts for other tests (for example in situations where 
technology reduces costs through increased efficiencies). A key goal in 
establishing this review process is to increase payment accuracy after 
technological changes; thus, payment amounts could increase or decrease 
as a result of these reviews.
    Comment: Some commenters recommended that CMS proceed through 
negotiated rulemaking, so that interested stakeholders will have a say 
in the process.
    Response: Similar to what we stated above regarding a formal 
advisory committee, we believe that using a negotiated rulemaking 
vehicle would be a time-consuming and resource intensive process. We 
believe that we can accomplish the same purpose by utilizing the 
rulemaking process, under which we would propose payment revisions for 
identified test codes and provide a comment period during which the 
public could comment prior to the publication of the final rule (which 
would finalize any payment changes). During the comment period, the 
public can nominate codes for review, provide information on how the 
technology for providing clinical diagnostic laboratory tests has 
changed over time and suggest data to support revised payment amounts 
for particular test codes. Therefore, our annual rulemaking process 
will provide the public with ample opportunity to comment and interact 
with us as the process proceeds. CMS will retain the final authority in 
determining which test codes move forward through the payment revision 
process.
    Comment: Several commenters suggested that the amount of a payment 
adjustment should be capped during the first year, and any remaining 
payment adjustment should be phased in over a number of years so that 
smaller laboratories or laboratories that offer only a small menu of 
tests would be minimally disrupted.
    Response: While we recognize that laboratories of different sizes 
or specialties may respond differently to market forces, our goal is to 
adjust payment amounts for test codes up for consideration in a given 
year as soon as possible to more accurately reflect the costs of these 
tests based on changes in technology. Laboratories that may be affected 
by the examination of a payment amount for any specific test code will 
have the opportunity to comment through the rulemaking process.
    Comment: Many commenters suggested that CMS recognize the 
difference between large and small laboratories so that small 
laboratories will not be phased out or forced out of business.
    Response: It is not our intention to eliminate or phase out any 
organization or business. Our goal is to adjust the payment amounts for 
tests on the CLFS to more accurately reflect the costs of tests based 
on technological changes, which should result in payment amounts under 
the CLFS being more commensurate with the current costs of providing 
these tests.

[[Page 74445]]

    Comment: Several commenters recommended that CMS send proposed 
adjustments out to interested parties prior to any final decisions for 
feedback.
    Response: We agree that we need to provide notice and an 
opportunity to comment on proposed adjustments to the fee schedules due 
to technological changes to interested parties prior to finalizing 
these adjustments and we believe that our proposed process, which we 
are finalizing, does this. Specifically, the rulemaking process would 
propose payment revisions for the identified test codes and provide a 
comment period during which the public could comment prior to the 
publication of the final rule (which would finalize any payment 
adjustments). Therefore, as proposed, we will utilize the rulemaking 
process with a comment period so that the public can provide 
information on how the technology of providing clinical diagnostic 
laboratory tests has changed over time and suggestions for data to 
support revised payment amounts on particular test codes.
    Comment: Some commenters suggested creating a pilot program, a 
demonstration project, or competitive bidding for changing the payment 
amounts for codes on the CLFS.
    Response: We believe, similar to our response above concerning 
either a negotiated rulemaking process or an advisory board, that 
developing anything formal such as a pilot program, a demonstration 
project, or competitive bidding would be a time-consuming and resource 
intensive process. We believe that we can accomplish the same purpose 
by utilizing the rulemaking process with a comment period where the 
public can nominate test codes for review, provide information on how 
the technology for delivering clinical diagnostic laboratory services 
has changed over time and suggest data to support revised payment 
amounts on particular test codes.
    After considering all of the comments received, we are finalizing 
our proposal without modification to define technological changes as 
changes to the tools, machines, supplies, labor, instruments, skills, 
techniques, and devices by which laboratory tests are produced and 
used. We are finalizing our proposed process, including the 
prioritization of codes for review, with modification as discussed 
above and noted below.
    Each year, we will conduct a data analysis of codes on the CLFS to 
determine which codes should be proposed during the rulemaking cycle 
for a payment adjustment due to technological changes. This review will 
involve examining test codes in several different ways, such as 
examining those that have been on the CLFS the longest, those that are 
high volume test codes, those that have a high dollar payment, or those 
that have experienced rapid spending growth, among other 
considerations. If we identify codes that are clinically and/or 
technologically similar to the ones identified through our data 
analysis process, we will consider them for review at the same time as 
we review the related codes.
    For those codes where we determine that payment adjustments should 
be made, beginning with the CY 2015 PFS proposed rule (which will be 
promulgated during 2014 and any finalized payment adjustments would 
affect payments beginning CY 2015), we will identify the test code, 
discuss how the test has been impacted by technological changes, and 
propose an associated adjustment to the payment amount for the test 
code as appropriate to reflect the impact of such technological 
changes. We will solicit comment on the technology used to perform any 
tests we reviewed for possible payment changes, and any relevant cost 
information.
    Under our process, the public may nominate test codes that are on 
the CLFS for review during the public comment period to the proposed 
rule. Test codes nominated for review by the public must include an 
explanation from the nominator of the technological change in the 
service and the way that change affects its delivery as well as any 
relevant cost information. CMS will retain the final authority in 
determining which test codes move forward through the payment revision 
process. For those codes identified by the public for review where we 
determine that payment adjustments based on technological changes 
should be made, in the following year's proposed rule, we will identify 
the test code, discuss how it has been impacted by technological 
changes, and propose an associated adjustment to the payment amount for 
the test code as appropriate to reflect the impact of such 
technological changes. We also will list any test codes that the public 
suggested for review but for which we are not proposing to move forward 
through the payment revision process and explain why we are not 
proposing any changes at that time. Finalized payment revisions would 
take effect the following January 1. For example, test codes suggested 
during the comment period to the CY 2015 PFS proposed rule and agreed 
to by CMS for the payment revision process will be addressed through 
the CY 2016 PFS rulemaking process with finalized payment adjustments 
being effective January 1, 2016. The CPI-U and multi-factor 
productivity adjustments will be applied after we establish the new 
payment amount through our usual instruction process.
    Finally, we are codifying our proposed definition of technological 
changes and the process at Sec.  414.511 with one technical correction. 
In Sec.  414.511(a), we are adding the words ``fee schedules,'' which 
we inadvertently omitted in the proposed rule.
3. Changes in the CY 2014 OPPS/ASC Final Rule With Comment Period
    In the CY 2014 PFS proposed rule (78 FR 43352), we notified readers 
that we were proposing to package payment for certain clinical 
diagnostic laboratory tests into the Ambulatory Payment Classification 
(APC) group payment for the significant procedures and services with 
which those laboratory tests are billed in the CY 2014 OPPS/ASC 
proposed rule. We discussed this proposal in the section on ``Proposed 
Changes to Packaged Items and Services'' in the CY 2014 OPPS/ASC 
proposed rule. For details on the final policy, please see the 
``Changes to Packaged Items and Services'' section of the CY 2014 OPPS/
ASC final rule with comment period.

F. Liability for Overpayments to or on Behalf of Individuals Including 
Payments to Providers or Other Persons

1. Background and Statutory Authority
    CMS waives recovery of overpayments in certain situations for 
claims based fee-for-service provider, supplier or beneficiary 
overpayments in accordance with section 1870 of the Act. Section 
1870(b) and (c) of the Act provide a waiver of recovery of provider, 
supplier or beneficiary overpayments under certain presumptions within 
a specified timeframe. Section 1870(b) and (c) of the Act allow the 
Secretary to reduce the specified time period to not less than 1 year 
if the Secretary finds that such a reduction is consistent with the 
objectives of the Medicare program. Section 638 of the American 
Taxpayer Relief Act of 2012 (ATRA) (Pub. L. 112-240, enacted January 2, 
2013) changed the timeframes associated with section 1870(b) and (c) of 
the Act.
    Section 1870(b) of the Act provides for the waiver of recovery of 
an overpayment to a provider of services (hereinafter, ``provider'') or 
other person whenever that provider or other person is ``without 
fault'' in incurring the overpayment. For purposes of section

[[Page 74446]]

1870 of the Act and this final rule with comment period, the term 
``other person'' includes practitioners, physicians, and other 
suppliers.
    Section 1870(b) of the Act also establishes circumstances under 
which a provider or other person is presumed for administrative 
purposes to be ``without fault'' for an overpayment. If an overpayment 
is determined after a specified period of time, a provider or other 
person is presumed to be ``without fault.'' This presumption is 
negated, however, if there is evidence to show that the provider or 
other person was responsible for causing the overpayment.
    Section 1870(c) of the Act provides for the waiver of recovery of 
an overpayment to an individual whenever the individual is ``without 
fault'' in incurring the overpayment, and recovery would either defeat 
the purpose of the Social Security or Medicare programs or would be 
``against equity and good conscience.''
    Section 1870(c) of the Act also establishes circumstances under 
which recovery of an overpayment for an individual is presumed to be 
``against equity and good conscience.'' After a specified period of 
time, recovery of certain overpayments from individuals who are 
``without fault'' is presumed ``against equity and good conscience.'' 
The overpayments addressed by this provision are payments for items or 
services for which payment may not be made because of the prohibitions 
found in section 1862(a)(1) or (a)(9) of the Act. Sections 1862(a)(1) 
and (a)(9) prohibit payment for, among other things, items and services 
that are not reasonable and necessary or that are for custodial care.
    Section 638 of the ATRA amended the timeframe specified in section 
1870(b) of the Act ``without fault'' presumption from 3 to 5 years so 
that the presumption of ``without fault'' only applies if the Medicare 
claims based fee-for-service overpayment determination for a provider 
or other person is made subsequent to the fifth year (instead of the 
third year) following the year in which the notice was sent to such 
individual that such amount had been paid. Likewise, section 638 of the 
ATRA amended the timeframe in section 1870(c) of the Act so that the 
presumption for ``against equity and good conscience'' for certain 
types of denials for an individual who is ``without fault'' only 
applies if the overpayment determination is made subsequent to the 
fifth year (instead of the third year) following the year in which 
notice of such payment was sent to such individual.
    These ATRA changes do not affect or change CMS' claims reopening 
regulation at Sec.  405.980. Specifically, we retain our authority to 
reopen claims for any reason within 1 year, for good cause within 4 
years, and at any time for fraud or similar fault.
2. Provisions of the Proposed Regulations
    We proposed to revise Sec.  405.350(c) and Sec.  405.355(b). These 
revisions would change the timing of the triggering event for the 
``without fault'' and ``against equity and good conscience'' 
presumptions. These revisions reflect the revisions to section 1870 of 
the Act as specified in section 638 of ATRA.
    Specifically, we proposed to change the timeframe at Sec.  
405.350(c) so that the rebuttable ``without fault'' presumption for the 
provider or other person would apply if the Medicare claims based fee-
for-service overpayment determination is made subsequent to the fifth 
year (instead of the third year) following the year in which the notice 
was sent to such individual that such amount had been paid.
    Likewise, we proposed to amend the timeframe at Sec.  405.355(b) 
for the presumption ``against equity and good conscience'' for certain 
types of denials for an individual who is ``without fault'' so that the 
presumption would apply if the overpayment determination is made 
subsequent to the fifth year (instead of the third year) following the 
year in which the notice of payment was sent to the individual.
    Additionally, in our review of the current regulation implementing 
section 1870(c) of the Act, we noted that Sec.  405.355(b) does not 
clearly reflect the statutory language, which limits the ``against 
equity and good conscience'' presumption to overpayments associated 
with denials under section 1862(a)(1) or (a)(9) of the Act. 
Accordingly, we proposed to update and clarify Sec.  405.355(b) so that 
it clearly reflects the statutory language by adding that the ``against 
equity and good conscience'' presumption would be applicable for an 
individual who is ``without fault'' only if the overpayment is related 
to items and services that are not payable under section 1862(a)(1) or 
(a)(9) of the Act. In addition, we proposed to delete the parenthetical 
at the end of Sec.  405.355(b) because the regulations referenced no 
longer exist; those sections of the regulations were reassigned. (See 
the October 11, 1989 Federal Register (54 FR 41733).) The modifications 
we proposed to Sec.  405.355(b) make the references in the 
parenthetical no longer necessary.
    The following is a summary of the comments we received regarding 
our proposals.
    Comment: Commenters were opposed to CMS changing the timeframe for 
the ``without fault'' presumptions in Sec.  405.350(c) and Sec.  
405.355(b) from 3 years to 5 years. These commenters expressed concern 
that changing the timeframe would require physicians to be subject to 
audits, recovery initiatives, and other undue burdens, including 
onerous record-keeping requirements, for an additional 2 years despite 
inadvertently or unknowingly receiving the overpayments.
    Response: We are finalizing the revisions to the regulations as 
proposed and changing the timeframe for the ``without fault'' 
presumptions from 3 years to 5 years as specified in section 638 of 
ATRA. Although the Secretary has the authority to reduce the 5-year 
timeframe to not less than 1 year consistent with the objectives of the 
program, we do not believe that the Secretary has any basis for such 
reduction at this time, particularly in light of the Congressional 
intent expressed by the ATRA provisions.
    In addition, although section 638 of ATRA changed the timeframe for 
the ``without fault'' presumptions, ATRA did not change CMS' claims 
reopening timeframes. (In accordance with Sec.  405.980, claims may be 
reopened within 1 year for any reason, up to 4 years for good cause, 
and at any time for fraud or similar fault.) We believe maintaining the 
existing claim reopening timeframes will alleviate the commenters 
concerns about an increased burden.
    We did not receive any comments on our proposals to edit Sec.  
405.355(b). Specifically, we proposed to (1) update and clarify Sec.  
405.355(b) so that it clearly reflects the statutory language and (2) 
delete the parenthetical at the end of Sec.  405.355(b) because the 
regulations referenced no longer exists. We are finalizing the updates 
to Sec.  405.355(b) as proposed.

G. Physician Compare Web Site

1. Background and Statutory Authority
    Section 10331(a)(1) of the Affordable Care Act, requires that, by 
no later than January 1, 2011, we develop a Physician Compare Internet 
Web site with information on physicians enrolled in the Medicare 
program under section 1866(j) of the Act, as well as information on 
other eligible professionals who participate in the Physician Quality 
Reporting System (PQRS) under section 1848 of the Act.

[[Page 74447]]

    CMS launched the first phase of Physician Compare on December 30, 
2010 (www.medicare.gov/physiciancompare). In the initial phase, we 
posted the names of eligible professionals that satisfactorily 
submitted quality data for the 2009 PQRS, as required by section 
1848(m)(5)(G) of the Act.
    Section 10331(a)(2) of the Affordable Care Act also requires that, 
no later than January 1, 2013, and for 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 that provides comparable information on quality and patient 
experience measures. We met this requirement in advance of January 1, 
2013, as outlined below, and intend to continue to address elements of 
the plan through rulemaking.
    To the extent that scientifically sound measures are developed and 
are available, we are required to include, to the extent practicable, 
the following types of measures for public reporting:
     Measures collected under the PQRS.
     An assessment of patient health outcomes and functional 
status of patients.
     An assessment of the continuity and coordination of care 
and care transitions, including episodes of care and risk-adjusted 
resource use.
     An assessment of efficiency.
     An assessment of patient experience and patient, 
caregiver, and family engagement.
     An assessment of the safety, effectiveness, and timeliness 
of care.
     Other information as determined appropriate by the 
Secretary.

As required under section 10331(b) of the Affordable Care Act, in 
developing and implementing the plan, we must include, to the extent 
practicable, the following:
     Processes to ensure that data made public are 
statistically valid, reliable, and accurate, including risk adjustment 
mechanisms used by the Secretary.
     Processes for physicians and eligible professionals whose 
information is being publicly reported to have a reasonable 
opportunity, as determined by the Secretary, to review their results 
before posting to Physician Compare. This would consist of a 30-day 
preview period for all measurement performance data that will allow 
physicians and other eligible professionals to view their data as it 
will appear on the Web site in advance of publication. Details of the 
preview process will be communicated on the Physician Compare 
Initiative page on CMS.gov in advance of the preview period.
     Processes to ensure the data published on Physician 
Compare provides a robust and accurate portrayal of a physician's 
performance.
     Data that reflects the care provided to all patients seen 
by physicians, under both the Medicare program and, to the extent 
applicable, other payers, to the extent such information would provide 
a more accurate portrayal of physician performance.
     Processes to ensure appropriate attribution of care when 
multiple physicians and other providers are involved in the care of the 
patient.
     Processes to ensure timely statistical performance 
feedback is provided to physicians concerning the data published on 
Physician Compare.
     Implementation of computer and data infrastructure and 
systems used to support valid, reliable and accurate reporting 
activities.
    Section 10331(d) of the Affordable Care Act requires us to consider 
input from multi-stakeholder groups in selecting quality measures for 
Physician Compare, which we are working to accomplish through a variety 
of means including rulemaking and various forms of stakeholder 
outreach. In developing the plan for making information on physician 
performance publicly available through Physician Compare, section 
10331(e) of the Affordable Care Act requires the Secretary, as the 
Secretary deems appropriate, to consider the plan to transition to 
value-based purchasing for physicians and other practitioners that was 
developed under section 131(d) of the Medicare Improvements for 
Patients and Providers Act of 2008 (MIPPA) (Pub. L. 110-275, enacted on 
July 15, 2008).
    Under section 10331(f) of the Affordable Care Act, we are required 
to submit a report to the Congress, by January 1, 2015, on Physician 
Compare development, and include information on the efforts and plans 
to collect and publish data on physician quality and efficiency and on 
patient experience of care in support of value-based purchasing and 
consumer choice. Initial work on this report is currently underway. 
Section 10331(g) of the Affordable Care Act provides that any time 
before that date, we may continue to expand the information made 
available on Physician Compare.
    We believe section 10331 of the Affordable Care Act supports our 
overarching goals of providing consumers with quality of care 
information to make informed decisions about their healthcare, while 
encouraging clinicians to improve on the quality of care they provide 
to their patients. In accordance with section 10331 of the Affordable 
Care Act, we intend to utilize Physician Compare to publicly report 
physician performance results.
2. Public Reporting of Physician Performance Data
    Since the initial launch of the Web site, we have continued to 
build on and improve Physician Compare. In 2013, we launched a full 
redesign of Physician Compare offering significant improvements 
including a complete overhaul of the underlying database and a new 
Intelligent Search feature, addressing two of our stakeholders' primary 
critiques of the site and considerably improving functionality and 
usability. The primary source of administrative information on 
Physician Compare is the Provider Enrollment, Chain, and Ownership 
System (PECOS); as the sole source of verified Medicare professional 
information, PECOS remains the primary information source. However, 
with the redesign, we incorporated the use of Medicare claims 
information to verify the information in PECOS to ensure only the most 
current and accurate information is included on the site. The following 
is a summary of general comments we received about the Web site and its 
redesign.
    Comment: We received positive comments regarding our use of 
Medicare claims to verify information in PECOS; however, some 
commenters did express concerns with lingering data issues regarding 
basic demographic information, specialty classification, and hospital 
affiliation. Some commenters urged CMS to address these concerns prior 
to posting quality measure performance information on the site. Other 
commenters requested we implement a streamlined process by which 
professionals can correct their information in a timely manner.
    Response: We appreciate the commenters' feedback regarding concerns 
over the accuracy of the information currently available on Physician 
Compare. CMS is committed to including accurate and up-to-date 
information on Physician Compare and continues to work to make 
improvements to the information presented.
    The underlying database on Physician Compare is generated from the 
PECOS as well as Fee-For-Service (FFS) claims and it is therefore 
critical that physicians, other healthcare professionals, and group 
practices ensure that their information is up-to-date and as complete 
as possible in the national PECOS database. Currently, the

[[Page 74448]]

most immediate way to address inaccurate PECOS data on Physician 
Compare is by updating information via Internet-based PECOS at https://
pecos.cms.hhs.gov/pecos/login.do. Please note that the specialties as 
reported on Physician Compare are those specialties reported to 
Medicare when a physician or other healthcare professional enrolls in 
Medicare and are limited to the specialties noted on the 855i 
Enrollment Form. And, all addresses listed on Physician Compare must be 
entered in and verified in PECOS. To update information not found in 
PECOS, such as hospital affiliation and foreign language, professionals 
and group practices should contact the Physician Compare team directly 
at physiciancompare@westat.com. Understanding the value of a more real-
time option for updating information on Physician Compare and the 
ability to update all information in one place, we are evaluating the 
feasibility of such a mechanism for potential future development.
    The following is a summary of the comments we received regarding 
the new Intelligent Search functionality:
    Comment: We received comments concerning primary care specialties 
being listed with other specialties in the search results. One 
commenter noted that when they conducted a search for ``neurosurgery'' 
they were directed to select names of physicians from family practice, 
neurology and then neurosurgery--in that order. One commenter who 
searched for ``general surgeons'' was surprised that thirteen primary 
care physicians were listed as related to general surgery. Another 
commenter requested that CMS remove the ``Search all Family Practice, 
General Practice, Geriatric Medicine, Internal Medicine, and Primary 
Healthcare Professionals'' option as a result from searches for a 
specific type of specialist. They also requested that for searches 
where primary care may be applicable but not most appropriate, the all 
primary care option should be listed last.
    Response: The purpose of Physician Compare is to connect users with 
a comprehensive list of physicians and other healthcare professionals 
that are capable of assisting them with their health-related concerns. 
Since primary care is generally the principal point of consultation for 
patients within the Medicare system, a link to search for all primary 
care specialties is always offered to patients as an option in the drop 
down list and/or results list. Based on feedback from both stakeholders 
and consumers received since the functionality went live, we are 
reevaluating how this information is presented on the site so it does 
not appear, for instance, that when you search for ``neurosurgery'' you 
are seeing primary care physicians because they are related to 
neurosurgery.
    Comment: Some commenters felt that the search results were too 
broad and not actionable for patients. Commenters requested that CMS 
work with stakeholders such as state and national specialty societies 
to improve the accuracy of Physician Compare in associating specialists 
with different body parts and diseases.
    Response: We appreciate the commenters' feedback on the Intelligent 
Search functionality. The development of this search function is an 
ongoing process and it will continue to evolve through quarterly 
updates. CMS values the input of stakeholders concerning the 
Intelligent Search. The Physician Compare team worked closely with 
specialty societies in the development of the initial Intelligent 
Search function and continues to seek input and conduct outreach to 
ensure that the terms and phrases powering the search function are as 
comprehensive and accurate as possible.
    Comment: One commenter noted that the search function for group 
practices does not work, citing that if one enters a zip code that is 
close to the group practice's primary address, the group practice does 
not appear.
    Response: Search results are displayed on the Web site based on 
proximity to the center of the location searched, therefore search 
results may vary depending on if a zip code or a city/state search is 
conducted. In addition, the search results are generated using an auto-
expand feature. The distance will vary depending on the location and 
type of search. All searches start at one mile and if less than 10 
individuals or groups are found within that distance, the search radius 
will automatically expand incrementally until it reaches a sufficient 
amount of results. If sufficient results are returned, however, the 
search will not expand. This may lead to a group practice nearby not 
being displayed because there are a sufficient number of practices 
closer to the center of the search radius to satisfy the search.
    Currently, users can view information about approved Medicare 
professionals such as name, primary and secondary specialties, practice 
locations, group affiliations, hospital affiliations that link to the 
hospital's profile on Hospital Compare as available, Medicare 
Assignment status, education, languages spoken, and American Board of 
Medical Specialties (ABMS) board certification information. In 
addition, for group practices, users can also view group practice 
names, specialties, practice locations, Medicare Assignment status, and 
affiliated professionals.
    Comment: We received two comments regarding the publication of the 
ABMS board certification information. One commenter suggested that we 
add additional information on board certification such as contextual 
information regarding the certification process, as well as identifying 
the certifying Board and not just the specialty. Another commenter 
urged CMS to include other board's certifications, in addition to ABMS.
    Response: We appreciate the commenters' feedback. We will evaluate 
the feasibility of including a link to the ABMS Web site so that users 
can get additional information about certification, as well as 
certifying board information. And, we will evaluate the feasibility of 
potentially including data on Physician Compare from other board 
certification sources in a future Web site release, if the information 
is available and it is technically feasible.
    As required by 1848(m)(5)(G) of the Act, we are required to post on 
a CMS Web site the names of eligible professionals who satisfactorily 
report under the PQRS, as well as those eligible professionals who are 
successful electronic prescribers under the Medicare Electronic 
Prescribing (eRx) Incentive Program. Physician Compare contains a link 
to the list of those names. In addition to the list of names, there is 
a section on each individual's profile page listing the quality 
programs under which the specific individual satisfactorily reported or 
if the individual was a successful electronic prescriber. The program 
name is listed and a green check mark clearly indicates which programs 
the individual satisfactorily or successfully participated in. These 
data will be updated annually with the most recent data available.
    With the Physician Compare redesign, we have also added a quality 
programs section to each group practice profile page in order to 
indicate which group practices are satisfactorily reporting in Group 
Practice Reporting Option (GPRO) under the PQRS or are successful 
electronic prescribers under the eRx Incentive program. We have also 
included a notation and check mark for individuals that successfully 
participate in the Medicare EHR Incentive Program, as authorized by 
section 1848(o)(3)(D) of the Act. These data will be updated with the 
most recent data available.

[[Page 74449]]

    Comment: One commenter urged CMS to reconsider its decision to 
publicly report on meaningful use data due to the ongoing issues 
related to the EHR program--including unresolved challenges related to 
interoperability of certified systems, concerns about the relevancy of 
meaningful use objectives to certain providers, and the large 
investment associated with EHR adoption that continues to make it cost 
prohibitive for small practices despite incentives.
    Response: We appreciate the commenter's feedback on including EHR 
participation information. However, as this proposal was previously 
finalized, these data are currently available on Physician Compare. We 
believe the benefits of including these data, the growth of the 
program, and consumer interest in EHR adoption warrant the inclusion of 
these data on Physician Compare.
    As we finalized in the 2013 PFS final rule with comment period (77 
FR 69166), we will include the names of those eligible professionals 
who report the PQRS Cardiovascular Prevention measures group in support 
of the Million Hearts Initiative by including a check mark in the 
quality programs section of the profile page. Finally, we will also 
indicate in this manner those individuals who have earned the PQRS 
Maintenance of Certification Incentive starting with data reported for 
CY 2013. We will update this information annually moving forward.
    Comment: One commenter requested that American Board of Optometry 
(ABO) certified optometrists who earn the PQRS MOC bonus be recognized 
on the Physician Compare Web site.
    Response: We appreciate the commenter's feedback on including an 
indication on Physician Compare for participation in the additional 
PQRS Maintenance of Certification incentive for Optometrists. As all 
successful participants in the additional PQRS Maintenance of 
Certification incentive will have an indication of their participation 
on Physician Compare, this information will be included on the site 
when the information is published.
    We are now instituting our plan for a phased approach to public 
reporting of performance information on Physician Compare. The first 
phase of our plan was finalized with the 2012 PFS final rule with 
comment period (77 FR 69166), where we established that PQRS GPRO 
measures collected through the GPRO web interface during 2012 would be 
publicly reported on Physician Compare. These measures will be publicly 
reported on Physician Compare in early CY 2014. We expanded our plan 
with the 2013 PFS final rule with comment period (77 FR 69166) where we 
established that the specific GPRO web interface measures that would be 
posted on Physician Compare include the Diabetes Mellitus (DM) and 
Coronary Artery Disease (CAD) PQRS GPRO measures, and that we would 
develop and report composite measures for these measure groups in 
future years, if technically feasible. Data reported in 2013 under the 
GPRO DM and GPRO CAD measures and composites collected via the GPRO web 
interface that meet the minimum sample size of 20 patients, and that 
prove to be statistically valid and reliable, will be publicly reported 
on Physician Compare in late CY 2014, if technically feasible. As we 
previously established, if the minimum threshold is not met for a 
particular measure, or the measure is otherwise deemed not to be 
suitable for public reporting, the group's performance rate on that 
measure will not be publicly reported.
    Comment: Several commenters requested CMS ensure the data reported 
on Physician Compare be accurate and reliable, citing that inaccurate 
data can damage physicians' reputations, result in false assumptions 
about care, and potentially lead to harmful consequences for patients. 
Commenters also strongly urged CMS to risk adjust the measures. Some 
commenters noted that there is an overreliance on process measures that 
are not linked to outcomes and that provide minimal value to consumers 
in comparing providers, or for assuring that physicians are providing 
high quality care.
    Response: We appreciate the commenters' feedback, and understand 
their concerns. As required under section 10331(b) of the Affordable 
Care Act, in developing and implementing the plan to include 
performance data on Physician Compare, we must include, to the extent 
practicable, processes to ensure that the posted data are statistically 
valid, reliable, and accurate, including risk adjustment mechanisms 
used by the Secretary, as well as processes to ensure appropriate 
attribution of care when multiple providers are involved in the care of 
the patient. We understand that this information is complex, and are 
committed to providing data on Physician Compare that are useful to 
beneficiaries in assisting them in making informed healthcare 
decisions, while being accurate, valid, reliable, and complete. We will 
closely evaluate all quality measures under consideration for public 
reporting on the Web site to ensure they are presented in a way that is 
helpful to beneficiaries and, through consumer testing and stakeholder 
outreach, work to present this information in an accurate and user-
friendly way. We also appreciate the commenters' feedback and 
understand the interest in focusing more on patient-centered outcome 
measures versus process measures. CMS will take this feedback into 
consideration for future rulemaking.
    In the Medicare Shared Savings Program final rule (76 FR 67948), we 
noted that because Accountable Care Organization (ACO) providers/
suppliers that are eligible professionals are considered to be a group 
practice for purposes of qualifying for a PQRS incentive under the 
Shared Savings Program, we would publicly report ACO performance on 
quality measures on Physician Compare in the same way as we report 
performance on quality measures for PQRS GPRO group practices. Public 
reporting of performance on these measures will be presented at the ACO 
level only.
    As part of our public reporting plan, in the CY 2013 PFS final rule 
with comment period (77 FR 69167), we also finalized our decision to 
publicly report Clinician and Group Consumer Assessment of Healthcare 
Providers and Systems (CG-CAHPS) data for group practices of 100 or 
more eligible professionals reporting data in 2013 under the GPRO, and 
for ACOs participating in the Shared Savings Program. We anticipate 
posting these data on Physician Compare as early as 2014.
3. Future Development of Physician Compare
    We will continue to phase in an expansion of Physician Compare over 
the next several years by incorporating quality measures from a variety 
of sources, as technically feasible. We previously finalized a decision 
to publicly report on Physician Compare the performance rates on a 
limited set of web interface quality measures that group practices 
submit under the 2012 and 2013 PQRS GPRO web interface (76 FR 73417 and 
77 FR 69166).
    For 2014, we proposed to expand the quality measures posted on 
Physician Compare by publicly reporting in CY 2015 performance on all 
measures collected through the GPRO web interface for groups of all 
sizes participating in 2014 under the PQRS GPRO and for ACOs 
participating in the Medicare Shared Savings Program (78 FR 43354). 
These data would include measure performance rates for measures 
reported that met the minimum sample size of 20 patients, and that 
prove to be statistically valid and reliable. We noted

[[Page 74450]]

we will provide a 30-day preview period prior to publication of quality 
data on Physician Compare so that group practices and ACOs can view 
their data as it will appear on Physician Compare before it is publicly 
reported, and that we will detail the process for the 30-day preview 
and provide a detailed timeline and instructions for preview in advance 
of the start of the preview period.
    Comment: We received both positive and negative comments regarding 
our proposal to expand public reporting to all performance measures 
collected through the GPRO web interface. Commenters in support of the 
expansion highlight that it will be easier to identify a core set of 
measures on which to gauge a group practice's overall rate of 
performance. Another commenter noted that the expansion will allow 
Physician Compare to report a wider selection of useful, actionable 
information to assist consumers in making informed choices about where 
they receive their care. Commenters opposed to the expansion felt that 
Physician Compare should revert to its original proposal to initially 
only report on a limited set of web interface measures noting that the 
public reporting of performance data should occur gradually and 
carefully to ensure the data are accurate and presented in a format 
that is easy to understand, meaningful, and actionable for consumers. 
Another commenter noted that the public reporting of physician 
performance data is a new undertaking for both CMS and the public and 
could have serious implications if it is not executed appropriately.
    Response: We appreciate the commenters' feedback. We proposed an 
expanded set of web interface measures in 2014 as these measures 
provide an opportunity for more group practices to be able to have 
relevant data publically reported on Physician Compare and because this 
will provide consumers with more information to help them make informed 
healthcare decisions. Regarding concerns about gradually and carefully 
including additional quality of care information, 2014 will be the 
third year of data publicly reported on Physician Compare. The previous 
2 years of public reporting will provide experience using a limited set 
of measures, allowing CMS to ensure an appropriate process and accurate 
data. Moving to a greater number of measures in 2014 is part of a 
gradual and phased approach. Also, CMS has been working to ensure the 
data are presented in a way that is both accurate and most useful to 
consumers through consumer testing and stakeholder outreach, starting 
with the 2012 data. Therefore, sufficient work in this area is being 
conducted to ensure the data are properly reported. We are thus 
finalizing this proposal to expand the quality measures posted on 
Physician Compare by publicly reporting in CY 2015 performance on all 
measures collected through the GPRO web interface for groups of all 
sizes participating in 2014 under the PQRS GPRO. For ACOs participating 
in the Medicare Shared Savings Program, performance on the ACO GPRO 
measures will be reported publicly on Physician Compare in the same 
manner as group practices that report under the PQRS GPRO (76 FR 
67948).
    Comment: We received several comments in support of the 30-day 
preview period prior to publication of quality data. Many commenters 
urged CMS to allow physicians, group practices, and ACOs the 
opportunity to correct and/or appeal any errors found in the 
performance information before it is posted on the site. Other 
commenters felt that a 30-day preview period was insufficient and 
requested that CMS extend the period up to 45, 60, or 90 days. One 
commenter recommends that CMS allow a preview period prior to any 
information being added to the Web site.
    Response: We appreciate the commenters' feedback in support of the 
30-day preview period for quality measures on Physician Compare. This 
30-day period is in line with the preview period provided for other 
public reporting programs such as Hospital Compare. We will provide a 
30-day preview period for confidential measure preview. If measure data 
have been collected and the measure has been deemed suitable for pubic 
reporting, the data will be published on Physician Compare. As such, 
there will not be a formal appeals process. However, if an error is 
found in the measure display during the preview period, there will be 
options to contact the Physician Compare team by both phone and email. 
Errors will be corrected prior to publication.
    We also appreciate the commenters' feedback regarding extending the 
30-day preview period for quality measures on Physician Compare. 
However, due to our commitment to make this information available to 
the public in as timely a manner as possible and the Web site 
development timeline, a longer preview period is not possible at this 
time. Groups and individuals that will have measure data posted will be 
informed in advance of the preview period and the logistics necessary 
to access the confidential preview, review their data, and contact the 
Physician Compare team if needed. We believe this 30-day period 
provides ample time to accomplish these goals as evidenced by other 
programs, such as Hospital Compare.
    At this time it is not feasible to incorporate a 30-day preview 
period for non-measure data, such as address, phone number, specialty, 
etc., included on the Physician Compare Web site as this would produce 
an unacceptable lag and limit our ability to provide up-to-date 
information to consumers that can assist them in making informed 
healthcare decisions.
    We also received comments regarding the patient sample size of 20 
patients. A patient sample size of 20 patients was previously finalized 
(77 FR 69166) for publication of the Diabetes and CAD measures. As we 
are now expanding the PQRS GPRO measures available for public reporting 
on Physician Compare, this sample size would also apply to this 
expanded set of measures.
    Comment: Two commenters expressed their concerns regarding the 
minimum patient sample size, citing that using such a small sample size 
will result in inaccurate and misleading information regarding the 
actual activities of the physician practice. One commenter recommended 
that we raise the sample size to 30. Another noted it was important to 
include sample size information on Physician Compare to help users 
better understand the measures being reported.
    Response: We appreciate the commenters' feedback regarding the 
patient sample size and including this information on Physician 
Compare. We are committed to reporting quality of care data that is 
statistically valid, reliable, and accurate, and will only post data 
that meet this standard of reliability regardless of threshold, and 
regardless of measure type. Should we find a measure meeting the 
minimum threshold to be invalid or unreliable for any reason, the 
measure will not be reported.
    We believe this threshold of 20 patients is sufficient. It is a 
large enough sample to protect patient privacy for reporting on the 
site, and it is the reliability threshold previously finalized for both 
the Value-Based Modifier (VBM) and the PQRS criteria for reporting 
measure groups (77 FR 69166). As we work to align quality initiatives 
and minimize reporting burden on physicians and other healthcare 
professionals, we are finalizing a patient sample size of 20 patients 
for the expanded set of PQRS GPRO measures available for public 
reporting on Physician Compare.

[[Page 74451]]

    For 2013, we expanded PQRS GPRO to include a registry reporting 
option (77 FR 69166). For 2014, we are expanding the PQRS GPRO further 
to include an option to report data via EHR. Consistent with the 
requirement under section 10331(a)(2)(A) of the Affordable Care Act to 
make publicly available information on quality measures submitted by 
physicians and other eligible professionals under PQRS, we proposed to 
publicly report on Physician Compare performance on certain measures 
that groups report via registries and EHRs in 2014 for the PQRS GPRO 
(78 FR 43354). Specifically, we proposed to report, no earlier than 
2015, performance on the GPRO registry and EHR measures identified 
below that can also be reported via the GPRO web interface in 2014. By 
proposing to include on Physician Compare performance on these measures 
reported by participants under the GPRO through registries and EHRs, as 
well as the GPRO web interface, we stated we would continue to provide 
beneficiaries with a consistent set of measures over time. For registry 
reporting, publicly reported measures would include:
     Diabetes: Hemoglobin A1c Poor Control.
     Heart Failure (HF): Beta-Blocker Therapy for Left 
Ventricular Systolic Dysfunction (LVSD).
     Medication Reconciliation.
     Preventive Care and Screening: Influenza Immunization.
     Pneumococcal Vaccination Status for Older Adults.
     Preventive Care and Screening: Breast Cancer Screening.
     Colorectal Cancer Screening.
     Coronary Artery Disease (CAD): Angiotensin-converting 
Enzyme (ACE) Inhibitor or Angiotensin Receptor Blocker (ARB) Therapy--
Diabetes or Left Ventricular Systolic Dysfunction (LVEF  Adult Weight Screening and Follow-Up.
     Preventive Care and Screening: Screening for Clinical 
Depression.
     Coronary Artery Disease (CAD): Lipid Control.
     Ischemic Vascular Disease (IVD): Use of Aspirin or Another 
Antithrombotic.
     Preventive Care and Screening: Tobacco Use: Screening and 
Cessation Intervention.
     Hypertension (HTN): Controlling High Blood Pressure.
     Ischemic Vascular Disease (IVD): Complete Lipid Panel and 
LDL Control.
     Preventive Care and Screening: Screening for High Blood 
Pressure and Follow-Up Documented.
    For EHR reporting, publicly reported measures would include:
     Diabetes: Hemoglobin A1c Poor Control.
     Heart Failure (HF): Beta-Blocker Therapy for Left 
Ventricular Systolic Dysfunction (LVSD).
     Preventive Care and Screening: Influenza Immunization.
     Pneumococcal Vaccination Status for Older Adults.
     Preventive Care and Screening: Breast Cancer Screening.
     Colorectal Cancer Screening.
     Adult Weight Screening and Follow-Up.
     Coronary Artery Disease (CAD): Lipid Control.
     Ischemic Vascular Disease (IVD): Use of Aspirin or Another 
Antithrombotic.
     Preventive Care and Screening: Tobacco Use: Screening and 
Cessation Intervention.
     Hypertension (HTN): Controlling High Blood Pressure.
     Ischemic Vascular Disease (IVD): Complete Lipid Panel and 
LDL Control.
     Preventive Care and Screening: Screening for High Blood 
Pressure and Follow-Up Documented.
    Comment: Commenters were opposed to the expansion of public 
reporting to include measures reported through the registry and EHR 
reporting options. Some commenters expressed concern that measures 
reported through different reporting mechanisms may not be comparable. 
One commenter believes CMS should first validate that the measure 
specifications are interpreted consistently across groups and across 
reporting mechanisms. One commenter suggests that it is too soon to 
have reporting entities publicly post performance data from electronic 
clinical quality measures (eCQMs) citing that additional work should be 
done to verify the validity and accuracy of the measure results. 
Another commenter recommends that CMS include a notation specifying the 
selected reporting mechanism with a simplified descriptor and 
accompanying measure set. Such a notation would ensure that patients 
are made aware of the differences in measure sets across the different 
reporting mechanisms and it will allow them to know which providers 
reported on the same measures when comparing performance.
    Response: We appreciate the commenters' feedback regarding 
including measures collected via both registries and EHRs. Though we 
understand concerns regarding including measures collected via 
different mechanisms, analyses are being conducted to ensure that these 
measures are consistently understood and the consistencies and 
inconsistencies across reporting mechanism are understood and 
appropriately addressed for the purposes of publicly reporting these 
measures. Analyses are also being conducted to ensure that the eCQMs 
produce valid and accurate results. Only those measures finalized to be 
published on Physician Compare that are proven to be comparable and 
most suitable for public reporting will be included on Physician 
Compare. Because we believe the appropriate steps are being taken to 
ensure that the proposed measures collected via registries and EHRs are 
comparable to the web interface measures, such as detailed analyses of 
the measure specifications across reporting mechanisms, and also valid 
and reliable, and for the various reasons we discussed previously, we 
are finalizing the proposal to publish in CY 2015 the measures 
identified above that are collected via registries and EHRs during 
2014, if technically feasible.
    CMS will also indicate the mechanism by which these data were 
collected, as we understand the concerns raised regarding potential 
differences in measures collected via different reporting mechanism. 
Analyses are ongoing to be sure these differences are fully understood.
    Consistent with the requirement under section 10331(a)(2) of the 
Affordable Care Act to make comparable information on patient 
experience of care measures publicly available, we previously finalized 
a plan to post performance on patient experience survey-based measures 
from the Clinician and Group Consumer Assessment of Healthcare 
Providers and Systems (CG-CAHPS) (77 FR 44804) including the following 
patient experience of care measures for group practices participating 
in the PQRS GPRO (77 FR 44964):
     CAHPS: Getting Timely Care, Appointments, and Information.
     CAHPS: How Well Your Doctors Communicate.
     CAHPS: Patients' Rating of Doctor.
     CAHPS: Access to Specialists.
     CAHPS: Health Promotion and Education
    These measures capture patients' experiences with clinicians and 
their staff, and patients' perception of care. We finalized a decision 
to publicly report performance on these measures on Physician Compare 
in CY 2014 for data collected for 2013 for group practices with 100 or 
more eligible professionals participating in the PQRS GPRO in 2013 and 
reporting data through the GPRO web interface (77 FR 69166). At least 
for data reported for

[[Page 74452]]

2013, we noted that we would administer and collect patient experience 
survey data on a sample of the group practices' beneficiaries.
    Consistent with the PQRS policy of publicly reporting patient 
experience measures on Physician Compare starting with data collected 
for 2013, for ACOs participating in the Shared Savings Program, we will 
publicly report patient experience data in addition to the measure data 
reported through the GPRO web interface. Specifically, the patient 
experience measures that would be reported for ACOs include the CG-
CAHPS measures in the Patient/Caregiver Experience domain finalized in 
the Shared Savings Program final rule (76 FR 67889):
     CAHPS: Getting Timely Care, Appointments, and Information.
     CAHPS: How Well Your Doctors Communicate.
     CAHPS: Patients' Rating of Doctor.
     CAHPS: Access to Specialists.
     CAHPS: Health Promotion and Education.
     CAHPS: Shared Decision Making
     CAHPS: Health Status/Functional Status
    For data reported for 2014, we proposed to continue public 
reporting CG-CAHPS data for PQRS GPRO group practices of 100 or more 
eligible professionals participating in the GPRO via the web interface 
and for Shared Savings Program ACOs reporting through the GPRO web 
interface or other CMS-approved tool or interface (78 FR 43355). 
Consistent with what we finalized for 2013 under the PQRS GPRO, we 
stated we would administer and fund the collection of data for these 
groups. Because we will be administering and collecting the data for 
these surveys, we did not anticipate public reporting to impose any 
notable burden on these groups.
    We believe these patient surveys are important tools for assessing 
beneficiary experience of care and outcomes, and under our authority 
under section 1848(m)(3)(C) of the Act to select the measures for which 
a group practice must report under the PQRS, we stated that we sought 
to encourage groups of 25 or more eligible professionals to report CG-
CAHPS by proposing to make these measures available for reporting under 
the PQRS and for the Value Based Payment Modifier. We proposed to 
publicly report 2014 CG-CAHPS data for any group practice (regardless 
of size) that voluntarily chooses to report CG-CAHPS; however, we 
stated that CMS would not fund the surveys for these groups of 2 to 99 
eligible professionals. We proposed to publicly report comparable CG-
CAHPS data collected by groups of any size collected via a certified 
CAHPS vendor in CY 2015 (78 FR 43355).
    We are dedicated to publicly reporting accurate, valid, and 
reliable data on Physician Compare and are aware that each group 
practice is unique in size and scope. We have closely evaluated the 
available data collection mechanisms, and are confident that CG-CAHPS 
is a well-tested collection mechanism with strong support from the 
healthcare community, and that it provides the best opportunity to 
collect useful and accurate data for the largest number of group 
practices. We proposed to use only those survey domains that are 
applicable to group practices or ACOs respectively, and believed that 
these domains have been well tested, and would therefore provide the 
best data for the largest number of groups.
    We received several comments related to our proposals to publicly 
report CG-CAHPS measures on Physician Compare. The following is a 
summary of the comments we received:
    Comment: Several commenters support our proposal to continue 
posting data for groups of 100 or more eligible professionals. 
Commenters were also generally supportive of the proposal to publish 
patient experience data for smaller groups; however, some commenters 
requested clarification on the size of group practice that CMS intends 
to publicly report, noting that there is conflicting language within 
the proposed rule regarding groups of 25 or more versus groups 
``regardless of size.'' Several of the commenters expressed their 
disappointment that CMS will not fund the data collection for these 
smaller groups, noting that it is extremely costly and burdensome on 
smaller practices to implement CAHPS.
    Response: We appreciate the commenters' feedback regarding our 
proposals to continue publicly reporting CG-CAHPS measures for groups 
of 100 or more eligible professionals with CY 2014 data and to begin 
publicly reporting CG-CAHPS measures for groups of 25 to 99 that 
voluntarily submit these data to meet PQRS reporting requirements.
    We are dedicated to accurate, valid, and reliable public reporting 
on Physician Compare and are aware that each group practice is unique 
and that opinions vary across patients. However, as noted, we are 
confident that CG-CAHPS is a well-tested collection mechanism that 
produces valid and comparable measures of physician quality.
    Per the requirement under section 10331(a)(2) of the Affordable 
Care Act to make comparable information on patient experience of care 
measures publicly available, as noted above, and due to the fact that 
these data are greatly valued by consumers and will assist consumers 
with making informed healthcare decisions, we are finalizing the 
proposal to continue to publicly report CG-CAHPS measures for groups of 
100 or more eligible professionals who participate in PQRS GPRO, 
regardless of GPRO submission method, and for Shared Savings Program 
ACOs reporting through the GPRO web interface or other CMS-approved 
tool or interface. As in 2013, CMS will support this survey data 
collection for group practices who participate in PQRS GPRO via the Web 
interface. As patient experience data are required under section 
10331(a)(2) of the Affordable Care Act, we are working to ensure that a 
greater set of measures are available for public reporting to help more 
group practices find measures that are relevant to them and to ease 
burden of reporting as some groups may already be collecting CG-CAHPS 
data under additional domains. For these reasons, we are finalizing 
that, if technically feasible, for these PQRS GPROs of 100 or more 
eligible professionals, we will collect data for additional summary 
survey measures. Specifically, we will collect data for the 12 summary 
survey measures also being finalized for groups of 25 to 99 for PQRS 
reporting requirements, namely:
     Getting timely care, appointments, and information;
     How well providers Communicate;
     Patient's Rating of Provider;
     Access to Specialists;
     Health Promotion & Education;
     Shared Decision Making;
     Health Status/Functional Status;
     Courteous and Helpful Office Staff;
     Care Coordination;
     Between Visit Communication;
     Helping Your to Take Medication as Directed; and
     Stewardship of Patient Resources.
    For the same reasons noted above, for groups of 25 to 99 eligible 
professionals, we are finalizing the proposal to publicly report on 
Physician Compare the CG-CAHPS measures collected on the 12 summary 
survey measures noted above when collected via a certified CAHPS 
vendor, as technically feasible. We will evaluate the data collected 
and will only publish those measures deemed suitable for public 
reporting and that prove to be comparable. As with all measure data 
reported on Physician Compare, there will be a 30-day preview period 
where groups can preview their data prior to its publication on the 
site.

[[Page 74453]]

    We appreciate the commenter's feedback and the fact that collecting 
CG-CAHPS data is an expense for smaller group practices. However, if 
smaller group practices are already collecting these data for internal 
use, we want to be sure that they are able to have the opportunity to 
have them published on the site. Therefore, we are finalizing this 
proposal. CMS will not fund collection of these data for groups of 25 
to 99.
    Comment: Several commenters opposed the publication of CAHPS 
measures citing that the measures are not relevant to their particular 
specialty. They request that CMS allow physicians the flexibility to 
select the survey instruments and patient satisfaction measures most 
appropriate for their practices. Many of the commenters recommended CMS 
use Surgical CAHPS as an optional patient experience of care measure.
    Response: We appreciate the commenters' feedback regarding the 
request for CMS to be flexible in the CAHPS surveys publicly reported 
to ensure the measures are as relevant as possible to all specialties. 
We understand that CG-CAHPS is not the most applicable CAHPS survey for 
all specialties and service settings represented by groups on Physician 
Compare. Therefore, we will evaluate the feasibility of including 
additional CAHPS surveys, such as S-CAHPS, on the site in the future. 
However, at this time CG-CAHPS provides the best opportunity to reach 
the largest number of groups with a single survey instrument. CG-CAHPS 
measures are also being incorporated into the PQRS program, which means 
that there will more likely be a sufficient number of groups reporting 
on these measures to allow comparable reporting. For these reasons and 
because we are working to phase in measures over time, we will not be 
able to accommodate additional CAHPS measures on Physician Compare at 
this time.
    In the CY 2013 PFS final rule with comment period (77 FR 44804), we 
indicated our intention to publicly report performance rates on quality 
measures included in the 2014 PQRS and for individual eligible 
professionals consistent with the requirements under section 10331 of 
the Affordable Care Act to provide information about physicians and 
other eligible professionals who participate in PQRS. We believe that 
individual-level measure data is important in helping consumers make 
informed healthcare decisions and that this information should be 
posted on the site as soon as technically feasible. Therefore, in the 
proposed rule, we proposed to publicly report comparable data, as noted 
below, collected for the 2014 PQRS via claims, EHR or registry from 
individual eligible professionals as early as CY 2015 (78 FR 43355). 
Specifically, we proposed to post individual measures reported by 
individual eligible professionals in line with those measures reported 
by groups through the GPRO web interface. We proposed to include the 
following measures:
     Diabetes: Hemoglobin A1c Poor Control.
     Heart Failure (HF): Beta-Blocker Therapy for Left 
Ventricular Systolic Dysfunction (LVSD).
     Medication Reconciliation.
     Preventive Care and Screening: Influenza Immunization.
     Pneumococcal Vaccination Status for Older Adults.
     Preventive Care and Screening: Breast Cancer Screening.
     Colorectal Cancer Screening.
     Coronary Artery Disease (CAD): Angiotensin-converting 
Enzyme (ACE) Inhibitor or Angiotensin Receptor Blocker (ARB) Therapy--
Diabetes or Left Ventricular Systolic Dysfunction (LVEF  Adult Weight Screening and Follow-Up.
     Preventive Care and Screening: Screening for Clinical 
Depression.
     Coronary Artery Disease (CAD): Lipid Control.
     Ischemic Vascular Disease (IVD): Use of Aspirin or Another 
Antithrombotic.
     Preventive Care and Screening: Tobacco Use: Screening and 
Cessation Intervention.
     Hypertension (HTN): Controlling High Blood Pressure.
     Ischemic Vascular Disease (IVD): Complete Lipid Panel and 
LDL Control.
     Preventive Care and Screening: Screening for High Blood 
Pressure and Follow-Up Documented.
     Falls: Screening for Fall Risk.
     Diabetes Mellitus: Low Density Lipoprotein (LDL-C) 
Control.
     Diabetes Mellitus: High Blood Pressure Control.
     Diabetes Mellitus: Hemoglobin A1c Control (eligible professional level, there is not always an adequate 
sample size to make valid comparisons. Other commenters believe that 
since multiple physicians can be involved in the treatment of a 
patient, it can be difficult to assess who ultimately is responsible 
for the care of that patient when evaluating a specific measure. One 
commenter is concerned that by reporting individual quality measures 
providers would have an incentive to turn away patients with low health 
literacy, inadequate financial resources to afford treatment, and 
ethnic groups traditionally subject to healthcare inequities in order 
to improve their process measure performance. Other commenters 
encourage CMS to limit the publication of measure data to group 
practices until there is sufficient experience and data to determine 
what measures, if any, can be reported at the individual level. .
    Response: We appreciate the commenters' feedback but believe 
strongly that individual-level measure data are important in helping 
consumers make informed healthcare decisions, and that this information 
should be posted on the site as soon as technically feasible. However, 
we appreciate the concerns raised by other commenters' regarding 
posting individual measures. We are committed to including only the 
most accurate, statistically reliable and valid quality of care measure 
data on Physician Compare when the data are publicly reported. Any data 
found to be invalid or inaccurate for any reason will not be publicly 
reported. And, we are confident that the sample size noted will produce 
comparable data as these measures have been in use in the PQRS program 
and have undergone significant review. We understand that attribution 
of care is a concern at the individual physician level, but believe 
that it can be appropriately determined for the purposes of these 
measures. We do not believe that collecting data at the individual 
physician level will cause physicians to turn away patients just as 
data collection at the hospital and group practice level have not. And, 
to further help mitigate this concern, we will evaluate risk adjustment 
to ensure that those physicians that serve a more complex patient 
population are not unduly penalized. In future years, we will continue 
to evaluate the available measures and work to ensure that the data on 
Physician Compare are those best suited for public reporting. We will 
ensure that these data are collected and presented appropriately, 
regardless of the mechanism through which they are collected, and that 
they accurately reflect performance. Only those measures that are 
reported for the

[[Page 74454]]

accepted sample size will be publicly reported. And, CMS will work to 
ensure that the measures are presented in a way that is understood by 
consumers. We will also evaluate the inclusion of language to help 
users understand why not all individuals will have quality data 
reported. Given the importance of making individual eligible 
professional-level measure data available to the public, CMS is 
finalizing this proposal to publicly report 2014 PQRS individual 
measure data in CY 2015 for individual PQRS quality measures listed, if 
technically feasible.
    Additionally, and in support of the HHS-wide Million Hearts 
Initiative, we proposed to publicly report, no earlier than CY 2015, 
performance rates on measures in the PQRS Cardiovascular Prevention 
measures group (see Table 116 at 77 FR 69280) at the individual 
eligible professional level for data collected in 2014 for the PQRS 
(see Table 74 of this rule).
    Comment: We received three comments regarding the publication of 
the PQRS Cardiovascular Prevention measures group. Two commenters 
request that CMS clearly and prominently state that certain physicians 
or groups are not included in the Million Hearts initiative for 
numerous reasons. One commenter encouraged CMS to limit public 
reporting of these measures to the group practice level, citing 
concerns that these measures if collected via EHRs are new for 
physicians to report, and thus CMS should allow at least two more years 
of data collection on these measures before publicly reporting them.
    Response: We appreciate the commenters' feedback. We appreciate the 
concern that reporting via an EHR is new for many physicians and it may 
take time to become comfortable with the reporting mechanism. However, 
these measures are not new to PQRS and thus have been previously 
reported. As noted above concerning individual PQRS measures, we 
recognize the importance of making individual eligible professional-
level measure data available to the public, and find these measures to 
be specifically relevant to the Physician Compare audience, and are, 
therefore, finalizing this proposal to publicly report in CY 2015 the 
individual Cardiovascular Prevention measures in support of the Million 
Hearts Initiative, if technically feasible. We are evaluating the 
feasibility of including clarification language to explain why it may 
not be appropriate for physicians or groups to report these 
Cardiovascular Prevention measures and will include this language if 
feasible.
    Please note that, during the comment period following the proposed 
rule, we received comments that were not related to our specific 
proposals for Physician Compare in the CY 2014 PFS proposed rule. While 
we appreciate the commenters' feedback and intend to use these comments 
to better develop Physician Compare, these comments will not be 
specifically addressed in this CY 2014 PFS final rule with comment 
period, as they are beyond the scope of this rule. However, we will 
take these comments into consideration when developing policies and 
program requirements for future years.

H. Physician Payment, Efficiency, and Quality Improvements--Physician 
Quality Reporting System

    This section contains the final requirements for the Physician 
Quality Reporting System (PQRS). The PQRS, as set forth in sections 
1848(a), (k), and (m) of the Act, is a quality reporting program that 
provides incentive payments and payment adjustments to eligible 
professionals and group practices based on whether or not they 
satisfactorily report data on quality measures for covered professional 
services furnished during a specified reporting period. The regulation 
governing the PQRS is located at Sec.  414.90. The program requirements 
for the 2007 through 2014 PQRS incentives and the 2015 PQRS payment 
adjustment that were previously established, as well as information on 
the PQRS, including related laws and established requirements, are 
available at http://www.cms.gov/Medicare/Quality-Initiatives-Patient-
Assessment-Instruments/PQRS/index.html. In addition, the 2011 PQRS and 
eRx Experience Report, which provides information about eligible 
professional participation in PQRS, is available for download at http:/
/www.cms.gov/Medicare/Quality-Initiatives-Patient-Assessment-
Instruments/PQRS/index.html.
    We note that eligible professionals in critical access hospitals 
(CAHs) were previously not able to participate in the PQRS. Due to a 
change we are making in the manner in which eligible professionals in 
CAHs are reimbursed by Medicare, it is now feasible for eligible 
professionals in CAHs to participate in the PQRS.
    In the CY 2013 PFS final rule with comment period (77 FR 69170), we 
finalized certain requirements for the 2013 and 2014 PQRS incentives, 
as well as 2015 and 2016 PQRS payment adjustments. We also finalized 
certain requirements for future years, such as the reporting periods 
for the PQRS payment adjustment, as well as requirements for the 
various PQRS reporting mechanisms. In the CY 2014 PFS proposed rule, we 
proposed to change some requirements for the 2014 PQRS incentive and 
2016 PQRS payment adjustment, as well as to make changes to the PQRS 
measure set. Furthermore, we introduced our proposals for a new PQRS 
reporting option--satisfactory participation in a qualified clinical 
data registry. This final rule with comment period addresses these 
proposals and specifically outlines the final requirements for the 2014 
PQRS incentive and 2016 PQRS payment adjustment.
    Please note that, during the comment period following the proposed 
rule, we received comments that were not related to our specific 
proposals for PQRS in the CY 2014 PFS proposed rule. In addition, we 
also solicited comment on a general plan for future years for PQRS, so 
that we may continue to consider stakeholder feedback as we develop 
policies and proposals for the future. While we appreciate the 
commenters' feedback and intend to use these comments to better develop 
PQRS, these comments will not be specifically addressed in this CY 2014 
PFS final rule with comment period, as they are beyond the scope of 
this rule. However, we will take these comments into consideration when 
developing policies and program requirements for future years.
1. Changes to Sec.  414.90
    As noted previously, the regulation governing the PQRS is located 
at Sec.  414.90. We proposed the following changes and technical 
corrections to Sec.  414.90 (78 FR 43357):
     Under Sec.  414.90(b), we proposed to modify the 
definition of administrative claims to eliminate the words ``the 
proposed'' in the phrase ``on the proposed PQRS quality measures.'' We 
proposed to make this technical change because this language was 
inadvertently included in the final regulation despite the fact that 
the quality measures that eligible professionals report under the PQRS 
were finalized in the CY 2013 PFS final rule with comment period (77 FR 
69364).
     We proposed to modify Sec.  414.90(f) to include the 
phrase ``for satisfactory reporting'' after the title ``Use of 
consensus-based quality measures.'' We proposed to add the phrase ``for 
satisfactory reporting'' so that it is clear that the paragraph refers 
to satisfactory reporting, not the new standard of satisfactorily 
participating in a qualified clinical data registry.

[[Page 74455]]

     We proposed to modify the paragraph heading of Sec.  
414.90(g) to add the phrase ``satisfactory reporting'', so that the 
title of the paragraph reads ``Satisfactory reporting requirements for 
the incentive payments.'' We proposed to make this change so that it is 
clear that the paragraph refers to satisfactory reporting, not the new 
standard of satisfactorily participating in a qualified clinical data 
registry. Please note that, due to additional changes we are making to 
Sec.  414.90, paragraph Sec.  414.90(g) is now designated as Sec.  
414.90(h).
     We proposed to modify the paragraph heading of Sec.  
414.90(h) to add the phrase ``satisfactory reporting'', so that the 
title of the paragraph reads ``Satisfactory reporting requirements for 
the incentive payments.'' We proposed to make this change so that it is 
clear that the paragraph refers to satisfactory reporting, not the new 
standard of satisfactorily participating in a qualified clinical data 
registry. Please note that, due to additional changes we are making to 
Sec.  414.90, paragraph Sec.  414.90(g) is now designated as Sec.  
414.90(j).
     We proposed to delete paragraph Sec.  414.90(i)(4), 
because Sec.  414.90(i)(4) list requirements that are identical to 
Sec.  414.90(i)(3), and therefore, redundant.
    In addition, we considered further revising the regulation at Sec.  
414.90 to list all the specific satisfactory reporting requirements for 
the 2014 PQRS incentive and 2016 PQRS payment adjustment, so that the 
different reporting requirements are specified in the regulation. We 
are making this change. Therefore, we are adding newly redesignated 
paragraphs Sec.  414.90(h)(3), Sec.  414.90(h)(5), Sec.  414.90(j)(3), 
and Sec.  414.90(j)(5) to list all the specific satisfactory reporting 
requirements for the 2014 PQRS incentive and 2016 PQRS payment 
adjustment.
    We solicited but received no public comment on these proposals. 
Therefore, we are finalizing these proposed technical changes.
    In the course of revising the regulation text to address the 
technical changes and final policies we are adopting in this final 
rule, we discovered a number of drafting errors and technical issues. 
In addition to the technical changes and corrections noted above, as 
well as the substantive changes discussed in the sections that follow, 
we also are modifying Sec.  414.90 as follows:
     Changing references to the Physician Quality Reporting 
System to its acronym, the PQRS, throughout Sec.  414.90 to shorten the 
regulation. This technical change is consistent with the references to 
the program we have made in the proposed rule.
     Deleting the phrase ``as defined in paragraph (b) of this 
section'' when referring to group practices throughout Sec.  414.90, 
because it is redundant to refer back to the definition of a group 
practice.
     Amending Sec.  414.90(d) to indicate that, in lieu of 
satisfactory reporting, an eligible professional may also 
satisfactorily participate in a qualified clinical data registry in 
2014.
     Changing the title of Sec.  414.90(f) currently titled 
``Use of consensus-based quality measures'' to ``Use of appropriate and 
consensus-based quality measures for satisfactory reporting'' to 
indicate criteria for measure selection for measures available under 
the group practice reporting option (GPRO).
     Combining Sec.  414.90(f)(1) and Sec.  414.90(f)(2) as 
measures under the PQRS may fit either of these two criteria.
     Adding paragraph (n) entitled ``Limitations on review.'' 
This ``limitations on review'' paragraph, previously designated in 
Sec.  414.90 as paragraph (k) was inadvertently deleted from Sec.  
414.90 in the CY 2013 PFS final rule with comment period. In lieu of 
this section, a duplicate paragraph (k) describing the PQRS informal 
review process was inserted. We are therefore deleting the duplicate 
informal review paragraph (k) and restoring paragraph (n).
    In addition, the previously established paragraph entitled 
``limitations on review'' included the following paragraph at Sec.  
414.90(k)(2): ``The determination of the payment limitation.'' This 
provision pertains to the Electronic Prescribing (eRx) Incentive 
Program and is irrelevant to the PQRS. Therefore, we are deleting that 
reference. Moreover, to be consistent section 1848(m)(5)(E) of the Act, 
we are adding to the ``limitations on review'' paragraph the following: 
``The determination of satisfactory reporting.'', which was 
inadvertently left out (presumably because we inadvertently listed an 
element of the eRx Incentive Program instead, as noted above). This 
technical change also necessary so that newly designated paragraph (l) 
will be consistent with section 1848(m)(5)(E) of the Act.
    Although we did not include these technical changes in the proposed 
rule, we believe it is unnecessary to undergo notice and comment 
rulemaking given that these changes are purely technical in nature and 
correct errors inadvertently made previously to the regulation, and do 
not substantively change the regulation. Finally, we note that we have 
made further structural and conforming changes to the regulation (for 
example, adding, deleting, and redesignating paragraphs) consistent 
with the changes and final policies we are adopting in this final rule.
2. Participation as a Group Practice in the Group Practice Reporting 
Option (GPRO)--Changes to the Self-nomination, or Registration, 
Requirement for Group Practices To Be Selected To Participate in the 
GPRO
    In the CY 2013 PFS final rule with comment period (77 FR 69172), we 
finalized requirements regarding the self-nomination process group 
practices must follow to participate in the PQRS GPRO. In the CY 2014 
PFS final rule with comment period, we proposed (78 FR 43357) to make 
the changes to those requirements for group practices to self-nominate. 
First, we proposed to change the deadline of October 15 of the year in 
which the reporting period occurs for group practices to submit a self-
nomination statement, or register, to participate in the PQRS GPRO. 
Starting with reporting periods occurring in 2014, we proposed (78 FR 
43357) to change this deadline to September 30 of the year in which the 
reporting period occurs (that is, September 30, 2014, for reporting 
periods occurring in 2014).
    We solicited and received the following public comments regarding 
our proposal to change the deadline that a group practice must register 
to participate in the GPRO:
    Comment: Several commenters did not support our proposal to change 
the deadline that a group practice must register to participate in the 
GPRO by September 30 of the year in which the reporting period occurs 
(that is September 30, 2014 for reporting periods occurring in 2014) 
suggesting that it is important that group practices are allowed more 
time to decide on whether they should participate in PQRS as a group 
practice or as individuals. The commenters felt that the later 
registration deadline of October 15 of the year in which the reporting 
period occurs or later allows more time for group practices to make a 
more informed decision, as well as account for changes in the 
composition of the group practice, such as changes in a group 
practice's Taxpayer Identification Number (TIN).
    Response: While we understand the commenters' concerns and proposed 
a deadline of September 30 of the year in which the reporting period 
occurs, we noted in the proposed rule (78 FR 43357) that CMS needs 
additional time

[[Page 74456]]

to identify group practices wishing to participate in the GPRO for a 
year in order to allow for more time to populate the GPRO web interface 
for those group practices that select the GPRO web interface reporting 
mechanism. Unfortunately,we cannot finalize a deadline later than 
September 30. Despite the comments we received requesting a later 
deadline, based on the reasons previously mentioned, we are requiring 
that group practices register to participate in the GPRO by September 
30 of the year in which the reporting period occurs (that is September 
30, 2014 for reporting periods occurring in 2014), as proposed.
    We note that we received comments related to proposals for the 
Value-based Payment Modifier (discussed in section III.K. of this final 
rule with comment period) requesting more timely feedback on group 
practice reporting, particularly information related Clinician Group 
Consumer Assessment of Healthcare Providers and Systems (CG CAHPS) 
survey. Since the performance of a group practice in the Value-based 
Payment Modifier is determined, in part, by a group practice's 
participation in the PQRS, to provide timelier feedback to these group 
practices, in order for eligible professionals to be able to receive 
feedback on CG CAHPS data and assess by the Value-based Payment 
Modifier, it would be necessary for CMS to identify which groups will 
be participating in the PQRS under the GPRO earlier than September 30 
of the year in which the reporting period occurs. Therefore, to respond 
to the commenters concerns to provide timelier feedback on performance 
on CG CAHPS in the future, we anticipate proposing an earlier deadline 
for group practices to register to participate in the GPRO in future 
years.
    Second, we proposed (78 FR 43357) that group practices comprised of 
25 or more individual eligible professionals that wish to report the CG 
CAHPS survey measures (which are discussed later in this section) would 
be required via the web to elect to report the CG CAHPS survey 
measures. We solicited and received no comments on this proposal. 
Therefore, we are finalizing our proposal to require group practices of 
25 or more individual eligible professionals that wish to report the CG 
CAHPS survey measures to indicate their intent to do so upon 
registration.
    Furthermore, we proposed (78 FR 43357) that the Web site that a 
group practice would use to elect to report the CG CAHPS survey 
measures would be the same Web site used by group practices to register 
to participate in the PQRS GPRO. We believe that providing a single Web 
site whereby group practices may make multiple elections (such as 
submitting the self-nomination statement to register to participate in 
the PQRS GPRO and be evaluated for the PQRS GPRO using CG CAHPS 
measures would be desirable for group practices.
    We solicited and received the following public comments on this 
proposal:
    Comment: Several commenters supported our proposal to use a single 
Web site to register to participate in the PQRS GPRO. The commenters 
believed that using a single Web site for functions relating to 
different CMS programs furthers CMS' goal of alignment, as well as aids 
in the group practice's management in participation in CMS' various 
quality reporting programs. Commenters urged CMS to further align and 
create a single Web site that will manage participation in the PQRS, 
EHR Incentive Program, and the Value-based Payment Modifier.
    Response: We appreciate the commenters' feedback and the support 
for this proposal. For the reasons stated above, we are finalizing our 
proposal to use a single Web site whereby a group practice of 25 or 
more individual eligible professionals may register to participate in 
the PQRS GPRO and elect to be evaluated for the PQRS GPRO by reporting 
CG CAHPS measures.
3. Requirements for the PQRS Reporting Mechanisms
    The PQRS includes the following reporting mechanisms: claims; 
registry; EHR (including direct EHR products and EHR data submission 
vendor products); administrative claims; and the GPRO web-interface. 
Under the existing PQRS regulation, section 414.90(g) and (h) govern 
which reporting mechanisms are available for use by individuals and 
group practices for the PQRS incentive and payment adjustment. This 
section contains the changes we are finalizing for these PQRS reporting 
mechanisms. In addition, this section contains the final requirements 
for two new PQRS reporting mechanisms--a new certified survey vendor 
reporting mechanism for purposes of reporting CG CAHPS measures and a 
qualified clinical data registry reporting mechanism under the new PQRS 
``satisfactory participation'' reporting option.
a. Registry-based Reporting Mechanism
    In the CY 2013 PFS final rule with comment period, we finalized the 
following requirement for registries to become qualified to participate 
in PQRS for 2013 and beyond: Be able to collect all needed data 
elements and transmit to CMS the data at the TIN/NPI level for at least 
3 measures (77 FR 69180). In the proposed rule, since we proposed (78 
FR 43358) to increase the number of measures eligible professionals 
would be required to report for the 2014 PQRS incentive from 3 to 9 
measures covering at least 3 of the National Quality Strategy (NQS) 
domains, we proposed (78 FR 43358) to change this registry requirement 
as follows: A qualified registry must be able to collect all needed 
data elements and transmit to CMS the data at the TIN/NPI level for at 
least 9 measures covering at least 3 of the NQS domains. We solicited 
but received no public comment on this proposal. Therefore, as we 
describe in detail below, since we are finalizing our proposal to 
increase the number of measures eligible professionals would be 
required to report for the 2014 PQRS incentive via qualified registry 
from 3 to 9 measures covering at least 3 of the NQS domains, we are 
finalizing this proposal.
b. Certified Survey Vendors
    We proposed (78 FR 43358) to allow group practices composed of 25 
or more eligible professionals to report CG CAHPS survey measures. The 
data collected on these CAHPS survey measures would not be transmitted 
to CMS via the previously established PQRS group practice reporting 
mechanisms (registry, EHR, or GPRO web interface). Rather, the data 
must be transmitted through a survey vendor. Therefore, to allow for 
the survey vendor to transmit survey measures data to CMS, we proposed 
to modify Sec.  414.90(b), Sec.  414.90(g)(3), and Sec.  414.90(h)(3) 
to propose a new reporting mechanism--the certified survey vendor (78 
FR 43358). We solicited and received the following public comment on 
this proposal:
    Comment: Several commenters supported our proposal to allow group 
practices of 25-99 eligible professionals to report the CG CAHPS survey 
measures and therefore generally supported our proposal to create a new 
reporting mechanism--the CMS-certified survey vendor--to administer the 
CG CAHPS survey measures.
    Response: We appreciate the commenters' feedback and are finalizing 
the creation of a new reporting mechanism, the CMS-certified survey 
vendor, to report the CG CAHPS survey measures. Therefore, we are 
finalizing our proposal to modify Sec.  414.90(b), newly designated 
Sec.  414.90(h)(3), and newly designated Sec.  414.90(j)(3) to indicate 
a group practice's ability to use a new reporting mechanism--the CMS-
certified survey vendor.

[[Page 74457]]

    Comment: Although commenters supported our proposal to allow group 
practices of 25-99 eligible professionals to report the CG CAHPS survey 
measures, the commenters opposed our proposal to require these group 
practices to report the CG CAHPS survey measures via a CMS-certified 
survey vendor. The commenters believed that group practices should have 
the flexibility to report CG CAHPS measures in any way the group 
practices choose, not solely through a CMS-certified survey vendor.
    Response: While we appreciate the commenters' concern to allow 
flexibility in allowing group practices to report the CG CAHPS 
measures, we must create parameters surrounding how the CG CAHPS survey 
measures would be reported to CMS. Similar to our other reporting 
mechanisms, we believe it is also important to ensure that vendors are 
able to test submission of CG CAHPS measures data prior to the 
submission period. We believe that requiring that the vendor be 
certified by CMS to submit CG CAHPS survey measures data furthers this 
goal. Therefore, we are requiring that group practices use a CMS-
certified survey vendor if the group practice wishes to report CG CAHPS 
survey measures data for purposes of the PQRS.
    In addition, Sec.  414.90(g)(3), and Sec.  414.90(h)(3) currently 
requires group practices to use only one mechanism to meet the 
requirements for satisfactory reporting (that is, CMS will not combine 
data submitted under multiple reporting mechanism to determine if the 
requirements for satisfactory reporting are met). However, for the 
proposed certified survey vendor option, we also proposed that a group 
practice choosing to report CG CAHPS survey measures would be required 
to select an additional reporting mechanism to meet the requirements 
for satisfactory reporting for both the 2014 PQRS incentive and the 
2016 PQRS payment adjustment (78 FR 43358). Therefore, we proposed to 
modify Sec.  414.90(g)(3), and Sec.  414.90(h)(3) to indicate that 
groups selecting to use the certified survey vendor would be the 
exception to this requirement. We received no public comment on this 
proposal and therefore, for the reasons we previously stated, are 
finalizing our proposal to modify newly designated Sec.  414.90(h)(3), 
and Sec.  414.90(j)(3) to indicate that groups selecting to use the 
certified survey vendor would be required to meet the criteria for 
satisfactory reporting using an additional reporting mechanism to 
report additional measures.
    For purposes of PQRS, we proposed to modify Sec.  414.90(b) to 
define a certified survey vendor as a vendor that is certified by CMS 
for a particular program year to transmit survey measures data to CMS 
(78 FR 43358). To obtain CMS certification, we proposed that vendors 
would be required to undergo training, meet CMS standards on how to 
administer the survey, and submit a quality assurance plan. CMS would 
provide the identified vendor with an appropriate sample frame of 
beneficiaries from the group. The vendor would also be required to 
administer the survey according to established protocols to ensure 
valid and reliable results. Survey vendors would be supplied with mail 
and telephone versions of the survey in electronic form, and text for 
beneficiary pre-notification and cover letters. Surveys can be 
administered in English, Spanish, Cantonese, Mandarin, Korean, Russian 
and/or Vietnamese. Vendors would be required to use appropriate quality 
control, encryption, security and backup procedures to maintain survey 
response data. The data would then be securely sent back to CMS for 
scoring and/or validation. To ensure that a vendor possesses the 
ability to transmit survey measures data for a particular program year, 
we proposed to require survey vendors to undergo this certification 
process for each year in which the vendor seeks to transmit survey 
measures data to CMS. We solicited and received no public comment on 
these proposals. Therefore, we are finalizing these proposals, as well 
as the proposed change at Sec.  414.90(b).
4. Changes to the Criteria for the Satisfactory Reporting for 
Individual Eligible Professionals for the 2014 PQRS Incentive--
Individual Quality Measures Submitted via Claims and Registries and 
Measures Groups Submitted via Claims
    For 2014, in accordance with Sec.  414.90(c)(3), eligible 
professionals that satisfactorily report data on PQRS quality measures 
are eligible to receive an incentive equal to 0.5 percent of the total 
estimated Medicare Part B allowed charges for all covered professional 
services furnished by the eligible professional or group practice 
during the applicable reporting period. Individual eligible 
professionals may currently report PQRS quality measures data to meet 
the criteria for satisfactory reporting for the 2014 PQRS incentive via 
the claims, registry, and EHR-based reporting mechanisms. This section 
contains our final changes to the criteria for satisfactory reporting 
of individual quality measures via claims and registries by individual 
eligible professionals for the 2014 PQRS incentive. Please note that we 
did not propose to modify and are therefore not modifying the criteria 
for satisfactory reporting of individual quality measures via EHR that 
were established in the CY 2013 PFS final rule with comment period (see 
Table 91, 77 FR 69194). For ease of reference, these criteria for 
satisfactory reporting of individual quality measures via EHR for the 
2014 PQRS incentive are also identified again in Table 47 of this final 
rule with comment period.
a. Proposed Changes to the Criterion for Satisfactory Reporting of 
Individual Quality Measures via Claims for Individual Eligible 
Professionals for the 2014 PQRS Incentive
    In the CY 2013 PFS final rule with comment period (see Table 91, 77 
FR 69194), to maintain the reporting criterion with which individual 
eligible professionals are familiar, we finalized the same satisfactory 
reporting criterion for the submission of individual quality measures 
via claims that we finalized in previous years: For the 12-month 
reporting period for the 2014 PQRS incentive, report at least 3 
measures, OR, if less than 3 measures apply to the eligible 
professional, report 1-2 measures, AND report each measure for at least 
50 percent of the eligible professional's Medicare Part B FFS patients 
seen during the reporting period to which the measure applies. Measures 
with a 0 percent performance rate would not be counted. For an eligible 
professional who reports fewer than 3 measures via the claims-based 
reporting mechanism, the eligible professional would be subject to the 
Measures Applicability Validation (MAV) process, which would allow us 
to determine whether an eligible professional should have reported 
quality data codes for additional measures (77 FR 69188).
    Under our authority to revise the criteria for satisfactory 
reporting for the 2014 PQRS incentive under section 1848(m)(3)(d) of 
the Act, we proposed (78 FR 43358) to change the criterion for the 
satisfactory reporting of individual, claims-based measures by 
individual eligible professionals for the 2014 PQRS incentive as 
follows: For the 12-month reporting period for the 2014 PQRS incentive, 
report at least 9 measures, covering at least 3 of the NQS domains, OR, 
if less than 9 measures apply to the eligible professional, report 1-8 
measures, AND report each measure for at least 50 percent of the 
Medicare Part B FFS patients seen during the reporting period to which 
the measure applies. Measures with a 0 percent performance rate would 
not be counted. For an

[[Page 74458]]

eligible professional who reports fewer than 9 measures covering less 
than 3 NQS domains via the claims-based reporting mechanism, the 
eligible professional would be subject to the MAV process, which would 
allow us to determine whether an eligible professional should have 
reported quality data codes for additional measures. We proposed to 
allow eligible professionals to report fewer than 9 measures so that 
eligible professionals who do not have at least 9 claims-based PQRS 
measures applicable to his/her practice would still have an opportunity 
to still meet the criteria for satisfactory reporting for the 2014 PQRS 
incentive by reporting on as many applicable claims-based measures as 
the eligible professionals can report.
    We solicited public comment on the proposed change to the criterion 
for the satisfactory reporting of individual quality measures via 
claims for individual eligible professionals for the 2014 PQRS 
incentive and received the following comments:
    Comment: Several commenters supported our proposal to increase the 
number of measures to be reported via claims, as requiring an eligible 
professional to report on more measures would better capture the 
quality of care provided by an eligible professional.
    Response: We appreciate the commenters' feedback and, based on the 
supportive comments received and for the reasons mentioned above and in 
the proposed rule (78 FR 43358), are finalizing this proposed 
criterion.
    Comment: While several commenters generally supported our proposal 
to increase the number of measures and NQS domains to be reported via 
claims, the commenters urged CMS to take a more gradual approach to 
increasing the number of measures that must be reported via claims. 
These commenters suggested requiring the reporting of either 4 measures 
covering at least 1 NQS domain, 5 measures covering at least 2 NQS 
domains, or 6 measures covering at least 2 NQS domains.
    Response: We appreciate the commenters' support for our desire to 
increase the number of measures to be reported via claims, as well as 
their alternative suggestions on how to increase the number of measures 
to be reported via claims. As we explain in more detail when we discuss 
our final requirements for the 2016 PQRS payment adjustment, we agree 
that a more gradual increase in the number of measures to be reported 
may be necessary for purposes of meeting the criteria for satisfactory 
reporting for the PQRS payment adjustments. However, since the PQRS 
program has provided incentives for satisfactory reporting since 2007, 
we believe it is appropriate to increase the number of measures to be 
reported via claims from 3 measures covering 1 NQS domain to 9 measures 
covering 3 NQS domains for the 2014 PQRS incentive. We believe 6 years 
is enough time for eligible professionals to familiarize themselves 
with the reporting options for satisfactory reporting under the PQRS. 
Additionally, we point out that we will be using a MAV process for 
individual eligible professionals who report less than 9 measures via 
claims, given that an eligible professional who does not have at least 
9 measures covering less than 3 NQS domains applicable to his/her 
practice may report the number of measures applicable to the eligible 
profession (i.e., fewer than 9 measures) to attempt to meet the 
criteria for satisfactory reporting for the 2014 PQRS incentive via 
claims. Through the MAV process, we will determine whether the eligible 
professional reported the measures applicable to the eligible 
professional. For the commenters' suggested alternative criteria, while 
we understand the commenters' concerns, we believe our interest in 
aligning the satisfactory reporting criteria of individual measures via 
claims with the satisfactory reporting criteria of individual measures 
via EHR for the 2014 PQRS incentive outweighs the need for such a 
gradual increase in the number of measures required to be reported via 
claims.
    Comment: One commenter stated that we should not align the PQRS 
reporting criteria for reporting mechanisms other than the EHR-based 
reporting mechanisms with the reporting criteria for the EHR Incentive 
Program, as the objectives for the two programs are different.
    Response: We respectfully disagree. Although the standards and 
criteria for which the PQRS and EHR Incentive Program provide 
incentives and relieve eligible professionals from payment adjustments 
are different, the two programs are both dedicated to the promotion of 
EHR technology and the collection of meaningful and quality data.
    Comment: The majority of commenters opposed our proposal to 
increase the number of measures to be reported via claims from 3 
measures covering 1 NQS domain to 9 measures covering 3 NQS domains. 
Several of these commenters generally opposed any proposal that would 
increase the number of measures to be reported via claims from 3 
measures covering 1 NQS domain. Some of these commenters noted that 
they have been successful at meeting the criteria for satisfactory 
reporting in the PQRS via claims in the past, and increasing the number 
of measures to be reported via claims would make it more difficult for 
these eligible professionals to meet the criteria for satisfactory 
reporting for the 2014 PQRS incentive. Other commenters urged CMS not 
to increase the criteria for satisfactory reporting until participation 
in PQRS increases, as the commenters feared that increasing the 
criteria for satisfactory reporting in PQRS would discourage eligible 
professionals from participating in the PQRS. Still some of the 
commenters opposing this proposal noted that certain eligible 
professionals did not have 9 measures covering 3 NQS domains for which 
to report. These commenters stressed that being able to report at least 
9 measures covering 3 NQS domains via claims for the 2014 PQRS 
incentive would be particularly difficult since we are proposing to 
eliminate the claims-based reporting mechanism as an option to report 
certain PQRS measures. Some of these commenters also expressed concern 
that certain practices having a limited number of applicable measures 
will not have applicable measures covering at least 3 NQS domains.
    Response: We understand the commenters' concerns. As we noted above 
and in the proposed rule (78 FR 43358), we believe that we have 
provided eligible professionals with enough time to familiarize 
themselves with the reporting options for satisfactory reporting under 
the PQRS, particularly for the PQRS incentives.
    For the commenters who urge us not to increase the satisfactory 
reporting criteria for the PQRS until participation in PQRS increases, 
we understand that, as discussed in this final rule below and in the 
2011 PQRS and eRx Reporting Experience, participation in the PQRS has 
fluctuated around 25 percent among those eligible to participate in the 
PQRS. Indeed, it is one of our major goals to increase participation in 
the PQRS. While increasing the satisfactory reporting threshold for the 
2014 PQRS incentive may deter or discourage eligible professionals from 
participating, we do not believe increased threshold we are finalizing 
will significantly deter eligible professionals from participating in 
the PQRS primarily given that the 2016 PQRS payment adjustment is 
applicable, and the reporting periods of the 2016 PQRS payment 
adjustment run concurrently with the reporting periods for the 2014 
PQRS incentive. Since eligible professionals are required to meet the 
criteria for satisfactory reporting for the 2016 PQRS payment

[[Page 74459]]

adjustment to avoid a reduction to the physician fee schedule payments, 
we believe these eligible professionals will also attempt to report for 
the 2014 PQRS incentive regardless of whether we increase the measure 
threshold from 3 measures covering 1 NQS domain to 9 measures covering 
3 NQS domains. For the commenters' concerns on not having at least 9 
PQRS measures covering 3 NQS domains for which to report via claims, 
particularly since we proposed to eliminate the claims-based reporting 
mechanism as a mechanism for which to report certain measures, we note 
that our proposal, which we are finalizing, allows eligible 
professionals to report 1-8 measures that are applicable, if the 
eligible professional does not have 9 applicable measures to report. If 
an eligible professional does not have 9 applicable measures to report, 
the eligible professional must report on as many measures covering as 
many domains as are applicable to his/her practice. For example, if an 
eligible professional only has 7 measures covering 2 NQS domains 
applicable to his/her practice, he/she must report all 7 measures 
covering 2 NQS domains in order to meet the criteria for satisfactory 
reporting for the 2014 PQRS incentive. It would not be sufficient for 
the eligible professional to report on, for example, 6 measures 
covering 2 NQS domains or 6 measeures covering 1 NQS domain.
    Given this aspect of the satisfactory reporting criterion, which 
would address these commenters concerns, we believe it is appropriate 
to finalize this satisfactory reporting criterion and the general 
increase in measures to up to 9. Also, we note that for eligible 
professionals who report 1-8 measures, we will use the MAV process. The 
current claims MAV process for the 2013 PQRS incentive is only 
triggered when an eligible professional reports on 1 or 2 measures 
covering 1 NQS domain via claims since, to meet the criteria for 
satisfactory reporting for the 2013 PQRS incentive, an eligible 
professional is only required to report on 3 measures covering 1 NQS 
domain (77 FR 69189). Since we are increasing the satisfactory 
reporting threshold from 3 measures covering 1 NQS domain to 9 measures 
covering at least 3 NQS domains, we are amending the 2013 MAV process 
for claims so that the 2014 claims MAV process will be triggered when 
an eligible professional reports on less than 9 measures covering at 
least 3 NQS domains. Therefore, the MAV process will be triggered when 
an eligible professional reports on either less than 9 measures or 
measures covering less than 3 NQS domains. If an eligible professional 
reports on less than 9 measures, the MAV process will also check to 
determine whether the eligible professional is reporting of the maximum 
amount of NQS domains (up to 3 NQS domains) applicable.
    For example, if an eligible professional reports on 8 measures 
covering 2 NQS domains, the MAV process will be triggered to determine 
whether an eligible professional could have reported on at least 9 
measures and covering at least 3 NQS domains. Likewise, if an eligible 
professional reports on 9 measures covering 2 domains, the MAV process 
will be triggered to determine whether an eligible professional could 
have reported on measures covering an additional domain. As in previous 
years, the MAV process will use a two-part test--(1) a ``clinical 
relation'' test, and (2) a ``minimum threshold'' test--to determine 
whether an eligible professional could have reported on more measures.
    To get a better sense of how the 2014 MAV process for claims will 
be implemented by CMS, please see our documentation explaining the 
current 2013 MAV process for claims. A description of the current 
claims MAV process is available at http://www.cms.gov/Medicare/Quality-
Initiatives-Patient-Assessment-Instruments/PQRS/Downloads/2013_PQRS_
MeasureApplicabilityValidation_Docs_030413.zip. Please note that we 
will post a guidance document on the 2014 claims MAV process, which 
will include a list of the measure clusters that are used for the 
``minimum threshold'' test, prior to January 1, 2014 (the start of the 
2014 reporting periods).
    In summary, we are adding paragraph Sec.  414.90(h)(3) to specify 
that, to meet the criterion for satisfactory reporting of individual, 
claims-based measures by individual eligible professionals for the 2014 
PQRS incentive an eligible professional must, for the 12-month 
reporting period for the 2014 PQRS incentive, report at least 9 
measures covering at least 3 NQS domains, OR, if less than 9 measures 
covering at least 3 NQS domains apply to the eligible professional, 
report 1-8 measures covering 1-3 NQS domains as applicable, AND report 
each measure for at least 50 percent of the Medicare Part B FFS 
patients seen during the reporting period to which the measure applies. 
Measures with a 0 percent performance rate would not be counted. For an 
eligible professional who reports fewer than 9 measures covering less 
than 3 NQS domains, the eligible professional would be subject to the 
MAV process, which would allow us to determine whether an eligible 
professional should have reported quality data codes for additional 
measures and/or covering additional NQS domains.
b. Changes to the Criterion for Satisfactory Reporting of Individual 
Quality Measures Via Registry for Individual Eligible Professionals for 
the 2014 PQRS Incentive
    In the CY 2013 PFS final rule with comment period, to maintain 
reporting criterion with which individual eligible professionals are 
familiar, we finalized the same satisfactory reporting criterion for 
individual eligible professionals to report individual quality measures 
via registry that we finalized in previous years: For the 12-month 
reporting period for the 2014 PQRS incentive, report at least 3 
measures AND report each measure for at least 80 percent of the 
eligible professional's Medicare Part B FFS patients seen during the 
reporting period to which the measure applies. Measures with a 0 
percent performance rate would not be counted (77 FR 69189). In the 
proposed rule, we proposed (78 FR 43359) to change this reporting 
criterion for individual eligible professionals reporting via registry 
for the 2014 PQRS incentive to the following: For the 12-month 
reporting period for the 2014 PQRS incentive, report at least 9 
measures covering at least 3 of the NQS domains AND report each measure 
for at least 50 percent of the eligible professional's Medicare Part B 
FFS patients seen during the reporting period to which the measure 
applies. Measures with a 0 percent performance rate would not be 
counted (78 FR 43359).
    We solicited and received the following public comments on the 
proposed changes to the criterion for the satisfactory reporting of 
individual quality measures via registry for individual eligible 
professionals for the 2014 PQRS incentive:
    Comment: The majority of commenters supported our proposal to 
decrease the percentage of patients that must be reported via registry 
from 80 percent to 50 percent. The commenters supported our proposal 
specifically because it aligns with the option to report individual 
measures via the claims-based reporting mechanism.
    Response: We appreciate the commenters' feedback and, based on the 
support received and for the reasons stated in the proposed rule (78 FR 
43359), we are finalizing this proposal with regard to the percent 
threshold. Therefore, to meet the criteria for satisfactory reporting 
for the 2014 PQRS incentive, an eligible professional

[[Page 74460]]

reporting individual quality measures via registry will be required to 
report each measure for at least 50 percent of the eligible 
professional's Medicare Part B FFS patients seen during the reporting 
period to which the measure applies.
    Comment: One commenter stated that we should not align the PQRS 
reporting criteria for reporting mechanisms other than the EHR-based 
reporting mechanisms with the reporting criteria for the EHR Incentive 
Program, as the objectives for the two programs are different.
    Response: We respectfully disagree. Although the standards and 
criteria for which the PQRS and EHR Incentive Program provide 
incentives and relieve eligible professionals from payment adjustments 
are different, the two programs are both dedicated to the promotion of 
EHR technology and the collection of quality data.
    Comment: The majority of commenters opposed our proposal to 
increase the number of measures to be reported via registry from 3 
measures covering 1 NQS domain to 9 measures covering 3 NQS domains. 
Several of these commenters generally opposed any proposal that would 
increase the number of measures to be reported via registry from 3 
measures covering 1 NQS domain. Some of these commenters noted that 
they have been successful at meeting the criteria for satisfactory 
reporting in the PQRS via registry in the past, and increasing the 
number of measures to be reported via registry would make it more 
difficult for these eligible professionals to meet the criteria for 
satisfactory reporting for the 2014 PQRS incentive. Other commenters 
urged CMS not to increase the criteria for satisfactory reporting until 
participation in PQRS increases, as the commenters feared that 
increasing the criteria for satisfactory reporting in PQRS would 
discourage eligible professionals from participating in the PQRS. Still 
some of these commenters opposing this proposal noted that certain 
eligible professionals did not have 9 measures covering 3 NQS domains 
for which to report.
    Response: We understand the commenters' concerns about increasing 
the number of measures to be reported via registry from 3 measures 
covering 1 NQS domain to 9 measures covering 3 NQS domains. However, we 
believe it is important to collect data that provides a broad picture 
of the quality of care provided by an eligible professional, 
specifically since, as discussed in section K of this final rule with 
comment period, the Value-based Payment Modifier will use participation 
in PQRS to determine upward, downward, and neutral adjustments based on 
physician performance. We also believe it is important to cover 3 NQS 
domains. As we noted above and in the proposed rule (78 FR 43359), we 
believe that we have provided eligible professionals with enough time 
to familiarize themselves with the reporting options for satisfactory 
reporting under the PQRS, particularly for the PQRS incentives, and 
thefore, we find this increase appropriate.
    For the commenters who urge us not to raise the satisfactory 
reporting criteria for the PQRS until participation in PQRS increases, 
we understand that, as discussed in this final rule below and in the 
2011 PQRS and eRx Reporting Experience, participation in the PQRS has 
fluctuated around 25 percent among those eligible to participate in the 
PQRS. Indeed, it is one of our major goals to increase participation in 
the PQRS. While increasing the satisfactory reporting threshold for the 
2014 PQRS incentive may deter or discourage some eligible professionals 
from participating, we believe that this increase to the satisfactory 
reporting threshold will not significantly deter eligible professionals 
from participating in the PQRS. In particular, eligible professionals 
will be required to report PQRS quality measures data in 2014 to meet 
the criteria for satisfactory reporting for the 2016 PQRS payment 
adjustment, which we believe will be an incentive for participation. In 
addition, we note the reporting periods for the 2014 PQRS incentive and 
2016 PQRS payment adjustment run concurrently. Since eligible 
professionals will already be required to meet the criteria for 
satisfactory reporting for the 2016 PQRS payment adjustment, we believe 
these eligible professionals will also attempt to report for the 2014 
PQRS incentive regardless of whether we increase the measure threshold 
from 3 measures covering 1 NQS domain to 9 measures covering 3 NQS 
domains.
    For the commenters' concerns about not having at least 9 PQRS 
measures covering 3 NQS domains for which to report via registry, we 
understand the commenters concerns. While we are still finalizing our 
proposal to increase the number of individual measures required to be 
reported via registry to meet the criteria for satisfactory reporting 
for the 2014 PQRS incentive to 9 measures covering 3 domains, to 
address the concern for those eligible professionals who fear they do 
not have 9 individual PQRS measures and/or measures covering at least 3 
NQS domains applicable to their practice, we are modifying our proposal 
to allow eligible professionals to report fewer measures so that 
eligible professionals who do not have at least 9 PQRS measures 
applicable to their practice can still meet this criteria for 
satisfactory reporting for the 2014 PQRS incentive by reporting 1-8 
measures covering for which there is Medicare patient data. If an 
eligible professional does not have 9 applicable measures to report, 
the eligible professional must report on as many measures covering as 
many NQS domains (up to 3 NQS domains) as are applicable to his/her 
practice. For example, if an eligible professional only has 7 measures 
covering 2 NQS domains applicable to his/her practice, he/she must 
report all 7 measures covering 2 NQS domains in order to meet the 
criteria for satisfactory reporting for the 2014 PQRS incentive. It 
would not be sufficient for the eligible professional to report on, for 
example, 6 measures covering 1 NQS domains.
    Given that change, we will analyze eligible professionals who 
report 1-8 measures using a Measures Application Validity (MAV) process 
(similar to the claims MAV process we discussed above) to ensure 
whether the eligible professionals could have reported on the 
applicable measures. This is consistent with our practice for applying 
this process to the claims-based reporting option for eligible 
professionals to report individual measures.
    Specifically, if fewer than 9 measures and/or measures covering 
fewer than 3 NQS domains apply to the eligible professional, an 
eligible professional must report 1-8 measures covering 1-3 NQS domains 
for which there is Medicare patient data. The MAV process will be 
triggered when an eligible professional reports on less than 9 
measures. For example, if an eligible professional reports on 8 
measures covering 3 NQS domains, the MAV process will be triggered to 
determine whether an eligible professional could have reported on an 
additional measure to report on a total of 9 measures covering 3 NQS 
domains.
    The 2014 registry MAV process that will determine whether an 
eligible professional could have reported on more measures and/covering 
more NQS domains will be similar to the ``clinical relation'' test used 
in the 2013 claims MAV process. To get a better sense of how the 2014 
registry MAV process will be implemented by CMS, a description of the 
``clinical relation'' test in the current 2013 claims MAV process is 
available at http://www.cms.gov/Medicare/Quality-Initiatives-Patient-
Assessment-Instruments/PQRS/Downloads/2013--PQRS--
MeasureApplicabilityValidation--Docs--

[[Page 74461]]

030413.zip. Please note that we will post a guidance document on the 
2014 registry MAV process, which will include a list of the measure 
clusters that are used for the ``clinical relation'' test, prior to 
January 1, 2014 (the start of the 2014 reporting periods).
    We believe the changes we are finalizing will address commenters 
concerns, while still maintaining our general goal of increasing the 
measures reported to 9 measures covering 3 NQS domains. This also will 
increase the likelihood that more eligible professionals will be able 
to take advantage of this reporting option.
    Comment: Several commenters supported our proposal to increase the 
number of measures to be reported via registry, as requiring an 
eligible professional to report on more measures would better capture 
the quality of care provided by an eligible professional.
    Response: We appreciate the commenter's feedback with regard to the 
increase in measures. However, as discussed below, we are making a 
change in the final rule with regard to the applicable measures that 
must be reported under this satisfactory reporting criterion.
    Comment: While several commenters generally supported our proposal 
to increase the number of measures to be reported via registry, the 
commenters urged CMS to provide a more gradual approach to increasing 
the number of measures that must be reported via registry. These 
commenters suggested requiring the reporting of either 4 measures 
covering at least 1 NQS domain, 5 measures covering at least 2 NQS 
domains, or 6 measures covering at least 2 NQS domains.
    Response: We appreciate the commenters' support for our desire to 
increase the number of measures to be reported via registry, as well as 
their alternative suggestions on how to increase the number of measures 
to be reported via registry. While we agree that a more gradual 
increase in the number of measures to be reported may be necessary for 
purposes of meeting the criteria for satisfactory reporting for the 
2016 PQRS payment adjustment, since 2016 would only be the second year 
in which an eligible professional could be subject to a PQRS payment 
adjustment, we do not believe this reasoning applies to satisfactory 
reporting criteria related to the 2014 PQRS incentive. For the 2014 
PQRS incentive, as we stated with claims-based reporting, the PQRS 
program has provided incentives for satisfactory reporting since 2007, 
and we believe 6 years is a reasonable amount of time to allow eligible 
professionals to become familiar with the requirements for earning a 
PQRS incentive. In fact, eligible professionals have traditionally been 
successful in meeting the criteria for satisfactory reporting using the 
registry-based reporting mechanism. According to the 2011 PQRS and eRx 
Experience Report, 88 percent of eligible professionals reporting 
individual measures using the registry-based reporting mechanism in 
2011 met the criteria for satisfactory reporting for the 2011 PQRS 
incentive. Therefore, our concerns on gradually phasing in an increased 
reporting threshold for the 2016 PQRS payment adjustment does not apply 
here with the 2014 PQRS incentive. We believe it is appropriate to 
increase the number of measures to be reported via registry from 3 
measures covering 1 NQS domain to 9 measures covering 3 NQS domains for 
the 2014 PQRS incentive.
    For the commenters' suggested alternative criteria, while we 
understand the commenters' concerns, we believe our interest in 
aligning the satisfactory reporting criteria of individual measures via 
registry with the satisfactory reporting criteria of individual 
measures via EHR for the 2014 PQRS incentive outweighs the need for a 
gradual increase in the number of measures required to be reported via 
registry.
    For the reasons stated above, we are finalizing at Sec.  
414.90(h)(3) the following criterion for individual eligible 
professionals reporting individual PQRS quality measures via registry 
for the 2014 PQRS incentive: For the 12-month reporting period for the 
2014 PQRS incentive, report at least 9 measures covering at least 3 of 
the NQS domains, OR, if less than 9 measures covering at least 3 NQS 
domains apply to the eligible professional, report 1-8 measures 
covering 1-3 NQS domains for which there is Medicare patient data, AND 
report each measure for at least 50 percent of the eligible 
professional's Medicare Part B FFS patients seen during the reporting 
period to which the measure applies. Measures with a 0 percent 
performance rate will not be counted. For an eligible professional who 
reports fewer than 9 measures covering less than 3 NQS domains, the 
eligible professional would be subject to the MAV process, which would 
allow us to determine whether an eligible professional should have 
reported on additional measures and/or measures covering additional NQS 
domains.
c. Changes to the Criterion for Satisfactory Reporting of Measures 
Groups Via Claims for Individual Eligible Professionals for the 2014 
PQRS Incentive
    In the CY 2013 PFS final rule with comment period, we finalized the 
following criteria for satisfactory reporting for individual eligible 
professionals to report measures groups via claims: Report at least 1 
measures group AND report each measures group for at least 20 Medicare 
Part B FFS patients. Measures groups containing a measure with a 0 
percent performance rate will not be counted (77 FR 69192). Since 
finalizing this criterion, we published and analyzed the 2011 PQRS and 
eRx Experience Report, which provides a summary of PQRS reporting 
trends from 2007 through 2011, to determine where we may work to 
further streamline the reporting options available under the PQRS. The 
PQRS and eRx Experience Report stated that the number of eligible 
professionals who participated via claims-based measures groups 
reporting mechanism grew more than three-fold between 2008 and 2011. 
However, according to Appendix 8 of the PQRS and eRx Experience Report 
titled ``Eligible Professionals who Participated by Reporting Measures 
Groups through the Claims Reporting Mechanism for the Physician Quality 
Reporting System, by Specialty (2008 to 2011),'' only 4,472 eligible 
professionals used this reporting option. Meanwhile, the Experience 
Report further shows that the option to report measures groups via 
registry has grown at an even faster rate with 12,894 participants in 
2011. Therefore, in an effort to streamline the reporting options 
available under the PQRS and to eliminate reporting options that are 
not widely used, we proposed to remove this satisfactory reporting 
criterion for the 2014 PQRS incentive (78 FR 43359). We solicited and 
received the following public comments on this proposal:
    Comment: Some commenters supported our proposal to eliminate the 
option to report measures groups via claims for the 2014 PQRS incentive 
in an effort to streamline the reporting options available under the 
PQRS.
    Response: We appreciate the commenters' feedback and are finalizing 
this proposal.
    Comment: Several commenters opposed our proposal to eliminate the 
option to report measures groups via claims for the 2014 PQRS 
incentive. Commenters stressed the need to maintain the claims-based 
reporting option, as some commenters are weary that moving away from 
the claims-based

[[Page 74462]]

reporting mechanism will eliminate a free way to report quality 
measures under the PQRS (as most registries charge a fee to report PQRS 
quality measures data on behalf of its eligible professionals to CMS). 
Other commenters stressed the need to maintain a wide range of 
reporting options.
    Response: We understand the commenters' desire to have free options 
to report under the PQRS. However, we do not believe it is necessary to 
maintain this reporting option, because an eligible professional may 
still use the free option of claims-based reporting to report 
individual quality measures for the 2014 PQRS incentive. In addition, 
we note that, while many qualified registries charge a fee for use of 
the registry, not all registries may charge a fee to use the registry 
to report quality measures for the PQRS. As you can see, although we 
are eliminating the option to report measures groups via claims, there 
are still ways to participate in the PQRS that are free.
    For the commenters' desire to keep a wide range of PQRS reporting 
options available to eligible professionals, as we stated in the 
proposed rule (78 FR 43359), we simply do not see the need to keep this 
option available since this is not a widely used reporting option. We 
note that, although we are eliminating this reporting option, there are 
several other ways to participate in the PQRS either as an individual 
eligible professional or as part of a group practice under the GPRO. In 
fact, as we describe below, we are adding the option to earn a 2014 
PQRS incentive based on an eligible professional's satisfactory 
participation in a qualified clinical data registry.
    For the reasons stated above, we are finalizing our proposal to 
eliminate the following criteria for satisfactory reporting for 
individual eligible professionals to report measures groups via claims 
for the 2014 PQRS incentive: Report at least 1 measures group AND 
report each measures group for at least 20 Medicare Part B FFS 
patients. Measures groups containing a measure with a 0 percent 
performance rate will not be counted. Please note that, as a result of 
our final decision to remove this satisfactory reporting criterion, the 
only manner in which an eligible professional will be able to report 
PQRS measures groups are via registry.
5. Criteria for Satisfactory Reporting for the 2016 PQRS Payment 
Adjustment for Individual Eligible Professionals Using the Claims and 
Registry Reporting Mechanisms
    Section 1848(a)(8) of the Act provides that for covered 
professional services furnished by an eligible professional during 2015 
or any subsequent year, if the eligible professional does not 
satisfactorily report 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 professional during the 
year shall be equal to the applicable percent of the fee schedule 
amount that would otherwise apply to such services. For 2016 and 
subsequent years, the applicable percent is 98.0 percent.
    In the CY 2013 PFS final rule, we finalized seven different 
criteria for the satisfactory reporting by individual eligible 
professionals of data in PQRS quality measures for the 2016 PQRS 
payment adjustment (see 77 FR 69200-69204 and Table 91 at 77 FR 69194). 
In the proposed rule, we proposed (78 FR 43360) to eliminate two 
criteria, revise another, and include two additional criteria (based on 
two of the existing criteria).
    Specifically, corresponding with our proposal (78 FR 43360) to 
eliminate a reporting criterion for the 2014 PQRS incentive to 
streamline the program and eliminate criteria for reporting options 
that are not widely used, we proposed to remove the following criterion 
we previously finalized for the CY 2016 payment adjustment for 
individual eligible professionals reporting measures groups through 
claims (77 FR 69200 and Table 91, 77 FR 69164): Report at least 1 
measures group AND report each measures group for at least 20 Medicare 
Part B FFS patients (Measures groups containing a measure with a 0 
percent performance rate will not be counted). We solicited and 
received the following public comments on this proposal:
    Comment: Some commenters supported our proposal to eliminate the 
option to report measures groups via claims for the 2016 PQRS payment 
adjustment in an effort to streamline the reporting options available 
under the PQRS.
    Response: We appreciate the commenters' feedback and, based on the 
commenters' support and the reasons stated above, are finalizing this 
proposal.
    Comment: Several commenters opposed our proposal to eliminate the 
option to report measures groups via claims for the 2016 PQRS payment 
adjustment. Commenters stressed the need to maintain the claims-based 
reporting option, as some commenters are weary that moving away from 
the claims-based reporting mechanism will eliminate a free way to 
report quality measures under the PQRS (as most registries charge a fee 
to report PQRS quality measures data on behalf of its eligible 
professionals to CMS).
    Response: Although we understand the commenters' desire to have 
free options to report under the PQRS, we do not believe it is 
necessary to maintain this reporting option, because, as is also the 
case for reporting for the 2014 PQRS incentive, an eligible 
professional may still use the free option of claims-based reporting to 
report individual quality measures for the 2016 PQRS payment 
adjustment. In addition, we note that, while many qualified registries 
charge a fee for use of the registry, not all registries may charge a 
fee to use the registry to report quality measures for the PQRS. 
Although we are finalizing our decition to eliminate the option to 
report measures groups via claims, there are still ways to participate 
in the PQRS that are free.
    As for the commenters' desire to keep a wide range of PQRS 
reporting options available to eligible professionals, we simply do not 
see the need to keep this option available since this is not a widely 
used reporting option. We note that, although we are eliminating this 
reporting option, there are several other ways to participate in the 
PQRS either as an individual eligible professional or as part of a 
group practice under the GPRO. In fact, as we describe below, we are 
adding the option to avoid the 2016 PQRS payment adjustment based on an 
eligible professional's satisfactory participation in a qualified 
clinical data registry.
    In summary, we are modifying Sec.  414.90(j)(3) to reflect our 
final decision to eliminate the following criteria for satisfactory 
reporting for individual eligible professionals to report measures 
groups via claims for the 2016 PQRS payment adjustment: Report at least 
1 measures group AND report each measures group for at least 20 
Medicare Part B FFS patients. Measures groups containing a measure with 
a 0 percent performance rate will not be counted. Please note that, 
since we are removing this reporting criterion, the only manner under 
which an eligible professional would be able to report a PQRS measures 
group would be via registry.
    We also proposed (78 FR 43360) to remove the following criterion we 
previously finalized for the 2016 PQRS payment adjustment for 
individual

[[Page 74463]]

eligible professionals reporting individual measures through a 
qualified registry: Report at least 3 measures, AND report each measure 
for at least 80 percent of the eligible professional's Medicare Part B 
FFS patients seen during the reporting period to which the measures 
applies. Measures with a 0 percent performance rate will not be 
counted. We solicited and received the following public comments on 
this proposal:
    Comment: While several commenters supported our proposal to 
increase the number of measures to be reported via registry, these 
commenters generally did not support eliminating this reporting 
criterion. Some commenters did not support eliminating this reporting 
criterion as eligible professionals have previously met the criteria 
for satisfactory reporting using this criterion and therefore do not 
want to modify they manner in which they report. Other commenters 
expressed concern that there are still eligible professionals who do 
not have 3 measures applicable to their practice. These commenters 
therefore suggested that this criterion be modified to require the 
reporting of only 1 measure covering 1 NQS domain for the 2016 PQRS 
payment adjustment, similar to the criterion that was finalized for the 
2015 PQRS payment adjustment (77 FR 69201), as some commenters are 
concerned that there are still eligible professionals who do not have 3 
measures applicable to their practice.
    Response: We understand the commenters' concerns regarding 
eliminating this reporting criterion. Although we still desire to move 
towards the reporting of more measures, we understand that eligible 
professionals may need another year to adjust to the reporting of 
additional measures. We believe it is pertinent to allow time for 
eligible professionals to adjust to the reporting of additional 
measures for purposes of the 2016 PQRS payment adjustment as opposed to 
the 2014 PQRS incentive, because earning a 2014 PQRS incentive results 
in a positive payment adjustment whereas being subject to the 2016 PQRS 
payment adjustment results in a downward payment adjustment. Therefore, 
based on the concerns expressed by commenters, we are not finalizing 
our proposal to eliminate this reporting criterion for the 2016 PQRS 
payment adjustment. We note, however, that it is our intention to move 
towards the reporting of 9 measures covering at least 3 NQS domains for 
the 2017 PQRS payment adjustment.
    Since we are maintaining this satisfactory reporting criterion 
under the PQRS, and given that, as noted above, we are finalizing our 
proposal to reduce the percentage threshold of reporting measures via 
registry for purposes of the 2014 PQRS incentive from 80 to 50 percent, 
we are finalizing the same change for this reporting criterion for the 
2016 PQRS payment adjustment. That is, to coincide with the registry 
reporting criterion for the 2014 PQRS incentive, we are also lowering 
the percentage threshold for the reporting of measures at least 3 
measures via registry for the 2016 PQRS payment adjustment from 80 to 
50 percent. We do not believe this change negatively affects eligible 
professionals who intend to report using this reporting criterion as 
this modification reduces reporting burden on eligible professionals. 
In addition, we note that, since the percentage threshold for the 2014 
PQRS incentive typically coincides with the percentage threshold for 
the 2016 PQRS payment adjustment, it was foreseeable that we would 
lower the percentage threshold of reporting measures via registry for 
the 2016 PQRS payment adjustment from 80 to 50 percent since we 
proposed to lower the percentage threshold for the 2014 PQRS incentive.
    For the commenters' who expressed concern that there are still 
eligible professionals who do not have 3 measures applicable to their 
practice, we are further modifing this satisfactory reporting criterion 
to allow EPs to report 1-2 applicable measures if 3 measures are not 
applicable to the eligible professional. As a result, and consistent 
with the other similar criteria we are finalizing in this final rule 
with comment for the 2014 PQRS incentive, we will apply a registry MAV 
process for the 2016 PQRS payment adjustment. For purposes of this 
reporting criterion, the registry MAV process will be triggered when an 
eligible professional reports on less than 3 measures covering 1 NQS 
domain. For example, if an eligible professional reports on 1-2 
measures, the MAV process will be triggered to determine whether an 
eligible professional could have reported on at least 3 measures 
covering 1 NQS domain.
    This registry MAV process that will determine whether an eligible 
professional could have reported on more measures will be similar to 
the ``clinical relation'' test used in the 2013 claims MAV process. To 
get a better sense of how the registry MAV process for the 2016 PQRS 
payment adjustment will be implemented by CMS, a description of the 
``clinical relation'' test in the current 2013 claims MAV process is 
available at http://www.cms.gov/Medicare/Quality-Initiatives-Patient-
Assessment-Instruments/PQRS/Downloads/2013_PQRS_
MeasureApplicabilityValidation_Docs_030413.zip. Please note that we 
will post a guidance document on the registry MAV process for the 2016 
PQRS payment adjustment, which will include a list of the measure 
clusters that are used for the ``clinical relation'' test, prior to 
January 1, 2014 (the start of the 2014 reporting periods).
    In summary, for the reasons we noted above and in response to 
comments, we are not eliminating the following reporting criterion: 
Report at least 3 measures, AND report each measure for at least 80 
percent of the eligible professional's Medicare Part B FFS patients 
seen during the reporting period to which the measures applies. 
Measures with a 0 percent performance rate will not be counted. 
Instead, we are retaining this reporting criterion for the 2016 payment 
adjustment for individual eligible professionals reporting individual 
measures through a qualified registry but modifying this reporting 
criterion in the following manner: For the 12-month reporting period 
for the 2016 PQRS payment adjustment, report at least 3 measures 
covering at least 1 of the NQS domains, OR, if less than 3 measures 
apply to the eligible professional, report 1-2 measures covering 1 NQS 
domain for which there is Medicare patient data, AND report each 
measure for at least 50 percent of the eligible professional's Medicare 
Part B FFS patients seen during the reporting period to which the 
measure applies. Measures with a 0 percent performance rate would not 
be counted. For an eligible professional who reports fewer than 3 
measures covering 1 NQS domain via the registry-based reporting 
mechanism, the eligible professional would be subject to the MAV 
process, which would allow us to determine whether an eligible 
professional should have reported on additional measures.
    Finally, to maintain some consistency and to otherwise align with 
the criteria we proposed for the 2014 PQRS incentive for individual 
eligible professionals, we proposed two other criteria for satisfactory 
reporting by individual eligible professionals for the 2016 PQRS 
payment adjustment using the claims reporting mechanism (78 FR 43360). 
We proposed (78 FR 43360) the following criterion for reporting 
individual measures via claims by individual eligible professionals for 
the 2016 PQRS payment adjustment: For the 12-month reporting period for 
the 2014 PQRS incentive, report at least 9 measures, covering at least 
3 of the National Quality Strategy domains, OR, if less than 9 measures 
covering at least

[[Page 74464]]

3 NQS domains apply to the eligible professional, report 1-8 measures, 
and report each measure for at least 50 percent of the Medicare Part B 
FFS patients seen during the reporting period to which the measure 
applies. Measures with a 0 percent performance rate would not be 
counted. We solicited and received the following comment on this 
proposed criterion:
    Comment: One commenter stressed the importance of aligning the 
reporting criteria for the 2014 PQRS incentive with the reporting 
criteria for the 2016 PQRS payment adjustment, so that eligible 
professionals would be able to use one reporting option for the 2014 
PQRS incentive and the 2016 PQRS payment adjustment.
    Response: We appreciate the commenters' support regarding our 
desire to align reporting options for the 2014 PQRS incentive and 2016 
PQRS payment adjustment. Based on the reasons previously stated and the 
positive feedback to align reporting options for the 2014 PQRS 
incentive and 2016 PQRS payment adjustment, we are finalizing the 
following criterion for reporting individual measures via claims by 
individual eligible professionals for the 2016 PQRS payment adjustment: 
Report at least 9 measures covering at least 3 NQS domains, OR, if less 
than 9 measures covering at least 3 NQS domains apply to the eligible 
professional, report 1-8 measures covering 1-3 NQS domains, AND report 
each measure for at least 50 percent of the Medicare Part B FFS 
patients seen during the reporting period to which the measure applies. 
Measures with a 0 percent performance rate would not be counted. For an 
eligible professional who reports fewer than 9 measures covering at 
least 3 NQS domains via the claims-based reporting mechanism, the 
eligible professional would be subject to the MAV process, which would 
allow us to determine whether an eligible professional should have 
reported quality data codes for additional measures and/or covering 
additional NQS domains.
    With respect to an eligible professional who reports on less than 9 
measures and/or covering less than 3 NQS domains, the eligible 
professional must report on ALL measures covering as many domains as 
are applicable to the eligible professional's practice. In other words, 
with respect to an eligible professional who does not have 9 measures 
covering 3 NQS domains to report, the EP must report 1-8 measures, as 
applicable, and hit the maximum number of domains. For example, if an 
eligible professional has only 7 measures covering at least 3 NQS 
domains applicable to the eligible professional's practice, the 
eligible professional must report on all 7 measures covering at least 3 
NQS domains.
    We also proposed (78 FR 43360) the following criterion for 
reporting individual measures via qualified registry by individual 
eligible professionals for the 2016 PQRS payment adjustment: For the 
12-month reporting period for the 2016 PQRS payment adjustment, report 
at least 9 measures covering at least 3 of the NQS domains and report 
each measure for at least 50 percent of the eligible professional's 
Medicare Part B FFS patients seen during the reporting period to which 
the measure applies. Measures with a 0 percent performance rate would 
not be counted. We solicited and received the following public comment 
on this proposed criterion:
    Comment: One commenter stressed the importance of aligning the 
reporting criteria for the 2014 PQRS incentive with the reporting 
criteria for the 2016 PQRS payment adjustment, so that eligible 
professionals would be able to use one reporting option for the 2014 
PQRS incentive and the 2016 PQRS payment adjustment.
    Response: We appreciate the commenters' feedback and are aligning 
reporting options for the 2014 PQRS incentive and 2016 PQRS payment 
adjustment to report individual measures via registry by individual 
eligible professionals.
    Comment: The majority of commenters supported our proposal to 
decrease the percentage of patients that must be reported via registry 
from 80 percent to 50 percent. The commenters supported our proposal 
specifically because it aligns with the option to report individual 
measures via the claims-based reporting mechanism.
    Response: We appreciate the commenters' feedback and, based on the 
support received and for the reasons stated in the proposed rule (78 FR 
43360), we are finalizing this proposal with regard to the percent 
threshold. Therefore, to meet the criteria for satisfactory reporting 
for the 2016 PQRS payment adjustment, an eligible professional 
reporting individual quality measures via registry will be required to 
report each measure for at least 50 percent of the eligible 
professional's Medicare Part B FFS patients seen during the reporting 
period to which the measure applies.
    Comment: One commenter stated that we should not align the PQRS 
reporting criteria for reporting mechanisms other than the EHR-based 
reporting mechanisms with the reporting criteria for the EHR Incentive 
Program, as the objectives for the two programs are different.
    Response: We respectfully disagree. Although the standards and 
criteria for which the PQRS and EHR Incentive Program provide 
incentives and relieve eligible professionals from payment adjustments 
are different, the two programs are both dedicated to the promotion of 
EHR technology and the collection of quality data.
    Comment: The majority of commenters opposed our proposal to 
increase the number of measures to be reported via registry from 3 
measures covering 1 NQS domain to 9 measures covering 3 NQS domains. 
Several of these commenters generally opposed any proposal that would 
increase the number of measures to be reported via registry from 3 
measures covering 1 NQS domain. Some of these commenters noted that 
they have been successful at meeting the criteria for satisfactory 
reporting in the PQRS via registry in the past, and increasing the 
number of measures to be reported via registry would make it more 
difficult for these eligible professionals to meet the criteria for 
satisfactory reporting for the 2016 PQRS payment adjustment. Other 
commenters urged CMS not to increase the criteria for satisfactory 
reporting until participation in PQRS increases, as the commenters 
feared that increasing the criteria for satisfactory reporting in PQRS 
would discourage eligible professionals from participating in the PQRS. 
Still some of these commenters opposing this proposal noted that 
certain eligible professionals did not have 9 measures covering 3 NQS 
domains for which to report. These commenters suggested requiring the 
reporting of either 4 measures covering at least 1 NQS domain, 5 
measures covering at least 2 NQS domains, or 6 measures covering at 
least 2 NQS domains. Many of these commenters suggested requiring the 
reporting of only 1 measure covering 1 NQS domain for the 2016 PQRS 
payment adjustment, similar to the criterion that was finalized for the 
2015 PQRS payment adjustment (see Table 91 at 77 FR 69194), as some 
commenters are concerned that there are still eligible professionals 
who do not have 3 measures applicable to their practice.
    Response: We understand the commenters' concerns. As stated above, 
we are not finalizing our proposal to eliminate the option to report 3 
measures covering 1 NQS domain (and further modifying it to allow the 
reporting of 1-2 meaures if 3 are not applicable). This should address 
some of the concerns raised regarding the

[[Page 74465]]

proposed satisfactory criterion described above regarding increasing 
and moving away from reporting 3 meausures. That also affords varying 
levels of reporting criteria from which to choose--particularly as 
participation increased. Therefore, eligible professionals will, at 
least for the 2016 PQRS payment adjustment, have the option to use an 
alternative, less stringent reporting criterion to generally report 3 
individual quality measures for the 2016 PQRS payment adjustment via 
registry in lieu of this criterion.
    As for this criterion and commenters' concerns about not having at 
least 9 PQRS measures covering 3 NQS domains, we are finalizing a 
modification to our proposal to allow eligible professionals to report 
fewer measures so that eligible professionals who do not have at least 
9 PQRS measures or measures covering at least 3 NQS domains applicable 
to their practice. Specifically, if fewer than 9 measures covering less 
than 3 NQS domains apply to the eligible professional, an eligible 
professional must report 1-8 measures covering 1-3 NQS domains for 
which there is Medicare patient data. This is consisten with what we 
are finalizing with regard to certain 2014 PQRS incentive criteria. 
Similarly, the MAV process will be triggered when an eligible 
professional reports on less than 9 measures. For example, if an 
eligible professional reports on 8 measures covering 2 NQS domains, the 
MAV process will be triggered to determine whether an eligible 
professional could have reported on an additional measure to report on 
at least 9 measures covering 2 or 3 NQS domains.
    In summary, we are finalizing at Sec.  414.90(j)(3) the following 
criterion for reporting individual measures via qualified registry by 
individual eligible professionals for the 2016 PQRS payment adjustment: 
Report at least 9 measures covering at least 3 of the NQS domains, OR, 
if less than 9 measures covering at least 3 NQS domains apply to the 
eligible professional, report 1-8 measures covering 1-3 NQS domains for 
which there is Medicare patient data, AND report each measure for at 
least 50 percent of the eligible professional's Medicare Part B FFS 
patients seen during the reporting period to which the measure applies. 
Measures with a 0 percent performance rate will not be counted. For an 
eligible professional who reports fewer than 9 measures, the eligible 
professional will be subject to the MAV process, which will allow us to 
determine whether an eligible professional should have reported on 
additional measures and/or measures covering additional NQS domains.
    Please note that if an individual eligible professional were to 
meet any of the criteria for satisfactory reporting for the 2014 PQRS 
incentive, the individual eligible professional would meet the 
requirements for satisfactory reporting for the 2016 PQRS payment 
adjustment (note, however, that the reverse would not necessarily be 
true since there are additional criteria for satisfactory reporting for 
the 2016 PQRS payment adjustment that would not apply to the 2014 PQRS 
incentive). As we continue to implement the PQRS payment adjustment and 
fully implement the value-based payment modifier in 2017, it is our 
intent to ramp up the criteria for satisfactory reporting for the 2017 
PQRS payment adjustment to be on par or more stringent than the 
criteria for satisfactory reporting for the 2014 PQRS incentive.
6. Satisfactory Participation in a Qualified Clinical Data Registry by 
Individual Eligible Professionals
    Section 601(b) of the American Taxpayer Relief Act of 2012 (ATRA) 
(Pub. L. 112-240, enacted January 2, 2013) amends section 1848(m)(3) of 
the Act, by redesignating paragraph (D) as subparagraph (F) and adding 
new subparagraph (D), to provide for a new standard for individual 
eligible professionals to satisfy the PQRS beginning in 2014, based on 
satisfactory participation in a qualified clinical data registry. In 
the CY 2014 PFS proposed rule (78 FR 43360), we set forth our proposals 
for implementing this provision, including the proposed requirements 
for qualified clinical data registries and our proposals for individual 
eligible professionals to satisfactorily participate in a qualified 
clinical data registry for the 2014 PQRS incentive and 2016 PQRS 
payment adjustment. Below, we address the final requirements related to 
satisfactory participation in a qualified clinical data registry by 
individual eligible professionals.
a. Definition of a Qualified Clinical Data Registry
    Under section 1848(m)(3)(D) of the Act, as amended and added by 
section 601(b)(1) of the ATRA, for 2014 and subsequent years, the 
Secretary shall treat an eligible professional as satisfactorily 
submitting data on quality measures if, in lieu of reporting measures 
under subsection (k)(2)(C), the eligible professional is satisfactorily 
participating, as determined by the Secretary, in a qualified clinical 
data registry for the year. Section 1848(m)(3)(E) of the Act, as added 
by section 601(b)(1) of the ATRA, authorizes the Secretary to define a 
qualified clinical data registry under the PQRS. Specifically, the 
Secretary is required to establish requirements for an entity to be 
considered a qualified clinical data registry (including that the 
entity provide the Secretary with such information, at such times, and 
in such manner, as the Secretary determines necessary to carry out the 
provision). In establishing such requirements, the Secretary must take 
certain factors into consideration.
    Based on CMS' authority to define a qualified clinical data 
registry under section 1848(m)(3)(E) of the Act, as added by section 
601(b) of the ATRA, and accounting for the considerations addressed in 
section 1848(m)(3)(E)(ii) of the Act and for the reasons stated in the 
CY 2014 PFS proposed rule (78 FR 43361), we proposed to modify Sec.  
414.90(b) to add a proposed definition for a qualified clinical data 
registry. Specifically, we proposed to define a ``qualified clinical 
data registry'' for purposes of the PQRS as a CMS-approved entity (such 
as a registry, certification board, collaborative, etc.) that collects 
medical and/or clinical data for the purpose of patient and disease 
tracking to foster improvement in the quality of care furnished to 
patients.
    First, we proposed that a qualified clinical data registry must be 
able to submit quality measures data or results to CMS for purposes of 
demonstrating that, for a reporting period, its eligible professionals 
have satisfactorily participated in PQRS. We proposed that a qualified 
clinical data registry must have in place mechanisms for the 
transparency of data elements and specifications, risk models, and 
measures. We solicited and received the following public comment on 
this proposed aspect of the definition we proposed for a qualified 
clinical data registry:
    Comment: Some commenters opposed our proposed requirement that an 
entity who seeks to become a qualified clinical data registry must be 
able to submit quality measures data or results to CMS for purposes of 
demonstrating that, for a reporting period, its eligible professionals 
have satisfactorily participated in PQRS. The commenters were generally 
opposed to requiring qualified clinical data registries to report on 
measures on behalf of its participating eligible professionals. These 
commenters believed that CMS should not require that a qualified 
clinical data registry be able to report on quality measures data if a 
clinical data

[[Page 74466]]

registry is able to perform other important functions, such as 
benchmarking.
    Response: We appreciate the commenters' feedback but respectfully 
disagree. We believe possessing the ability to submit quality measures 
data to CMS is an essential, not optional, aspect of a qualified 
clinical data registry. We believe collecting quality measures data 
from a qualified clinical data registry is essential, particularly so 
that the data received could be compared against eligible professionals 
participating in PQRS using other reporting options to determine 
application of an upward, downward, or neutral adjustment under the 
Value-based Payment Modifier.
    Second, with regard to the consideration under section 
1848(m)(3)(E)(ii)(II) of the Act, as added by section 601(b) of the 
ATRA that allows the submission of data from participants for multiple 
payers, we proposed that the data a qualified clinical data registry 
submitted to CMS for purposes of demonstrating satisfactory 
participation be quality measures data on multiple payers, not just 
Medicare patients. We solicited and received the following public 
comment on this proposed aspect of our proposed definition of a 
qualified clinical data registry:
    Comment: Several commenters supported our proposal to allow the 
reporting of quality measures data on multiple payers, not just 
Medicare patients.
    Response: We appreciate the commenters' positive feedback and 
agree. Therefore, we are finalizing our proposal to include in the 
definition of a qualified clinical data registry the requirement that 
the data a qualified clinical data registry submitted to CMS for 
purposes of demonstrating satisfactory participation be quality 
measures data on multiple payers, not just Medicare patients.
    Comment: Some commenters were weary of collecting quality measures 
data on multiple payers. One of the commenters expressed concern that 
this could compel eligible professionals to collect and submit to a 
qualified clinical data registry patient data on multiple payers with 
no plan for utilizing the non-Medicare data or informing other payers 
that quality measure data have been collected on their patients.
    Response: We respectfully disagree with the commenters. Please 
understand that, although the PQRS is a pay-for-reporting program, the 
data collected under the PQRS is used to measure performance and the 
quality of care an eligible professional provides. In fact, as 
specified in this final rule, the data collected under the PQRS 
reported by qualified clinical data registries will be used to measure 
performance of certain eligible professionals under the Value-based 
Payment Modifier.
    Third, with regard to the consideration under section 
1848(m)(3)(E)(ii)(III) of the Act, as added by section 601(b) of the 
ATRA, that a qualified clinical data registry provide timely 
performance reports to participants at the individual participant 
level, we proposed that a qualified clinical data registry must provide 
timely feedback at least quarterly on the measures for which the 
qualified clinical data registry would report on the individual 
eligible professional's behalf for purposes of the eligible 
professional meeting the criteria for satisfactory participation under 
PQRS. We solicited and received the following public comment on this 
proposal:
    Comment: Some commenters supported our proposal to require a 
qualified clinical data registry to provide timely feedback at least 
quarterly on the measures for which the qualified clinical data 
registry would report on the individual eligible professional's behalf 
for purposes of the eligible professional meeting the criteria for 
satisfactory participation under PQRS. However, other commenters 
expressed concern with this proposal, as it is costly and resource-
intensive to provide quarterly feedback to all eligible professionals 
participating in a qualified clinical data registry. Some commenters 
requested clarification on the meaning of providing timely feedback at 
least quarterly on the measures for which the qualified clinical data 
registry would report on the individual eligible professional's behalf 
for purposes of the eligible professional meeting the criteria for 
satisfactory participation under PQRS. These commenters asked whether 
certain registries that allow users to generate reports on an ``on 
demand'' basis rather than directly pushing out feedback reports to its 
participate eligible professionals would meet the requirement of 
providing timely feedback at least quarterly to its eligible 
professionals.
    Response: We appreciate the commenters' support, as well as 
concerns regarding this proposal. We understand the cost and resources 
a qualified clinical data registry would undergo to provide quarterly 
feedback to its participating eligible professionals. However, 
regardless of the cost, we believe that the ability to provide timely 
and frequent feedback to participating eligible professionals is 
critically important to fostering quality care. Please note that we 
currently require traditional qualified registries to provide at least 
2 feedback reports to its participating eligible professionals per 
year. Since we view a qualified clinical data registry as an entity 
that is more robust than a traditional qualified registry and goes 
further to drive the quality of care provided to patients than only 
reporting quality measures data for the PQRS, we believe that 
requirements for an entity to become a qualified clinical data registry 
should be more stringent than the requirements for a registry to be 
qualified under the PQRS. Therefore, we believe that a qualified 
clinical data registry should provide its participating eligible 
professionals with more than 2 feedback reports each year in which the 
clinical data registry is qualified. While we will not require a 
qualified clinical data registry to provide quarterly feedback reports, 
we are still requiring that a qualified clinical data registry provide 
at least 4 feedback reports to each of its participating eligible 
professionals during the year in which the clinical data registry is 
qualified (that is, if a qualified clinical data registry is qualified 
to report quality measures data for reporting periods occurring in 
2014, the qualified clinical data registry must provide each 
participating eligible professional with at least 4 feedback reports in 
2014).
    We understand that some entities do not directly send feedback 
reports to its participating eligible professionals. Rather, these 
entities have feedback reports that are readily available for viewing 
at any time via the web or other communication mechanism. As one 
commenter specified, certain registries allow users to generate reports 
on an ``on demand'' basis rather than directly pushing out feedback 
reports to its participating eligible professionals. We note that this 
would fulfill the requirement that an entity seeking to be a qualified 
clinical data registry provide each participating eligible professional 
with at least 4 feedback reports per year.
    Fourth, to address section 1848(m)(3)(E)(ii)(IV) of the Act, as 
added by section 601(b) of the ATRA, regarding whether a qualified 
clinical data registry supports quality improvement initiatives for its 
participants, we proposed (78 FR 43362) to require that a qualified 
clinical data registry possess a method to benchmark the quality of 
care measures an eligible professional provides with that of other 
eligible professionals performing the same or similar functions. 
Benchmarking would require that a qualified clinical data registry 
provide

[[Page 74467]]

metrics to compare the quality of care its participating eligible 
professional provides. For example, the National Committee for Quality 
Assurance (NCQA) provides national and regional benchmarks for certain 
measures. Adopting benchmarks such as those provided by NCQA could 
serve to satisfy this requirement.
    In addition to the comments received on our proposed definition of 
a qualified clinical data registry, we received the following general 
comments on the implementation of this new qualified clinical data 
registry option:
    Comment: Several commenters supported the addition of the option to 
meet the criteria for satisfactory participation in a qualified 
clinical data registry for the PQRS. However, some commenters opposed 
this new option. Commenters were concerned that participation in a 
qualified clinical data registry requires considerable resources, 
ranging from subscription fees to the expertise of clinical personnel 
to abstract and report data.
    Response: We understand the commenters' concerns regarding the 
expense of participating in a qualified clinical data registry. 
However, we note that it is voluntary for eligible professionals 
participate in the PQRS using a qualified clinical data registry. 
Rather, it is one of several reporting mechanisms that may be used to 
report quality measures data under the PQRS.
    Comment: One commenter generally opposed the implementation of the 
option to satisfactorily participate in a qualified clinical data 
registry for purposes of the PQRS. The commenter stressed that adding 
another reporting option would add to the complexity of the program.
    Response: We understand the commenters' concerns regarding adding 
complexity to the PQRS. Indeed, we have worked to streamline the PQRS 
to eliminate complexity in the program. However, under section 
1848(m)(3)(D) of the Act, we are required to provide for a new standard 
for individual eligible professionals to satisfy the PQRS beginning in 
2014, based on satisfactory participation in a qualified clinical data 
registry. Furthermore, we disagree with the commenter that this new 
qualified clinical data registry reporting option will add complexity 
to the PQRS, as this new option provides more flexibility than all 
other PQRS reporting options. For example, as explained in further 
detail in the PQRS measures section below, if reporting via a qualified 
clinical data registry, an eligible professional is not required to 
report on measures within the PQRS measure set.
    In summary, we are amending Sec.  414.90(b) to define a qualified 
clinical data registry as a CMS-approved entity that has self-nominated 
and successfully completed a qualification process that collects 
medical and/or clinical data for the purpose of patient and disease 
tracking to foster improvement in the quality of care provided to 
patients. A qualified clinical data registry must perform the following 
functions:
    (1) Submit quality measures data or results to CMS for purposes of 
demonstrating that, for a reporting period, its eligible professionals 
have satisfactorily participated in PQRS. A qualified clinical data 
registry must have in place mechanisms for the transparency of data 
elements and specifications, risk models, and measures.
    (2) Submit to CMS, for purposes of demonstrating satisfactory 
participation, quality measures data on multiple payers, not just 
Medicare patients
    (3) Provide timely feedback, at least four times a year, on the 
measures at the individual participant level for which the qualified 
clinical data registry reports on the eligible professional's behalf 
for purposes of the individual eligible professional's satisfactory 
participation in the clinical quality data registry.
    (4) Possess benchmarking capacity that measures the quality of care 
an eligible professional provides with other eligible professionals 
performing the same or similar functions.
    Please note that it is possible for an entity to serve as both a 
traditional, qualified registry or a data submission vendor and a 
qualified clinical data registry under the PQRS.
b. Requirements for a Qualified Clinical Data Registry
    As we noted above, we are required, under section 1848(m)(3)(E)(i) 
of the Act, to establish requirements for an entity to be considered a 
qualified clinical data registry. Such requirements shall include a 
requirement that the entity provide the Secretary with such 
information, at such times, and in such manner, as the Secretary 
determines necessary to carry out this subsection. Section 
1848(m)(3)(E)(iv) of the Act, as added by section 601(b) of the ATRA, 
requires CMS to consult with interested parties in carrying out this 
provision.
    Under this authority to establish the requirements for an entity to 
be considered a qualified clinical data registry, we proposed (78 FR 
43362) the following requirements that an entity must meet to serve as 
a qualified clinical data registry under the PQRS:
    Comment: Some commenters generally supported the stringent 
requirements we proposed for an entity to become a qualified clinical 
data registry.
    Response: We appreciate the commenters' support for our proposals.
    We proposed (78 FR 43362) the following requirements to ensure that 
the entity seeking to become a qualified clinical data registry is 
well-established:
     Be in existence as of January 1 the year prior to the year 
for which the entity seeks to become a qualified clinical data registry 
(for example, January 1, 2013, to be eligible to participate for 
purposes of data collected in 2014). This proposed requirement is also 
required of a traditional qualified registry.
    We solicited and received the following public comments on this 
proposed requirement:
    Comment: While some commenters generally supported this proposal as 
it help ensures that entities seeking to become qualified clinical data 
registries are established entities with experience in driving quality 
improvement in healthcare, a few commenters opposed our proposed 
requirement that, to become a qualified clinical data registry an 
entity must be in existence as of January 1 the year prior to the year 
for which the entity seeks to become a qualified clinical data registry 
(for example, January 1, 2013, to be eligible to participate for 
purposes of data collected in 2014). The commenters noted that this may 
alienate new and developing entities that already perform the functions 
required of a qualified clinical data registry.
    Response: We understand that finalizing this requirement may 
exclude new entities that could perform the functions we require of a 
qualified clinical data registry. However, as we noted in the CY 2014 
PFS proposed rule (78 FR 43362), we believe it is important for an 
entity to test out its business practices to ensure that the practices 
it adopts truly foster the improvement of quality care prior to seeking 
to become a qualified clinical data registry. We believe that entities 
that have been in existence for less than 1 year prior to the year for 
which the entity seeks to become a qualified clinical data registry 
have not had an adequate opportunity to do so. We believe our reasons 
for proposing this requirement outweigh the commenters' concerns. 
Therefore, we are finalizing this proposal. For an entity to become 
qualified for a given year, the entity must be in existence as of 
January 1 the year prior to the year

[[Page 74468]]

for which the entity seeks to become a qualified clinical data registry 
(for example, January 1, 2013, to be eligible to participate for 
purposes of data collected in 2014).
     Have at least 100 clinical data registry participants by 
January 1 the year prior to the year for which the entity seeks to 
submit clinical quality measures data (for example, January 1, 2013, to 
be eligible to participate under the program with regard to data 
collected in 2014). Please note that not all participants would be 
required to participate in PQRS (78 FR 43362).
    We solicited and received the following public comments on this 
proposal:
    Comment: Some commenters opposed this proposed requirement that an 
entity have at least 100 participants, because the commenters believe 
this requirement would effectively exclude smaller registries that 
perform important functions that provide for the advancement of quality 
care. Commenters felt that this proposed requirement unfairly favors 
larger entities that perform similar tasks.
    Response: As we stated in the CY 2014 PFS proposed rule (78 FR 
43362), we proposed this requirement to ensure that the entity seeking 
to become a qualified clinical data registry is sufficient in size and 
technical capability. Because we believe that a qualified clinical data 
registry should be more robust in technical capabilities than a 
traditional PQRS-qualified registry, we believe that a qualified 
clinical data registry should be sufficiently larger in size than a 
traditional PQRS-qualified registry, which is required to have at least 
25 registry participants (77 FR 69179). Nonetheless, we understand the 
commenters' concerns. Although we do not believe we should drop the 
minimum threshold to 25, we believe it is reasonable to drop this 
proposed participation threshold to 50 participants. We believe that 
doubling the number of participants would ensure that the entities 
seeking to become qualified as a qualified clinical data registry would 
achieve our goal of attracting entities that are more robust in 
technical capabilities. In addition, we believe that the other 
requirements we are finalizing--such as the requirement that an entity 
seeking to become a qualified clinical data registry possess 
benchmarking capabilities--will help to ensure that an entity seeking 
to become a qualified clinical data registry is well established. 
Therefore, for an entity to become qualified for a given year, we are 
adopting the requirement that the entity must have at least 50 clinical 
data registry participants by January 1 the year prior to the year for 
which the entity seeks to submit clinical quality measures data (for 
example, January 1, 2013, to be eligible to participate under the 
program with regard to data collected in 2014). Please note that not 
all participants would be required to participate in PQRS.
    Comment: One commenter requested that we only require that an 
entity seeking to become a qualified clinical data registry have at 
least 100 clinical data registry participants by January 1 the year in 
which the entity seeks to submit clinical quality measures data (for 
example, January 1, 2014, to be eligible to participate under the 
program with regard to data collected in 2014) rather than the year 
prior to which the entity seeks to submit clinical quality measures 
data, because the commenter believes that this sufficiently ensures the 
legitimacy of an entity while providing entities with more time to gain 
participants.
    Response: We appreciate the commenter's feedback. However, as we 
are requiring that a entity be in existence as of the year prior to 
which the entity seeks to participate in the PQRS as a qualified 
clinical data registry, we believe it is important that an entity have 
at least 50 participants the year prior to which the entity seeks to 
submit clinical quality measures data (for example, January 1, 2013 to 
be eligible to participate under the program with regard to data 
collected in 2014) to ensure that the entity is adequately established 
to participate in the PQRS as a qualified clinical data registry prior 
to the start of the reporting periods occurring in 2014.
     Not be owned or managed by an individual, locally-owned, 
single-specialty group (for example, single-specialty practices with 
only 1 practice location or solo practitioner practices would be 
precluded from becoming a qualified clinical data registry) (78 FR 
43362). We solicited and received the following public comment on this 
proposed requirement:
    Comment: Some commenters supported this proposal, as it encouraged 
shared care across specialties and groups. However, one commenter 
opposed this proposal, as the commenter does not believe that a 
registry that covers patients within only a single group, even if 
multi-specialty or covering multiple states or regions, should meet the 
definition of a registry.
    Response: We appreciate the commenter's support and, based on the 
commenters' support, are finalizing this requirement, as proposed.
    In addition, for transparency purposes, we proposed (78 FR 43362) 
that a qualified clinical data registry must:
     Enter into and maintain with its participating 
professionals an appropriate Business Associate agreement that provides 
for the qualified clinical data registry's receipt of patient-specific 
data from the eligible professionals, as well as the qualified clinical 
data registry's public disclosure of quality measure results. We 
solicited and received the following public comment on this proposed 
requirement:
    Comment: One commenter expressed concern with this proposed 
requirement, as the commenter believes that many registries will have 
to modify their business agreements to account for public disclosure of 
quality measure results.
    Response: We understand the commenter's concerns on proposing to 
require that an entity's business agreement account for public 
disclosure of quality measure results. However, we believe that our 
desire for transparency in reporting outweighs the commenter's 
concerns. Therefore, we are finalizing this requirement, as proposed.
     Describe to CMS the cost for eligible professionals that 
the qualified clinical data registry charges to submit data to CMS (78 
FR 43362). We solicited and received the following public comment on 
this proposed requirement:
    Comment: One commenter supported this proposal.
    Response: We appreciate the commenter's positive feedback and are 
finalizing this requirement, as proposed.
    We also proposed (78 FR 43362) to require qualified clinical data 
registries to meet the following requirements pertaining to the 
transmission of quality measures data to CMS:
     To ensure that the qualified clinical data registry is 
compliant with applicable privacy and security laws and regulations, 
the entity must describe its plan to maintain Data Privacy and Security 
for data transmission, storage and reporting (78 FR 43362).
    Comment: One commenter supported this proposal. Some commenters 
requested clarification as to how to successfully comply with certain 
security and privacy laws, as CMS has not provided specific guidance on 
how to maintain compliance with these laws.
    Response: We understand the commenters' concerns regarding security 
and privacy laws related to the transmission of patient data. As 
addressing how to comply with applicable privacy and security laws and 
regulations is outside the scope of

[[Page 74469]]

this final rule, we are simply finalizing a requirement that an entity 
seeking to be a qualified clinical data registry comply with these 
laws. Therefore, we are not providing additional guidance on this 
proposed requirement. However, we would expect that in developing a 
plan to maintain data privacy and security for data transmission, 
storage, and reporting, qualified clinical data registries would assess 
the laws and regulations governing such requirements and incorporate 
appropriate safeguards into their plans. We are finalizing these 
requirements, as proposed.
     Comply with a CMS-specified secure method for quality data 
submission (78 FR 43362). We solicited and received the following 
public comment on this proposed requirement:
    Comment: One commenter supported this proposal.
    Response: We appreciate the commenter's positive feedback and are 
finalizing this requirement, as proposed.
     Provide information on each measure to be reported by an 
eligible professional, including a summary of supporting evidence/
rationale, title, numerator, denominator, exclusions/exceptions, data 
elements and value sets in addition to measure level reporting rates, 
patient-level demographic data and/or the data elements needed to 
calculate the reporting rates by TIN/NPI (78 FR 43362). We solicited 
and received the following public comment on this proposed requirement:
    Comment: While one commenter supported the collection of aggregate 
quality measures data, the commenter opposed providing to CMS specific 
information that this proposed requirement suggests as it is akin to 
requiring the reporting of patient-level data. The commenter requests 
clarification on this proposed requirement.
    Response: Please note that this proposed requirement does not 
require reporting of patient-level data. Rather, this proposed 
requirement requires a qualified clinical data registry to provide the 
measure specifications on each measure to be reported by an eligible 
professional. For more information on what level of specificity is 
needed, please refer to the 2013 PQRS Measures List available at http:/
/www.cms.gov/Medicare/Quality-Initiatives-Patient-Assessment-
Instruments/PQRS/MeasuresCodes.html. For the reasons we explained, and 
since we received no direct opposition to this proposal, are finalizing 
this requirement, as proposed.
     Submit an acceptable ``validation strategy'' to CMS by 
March 31 of the reporting year the entity seeks qualification (for 
example, if an entity wishes to become qualified for participation with 
regard to data collected in 2014, this validation strategy would be 
required to be submitted to CMS by March 31, 2014). A validation 
strategy would detail how the qualified clinical data registry will 
determine whether eligible professionals succeed in reporting clinical 
quality measures. Acceptable validation strategies often include such 
provisions as the entity 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 (78 FR 43362). For a template 
for data validation and integrity, please also see the requirements for 
certification of an EHR product by the Office of the National 
Coordinator for Health Information Technology (ONC) that are explained 
at http://www.healthit.gov/policy-researchers-implementers/2014-
edition-final-test-method.
    Comment: Some commenters supported this proposed requirement. Other 
commenters requested clarification on the definition of an acceptable 
``validation strategy.''
    Response: Please note that, to maintain flexibility, we did not 
identify a specific validation strategy. Rather, we outlined what such 
a validation strategy would need to demonstrate--namely, to determine 
whether eligible professionals succeed in reporting clinical quality 
measures. Should entities wishing to become qualified clinical data 
registries for 2014 require additional guidance and to vet their 
strategies, CMS will provide guidance in subregulatory communication. 
Therefore, we are finalizing this proposal, as proposed.
     Perform the validation outlined in the strategy and send 
evidence of successful results to CMS by June 30 of the year following 
the reporting period (for example, June 30, 2015, for data collected in 
the reporting periods occurring in 2014) (78 FR 43363). We solicited 
and received the following public comment on this proposed requirement:
    Comment: One commenter supported this proposed requirement.
    Response: We appreciate the commenter's positive feedback and are 
finalizing this requirement, as proposed.
     Obtain and keep on file for at least 7 years signed 
documentation that each holder of an NPI whose data are submitted to 
the qualified clinical data registry has authorized the registry to 
submit quality measure results and numerator and denominator data and/
or patient-specific data on beneficiaries to CMS for the purpose of 
PQRS participation. This documentation would be required to be obtained 
at the time the eligible professional signs up with the qualified 
clinical data registry to submit quality measures data to the qualified 
clinical data registry and would be required to meet any applicable 
laws, regulations, and contractual business associate agreements (78 FR 
43363). We solicited and received the following public comment on this 
proposal:
    Comment: One commenter supported this proposed requirement.
    Response: We appreciate the commenter's positive feedback and are 
finalizing this requirement, as proposed.
     Upon request and for oversight purposes, provide CMS 
access to the qualified clinical data registry's database to review the 
beneficiary data on which the qualified clinical data registry-based 
submissions are based or provide to CMS a copy of the actual data (78 
FR 43363). We solicited and received the following public comment on 
this proposal:
    Comment: Several commenters opposed this proposed requirement, as 
the commenters fear that this would violate patient privacy laws. One 
of the commenters believes that both eligible professionals and their 
patients would be opposed to this proposed requirement, as it provides 
CMS access to patient-level data.
    Response: CMS shares the commenters' interest in ensuring the 
protection of individually identifiable health information. As a HIPAA 
Covered Entity, the Medicare program fully intends to limit its data 
demands to the minimum data necessary to achieve a statistically valid 
audit of the registry's submissions. We believe that such disclosures 
are well within the Privacy Rule's provisions governing ``oversight'' 
disclosures. For the reasons stated previously, we are finalizing this 
requirement, as proposed.
     Prior to CMS posting the list of qualified clinical data 
registries for a particular year, verify the information contained on 
the list (includes names, contact information, measures, cost, etc.) 
and agree to furnish/support all of the services listed on the list (78 
FR 43363). We solicited and received the following public comment on 
this proposal:
    Comment: One commenter supported this proposed requirement.
    Response: We appreciate the commenter's positive feedback and are 
finalizing this requirement, as proposed.

[[Page 74470]]

     Make available to CMS samples of patient level data to 
audit the entity for purposes of validating the data submitted to CMS 
by the qualified clinical data registry, if determined to be necessary 
(78 FR 43363). We proposed this requirement to be able to conduct 
audits on clinical data registries for oversight purposes.
    Comment: Several commenters opposed this proposed requirement, as 
the commenters fear that this would violate patient privacy laws. One 
commenter opposed this proposed requirement as it is duplicative of the 
proposed requirement to submit a validation strategy to CMS.
    Response: CMS is tasked with overseeing the appropriate dispersal 
of funds from the Medicare trust fund, including the funds issued as 
PQRS payment incentives or adjustments made to fee schedule payments, 
as a result of PQRS reporting via qualified clinical data registries. 
This oversight is achieved through auditing the records CMS receives 
that serve as the basis for an amount paid out of the trust fund. CMS 
intends to exercise its oversight authority in full conformance with 
the HIPAA Privacy Rule's provisions governing an oversight authority's 
access to the data to carry out their oversight functions.
    With respect to the commenter who believes that this proposed 
requirement is unnecessary as it is duplicative of the proposed 
requirement to submit a validation strategy to CMS, we disagree. We are 
finalizing the requirement to submit a validation strategy to CMS so 
that CMS can determine whether the validation strategy used is 
sufficient to help ensure that accurate data is submitted to CMS. 
Although we proposed both requirements for oversight purposes, the 
requirement to make available to CMS samples of patient level data to 
audit the entity for purposes of validating the data submitted to CMS 
by the qualified clinical data registry, if determined to be necessary, 
would require more specific data to be made available to CMS. We note 
that, in all cases, we are requiring entities wishing to become 
qualified clinical data regsitries to submit its validation strategy to 
CMS, whereas we would only require that data be made available under 
this requirement only ``if necessary.'' For the reasons stated 
previously, we are finalizing this requirement, as proposed.
     The entity must provide information on how the entity 
collects quality measurement data, if requested (78 FR 43363). We 
solicited and received the following public comment on this proposal:
    Comment: One commenter supported this proposed requirement.
    Response: We appreciate the commenter's positive feedback and are 
finalizing this requirement, as proposed.
     By March 31 of the year in which the entity seeks to 
participate in PQRS as a qualified clinical data registry, the entity 
must publically post (on the entity's Web site or other publication 
available to the public) a detailed description (rationale, numerator, 
denominator, exclusions/exceptions, data elements) of the quality 
measures it collects to ensure transparency of information to the 
public (78 FR 43363). We solicited and received the following public 
comment on this proposed requirement:
    Comment: One commenter opposed the proposed March 31 deadline for 
an entity seeking to participate in the PQRS as a qualified clinical 
data registry to publically post a detailed description (rationale, 
numerator, denominator, exclusions/exceptions, data elements) of the 
quality measures it collects to ensure transparency of information to 
the public. The commenter requested that this deadline be extended to 
June 1 of the year in which the entity seeks to participate in the PQRS 
as a qualified clinical data registry to allow time for these entities 
to prepare its measures for submission under this new reporting 
mechanism.
    Response: We understand the commenter's concerns regarding the 
March 31 deadline. However, it is not technically feasible to accept 
this information later than the proposed March 31 deadline, as CMS must 
have time to be able to analyze the measure to determine how the 
measures data would be captured by CMS. Therefore, we are finalizing 
this requirement, as proposed.
     The entity must report, on behalf of its individual 
eligible professional participants, a minimum of 9 measures that cross 
3 NQS domains (78 FR 43363). We solicited but received no public 
comment on this proposed requirement, as most comments were more 
specifically directed to our proposed criteria for satisfactory 
participation in a qualified clinical data registry for the 2014 PQRS 
incentive and 2016 PQRS payment adjustment, which we address below. 
However, since, as we specify below, we are not allowing a qualified 
clinical data registry to report less than 9 measures covering 3 NQS 
domains if less than 9 measures are applicable to its eligible 
professional participants, we are modifying this requirement in the 
following manner: the entity must report, on behalf of its individual 
eligible professional participants, a minimum of 9 measures that cross 
3 NQS domains.
     The entity, on behalf of its individual eligible 
professional participants, must report on at least one outcomes-based 
measure (defined in this section below) (78 FR 43363). We solicited and 
received the following public comment on this proposed requirement 
(please note that most comments related to this proposed requirement 
were more specifically directed to our proposed criteria for 
satisfactory participation in a qualified clinical data registry for 
the 2014 PQRS incentive and 2016 PQRS payment adjustment):
    Comment: One commenter supported this proposal as it furthers our 
focus on quality improvement. Other commenters requested clarification 
as to the definition of an outcome measure and requested that certain 
measures be considered outcome measures for purposes of reporting these 
measures for the PQRS via a qualified clinical data registry.
    Response: We appreciate the commenter's feedback and are finalizing 
this requirement, as proposed. Please note that we further clarify the 
definition of an outcome measure in the section below that describes 
the final parameters surrounding the measures for which a qualified 
clinical data registry may report for purposes of the PQRS.
     The entity, on behalf of its individual eligible 
professional participants, must report on a set of measures from one or 
more of the following categories: CG-CAHPS; NQF endorsed measures 
(information of which is available at http://www.qualityforum.org/
Home.aspx); current PQRS measures; measures used by boards or specialty 
societies; and measures used in regional quality collaboratives (78 FR 
43363). We solicited and received the following public comment on this 
proposed requirement:
    Comment: One commenter supported this proposal as it furthers our 
focus on quality improvement.
    Response: We appreciate the commenter's feedback and are finalizing 
this requirement, as proposed.
     The entity must demonstrate that it has a plan to publicly 
report its quality data through a mechanism where the public and 
registry participants can view data about individual eligible 
professionals, as well as view regional and national benchmarks. As an 
alternative, we considered requiring that the entity must benchmark 
within its own registry for purposes of

[[Page 74471]]

determining relative quality performance where appropriate (78 FR 
43363).
    We solicited and received the following public comments on this 
proposal:
    Comment: Several commenters opposed this proposed requirement, 
claiming that publicly reporting measures would be very costly to an 
entity. The commenters also stated that, if the entity did not already 
have an existing plan to publicly report measures, it would take 
entities a significant amount of time (over a year) to establish a plan 
to publicly report its measures.
    Response: We understand the commenters' concerns regarding the 
cost, time, and other expenses associated with publicly reporting 
quality measures data. Please note that CMS only proposed that an 
entity demonstrate that a plan be developed, but did not explicitly 
propose that an entity wishing to become a qualified clinical data 
registry publicly report measures in 2014. Rather, as a first step, CMS 
was merely proposing that the entity have a plan in place to eventually 
publicly report their quality measures data. Regardless, due to the 
commenters' concerns, we are not finalizing this proposal at this time. 
We note, however, that CMS encourages these qualified clinical data 
registries to move towards the public reporting of quality measures 
data. We plan to establish such a requirement in the future and will 
revisit this proposed requirement as part of CY 2015 rulemaking.
     The entity must demonstrate that it has a plan to risk 
adjust the quality measures data for which it collects and intends to 
transmit to CMS, where appropriate. Risk adjustment has been described 
as a corrective tool used to level the playing field regarding the 
reporting of patient outcomes, adjusting for the differences in risk 
among specific patients (http://www.sts.org/patient-information/what-
risk-adjustment). Risk adjustment also makes it possible to compare 
performance fairly. For example, if an 86 year old female with diabetes 
undergoes bypass surgery, there is less chance for a good outcome when 
compared with a relatively healthier 40 year old male undergoing the 
same procedure. To take factors into account which influence outcomes, 
for example, advanced age, emergency operation, previous heart surgery, 
a risk adjustment model is used to report surgery results (78 FR 
43363).
    Comment: Several commenters supported this proposal as the 
commenters believe that risk adjustment is a critical component to 
ensure that the quality measures data submitted to CMS provides an 
accurate picture of the quality of care the eligible professional 
provides to its patients. Several other commenters, however, opposed 
the proposed requirement that the entity be required to demonstrate 
that it has a plan to risk adjust. While the commenters recognize that 
risk adjustment is a critical component of quality measurement, the 
commenters do not believe it should be a requirement for qualified 
clinical data registries currently since it is a resource intensive 
task and one for which there is no single proven model to ensure 
accuracy.
    Response: We understand the costs associated with risk adjustment. 
However, we note that several comments responding to the Request for 
Information titled ``Medicare Program; Request for Information on the 
Use of Clinical Quality Measures (CQMs) Reported Under the Physician 
Quality Reporting System (PQRS), the Electronic Health Record (EHR) 
Incentive Program, and Other Reporting Programs'' (at 78 FR 9057) 
stressed the need to risk adjust quality measures data, and we agree. 
We believe this is especially important as the quality data submitted 
to CMS by qualified clinical data registries will be used to assess 
physician performance under the Value-based Payment Modifier. 
Therefore, for the reasons stated above, we are finalizing this 
proposal.
    Please note that we are only requiring that the entity have a plan 
to risk adjust measures for which risk adjustment may be appropriate. 
If an entity has a plan to risk adjust its measures, we strongly 
encourage that this plan be made available to the public (such as 
having it posted on the entity's Web site). Please note that there are 
certain measures, such as process measures that only indicate the 
processes taken when performing a service, for which risk adjustment 
may not be appropriate.
    Should CMS find, pursuant to an audit, that a qualified clinical 
data registry has submitted inaccurate data, CMS also proposed (78 FR 
43363) to disqualify the qualified clinical data registry, meaning the 
entity would not be allowed to submit quality measures data on behalf 
of its eligible professionals for purposes of meeting the criteria for 
satisfactory participation for the following year. Should an entity be 
disqualified, we proposed that the entity must again become a qualified 
clinical data registry before it may submit quality measures data on 
behalf of its eligible professionals for purposes of the individual 
eligible professional participants meeting the criteria for 
satisfactory participation under the PQRS. Additionally, we proposed 
that the inaccurate data collected would be discounted for purposes of 
an individual eligible professional meeting the criteria for 
satisfactory participation in a qualified clinical data registry. We 
sought and received the following public comments on these proposals.
    Comment: Some commenters opposed our proposal not to allow a 
qualified clinical data registry to re-submit quality measures data on 
behalf of its eligible professionals if CMS discovers the qualified 
clinical data registry has submitted inaccurate data. The commenters 
believe that this proposal unnecessarily and negatively affects 
eligible professionals' success in the PQRS.
    Response: We understand the commenters' concerns. However, it is 
not feasible to accept data later than the last Friday of the February 
immediately following the end of the respective reporting period (that 
is, February 27, 2015 for reporting periods occurring in 2014) and 
still be able to analyze the data in time to assess whether an eligible 
professional should be assessed a payment adjustment. Therefore, we are 
finalizing our proposal not to allow a qualified clinical data registry 
to re-submit quality measures data on behalf of its eligible 
professionals if CMS discovers the qualified clinical data registry has 
submitted inaccurate data, as proposed. We note that this limitation is 
consistent with other rules for reporting quality measures data via a 
qualified registry, a direct EHR product, or the EHR data submission 
vendor.
    In summary, we are finalizing our proposals related to 
disqualification of a qualified clinical data registry, as proposed.
    As we noted, section 1848(m)(3)(E)(i) of the Act, as added by 
section 601(b) of the ATRA, requires us to establish requirements for 
an entity to be considered a qualified clinical data registry, 
including that the entity provide us with such information, at such 
times, and in such manner, as we determine necessary to carry out the 
provision. Given the broad discretion afforded under the statute, we 
proposed that qualified clinical data registries provide CMS with the 
quality measures data it collects from its eligible professional 
participants. We believe it is important that a qualified clinical data 
registry provide such data for a number of reasons. As we discuss in 
greater detail below, we believe such information is necessary for 
purposes of

[[Page 74472]]

determining whether individual eligible professionals have 
satisfactorily participated in a clinical qualified data registry under 
the PQRS. In addition, we proposed (78 FR 43485) to use the quality 
measures data reported under the PQRS to assess eligible professionals 
with regard to applying the value-based payment modifier in an upward, 
downward, and neutral adjustment to an eligible professional's Medicare 
Part B PFS charges. Therefore, we proposed to require that qualified 
clinical data registries submit quality measures data to CMS (78 FR 
63363-43364). Specifically, to further ensure that the quality measures 
data elements are reported to CMS in a standardized manner, we proposed 
to require that qualified clinical data registries be able to collect 
all needed data elements and transmit the data on quality measures to 
CMS, upon request, in one of two formats, either via a CMS-approved XML 
format or via the Quality Reporting Document Architecture (QRDA) 
category III format. The CMS-approved XML format is consistent with how 
traditional qualified registries under the PQRS transmit data on 
quality measures to CMS. Although our preference would be to receive 
data on quality measures via the QRDA category III format only, since 
the QRDA category III format is one of the formats we require for an 
EP's EHR or an EHR data submission vendor to submit quality measures 
data (see 77 FR 69183), we noted that we understood that the quality 
measures data collected by qualified clinical data registries vary and 
that these qualified clinical data registries may not be equipped to 
submit quality measures data to CMS using the QRDA category III format. 
We stated that in future years, it was our intention to require all 
qualified clinical data registries to provide quality measures data via 
the QRDA category III format.
    We solicited and received the following public comments on our 
proposal to accept quality measures data from a qualified clinical data 
registry in one of two formats, either via a CMS-approved XML format or 
via the QRDA category III format:
    Comment: Several commenters supported our proposal to accept 
quality measures data in a CMS-approved XML format. Some commenters 
suggested clarification as to whether an qualified clinical data 
registry would have to be able to separate the reporting of Medicare 
vs. non-Medicare patients when submitting quality measures data to CMS.
    Response: We appreciate the commenters' support, and based on the 
comments received and for the reasons stated above, are finalizing our 
proposal to accept quality measures data from a qualified clinical data 
registry in a CMS-approved XML format. Please note that CMS will not 
require the qualified clinical data registry submitting quality 
measures data on an eligible professional's behalf to separate the 
reporting of measures on the eligible professional's Medicare vs. non-
Medicare patients.
    Comment: Several commenters supported our proposal to accept 
quality measures data via the QRDA category III format, as this aligns 
with the format accepted under the EHR Incentive Program.
    Response: We appreciate the commenters' feedback. However, after 
exploring the technological capabilities of our analysis systems, we 
have discovered that it is not technically feasible to accept quality 
measures data via a QRDA III format other than the electronically 
specified clinical quality measures (eCQMs) that may be reported to 
meet the CQM component of meaningful use under the EHR Incentive 
Program in 2014. In the future, we hope to further develop our analysis 
systems so that we are capable of accepting quality measures data via 
the QRDA category III format for additional measures. Therefore, for 
the reasons stated previously and based on the comments received, we 
are finalizing our proposal to accept quality measures data via the 
QRDA category III format exclusively for the 64 eCQMs that may be 
reported to meet the CQM component of meaningful use under the EHR 
Incentive Program in 2014 that are also reportable under the PQRS in 
2014. We are finalizing the option to submit quality measures data via 
the QRDA category III format exclusively for the 64 eCQMs that may be 
reported to meet the CQM component of meaningful use under the EHR 
Incentive Program in 2014 because, unlike potential non-PQRS measures 
that may be reported by eligible professionals in a qualified clinical 
data registry, we are already able to analyze the measures 
specifications for these measures. Since we do not currently have the 
measures specifications for the non-PQRS measures that will be 
submitted via a qualified clinical data registry, it is not feasible to 
test these measures to determine whether we are able to accept these 
measures data in a QRDA category III format.
    To ensure that the data provided by the qualified clinical data 
registry is correct, we proposed to require that qualified clinical 
data registries provide CMS a signed, written attestation statement via 
email which states that the quality measure results and any and all 
data including numerator and denominator data provided to CMS are 
accurate and complete (78 FR 43364). We solicited and received the 
following public comment on this proposal:
    Comment: One commenter supported this proposed requirement.
    Response: We appreciate the commenter's feedback and, based on the 
comments received and for the reasons stated above, are therefore 
finalizing this requirement, as proposed.
    We proposed (78 FR 43364) that, regardless of whether the eligible 
professional uses the XML or QRDA III format to report quality measures 
data to CMS, the qualified clinical data registry would be required to 
submit this data no later than the last Friday occurring 2 months after 
the end of the respective reporting period (that is, February 27, 2015 
for reporting periods occurring in 2014). We also proposed that, if a 
qualified clinical data registry is submitting quality measures data on 
behalf of individual eligible professionals that are part of the same 
group practice (but not participating in the PQRS GPRO), the qualified 
clinical data registry would have the option to report the quality 
measures data to CMS in a batch containing data for each of the 
individual eligible professionals within the group practice, rather 
than submitting individual files for each eligible professional (78 FR 
43364). We solicited and received the following public comment on this 
proposal:
    Comment: Some commenters requested that qualified clinical data 
registries be given more time to submit quality measures data to CMS, 
particularly since the qualified clinical data registry reporting 
mechanism is new. Some of these commenters requested that we extend the 
deadline to March 31 following the end of the respective reporting 
period (that is, March 31, 2015 for reporting periods occurring in 
2014), at least for the first year in which a qualified clinical data 
registry must submit quality measures data to CMS.
    Response: We appreciate the commenters' concerns. However, it is 
not technically feasible to accept quality measures data from qualified 
clinical data registries any later than the last Friday occurring 2 
months after the end of the respective reporting period (that is, 
February 27, 2015 for reporting periods occurring in 2014). The 
additional time is needed to complete a thorough analysis of the 
submitted data prior to the application of the 2016 PQRS payment 
adjustment. Therefore, we are finalizing our proposal that a qualified 
clinical data registry would be

[[Page 74473]]

required to submit this data no later than the last Friday occurring 2 
months after the end of the respective reporting period (that is, 
February 27, 2015 for reporting periods occurring in 2014), as 
proposed.
    In conjunction with our proposal to require that qualified clinical 
data registries be able to provide data on quality measures in a CMS-
approved XML format, we proposed to require that qualified clinical 
data registries report back to participants on the completeness, 
integrity, and accuracy of its participants' data (78 FR 43364). We 
believe that it would be beneficial to the participants to receive 
feedback on the data transmission process so that the participants are 
aware of any inaccuracies transmitted to CMS. We solicited and but 
received no public comment on this proposal. Therefore, we are 
finalizing this requirement, as proposed.
    Alternatively, for the information CMS would require a qualified 
clinical data registry to furnish to CMS to determine that the eligible 
professionals have met the criteria for satisfactory participation for 
the 2014 PQRS incentive and 2016 PQRS payment adjustment, in lieu of 
accepting quality measures data for reporting periods occurring in 2014 
only, we considered proposing (78 FR 43364) that a qualified clinical 
data registry provide CMS with a list of the eligible professionals 
(containing the respective eligible professionals' TIN/NPI information) 
who participated in and reported quality data to the qualified clinical 
data registry to determine which individual eligible professionals met 
the criteria for satisfactory participation for the 2014 PQRS incentive 
and 2016 PQRS payment adjustment. We considered this alternative 
because we do not have experience collecting data from qualified 
clinical data registries, we are unfamiliar with the type of quality 
data qualified clinical data registries collect, and we are still 
building out our data infrastructure. We solicited and received the 
following public comment on this alternative:
    Comment: Several commenters preferred requiring a qualified 
clinical data registry provide CMS with a list of the eligible 
professionals (containing the respective eligible professionals' TIN/
NPI information) who participated in and reported quality data to the 
qualified clinical data registry to determine which individual eligible 
professionals met the criteria for satisfactory participation for the 
2014 PQRS incentive and 2016 PQRS payment adjustment in lieu of 
submitting actual quality measures data. Some of the commenters were 
concerned that a qualified clinical data registry seeking to 
participate in the PQRS would not be able to submit actual quality 
measures data to CMS in 2014, as the entities would not have enough 
time to adjust its systems to submit quality measures data in this 
initial year.
    Response: We appreciate the commenters' feedback and understand the 
tight timeline that must be adhered to for a qualified clinical data 
registry to submit quality measures data to CMS for the 12-month 
reporting period occurring in 2014 for the 2014 PQRS incentive and 2016 
PQRS payment adjustment. However, as for the reasons we noted above, we 
believe it is important to collect such data under the PQRS. 
Additionally, we note that for the Value-based Payment Modifier, which 
is based off of data submitted via the PQRS, to be able to accurately 
compare performance in the PQRS across eligible professionals, it is 
necessary to receive actual quality measures data from qualified 
clinical data registries. Therefore, we are not adopting this 
alternative.
    Please note that we will post additional guidance and information 
on the requirements to become a qualified clinical data registry, as 
well as information on how a qualified clinical data registry will 
submit quality measures data for reporting periods occurring in 2014 on 
the PQRS Web site at http://www.cms.gov/Medicare/Quality-Initiatives-
Patient-Assessment-Instruments/PQRS/index.html.
c. Process for Being Designated as a Qualified Clinical Data Registry
    Section 1848(m)(3)(E)(v) of the Act, as added by section 601(b) of 
the ATRA, requires the Secretary to establish a process to determine 
whether or not an entity meets the requirements established under 
section 1848(m)(3)(E)(i) of the Act. Such process may involve one or 
both of the following: (I) A determination by the Secretary; (II) A 
designation by the Secretary of one or more independent organizations 
to make such determination. This section sets forth our proposals for 
our process to determine whether or not an entity should be designated 
as a qualified clinical data registry.
    Consistent with what we require of traditional qualified registries 
under the PQRS, we proposed that an entity must submit a self-
nomination statement that indicates its intent to participate in PQRS 
as a qualified clinical data registry (78 FR 43364). We believe this 
self-nomination statement is necessary for CMS to anticipate how many 
clinical data registries would participate for a certain year, as well 
as provide information to eligible professionals about potential 
participating clinical data registries. We proposed that the self-
nomination statement contain the following information:
     The name of the entity seeking to become a qualified 
clinical data registry.
     The entity's contact information, including phone number, 
email, and mailing address.
     A point of contact, including the contact's email address 
and phone number, to notify the entity of the status of its request to 
be considered a qualified clinical data registry.
     The measure title, description, and specifications for 
each measure the qualified clinical data registry would require its 
eligible professionals to report for purposes of participating in PQRS. 
In addition, the qualified clinical data registry must describe the 
rationale and evidence basis to support each measure it would require 
its eligible professionals to report.
     The reporting period start date the entity will cover as a 
clinical data registry.
    Since we believe that accepting these statements via email would be 
the most efficient method for collecting and processing self-nomination 
statements, we proposed to accept self-nomination statements via email 
only (78 FR 43364). However, in the event that it is not technically 
feasible to collect this self-nomination statement via email, we 
proposed that entities seeking to become qualified clinical data 
registries submit its self-nomination statement via a mailed letter to 
CMS. The self-nomination statement would be mailed to the following 
address: Centers for Medicare & Medicaid Services, Center for Clinical 
Standards and Quality, Quality Measurement and Health Assessment Group, 
7500 Security Boulevard, Mail Stop S3-02-01, Baltimore, MD 21244-1850.
    To ensure that CMS is able to process these self-nomination 
statements as early as possible, we proposed (78 FR 43364) that these 
self-nomination statements must be received by CMS by 5:00 p.m. Eastern 
Standard Time (e.s.t.) on January 31 of the year in which the clinical 
data registry seeks to be qualified (that is, January 31, 2014 for 
purposes of becoming a qualified clinical data registry for the 
reporting periods for the 2014 PQRS incentive and 2016 PQRS payment 
adjustment). We indicated that we anticipated posting a list of the 
entities that are designated by CMS as qualified clinical

[[Page 74474]]

data registries in fall of the same year (78 FR 43365).
    Since participation in a qualified clinical data registry is a new 
option for individual eligible professionals, we stated that we 
anticipated making changes to the requirements for becoming a qualified 
clinical data registry in future rulemaking as we gain more experience 
with this option. Since we believe it is important that the entity keep 
up with these changes, at this time, we proposed that entities seeking 
to serve as qualified clinical data registries must self-nominate for 
each year that the entity seeks to participate (78 FR 43365). In the 
future, we noted we anticipated moving towards a multi-year self-
nomination process as the requirements for qualified clinical data 
registries become firmly established; however, at this time, we 
proposed self-nomination for any year in which a qualified clinical 
data registry intends to participate under the PQRS.
    We solicited and received the following public comment on these 
proposals:
    Comment: Some commenters opposed our proposed deadline to receive 
self-nomination statements by January 31 of the year in which the 
clinical data registry seeks to be qualified. These commenters believed 
that this proposed deadline did not provide entities with enough time 
to decide whether they should seek to become a qualified clinical data 
registry, particularly since the final requirements for an entity to 
become a qualified clinical data registry would not be made available 
until the CY 2014 PFS final rule with comment period is displayed 
(approximately November 2013).
    Response: We understand the commenters' concerns. However, as it is 
the first year in which this reporting mechanism will be implemented, 
it is not feasible to accept self-nomination statements later than 
Jaunary 31 of the year in which an entity seeks to become a qualified 
clinical data registry. CMS needs sufficient time to allow system 
updates to accommodate entities seeking to be qualified clinical data 
registries as well as work with entities who are seeking to become 
qualified clinical data registries. Therefore, we are finalizing our 
proposed deadline to receive self-nomination statements from entities 
wishing to become qualified clinical data registry by 5:00 p.m. 
(e.s.t.) on January 31 of the year in which the clinical data registry 
seeks to be qualified (that is, January 31, 2014 for purposes of 
becoming a qualified clinical data registry for the reporting periods 
for the 2014 PQRS incentive and 2016 PQRS payment adjustment), as 
proposed.
    Comment: Some commenters generally supported the proposed self-
nomination process for entities wishing to become qualified as a 
qualified clinical data registry.
    Response: We appreciate the commenters' response and, for the 
reasons stated above and based on the comments received, are finalizing 
this proposed process for being designated as a qualified clinical data 
registry, as proposed.
d. Reporting Period for the Satisfactory Participation by Individual 
Eligible Professionals in a Qualified Clinical Data Registry for the 
2014 PQRS Incentive
    Section 1848(m)(3)(D) of the Act, as redesignated and added by 
section 601(b) of the ATRA, authorizes the Secretary to treat an 
individual eligible professional as satisfactorily submitting data on 
quality measures under section 1848(m)(A) of the Act if the eligible 
professional is satisfactorily participating in a qualified clinical 
data registry for the year. Given that satisfactory participation is 
with regard to the year, and to provide consistency with the reporting 
period applicable to individual eligible professionals who report 
quality measures data under section 1848(m)(3)(A), we proposed to 
modify Sec.  414.90(c)(5) to specify a 12-month, calendar year (CY) 
reporting period from January 1, 2014 through December 31, 2014 for 
individual eligible professionals to satisfactorily participate in a 
qualified clinical data registry for purposes of the 2014 PQRS 
incentive (78 FR 43365). We invited and received the following public 
comment on the proposed 12-month, CY 2014 reporting period for the 
satisfactory participation of individual eligible professionals in a 
qualified clinical data registry for the 2014 PQRS incentive:
    Comment: Some commenters provided general suggestions to align 
reporting periods for various CMS quality reporting programs wherever 
possible.
    Response: We agree with the commenters. In fact, the proposed 12-
month, CY 2014 reporting period for the satisfactory participation of 
individual eligible professionals in a qualified clinical data registry 
for the 2014 PQRS incentive aligns with the 12-month CY 2014 reporting 
period for meeting the criteria for satisfactory reporting for the 2014 
PQRS incentive. Therefore, we are adding paragraph Sec.  414.90(i)(1) 
to specify a 12-month, CY 2014 reporting period for the satisfactory 
participation of individual eligible professionals in a qualified 
clinical data registry for the 2014 PQRS incentive, as proposed.
e. Criteria for Satisfactory Participation for Individual Eligible 
Professionals in a Qualified Clinical Data Registry for the 2014 PQRS 
Incentive
    For 2014, in accordance with Sec.  414.90(c)(3), eligible 
professionals that satisfactorily report data on PQRS quality measures 
are eligible to receive an incentive equal to 0.5 percent of the total 
estimated Medicare Part B allowed charges for all covered professional 
services furnished by the eligible professional or group practice 
during the applicable reporting period. Section 1848(m)(3)(D) of the 
Act, as redesignated and added by section 601(b) of the ATRA, 
authorizes the Secretary to treat an individual eligible professional 
as satisfactorily submitting data on quality measures under section 
1848(m)(A) of the Act if, in lieu of reporting measures under section 
1848(k)(2)(C) of the Act, the eligible professional is satisfactorily 
participating in a qualified clinical data registry for the year. 
``Satisfactory participation'' is a new standard under the PQRS and is 
a substitute for the underlying standard of ``satisfactory reporting'' 
data on covered professional services that eligible professionals must 
meet to earn a PQRS incentive or avoid the PQRS payment adjustment. 
Therefore, we proposed to modify Sec.  414.90 to add paragraph (c)(5) 
to indicate that individual eligible professionals shall be treated as 
satisfactorily reporting data on quality measures if individual 
eligible professionals satisfactorily participate in a qualified 
clinical data registry for purposes of the PQRS incentive (78 FR 
43365). We solicited but received no public comment on this proposal. 
Therefore, we are finalizing our proposal to modify Sec.  414.90 to add 
paragraph (c)(5) to indicate that individual eligible professionals 
shall be treated as satisfactorily reporting data on quality measures 
if individual eligible professionals satisfactorily participate in a 
qualified clinical data registry for purposes of the PQRS incentive, as 
proposed.
    In addition, to establish a standard for satisfactory participation 
in a qualified clinical data registry, we proposed that, to meet the 
criteria for satisfactory participation for the 2014 PQRS incentive, an 
individual eligible professional would be required to: For the 12-month 
2014 reporting period, report at least 9 measures available for 
reporting under the qualified clinical data registry covering at least 
3 of the NQS domains, OR, if less than 9

[[Page 74475]]

measures apply to the eligible professional, report 1-8 measures, AND 
report each measure for at least 50 percent of the eligible 
professional's applicable patients. Of the measures reported via a 
qualified clinical data registry, the eligible professional must report 
on at least 1 outcome measure (78 FR 43365). We solicited and received 
the following public comment for these proposals:
    Comment: Several commenters opposed our proposal to require that, 
of the measures reported via a qualified clinical data registry, the 
eligible professional must report on at least 1 outcome measure. Some 
of these commenters noted that, there are many specialties for which 
outcomes measures may not yet be available, hindering these specialties 
from participating in the PQRS via a qualified clinical data registry.
    Response: We understand that certain specialties may not have 
outcome measures for which they may report. However, we believe it is 
important to emphasize the reporting of outcomes measures, as we 
believe they provide better metrics in the quality of care an eligible 
professional provides than process measures do. To encourage the 
reporting of outcome measures, we are therefore finalizing our proposal 
to require that, of the measures reported via a qualified clinical data 
registry to meet the criteria for satisfactory participation in a 
qualified clinical data registry for the 2014 PQRS incentive, the 
eligible professional must report on at least 1 outcome measure.
    Comment: Several commenters supported our proposal to require that 
an eligible professional report each measure for at least 50 percent of 
the eligible professional's applicable patients. The commenters 
supported our proposal specifically because it aligns with the option 
to report individual measures via the claims-based reporting mechanism. 
One commenter, however, opposed this proposal. Instead, the commenter 
suggested that CMS allow a qualified clinical data registry to submit 
its verifiable, statistically supported sampling methodology to CMS for 
review and require eligible professionals to report a sufficient number 
of cases as determined by the individual registry's sampling 
requirements.
    Response: We appreciate the commenters' positive feedback. For the 
suggestion to allow a qualified clinical data registry to submit 
quality measures data based on an approved sampling methodology created 
by the clinical data registry, we do not believe this is sufficient for 
the PQRS at this time. Particularly since the quality measures data 
received through the PQRS will be used to assess eligible professionals 
under the Value-based Payment Modifier, we believe it is important to 
receive data consistent with the data we are receiving via the claims 
and registry-based reporting mechanisms. Therefore, we are finalizing 
this proposal. For the 2014 PQRS incentive, an eligible professional 
reporting individual quality measures via a qualified clinical data 
registry will be required to report each measure for at least 50 
percent of the eligible professional's applicable patients. Please 
note, however, that as the program evolves, we anticipate increasing 
the reporting threshold for the qualified clinical data registry 
reporting mechanism.
    Comment: While several commenters generally supported our proposal 
to require the reporting of more than 3 measures, the commenters 
believed that requiring the reporting of at least 9 measures covering 
at least 3 of the NQS domains is too onerous. These commenters 
suggested requiring the reporting of either 4 measures covering at 
least 1 NQS domain, 5 measures covering at least 2 NQS domains, or 6 
measures covering at least 2 NQS domains.
    Response: We appreciate the commenters' support for our desire to 
require the reporting of more than 3 measures to meet the criteria for 
satisfactory participation in a qualified clinical data registry for 
the 2014 PQRS incentive. For purposes of the 2014 PQRS incentive, we 
believe that requiring the reporting of 9 measures is appropriate for 
satisfactory participation, as the proposal is consistent with the 
requirement for an eligible professional to report on at least 9 
individual measures to meet the criteria for satisfactory reporting for 
the 2014 PQRS incentive. In fact, while we understand the commenters' 
concerns that an eligible professional reporting via the claims or 
traditional registry may not have 9 relevant measures for which to 
report, we do not believe the same argument can be made for an eligible 
professional reporting quality measures data via a qualified clinical 
data reporting. An eligible professional reporting via a qualified 
clinical data registry is not limited to reporting on measures within 
the PQRS measure set. Rather, an eligible professional using the 
qualified clinical data registry reporting mechanism may report on 
measures that are outside of the PQRS measure set. Based on the 
comments received and for the reasons stated previously, we are 
finalizing our proposal to require an individual eligible professional 
using a qualified clinical data registry to report on at least 9 
measures for the PQRS incentive.
    Comment: Several commenters generally supported the reporting of 
measures across multiple NQS domains, as reporting on a variety of 
measures provides eligible professionals with a better picture of the 
full continuum of care provided.
    Response: We agree with the commenters. Based on the comments 
received, we are finalizing our proposal to require an individual 
eligible professional using a qualified clinical data registry to 
report on at least 9 measures covering at least 3 of the NQS domains 
for the 2014 PQRS incentive.
    Comment: Several commenters supported our proposal to allow an 
eligible professional to report less than 9 measures, should less than 
9 measures be applicable to the eligible professional. Several of the 
commenters sought clarification on how CMS would determine whether 
additional measures could be reported by an eligible professional.
    Response: We appreciate the commenters' feedback. Unfortunately, at 
this time, it is not feasible for us to finalize an option to report on 
less than 9 measures via a qualified clinical data registry for the 
2014 PQRS incentive. In order to do so, we believe we would need to 
apply the MAV process. Although we are able to implement a MAV process 
for the claims and registry-based reporting mechanisms to determine 
whether an eligible professional could have reported on additional 
measures, we are unable to implement a similar process for the 
qualified clinical data registry-based reporting mechanism as the 
measures that may be reported via a qualified clinical data registry 
are not required to be measures found in the PQRS measure set. 
Therefore, it would be difficult for CMS to determine appropriate 
measure clusters for the MAV process. Until we can implement a MAV 
process where we are able to accurately identify the measure clusters, 
we do not believe it is appropriate to adopt such a change to the 
criterion. Therefore, eligible professionals must report on at least 9 
measures covering at least 3 of the NQS domains.
    Comment: Several commenters urged CMS to allow the reporting of 
measures groups under the qualified clinical data registry reporting 
mechanism for the 2014 PQRS incentive.
    Response: We agree with the commenters. However, please note that 
we are not restricting this reporting criterion to individual measures. 
Rather, as we discuss in greater detail in the PQRS measures section 
below, a

[[Page 74476]]

qualified clinical data registry is free to choose which measures its 
participants will report for purposes of the PQRS. Should a qualified 
clinical data registry require its eligible professionals to report on 
a cluster of measures similar to PQRS measures groups, the measures 
within the measures group would count as separate, individual measures.
    Based on the comments received and for the reasons explained 
previously, as we specify in Sec.  414.90(i), we are finalizing the 
following criteria for an individual eligible professional to meet the 
criteria for satisfactory participation for the 2014 PQRS incentive: 
For the 12-month 2014 reporting period, report at least 9 measures 
available for reporting under the qualified clinical data registry 
covering at least 3 of the NQS domains AND report each measure for at 
least 50 percent of the eligible professional's applicable patients. Of 
the measures reported via a qualified clinical data registry, the 
eligible professional must report on at least 1 outcome measure.
    We further proposed that a qualified clinical data registry may 
submit data on more than 9 quality measures on behalf of an eligible 
professional (78 FR 43365). However, we proposed that a qualified 
clinical data registry may not submit data on more than 20 measures on 
behalf of an eligible professional. We proposed to place a limit on the 
number of measures that a qualified clinical data registry may submit 
on behalf of an eligible professional at this time because we have no 
experience with qualified clinical data registries and the types of 
data on quality measures that they collect. We solicited and but 
received no public comment on this proposal.
    Although we have the capacity to accept quality measures data from 
all measures finalized in the PQRS measure set specified in Table 52, 
in analyzing our capability to accept quality measures data, we 
discovered that it would not be feasible for CMS to accept quality 
measures data on more than 20 measures not specified in Table 52 from a 
qualified clinical data registry at this time. CMS needs to have 
adequate time to analyze the measures provided to determine how the 
quality measures data will be calculated. We solicited but received no 
public comment on this proposal. Therefore, for the reasons stated 
above, we are capping the number of non-PQRS measures CMS may receive 
from each qualified clinical data registry to 20 so as not to be 
inundated with measures whose specifications must be analyzed prior to 
the submission deadline for qualified clinical data registries to 
submit quality measures data to CMS. Therefore, we are limiting the 
number of quality measures a qualified clinical data registry may 
submit to no more than 20 measures not specified in Table 52 on behalf 
of an eligible professional. Qualified clinical data registries may 
submit quality measures data on any or all measures specified in Table 
52 of this final rule with comment period. As the qualified clinical 
data registry reporting option develops, we hope to be able to accept 
data on more quality measures outside of the PQRS measure set in the 
future. Please note that this restriction also applies to measures 
being reported to meet the criteria for satisfactory participation in a 
qualified clinical data registry for the 2016 PQRS payment adjustment.
f. Reporting Period for the Satisfactory Participation for Individual 
Eligible Professionals in a Qualified Clinical Data Registry for the 
2016 PQRS Payment Adjustment
    Section 1848(m)(3)(D) of the Act, as redesignated and added by 
section 601(b) of the ATRA, authorizes the Secretary to treat an 
individual eligible professional as satisfactorily submitting data on 
quality measures under section 1848(m)(A) of the Act if the eligible 
professional is satisfactorily participating in a qualified clinical 
data registry for the year. Given that satisfactory participation is 
with regard to the year, and to provide consistency with how individual 
eligible professionals report quality measures data to a qualified 
clinical data registry, we proposed to modify Sec.  414.90(e)(2) to 
specify a 12-month, calendar year (CY) reporting period from January 1, 
2014 through December 31, 2014, for individual eligible professionals 
to satisfactorily participate in a qualified clinical data registry for 
purposes of the 2016 PQRS payment adjustment (78 FR 43366). We invited 
and received the following public comments on the proposed 12-month, CY 
2014 reporting period (that is, January 1, 2014-December 31, 2014) for 
the satisfactory participation of individual eligible professionals in 
a qualified clinical data registry for the 2016 PQRS payment 
adjustment:
    Comment: Several commenters opposed our proposal to base the 2016 
PQRS payment adjustment year on a reporting period occurring 2 years 
prior to the payment adjustment year. The commenters believe that the 
reporting period should occur closer to the payment adjustment year.
    Response: We understand the commenters' concerns on establishing a 
reporting period 2 years prior to the payment adjustment year. However, 
it is not operationally feasible to create a full calendar year 
reporting period for the 2016 PQRS payment adjustment any later than 2 
years prior to the adjustment year and still avoid retroactive payments 
or the reprocessing of claims. Section 1848(a)(8) of the Act requires 
that a payment adjustment be applied to covered professional services 
furnished by an eligible professional in the particular payment 
adjustment year. Therefore, we believe it is necessary to reduce the 
PFS amount concurrently for PFS allowed charges for covered 
professional services furnished in 2016. If we do not reduce the PFS 
amount concurrently with claims submissions in 2016, we would need to 
potentially recoup or provide added payments after the determination is 
made about whether the payment adjustment applies, or alternatively, 
hold claims until such a determination is made. In addition, we note 
that if such retroactive adjustments were made it may require a 
reconciliation of beneficiary copayments. As a result, we need to 
determine whether eligible professionals have satisfactorily reported 
under the PQRS based on a reporting period that occurs prior to 2016. 
For the reasons stated here and above, we are specifying under Sec.  
414.90(k) a 12-month, CY 2014 reporting period (that is, January 1, 
2014-December 31, 2014) for the satisfactory participation of 
individual eligible professionals in a qualified clinical data registry 
for the 2016 PQRS payment adjustment. As we stated in the proposed rule 
(78 FR 43366), this final reporting period for the 2016 PQRS payment 
adjustment is consistent with the 2016 PQRS payment adjustment 
reporting periods for all other reporting mechanisms.
g. Criteria for the Satisfactory Participation for Individual Eligible 
Professionals in a Qualified Clinical Data Registry for the 2016 PQRS 
Payment Adjustment
    Section 1848(a)(8) of the Act provides that for covered 
professional services furnished by an eligible professional during 2015 
or any subsequent year, if the eligible professional does not 
satisfactorily report 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 professional during the 
year shall be equal to the applicable percent of the fee schedule 
amount that would otherwise apply to such services. For 2016 and 
subsequent years, the applicable percent is 98.0 percent.
    Section 1848(m)(3)(D) of the Act, as redesignated and added by 
section

[[Page 74477]]

601(b) of the ATRA, authorizes the Secretary to treat an individual 
eligible professional as satisfactorily submitting data on quality 
measures under section 1848(m)(A) of the Act if, in lieu of reporting 
measures under section 1848(k)(2)(C) of the Act, the eligible 
professional is satisfactorily participating in a qualified clinical 
data registry for the year. ``Satisfactory participation'' is a new 
standard under the PQRS and is a substitute for the underlying standard 
of ``satisfactory reporting'' data on covered professional services 
that eligible professionals must meet to earn a PQRS incentive or avoid 
the PQRS payment adjustment. Therefore, we proposed to modify Sec.  
414.90 to add paragraph (e)(2) to indicate that individual eligible 
professionals shall be treated as satisfactorily reporting data on 
quality measures, if the individual eligible professional 
satisfactorily participates in a qualified clinical data registry (78 
FR 43366). We solicited but received no public comment on this 
proposal. Therefore, we are modifying Sec.  414.90 to indicate that 
individual eligible professionals shall be treated as satisfactorily 
reporting data on quality measures, if the individual eligible 
professional satisfactorily participates in a qualified clinical data 
registry. However, as some of the paragraphs have changed since this 
proposal, we are not indicating this change in paragraph (e)(2). 
Rather, we are adding paragraph Sec.  414.90(k) to indicate that 
individual eligible professionals shall be treated as satisfactorily 
reporting data on quality measures, if the individual eligible 
professional satisfactorily participates in a qualified clinical data 
registry.
    For purposes of the 2016 PQRS payment adjustment (which would be 
based on data reported during the 12-month period that falls in CY 
2014), we proposed the exact same requirement we proposed above for 
satisfactory participation for the 2014 PQRS incentive (78 FR 43366). 
Specifically, we proposed the following criteria for an individual 
eligible professional to meet the criteria for satisfactory 
participation for the 2016 PQRS payment adjustment: For the 12-month 
reporting period for the 2016 PQRS payment adjustment, report at least 
9 measures available for reporting under the qualified clinical data 
registry covering at least 3 of the NQS domains; AND report each 
measure for at least 50 percent of the eligible professional's 
applicable patients. Of the measures reported via a qualified clinical 
data registry, the eligible professional must report on at least 1 
outcome measure (78 FR 43367, Table 25). We solicited and received the 
following public comments on the proposed criterion for the 
satisfactory participation by individual eligible professionals in a 
qualified clinical data registry for the 2016 PQRS payment adjustment:
    Comment: Several commenters urged CMS to allow the reporting of 
measures groups under the qualified clinical data registry reporting 
mechanism for the 2016 PQRS payment adjustment.
    Response: We agree with the commenters. However, please note that 
we are not restricting this reporting criterion to individual measures. 
Rather, as we discuss in greater detail in the PQRS measures section 
below, a qualified clinical data registry is free to choose which 
measures its participants will report for purposes of the PQRS. Should 
a qualified clinical data registry require its eligible professionals 
to report on a cluster of measures similar to PQRS measures groups, the 
measures within the measures group would count as separate, individual 
measures.
    Comment: Several commenters supported our proposal to require that 
an eligible professional report each measure for at least 50 percent of 
the eligible professional's applicable patients. The commenters 
supported our proposal specifically because it aligns with the option 
to report individual measures via the claims-based reporting mechanism. 
One commenter, however, opposed this proposal. Instead, the commenter 
suggested that CMS allow a qualified clinical data registry to submit 
its verifiable, statistically supported sampling methodology to CMS for 
review and require eligible professionals to report a sufficient number 
of cases as determined by the individual registry's sampling 
requirements.
    Response: We appreciate the commenters' positive feedback. For the 
suggestion to allow a qualified clinical data registry to submit 
quality measures data based on an approved sampling methodology created 
by the clinical data registry, we do not believe this is sufficient for 
the PQRS at this time. Particularly since the quality measures data 
received through the PQRS will be used to assess eligible professionals 
under the Value-based Payment Modifier, we believe it is important to 
receive data consistent with the data we are receiving via the claims 
and registry-based reporting mechanisms. Therefore, we are finalizing 
our proposal to use a 50 percent threshold. For the 2016 PQRS payment 
adjustment, an eligible professional reporting individual quality 
measures via a qualified clinical data registry will be required to 
report on at least 3 measures and report each measure for at least 50 
percent of the eligible professional's applicable patients.
    Comment: While several commenters generally supported our proposal 
to require the reporting of more than 3 measures, the commenters 
believed that requiring the reporting of at least 9 measures covering 
at least 3 of the NQS domains is too onerous, especially for the PQRS 
payment adjustment. These commenters suggested requiring the reporting 
of either 4 measures covering at least 1 NQS domain, 5 measures 
covering at least 2 NQS domains, or 6 measures covering at least 2 NQS 
domains.
    Response: We appreciate the commenters' support for our desire to 
require the reporting of more than 3 measures to meet the criteria for 
satisfactory participation in a qualified clinical data registry for 
the 2014 PQRS incentive. To be consistent with the criterion we are 
finalizing for the 2014 PQRS incentive, we are requiring that an 
eligible professional report on at least 9 measures covering at least 3 
NQS domains.
    However, we believe it is appropriate to finalize less stringent 
criteria for the 2016 PQRS payment adjustment, particularly since the 
qualified clinical data registry is a new reporting mechanism for 2014. 
We believe this is especially helpful for those eligible professionals 
who use current qualified registries that will seek to become qualified 
clinical data registries for 2014 that have traditionally reported 3 
measures covering 1 domain to meet the criteria for satisfactory 
reporting in the PQRS. Therefore, to be consistent with the criterion 
we are finalizing for individual eligible professionals to reporting 
individual measures registry for the 2016 PQRS payment adjustment, an 
individual eligible professional using a qualified clinical data 
registry may report on at least 3 measures for at least 50 percent of 
the eligible professional's applicable patients to satisfy the criteria 
for satisfactory participation in a qualified clinical data registry 
for the 2016 PQRS payment adjustment. Please note that it is our 
intention to fully move towards the reporting of 9 measures covering at 
least 3 domains to meet the criteria for satisfactory participation for 
the 2017 PQRS payment adjustment.
    Comment: Several commenters opposed our proposal to require that, 
of the measures reported via a qualified clinical data registry, the 
eligible professional must report on at least 1 outcome measure. Some 
of these commenters noted that, there are many

[[Page 74478]]

specialties for which outcomes measures may not yet be available, 
hindering these specialties from participating in the PQRS via a 
qualified clinical data registry.
    Response: To be consistent with criterion we are finalizing for the 
2014 PQRS incentive, if an eligible professional wants to meet the 
criteria for satisfactory participation for the 2014 PQRS incentive AND 
2016 PQRS payment adjustment, we are requiring that an eligible 
professional who reports at least 9 measures covering at least 3 NQS 
domains report on at least 1 outcome measure.
    However, for eligible professionals who only seek to meet the 
criteria for satisfactory participation for the 2016 PQRS payment 
adjustment (for example, not seek to earn a 2014 PQRS incentive), we 
understand that not all entities seeking to become qualified clinical 
data registries may have outcome measures available for its eligible 
professionals to report. For example, we understand that registries 
created for eligible professionals whose primary function is to perform 
imagining scans have found it difficult to develop outcome measures, as 
outcomes are usually measures not with those particular eligible 
professionals but by other eligible professionals for which a patient 
primarily sees. Unlike the PQRS incentive, we believe that, for 
purposes of the 2016 PQRS payment adjustment only, it is appropriate 
for this initial year not to finalize the requirement to report an 
outcome measure. Therefore, if reporting for the 2016 PQRS payment 
adjustment only and not seeking to earn a 2014 PQRS incentive, if an 
eligible professional is reporting 3 measures covering at least 1 NQS 
domain, we will not require an eligible professional to report on at 
least 1 outcome measure. Please note, however, that it is our intention 
to require the reporting of 1 outcome measure if reporting via a 
qualified clinical data registry for the 2017 PQRS payment adjustment. 
Therefore, we encourage these registries that do not currently require 
the reporting of an outcome measure to find ways for which an outcome 
measure may be developed.
    Comment: Several commenters generally supported the reporting of 
measures across multiple NQS domains, as reporting on a variety of 
measures provides eligible professionals with a better picture of full 
continuum of care provided.
    Response: We agree with the commenters. To be consistent with the 
criterion we are finalizing for the 2014 PQRS incentive, we are 
requiring that an eligible professional report on measures covering at 
least 3 NQS domains.
    However, since we are also finalizing an alternative criterion only 
requiring that an eligible professional using a qualified clinical data 
registry report on at least 3 measures for the 2016 PQRS payment 
adjustment, as well as to be consistent with the criterion we finalized 
for an individual eligible professional reporting individual quality 
measures via registry for the 2016 PQRS payment adjustment, for 
purposes of the 2016 PQRS payment adjustment only, we are finalizing a 
decision to require that an eligible professional using a qualified 
clinical data registry report on at least 3 measures covering only 1 
NQS domain.
    Comment: Several commenters supported our proposal to implement a 
MAV process, in the event an eligible professional reports 1-8 measures 
because less than 9 measures are applicable to the eligible 
professional. Several of the commenters sought clarification on how CMS 
would determine whether additional measures could be reported by an 
eligible professional.
    Response: We appreciate the commenters' feedback and support for 
implementing a MAV process for eligible professionals reporting via a 
qualified clinical data registry. Unfortunately, although we are able 
to implement a MAV process for the claims and registry-based reporting 
mechanisms to determine whether an eligible professional could have 
reported on additional measures, we are unable to implement a similar 
process for the qualified clinical data registry-based reporting 
mechanism as the measures that may be reported via a qualified clinical 
data registry are not required to be measures found in the PQRS measure 
set. Unfortunately, we will not receive measure information from 
clinical data registries in time to develop the measure clusters needed 
to implement such a MAV process. Therefore, it would be difficult for 
CMS to determine appropriate measure clusters for the MAV process.
    In summary, based on the comments received and for the reasons 
explained previously, we are finalizing the following criteria for an 
individual eligible professional to meet the criteria for satisfactory 
participation in a qualified clinical data registry for the 2016 PQRS 
payment adjustment:
    For the 12-month 2016 PQRS payment adjustment reporting period, 
report at least 9 measures covering at least 3 NQS domains AND report 
each measure for at least 50 percent of the applicable patients seen 
during the reporting period to which the measure applies. Measures with 
a 0 percent performance rate would not be counted. Of the measures 
reported via a qualified clinical data registry, the eligible 
professional must report on at least 1 outcome measure; OR
    For the 12-month 2016 PQRS payment adjustment reporting period, 
report at least 3 measures covering at least 1 NQS domain AND report 
each measure for at least 50 percent of the applicable patients seen 
during the reporting period to which the measure applies. Measures with 
a 0 percent performance rate would not be counted.
    Tables 47 and 48 provide a summary of the final criteria for 
satisfactory reporting and satisfactory participation we discussed 
above for individual eligible professionals for the 2014 PQRS incentive 
and 2016 PQRS payment adjustment, respectively.

  Table 47--Summary of Requirements for the 2014 PQRS Incentive: Individual Reporting Criteria for Satisfactory
      Reporting of Individual Quality Measures via Claims, Qualified Registries, and EHRs and Satisfactory
                          Participation Criterion in Qualified Clinical Data Registries
----------------------------------------------------------------------------------------------------------------
                                                                                        Satisfactory reporting
          Reporting period                Measure type         Reporting mechanism      criteria/satisfactory
                                                                                       participation criterion
----------------------------------------------------------------------------------------------------------------
12-month (Jan 1-Dec 31)............  Individual Measures...  Claims................  Report at least 9 measures
                                                                                      covering at least 3 NQS
                                                                                      domains, OR, if less than
                                                                                      9 measures covering at
                                                                                      least 3 NQS domains apply
                                                                                      to the eligible
                                                                                      professional, report 1-8
                                                                                      measures covering 1-3 NQS
                                                                                      domains, AND report each
                                                                                      measure for at least 50
                                                                                      percent of the Medicare
                                                                                      Part B FFS patients seen
                                                                                      during the reporting
                                                                                      period to which the
                                                                                      measure applies. Measures
                                                                                      with a 0 percent
                                                                                      performance rate would not
                                                                                      be counted.

[[Page 74479]]

 
                                                                                     * For an eligible
                                                                                      professional who reports
                                                                                      fewer than 9 measures
                                                                                      covering 3 NQS domains via
                                                                                      the claims-based reporting
                                                                                      mechanism, the eligible
                                                                                      professional will be
                                                                                      subject to the MAV
                                                                                      process, which would allow
                                                                                      us to determine whether an
                                                                                      eligible professional
                                                                                      should have reported
                                                                                      quality data codes for
                                                                                      additional measures and/or
                                                                                      covering additional NQS
                                                                                      domains.
12-month (Jan 1-Dec 31)............  Individual Measures...  Qualified Registry....  Report at least 9 measures
                                                                                      covering at least 3 of the
                                                                                      NQS domains, OR, if less
                                                                                      than 9 measures covering
                                                                                      at least 3 NQS domains
                                                                                      apply to the eligible
                                                                                      professional, report 1-8
                                                                                      measures covering 1-3 NQS
                                                                                      domains for which there is
                                                                                      Medicare patient data, AND
                                                                                      report each measure for at
                                                                                      least 50 percent of the
                                                                                      eligible professional's
                                                                                      Medicare Part B FFS
                                                                                      patients seen during the
                                                                                      reporting period to which
                                                                                      the measure applies.
                                                                                      Measures with a 0 percent
                                                                                      performance rate would not
                                                                                      be counted.
                                                                                     * For an eligible
                                                                                      professional who reports
                                                                                      fewer than 9 measures
                                                                                      covering 3 NQS domains via
                                                                                      the registry-based
                                                                                      reporting mechanism, the
                                                                                      eligible professional will
                                                                                      be subject to the MAV
                                                                                      process, which would allow
                                                                                      us to determine whether an
                                                                                      eligible professional
                                                                                      should have reported on
                                                                                      additional measures and/or
                                                                                      measures covering
                                                                                      additional NQS domains.
** 12-month (Jan 1-Dec 31).........  Individual Measures...  Direct EHR product      Report 9 measures covering
                                                              that is CEHRT and EHR   at least 3 of the NQS
                                                              data submission         domains. If an eligible
                                                              vendor that is CEHRT.   professional's CEHRT does
                                                                                      not contain patient data
                                                                                      for at least 9 measures
                                                                                      covering at least 3
                                                                                      domains, then the eligible
                                                                                      professional must report
                                                                                      the measures for which
                                                                                      there is Medicare patient
                                                                                      data.
                                                                                     An eligible professional
                                                                                      must report on at least 1
                                                                                      measure for which there is
                                                                                      Medicare patient data.
** 12-month (Jan 1-Dec 31).........  Measures Groups.......  Qualified Registry....  Report at least 1 measures
                                                                                      group, AND report each
                                                                                      measures group for at
                                                                                      least 20 patients, a
                                                                                      majority of which much be
                                                                                      Medicare Part B FFS
                                                                                      patients.
** 6-month (Jul 1-Dec 31)..........  Measures Groups.......  Qualified Registry....  Report at least 1 measures
                                                                                      group, AND report each
                                                                                      measures group for at
                                                                                      least 20 patients, a
                                                                                      majority of which much be
                                                                                      Medicare Part B FFS
                                                                                      patients.
12-month (Jan 1-Dec 31)............  Measures selected by    Qualified Clinical      Report at least 9 measures
                                      Qualified Clinical      Data Registry.          covering at least 3 NQS
                                      Data Registry.                                  domains AND report each
                                                                                      measure for at least 50
                                                                                      percent of the eligible
                                                                                      professional's applicable
                                                                                      patients seen during the
                                                                                      reporting period to which
                                                                                      the measure applies.
                                                                                      Measures with a 0 percent
                                                                                      performance rate would not
                                                                                      be counted.
                                                                                     Of the measures reported
                                                                                      via a qualified clinical
                                                                                      data registry, the
                                                                                      eligible professional must
                                                                                      report on at least 1
                                                                                      outcome measure.
----------------------------------------------------------------------------------------------------------------
* Subject to the MAV process.
** Finalized in the CY 2013 PFS final rule (see Table 91 at 77 FR 69194).

    Table 48--Summary of Requirements for the 2016 PQRS Payment Adjustment: Individual Reporting Criteria for
     Satisfactory Reporting of Individual Quality Measures via Claims, Registries, and EHRs and Satisfactory
                          Participation Criterion in Qualified Clinical Data Registries
----------------------------------------------------------------------------------------------------------------
                                                                                        Satisfactory reporting
          Reporting period                Measure type         Reporting mechanism      criteria/satisfactory
                                                                                       participation criterion
----------------------------------------------------------------------------------------------------------------
12-month (Jan 1-Dec 31)............  Individual Measures...  Claims................  Report at least 9 measures
                                                                                      covering at least 3 NQS
                                                                                      domains, OR, if less than
                                                                                      9 measures covering at
                                                                                      least 3 NQS domains apply
                                                                                      to the eligible
                                                                                      professional, report 1-8
                                                                                      measures covering 1-3 NQS
                                                                                      domains, AND report each
                                                                                      measure for at least 50
                                                                                      percent of the Medicare
                                                                                      Part B FFS patients seen
                                                                                      during the reporting
                                                                                      period to which the
                                                                                      measure applies. Measures
                                                                                      with a 0 percent
                                                                                      performance rate would not
                                                                                      be counted.
                                                                                     * For an eligible
                                                                                      professional who reports
                                                                                      fewer than 9 measures
                                                                                      covering 3 NQS domains via
                                                                                      the claims-based reporting
                                                                                      mechanism, the eligible
                                                                                      professional will be
                                                                                      subject to the MAV
                                                                                      process, which would allow
                                                                                      us to determine whether an
                                                                                      eligible professional
                                                                                      should have reported
                                                                                      quality data codes for
                                                                                      additional measures and/or
                                                                                      covering additional NQS
                                                                                      domains.
** 12-month (Jan 1-Dec 31).........  Individual Measures...  Claims................  Report at least 3 measures,
                                                                                      OR,
                                                                                     If less than 3 measures
                                                                                      apply to the eligible
                                                                                      professional, report 1-2
                                                                                      measures*; AND
                                                                                     Report each measure for at
                                                                                      least 50 percent of the
                                                                                      eligible professional's
                                                                                      Medicare Part B FFS
                                                                                      patients seen during the
                                                                                      reporting period to which
                                                                                      the measure applies.

[[Page 74480]]

 
                                                                                     Measures with a 0 percent
                                                                                      performance rate will not
                                                                                      be counted.
12-month (Jan 1-Dec 31)............  Individual Measures...  Qualified Registry....  Report at least 9 measures
                                                                                      covering at least 3 of the
                                                                                      NQS domains, OR, if less
                                                                                      than 9 measures covering
                                                                                      at least 3 NQS domains
                                                                                      apply to the eligible
                                                                                      professional, report 1-8
                                                                                      measures covering 1-3 NQS
                                                                                      domains for which there is
                                                                                      Medicare patient data, AND
                                                                                      report each measure for at
                                                                                      least 50 percent of the
                                                                                      eligible professional's
                                                                                      Medicare Part B FFS
                                                                                      patients seen during the
                                                                                      reporting period to which
                                                                                      the measure applies.
                                                                                      Measures with a 0 percent
                                                                                      performance rate would not
                                                                                      be counted.
                                                                                     * For an eligible
                                                                                      professional who reports
                                                                                      fewer than 9 measures
                                                                                      covering at least 3 NQS
                                                                                      domains via the registry-
                                                                                      based reporting mechanism,
                                                                                      the eligible professional
                                                                                      will be subject to the MAV
                                                                                      process, which would allow
                                                                                      us to determine whether an
                                                                                      eligible professional
                                                                                      should have reported on
                                                                                      additional measures and/or
                                                                                      measures covering
                                                                                      additional NQS domains.
12-month (Jan 1-Dec 31)............  Individual Measures...  Qualified Registry....  Report at least 3 measures
                                                                                      covering at least 1 of the
                                                                                      NQS domains, OR, if less
                                                                                      than 3 measures apply to
                                                                                      the eligible professional,
                                                                                      report 1-2 measures
                                                                                      covering at least 1 NQS
                                                                                      domain for which there is
                                                                                      Medicare patient data, AND
                                                                                      report each measure for at
                                                                                      least 50 percent of the
                                                                                      eligible professional's
                                                                                      Medicare Part B FFS
                                                                                      patients seen during the
                                                                                      reporting period to which
                                                                                      the measure applies.
                                                                                      Measures with a 0 percent
                                                                                      performance rate would not
                                                                                      be counted.
                                                                                     * For an eligible
                                                                                      professional who reports
                                                                                      fewer than 3 measures
                                                                                      covering 1 NQS domain via
                                                                                      the registry-based
                                                                                      reporting mechanism, the
                                                                                      eligible professional will
                                                                                      be subject to the MAV
                                                                                      process, which would allow
                                                                                      us to determine whether an
                                                                                      eligible professional
                                                                                      should have reported on
                                                                                      additional measures.
** 12-month (Jan 1-Dec 31).........  Individual Measures...  Direct EHR product      Report 9 measures covering
                                                              that is CEHRT and EHR   at least 3 of the NQS
                                                              data submission         domains. If an eligible
                                                              vendor that is CEHRT.   professional's CEHRT does
                                                                                      not contain patient data
                                                                                      for at least 9 measures
                                                                                      covering at least 3
                                                                                      domains, then the eligible
                                                                                      professional must report
                                                                                      the measures for which
                                                                                      there is Medicare patient
                                                                                      data.
                                                                                     An eligible professional
                                                                                      must report on at least 1
                                                                                      measure for which there is
                                                                                      Medicare patient data.
** 12-month (Jan 1-Dec 31).........  Measures Groups.......  Qualified Registry....  Report at least 1 measures
                                                                                      group, AND report each
                                                                                      measures group for at
                                                                                      least 20 patients, a
                                                                                      majority of which much be
                                                                                      Medicare Part B FFS
                                                                                      patients.
** 6-month (Jul 1-Dec 31)..........  Measures Groups.......  Qualified Registry....  Report at least 1 measures
                                                                                      group, AND report each
                                                                                      measures group for at
                                                                                      least 20 patients, a
                                                                                      majority of which much be
                                                                                      Medicare Part B FFS
                                                                                      patients.
12-month (Jan 1-Dec 31)............  Measures selected by    Qualified Clinical      Report at least 9 measures
                                      Qualified Clinical      Data Registry.          covering at least 3 NQS
                                      Data Registry.                                  domains AND report each
                                                                                      measure for at least 50
                                                                                      percent of the eligible
                                                                                      professional's applicable
                                                                                      patients seen during the
                                                                                      reporting period to which
                                                                                      the measure applies.
                                                                                      Measures with a 0 percent
                                                                                      performance rate would not
                                                                                      be counted.
                                                                                     Of the measures reported
                                                                                      via a qualified clinical
                                                                                      data registry, the
                                                                                      eligible professional must
                                                                                      report on at least 1
                                                                                      outcome measure.
12-month (Jan 1-Dec 31)............  Measures selected by    Qualified Clinical      Report at least 3 measures
                                      Qualified Clinical      Data Registry.          covering at least 1 NQS
                                      Data Registry.                                  domain AND report each
                                                                                      measure for at least 50
                                                                                      percent of the eligible
                                                                                      professional's applicable
                                                                                      patients seen during the
                                                                                      reporting period to which
                                                                                      the measure applies.
                                                                                      Measures with a 0 percent
                                                                                      performance rate would not
                                                                                      be counted.
----------------------------------------------------------------------------------------------------------------
* Subject to the MAV process.
** Finalized in the CY 2013 PFS final rule (see Table 91 at 77 FR 69194).

7. Criteria for Satisfactory Reporting for the 2014 PQRS Incentive for 
Group Practices in the GPRO
    For 2014, in accordance with Sec.  414.90(c)(3), eligible 
professionals that satisfactorily report data on PQRS quality measures 
are eligible to receive an incentive equal to 0.5 percent of the total 
estimated Medicare Part B allowed charges for all covered professional 
services furnished by the eligible professional or group practice 
during the applicable reporting period. We finalized criteria for the 
satisfactory reporting for group practices participating in the GPRO 
for the 2014 PQRS incentive in the CY 2013 PFS final rule with comment 
period (see Table 93, 77 FR 69195). In the CY 2014 PFS proposed rule, 
we proposed to change some of the criteria for satisfactory reporting 
for group practices under the GPRO using the registry and GPRO web 
interface reporting mechanisms (78 FR 43368).
    Group practices may currently report PQRS quality measures data to 
meet the criteria for satisfactory reporting for the 2014 PQRS 
incentive via the registry, EHR, and GPRO web interface reporting

[[Page 74481]]

mechanisms. First, for the 2014 PQRS incentive, we previously finalized 
the following criterion for the satisfactory reporting of PQRS quality 
measures via the GPRO web interface for group practices comprised of 
25-99 eligible professionals: Report on all measures included in the 
web interface; AND populate data fields for the first 218 consecutively 
ranked and assigned beneficiaries in the order in which they appear in 
the group's sample for each module or preventive care measure. If the 
pool of eligible assigned beneficiaries is less than 218, then report 
on 100 percent of assigned beneficiaries (77 FR 69195). To streamline 
the PQRS and eliminate reporting options that are largely unused, in 
the CY 2014 PFS proposed rule, we proposed to eliminate this criterion 
under the GPRO for the 2014 PQRS incentive. As a result, group 
practices composed of 25-99 eligible professionals would no longer have 
the option to report PQRS quality measures using the GPRO web interface 
for the 2014 PQRS incentive (78 FR 43368). We solicited and received 
the following public comments on this proposal:
    Comment: Several commenters opposed our proposal to eliminate the 
option for group practices comprised of 25-99 eligible professionals to 
report PQRS quality measures using the GPRO web interface for the 2014 
PQRS incentive. The commenters request that, although there has been 
low participation in this reporting option, we keep this option for at 
least one more year. The commenters believe that group practices may 
increasingly use this option, particularly as the PQRS moves from an 
incentive-based to a program that solely provides payment adjustments.
    Response: While we proposed to eliminate this reporting option due 
to low participation, we agree with the commenters. We understand that 
other commenters expressed similar concerns with our proposal to 
eliminate the option to report PQRS measures groups via registry, yet 
we are still finalizing our proposal to eliminate the option to report 
PQRS measures groups via registry for the 2014 PQRS incentive and 2016 
PQRS payment adjustment. Unlike the option to report PQRS measures 
groups via registry, the option for group practices comprised of 25-99 
eligible professionals to report PQRS quality measures using the GPRO 
web interface is relatively new as it was finalized in the CY 2013 PRS 
final rule with comment period (77 FR 69196). As such, we are willing 
to keep the option for group practices comprised of 25-99 eligible 
professionals to report PQRS quality measures using the GPRO web 
interface for the 2014 PQRS incentive to see whether PQRS participation 
using this reporting criterion will increase. Therefore, we are not 
finalizing our proposal to eliminate this GPRO reporting option. 
However, we note that should we continue to see low participation in 
this reporting criterion, we may propose to eliminate this reporting 
criterion again in future rulemaking.
    In the CY 2013 PFS final rule with comment period, for reporting 
under the GPRO using the registry-based reporting mechanism, we 
finalized the following criterion for the satisfactory reporting of 
PQRS quality measures for group practices composed of 2 or more 
eligible professionals for the 2014 PQRS incentive: Report at least 3 
measures, AND report each measure for at least 80 percent of the group 
practice's Medicare Part B FFS patients seen during the reporting 
period to which the measure applies. Measures with a 0 percent 
performance rate will not be counted (77 FR 69196). For the same 
reasons we proposed to increase the number of measures an individual 
eligible must report, as well as decrease the percentage threshold for 
individual eligible professionals reporting via registry for the 2014 
PQRS incentive in the CY 2014 PFS proposed rule, we proposed the 
following modified criteria for the satisfactory reporting of 
individual quality measures under the GPRO for the registry-based 
reporting mechanism: Report at least 9 measures covering at least 3 of 
the NQS domains; AND report each measure for at least 50 percent of the 
group practice's applicable seen during the reporting period to which 
the measure applies. Measures with a 0 percent performance rate will 
not be counted (78 FR 43368). We solicited and received the following 
public comments on this proposal:
    Comment: The majority of commenters supported our proposal to 
decrease the percentage of patients that must be reported via registry 
from 80 percent to 50 percent. The commenters supported our proposal 
specifically because this threshold aligns with the option to report 
individual measures via the claims-based reporting mechanism.
    Response: We appreciate the commenters' feedback and, based on the 
support received and for the reasons stated previously, we are 
finalizing this proposal for reducing the reporting threshold. 
Therefore, for the 2014 PQRS incentive, a group practice reporting 
individual quality measures via registry will be required to report 
each measure for at least 50 percent of the eligible professional's 
Medicare Part B FFS patients seen during the reporting period to which 
the measure applies. Please note, however, that as the program evolves, 
we anticipate increasing the reporting threshold again both for the 
registry-based reporting mechanism.
    Comment: Several commenters supported our proposal to increase the 
number of measures to be reported via registry to 9, as requiring a 
group practice to report on more measures would better capture the 
quality of care provided by a group practice. However, while several 
commenters generally supported our proposal to increase the number of 
measures to be reported via registry, the commenters urged CMS to 
provide a more gradual approach to increasing the number of measures 
that must be reported via registry. These commenters suggested 
requiring the reporting of either 4 measures covering at least 1 NQS 
domain, 5 measures covering at least 2 NQS domains, or 6 measures 
covering at least 2 NQS domains.
    The majority of commenters opposed our proposal to increase the 
number of measures to be reported via registry from 3 to 9. Several of 
these commenters generally opposed any proposal that would increase the 
number of measures to be reported via registry from 3. Some of these 
commenters urged CMS not to increase the criteria for satisfactory 
reporting until participation in PQRS increases, as the commenters 
feared that increasing the criteria for satisfactory reporting in PQRS 
would discourage eligible professionals from participating in the PQRS. 
Still some of these commenters opposing this proposal noted that 
certain eligible professionals did not have 9 measures for which to 
report.
    Response: We appreciate commenters' positive feedback, as well as 
suggested alternative reporting criteria. We understand the commenters' 
concerns opposing this proposal. However, we believe that it is 
important to collect data that provides a broad picture of the quality 
of care provided by a group practice, and, as discussed in section K of 
this final rule with comment period, such information will be used, in 
part, for the Value-based Payment Modifier to determine upward, 
downward, and neutral adjustments based on physician performance. So we 
believe it is important to raise the measure threshold from 3 measures 
covering 1 NQS domain to 9 measures covering 3 NQS domains. As we noted 
above and in the proposed rule (78 FR 43368), we believe that we have 
provided group practices with enough time to familiarize themselves 
with the reporting options

[[Page 74482]]

for satisfactory reporting under the PQRS, particularly for the PQRS 
incentives.
    For the commenters who urge us not to increase the satisfactory 
reporting criteria for the PQRS until participation in PQRS increases, 
we understand that, as discussed in this final rule below and in the 
2011 PQRS and eRx Reporting Experience, participation in the PQRS has 
fluctuated around 25 percent among those eligible to participate in the 
PQRS. Indeed, it is one of our major goals to increase participation in 
the PQRS. While increasing the satisfactory reporting threshold for the 
2014 PQRS incentive may deter or discourage eligible professionals from 
participating, we believe the increase we proposed for the satisfactory 
reporting threshold will not significantly deter eligible professionals 
in group practices from participating in the PQRS. Also, we note that 
eligible professionals in group practices will be required to report 
PQRS quality measures data to meet the criteria for satisfactory 
reporting for the 2016 PQRS payment adjustment, the reporting periods 
of which run concurrently with the reporting periods for the 2014 PQRS 
incentive. Since eligible professionals will already be required to 
meet the criteria for satisfactory reporting for the 2016 PQRS payment 
adjustment, we believe these eligible professionals will also attempt 
to report for the 2014 PQRS incentive regardless of whether we increase 
the measure threshold from 3 measures covering 1 NQS domain to 9 
measures covering 3 NQS domains.
    But to addres the commenters' concerns about not having at least 9 
PQRS measures covering 3 NQS domains for which to report via registry, 
we are modifying what we are finalizing to allow group practices to 
report fewer measures so that group practices who do not have at least 
9 PQRS measures applicable to their practice. Specifically, if fewer 
than 9 measures covering less than 3 NQS domains apply to the group 
practice, a group practice must report 1-8 measures covering 1-3 NQS 
domains for which there is Medicare patient data. Given this change to 
the criterion, we will apply a MAV process, which will be triggered 
when a group practice reports on less than 9 measures. This is 
consistent with our practice for applying this process to the claims-
based reporting option for individuals to report individual measures. 
For example, if a group practice reports on 8 measures covering 2 NQS 
domains, the MAV process will be triggered to determine whether a group 
practice could have reported on an additional measure and/or covering 
an additional domain.
    The 2014 registry MAV process that will determine whether a group 
practice could have reported on more measures and/covering more NQS 
domains will be similar to the ``clinical relation'' test used in the 
2013 claims MAV process. To get a better sense of how the 2014 registry 
MAV process will be implemented by CMS, a description of the ``clinical 
relation'' test in the current 2013 claims MAV process is available at 
http://www.cms.gov/Medicare/Quality-Initiatives-Patient-Assessment-
Instruments/PQRS/Downloads/2013_PQRS_MeasureApplicabilityValidation_
Docs_030413.zip. Please note that we will post a guidance document on 
the 2014 registry MAV process, which will include a list of the measure 
clusters that are used for the ``clinical relation'' test, prior to 
January 1, 2014 (the start of the 2014 reporting periods).
    We believe modifying the reporting criterion will address 
commenters concerns, while still maintaining our general goal of 
increasing the measures reported to 9 measures covering 3 NQS domains. 
This also will increase the likelihood that more eligible 
professionals, including those in group practices, will be able to take 
advantage of this reporting option.
    For the reasons stated above, we are finalizing the following 
criterion for group practices in the GPRO reporting individual PQRS 
quality measures via registry for the 2014 PQRS incentive: For the 12-
month reporting period for the 2014 PQRS incentive, report at least 9 
measures covering at least 3 of the NQS domains, OR, if less than 9 
measures covering at least 3 NQS domains apply to the group practice, 
report 1-8 measures covering 1-3 NQS domains for which there is 
Medicare patient data, AND report each measure for at least 50 percent 
of the group practice's Medicare Part B FFS patients seen during the 
reporting period to which the measure applies. Measures with a 0 
percent performance rate would not be counted. For a group practice who 
reports fewer than 9 measures covering less than 3 NQS domains via the 
registry-based reporting mechanism, the group practice would be subject 
to the MAV process, which would allow us to determine whether a group 
practice should have reported on additional measures and/or measures 
covering additional NQS domains.
    Third, under our authority under section 1848(m)(3)(C)(i) of the 
Act to select the measures for which a group practice must report, 
based on our desire to encourage the use of patient surveys to assess 
beneficiary experience of care and outcomes, we proposed to provide 
group practices composed of 25 or more eligible professionals with a 
new satisfactory reporting criterion that would include the option to 
complete the CG CAHPS survey along with reporting 6 other PQRS measures 
for purposes of meeting the criteria for satisfactory reporting for the 
2014 PQRS incentive and 2016 PQRS payment adjustment (78 FR 43368).
    We further proposed that the survey would be administered following 
the close of the PQRS registration period. We indicated that CMS would 
provide each group a detailed report about the results of the survey. 
In addition, we proposed to assign beneficiaries to a group practice 
using the same assignment methodology that we use for the GPRO web 
interface (77 FR 69195). This method focuses on assigning beneficiaries 
to a group based on whether the group provided the plurality of primary 
care services. Because we proposed to assign beneficiaries to a group 
based on the provision of primary care services, we noted that this 
survey is not an appropriate option for groups of physicians (for 
example, such as a group of surgeons) that do not provide primary care 
services. In accordance with section 1848(m)(3)(C)(ii) of the Act, 
which requires the GPRO to provide for the use of a statistical 
sampling model, we propose that the survey would be administered by 
certified survey vendor on behalf of the group practice for a sample of 
group's assigned beneficiaries. As noted earlier, to complete this 
survey, a group practice must indicate its intent to report the CG 
CAHPS survey when it registers to participate in the PQRS via the GPRO.
    Please note that the CAHPS survey measures only cover 1 NQS domain. 
To be consistent with other group practice reporting criteria we 
proposed to require the reporting of measures covering at least 3 NQS 
domains, we proposed that, unless a group practice is comprised of 100 
or more eligible professionals and is participating in the PQRS via the 
GPRO web interface, if a group practice comprised of 25 of more 
eligible professionals reports the CAHPS measures via a certified 
survey vendor, the group practice would be required to report on at 
least 6 additional measures covering at least 2 NQS domains.
    Specifically, we proposed the following criteria for satisfactory 
reporting for the 2014 PQRS incentive: For the 12-month reporting 
period for the 2014 PQRS incentive, report all CAHPS survey measures 
via a certified vendor, AND report at least 6 measures covering at 
least 2 of the NQS domains

[[Page 74483]]

using the qualified registry, direct EHR product, EHR data submission 
vendor, or GPRO web interface reporting mechanisms (78 FR 43368).
    We solicited and received the following public comments on our 
proposed criterion for the satisfactory reporting of data on these PQRS 
quality measures under the GPRO for the 2014 PQRS incentive:
    Comment: Although one commenter supported the proposal to allow all 
group practices of 25 or more eligible professionals in the GPRO to 
report the CG CAHPS survey measures for the 2014 PQRS incentive, since 
the cost to do the survey will be at the practice's expense, the 
commenter appreciate CMS' proposal to make this optional for practices.
    Response: We appreciate the commenter's response. Unfortunately, 
except for group practices comprised of 100 or more eligible 
professionals in the GPRO that are using the GPRO web interface 
reporting mechanism who must report the CG CAHPS measures (77 FR 69267) 
to meet the criteria for satisfactory reporting for the 2014 PQRS 
incentive, we cannot bear the cost of administering the CG CAHPS survey 
to group practices. However, in the interest of encouraging the 
administering and reporting of CG CAHPS data, we proposed this 
alternative reporting criterion for which group practices may use to 
meet the criteria for satisfactory reporting for the 2014 PQRS 
incentive. Since CMS cannot bear the cost of administering the CG CAHPS 
survey for these group practices, the reporting of CG CAHPS measures is 
optional for the purpose of meeting the criteria for satisfactory 
reporting for the 2014 PQRS incentive except for group practices 
comprised of 100+ eligible professionals who are reporting PQRS 
measures via the GPRO web interface.
    Comment: Some commenters opposed our proposal to require the 
reporting of 6 measures covering at least 2 of the NQS domains using 
the qualified registry, direct EHR product, EHR data submission vendor, 
or GPRO web interface reporting mechanisms in addition to the CG CAHPS 
survey. Commenters felt this proposed criterion was too onerous, 
especially given the time and expense associated with administering the 
CG CAHPS survey.
    Response: We understand the commenters' concerns with this 
proposal. However, we believe requiring the reporting of 6 measures 
covering at least 2 of the NQS domains using the qualified registry, 
direct EHR product, EHR data submission vendor, or GPRO web interface 
reporting mechanisms in addition to the CG CAHPS survey is fair. The CG 
CAHPS survey measure only satisfies the reporting of 1 NQS domain, 
while other group practice criteria we have established for the 
registry and EHR-based reporting mechanisms for the 2014 PQRS incentive 
require the reporting of measures in at least 3 NQS domains to meet the 
criteria for satisfactory reporting for the 2014 PQRS incentive. In 
addition, we note that requiring the reporting of 6 measures in 
addition to the CG CAHPS survey would essentially require a group 
practice to report on 6 measures and 12 survey questions, for a total 
of 18 measures and questions. We note that this is the same number of 
measures (18) that we currently require group practices in the GPRO to 
report via the GPRO web interface. Based on the comments received and 
for the reasons stated previously, we are finalizing the following 
criterion for a group practice comprised of 25 or more eligible 
professionals who chooses to complete the CG CAHPS survey in 
conjunction with the qualified registry, direct EHR product, EHR data 
submission vendor, or GPRO web-interface reporting mechanisms: For the 
12-month reporting period for the 2014 PQRS incentive, report all CAHPS 
survey measures via a certified vendor, AND report at least 6 measures 
covering at least 2 of the NQS domains using the qualified registry, 
direct EHR product, EHR data submission vendor, or GPRO web interface 
reporting mechanisms. We are modifying Sec.  414.90(h) to indicate this 
reporting criterion.
8. Criteria for Satisfactory Reporting for the 2016 PQRS Payment 
Adjustment for Group Practices in the GPRO
    This section addresses the certain proposals we made regarding 
criteria for satisfactory reporting for group practices in the GPRO for 
the 2016 PQRS payment adjustment using the registry, GPRO web 
interface, and certified survey vendor reporting mechanisms. In the CY 
2013 PFS final rule with comment period, we finalized the same criteria 
for satisfactorily reporting data on quality measures for the 2016 PQRS 
payment adjustment that apply for the 2014 PQRS incentive for the PQRS 
GPRO (77 FR 69200). In the CY 2014 PFS proposed rule, we made three of 
the same proposals for the criteria for satisfactory reporting under 
the GPRO for the 2016 PQRS payment adjustment that we are proposed for 
the 2014 PQRS incentive (78 FR 43369).
    Specifically, to coincide with our proposals for the 2014 PQRS 
incentive, we first proposed (78 FR 43369) to eliminate the following 
criterion for satisfactory reporting of PQRS quality measures via the 
GPRO web interface for group practices comprised of 25-99 eligible 
professionals: Report on all measures included in the web interface; 
AND populate data fields for the first 218 consecutively ranked and 
assigned beneficiaries in the order in which they appear in the group's 
sample for each module or preventive care measure. If the pool of 
eligible assigned beneficiaries is less than 218, then report on 100 
percent of assigned beneficiaries. We solicited and received the 
following public comments on this proposal:
    Comment: Several commenters opposed our proposal to eliminate the 
option for group practices comprised of 25-99 eligible professionals to 
report PQRS quality measures using the GPRO web interface for the 2014 
PQRS incentive. The commenters request that, although there has been 
low participation in this reporting option, we keep this option for at 
least one more year. The commenters believe that group practices may 
increasingly use this option, particularly as the PQRS moves from an 
incentive-based to a program that solely provides payment adjustments.
    Response: We appreciate the commenters' feedback and understand the 
commenters' concerns. Since we are not finalizing our proposal to 
eliminate this reporting criterion for the 2014 PQRS incentive, to 
coincide with the criterion established for the 2014 PQRS incentive and 
for the same reasons we are not finalizing our proposal to remove this 
reporting criterion for the 2014 PQRS incentive, we are not finalizing 
our proposal to remove this reporting criterion. As we previously 
stated, although we proposed to eliminate this reporting criterion due 
to low participation, we are willing to keep the option for group 
practices comprised of 25-99 eligible professionals to report PQRS 
quality measures using the GPRO web interface for the 2014 PQRS 
incentive to see whether PQRS participation using this reporting 
criterion will increase. However, we note that should we continue to 
see low participation in this reporting criterion, we may propose to 
eliminate this reporting criterion again in future rulemaking. Based on 
the comments received and for the reasons previously stated, group 
practices of 25-99 eligible professionals have the option to use the 
following criterion for satisfactory reporting of PQRS quality measures 
via the GPRO web interface: Report on all measures included in the web 
interface; AND populate data fields for the first 218 consecutively 
ranked and assigned beneficiaries in the order

[[Page 74484]]

in which they appear in the group's sample for each module or 
preventive care measure. If the pool of eligible assigned beneficiaries 
is less than 218, then report on 100 percent of assigned beneficiaries.
    Second, we proposed to remove the following criterion for 
satisfactory reporting via registry under the GPRO for the 2016 PQRS 
payment adjustment: Report at least 3 measures, AND report each measure 
for at least 80 percent of the group practice's Medicare Part B FFS 
patients seen during the reporting period to which the measure applies. 
Measures with a 0 percent performance rate will not be counted (78 FR 
43369). By eliminating this option as proposed, a group practice 
reporting via registry would have been required to meet the same 
criteria for satisfactory reporting for the 2014 PQRS incentive as the 
2016 PQRS payment adjustment. This would allow us to maintain 
consistent criteria for the 2016 PQRS payment adjustment and 2014 PQRS 
incentive. We solicited and received the following public comments on 
this proposal:
    Comment: While several commenters supported our proposal to 
increase the number of measures to be reported via registry, these 
commenters generally did not support eliminating this reporting 
criterion. Other commenters expressed concern that there are still 
group practices who do not have 3 measures applicable to their 
practice. These commenters therefore suggested that this criterion be 
modified to require the reporting of only 1 measure covering 1 NQS 
domain for the 2016 PQRS payment adjustment, similar to the criterion 
that was finalized for the 2015 PQRS payment adjustment (77 FR 69200), 
as some commenters are concerned that there are still group practices 
who do not have 3 measures applicable to their practice.
    Response: We understand the commenters' concerns regarding 
eliminating this reporting criterion. Although we still desire to move 
towards the reporting of more measures, we understand that eligible 
professionals may need another year to adjust to the reporting of 
additional measures. We believe it is pertinent to allow time for 
eligible professionals to adjust to the reporting of additional 
measures for purposes of the 2016 PQRS payment adjustment as opposed to 
the 2014 PQRS incentive, where forgoing reporting has no downward 
payment consequencee. Therefore, based on the concerns expressed by 
commenters, we are not finalizing our proposal to eliminate this 
reporting criterion for the 2016 PQRS payment adjustment, but as noted 
below, are further modifying the criterion in this final rule. We note, 
however, that it is our intention to move towards the reporting of 9 
measures covering at least 3 NQS domains for the 2017 PQRS payment 
adjustment.
    To address commenters concerns and to coincide with the percentage 
reporting threshold we are finalizing for group practices who report 
individual measures via registry for the 2014 PQRS incentive, we are 
lowering the percentage threshold for the reporting of measures via 
registry for the 2016 PQRS payment adjustment from 80 to 50 percent. We 
believe this modification reduces reporting burden on group practices 
since they will be required to report on less patients. This further 
aligns with some the reporting criteria for the 2014 PQRS incentive 
criteria.
    For the commenters who expressed concern that there are still group 
practices who do not have 3 measures applicable to their practice, we 
are finalizing another modification to allow eligible professionals to 
report 1-2 applicable measures. And consistent with the other final 
policies we are adopting, we will apply a registry MAV process for the 
2016 PQRS payment adjustment. For purposes of this reporting criterion, 
the registry MAV process will be triggered when a group practice 
reports on less than 3 measures. For example, if a group practice 
reports on 1-2 measures, the MAV process will be triggered to determine 
whether a group practice could have reported on at least 3 measures 
covering 1 NQS domain. We believe implementing this change to the 
criterion for the 2016 PQRS payment adjustment will help to alleviate 
commenters' concerns that certain group practices may not have a 
sufficient number of measures to report covering a sufficient amount of 
NQS domains.
    This registry MAV process that will determine whether a group 
practice could have reported on more measures will be similar to the 
``clinical relation'' test used in the 2013 claims MAV process. To get 
a better sense of how the registry MAV process for the 2016 PQRS 
payment adjustment will be implemented by CMS, a description of the 
``clinical relation'' test in the current 2013 claims MAV process is 
available at http://www.cms.gov/Medicare/Quality-Initiatives-Patient-
Assessment-Instruments/PQRS/Downloads/2013_PQRS_
MeasureApplicabilityValidation_Docs_030413.zip. Please note that we 
will post a guidance document on the registry MAV process for the 2016 
PQRS payment adjustment, which will include a list of the measure 
clusters that are used for the ``clinical relation'' test, prior to 
January 1, 2014 (the start of the 2014 reporting periods).
    In summary, we are finalizing in the following criterion for 
satisfactory reporting via registry under the GPRO for the 2016 PQRS 
payment adjustment: For the 12-month reporting period for the 2016 PQRS 
payment adjustment, report at least 3 measures covering at least 1 of 
the NQS domains, OR, if less than 3 measures apply to the group 
practice, report 1-2 measures covering at least 1 NQS domain for which 
there is Medicare patient data, AND report each measure for at least 50 
percent of the group practice's Medicare Part B FFS patients seen 
during the reporting period to which the measure applies. Measures with 
a 0 percent performance rate would not be counted. For a group practice 
who reports fewer than 3 measures via the registry-based reporting 
mechanism, the group practice would be subject to the MAV process, 
which would allow us to determine whether a group practice should have 
reported on additional measures.
    Third, to coincide with criterion we are finalizing for the 2014 
PQRS incentive, we proposed (78 FR 43369) the following criterion for 
satisfactory reporting of measures via registry under the GPRO for the 
2016 PQRS payment adjustment: Report at least 9 measures covering at 
least 3 of the National Quality Strategy domains, and report each 
measure for at least 50 percent of the group practice's applicable 
patients seen during the reporting period to which the measure applies. 
Measures with a 0 percent performance rate will not be counted.
    Comment: Several commenters generally supported our proposal to 
align the satisfactory reporting criteria for the 2014 PQRS incentive 
with the satisfactory reporting criteria for the 2016 PQRS payment 
adjustment.
    Response: We appreciate the commenters' support. However, given 
that we are making certain changes to address concerns raised above and 
with regard to the 2014 incentive about increasing the number of 
measures to 9 and whether eligible professionals have enough applicable 
measures to report to take advantage of this reporting criterion, we 
are finalizing a modification of the criterion that was proposed for 
the satisfactory reporting of measures via registry under the GPRO for 
the 2014 PQRS incentive. This will also help to meet our goal of 
aligment under the program where possible with regard to various 
reporting criteria.
    Specifically, we are finalizing the following criterion for 
satisfactory reporting via registry under the GPRO for the 2016 PQRS 
payment adjustment:

[[Page 74485]]

Report at least 9 measures covering at least 3 of the NQS domains, OR, 
if less than 9 measures covering at least 3 NQS domains apply to the 
group practice, report 1-8 measures covering 1-3 NQS domains for which 
there is Medicare patient data, AND report each measure for at least 50 
percent of the group practice's Medicare Part B FFS patients seen 
during the reporting period to which the measure applies. Measures with 
a 0 percent performance rate would not be counted. For a group practice 
who reports fewer than 9 measures covering less than 3 NQS domains via 
the registry-based reporting mechanism, the group practice would be 
subject to the MAV process, which would allow us to determine whether a 
group practice should have reported on additional measures and/or 
measures covering additional NQS domains.
    Fourth, consistent with the proposal we made to provide group 
practices comprised of 25 or more eligible professionals with a new 
satisfactory reporting criterion that would include the option to 
complete the CG CAHPS survey along with reporting 6 other PQRS measures 
for purposes of meeting the criteria for satisfactory reporting for the 
2014 PQRS incentive, we also proposed the same criterion for purposes 
of meeting the criteria for satisfactory reporting for the 2016 PQRS 
payment adjustment. Specifically, we proposed the following criteria 
for satisfactory reporting for the 2016 PQRS payment adjustment: For 
the 12-month reporting period for the 2016 PQRS payment adjustment, 
report all CAHPS survey measures via a certified vendor, AND report at 
least 6 measures covering at least 2 of the NQS domains using the 
qualified registry, direct EHR product, EHR data submission vendor, or 
GPRO web interface reporting mechanisms. As noted earlier, to complete 
this survey, a group practice must indicate its intent to report the CG 
CAHPS survey when it registers to participate in the PQRS via the GPRO 
(78 FR 43369). We solicited and received the following public comments 
on this proposed criterion:
    Comment: Although one commenter supported the proposal to allow all 
group practices of 25 or more eligible professionals in the GPRO to 
report the CG CAHPS survey measures, since the cost to do the survey 
will be at the practice's expense, the commenter appreciates CMS' 
proposal to make this optional for practices.
    Response: We appreciate the commenter's response. However, although 
this reporting criterion is generally optional for group practices of 
25 or more eligible professionals, please note that completion of the 
CG CAHPS survey it not optional for all group practices participating 
under the GPRO for the 2016 PQRS payment adjustment. As we stated in 
the CY 2013 PFS final rule with comment period, all group practices 
comprised of 100 or more eligible professionals in the GPRO that are 
using the GPRO web interface reporting mechanism must report the CG 
CAHPS measures (77 FR 69267) to meet the criteria for satisfactory 
reporting for the 2014 PQRS incentive. Since, as finalized in the CY 
2013 PFS final rule with comment period (77 FR 69200), a group practice 
may meet the criteria for satisfactory reporting for the 2016 PQRS 
payment adjustment by meeting the criteria for satisfactory reporting 
for the 2014 PQRS incentive, all group practices comprised of 100 or 
more eligible professionals in the GPRO that are using the GPRO web 
interface reporting mechanism must also report the CG CAHPS measures 
(77 FR 69267) to meet the criteria for satisfactory reporting for the 
2016 PQRS payment adjustment. Because we are requiring these group 
practices to report the CG CAHPS survey measures, we noted that CMS 
would bear the cost of administering the survey.
    Nonetheless, we are pleased with the commenter's support with 
making reporting of the CG CAHPS survey measures optional for the 2014 
PQRS incentive. We understand that it is a considerable expense to 
administer the CG CAHPS survey. Since CMS cannot bear the cost of 
administering the CG CAHPS survey for these group practices, the 
reporting of CG CAHPS measures is optional for the purpose of meeting 
the criteria for satisfactory reporting for the 2016 PQRS payment 
adjustment except for group practices comprised of 100+ eligible 
professionals who are reporting PQRS measures via the GPRO web 
interface.
    Comment: Some commenters opposed our proposal to require the 
reporting of 6 measures covering at least 2 of the NQS domains using 
the qualified registry, direct EHR product, EHR data submission vendor, 
or GPRO web interface reporting mechanisms in addition to the CG CAHPS 
survey. Commenters felt this proposed criterion was too onerous, 
especially given the time and expense associated with administering the 
CG CAHPS survey.
    Response: We understand the commenters' concerns with this 
proposal. However, we believe requiring the reporting of 6 measures 
covering at least 2 of the NQS domains using the qualified registry, 
direct EHR product, EHR data submission vendor, or GPRO web interface 
reporting mechanisms in addition to the CG CAHPS survey is fair. The CG 
CAHPS survey measure only satisfies the reporting of 1 NQS domain, 
while most other group practice criteria we have established for the 
registry and EHR-based reporting mechanisms require the reporting of 
measures in at least 3 NQS domains to meet the criteria for 
satisfactory reporting for the 2016 PQRS payment adjustment. In 
addition, we note that requiring the reporting of 6 measures in 
addition to the CG CAHPS survey would essentially require a group 
practice to report on 6 measures and 12 survey questions, for a total 
of 18 measures and questions. We note that this is the same number of 
measures (18) that we currently require group practices in the GPRO to 
report via the GPRO web interface. Based on the comments received and 
for the reasons stated previously, we are finalizing the following 
criterion--which is identical to the criterion finalized for the 2014 
PQRS incentive--for a group practice who chooses to complete the CG 
CAHPS survey in conjunction with the qualified registry, direct EHR 
product, EHR data submission vendor, or GPRO web-interface reporting 
mechanisms for the 2016 PQRS payment adjustment: For the 12-month 
reporting period for the 2014 PQRS incentive, report all CAHPS survey 
measures via a certified vendor, AND report at least 6 measures 
covering at least 2 of the NQS domains using the qualified registry, 
direct EHR product, EHR data submission vendor, or GPRO web interface 
reporting mechanisms
    Tables 49 and 50 provide a summary of our final criteria for the 
satisfactory reporting of data on PQRS quality measures via the GPRO 
for the 2014 PQRS incentive and 2016 PQRS payment adjustment. Please 
note that we are adding paragraph Sec.  414.90(h)(5) to specify the 
criteria for the satisfactory reporting of data on PQRS quality 
measures via the GPRO for the 2014 PQRS incentive as described in Table 
49, and we are adding paragraph Sec.  414.90(j)(5) to specify the 
criteria for the satisfactory reporting of data on PQRS quality 
measures via the GPRO for the 2016 PQRS payment adjustment as described 
in Table 50.

[[Page 74486]]

Table 49--Summary of Final Requirements for the 2014 PQRS Incentive: Criteria for Satisfactory Reporting of Data
                                      on PQRS Quality Measures Via the GPRO
----------------------------------------------------------------------------------------------------------------
                                                                                          Proposed reporting
          Reporting period             Reporting mechanism     Group practice size            criterion
----------------------------------------------------------------------------------------------------------------
** 12-month (Jan 1-Dec 31).........  GPRO Web interface....  25-99 eligible          Report on all measures
                                                              professionals.          included in the web
                                                                                      interface; AND Populate
                                                                                      data fields for the first
                                                                                      218 consecutively ranked
                                                                                      and assigned beneficiaries
                                                                                      in the order in which they
                                                                                      appear in the group's
                                                                                      sample for each module or
                                                                                      preventive care measure.
                                                                                      If the pool of eligible
                                                                                      assigned beneficiaries is
                                                                                      less than 218, then report
                                                                                      on 100 percent of assigned
                                                                                      beneficiaries.
** 12-month (Jan 1-Dec 31).........  GPRO Web interface....  100+ eligible           Report on all measures
                                                              professionals.          included in the web
                                                                                      interface; AND Populate
                                                                                      data fields for the first
                                                                                      411 consecutively ranked
                                                                                      and assigned beneficiaries
                                                                                      in the order in which they
                                                                                      appear in the group's
                                                                                      sample for each module or
                                                                                      preventive care measure.
                                                                                      If the pool of eligible
                                                                                      assigned beneficiaries is
                                                                                      less than 411, then report
                                                                                      on 100 percent of assigned
                                                                                      beneficiaries.
                                                                                     In addition, the group
                                                                                      practice must also report
                                                                                      all CG CAHPS survey
                                                                                      measures via certified
                                                                                      survey vendor.
12-month (Jan 1-Dec 31)............  Qualified Registry....  2+ eligible             Report at least 9 measures
                                                              professionals.          covering at least 3 of the
                                                                                      NQS domains, OR, if less
                                                                                      than 9 measures covering
                                                                                      at least 3 NQS domains
                                                                                      apply to the group
                                                                                      practice, report 1-8
                                                                                      measures covering 1-3 NQS
                                                                                      domains for which there is
                                                                                      Medicare patient data, AND
                                                                                      report each measure for at
                                                                                      least 50 percent of the
                                                                                      group practice's Medicare
                                                                                      Part B FFS patients seen
                                                                                      during the reporting
                                                                                      period to which the
                                                                                      measure applies. Measures
                                                                                      with a 0 percent
                                                                                      performance rate would not
                                                                                      be counted.
                                                                                     For a group practice who
                                                                                      reports fewer than 9
                                                                                      measures covering at least
                                                                                      3 NQS domains via the
                                                                                      registry-based reporting
                                                                                      mechanism, the group
                                                                                      practice will be subject
                                                                                      to the MAV process, which
                                                                                      would allow us to
                                                                                      determine whether a group
                                                                                      practice should have
                                                                                      reported on additional
                                                                                      measures and/or measures
                                                                                      covering additional NQS
                                                                                      domains.
** 12-month (Jan 1-Dec 31).........  Direct EHR product      2+ eligible             Report 9 measures covering
                                      that is CEHRT/EHR       professionals.          at least 3 of the NQS
                                      data submission                                 domains. If a group
                                      vendor that is CEHRT.                           practice's CEHRT does not
                                                                                      contain patient data for
                                                                                      at least 9 measures
                                                                                      covering at least 3
                                                                                      domains, then the group
                                                                                      practice must report the
                                                                                      measures for which there
                                                                                      is Medicare patient data.
                                                                                     A group practice must
                                                                                      report on at least 1
                                                                                      measure for which there is
                                                                                      Medicare patient data.
12-month (Jan 1-Dec 31.............  CMS-certified survey    25+ eligible            Report all CG CAHPS survey
                                      vendor + qualified      professionals.          measures via a CMS-
                                      registry, direct EHR                            certified survey vendor,
                                      product, EHR data                               AND report at least 6
                                      submission vendor, or                           measures covering at least
                                      GPRO web interface.                             2 of the NQS domains using
                                                                                      a qualified registry,
                                                                                      direct EHR product, EHR
                                                                                      data submission vendor, or
                                                                                      GPRO web interface.
----------------------------------------------------------------------------------------------------------------
* Subject to the Measure Application Validity (MAV) process.
** Criteria finalized in the CY 2013 PFS final rule (77 FR 69200).

     Table 50--Summary of Final Requirements for the 2016 PQRS Payment Adjustment: Criteria for Satisfactory
                             Reporting of Data on PQRS Quality Measures via the GPRO
----------------------------------------------------------------------------------------------------------------
                                                                                          Proposed reporting
          Reporting period             Reporting mechanism     Group practice size            criterion
----------------------------------------------------------------------------------------------------------------
** 12-month (Jan 1-Dec 31).........  GPRO Web interface....  25-99 eligible          Report on all measures
                                                              professionals.          included in the web
                                                                                      interface; AND Populate
                                                                                      data fields for the first
                                                                                      218 consecutively ranked
                                                                                      and assigned beneficiaries
                                                                                      in the order in which they
                                                                                      appear in the group's
                                                                                      sample for each module or
                                                                                      preventive care measure.
                                                                                      If the pool of eligible
                                                                                      assigned beneficiaries is
                                                                                      less than 218, then report
                                                                                      on 100 percent of assigned
                                                                                      beneficiaries.
** 12-month (Jan 1-Dec 31).........  GPRO Web interface....  100+ eligible           Report on all measures
                                                              professionals.          included in the web
                                                                                      interface; AND Populate
                                                                                      data fields for the first
                                                                                      411 consecutively ranked
                                                                                      and assigned beneficiaries
                                                                                      in the order in which they
                                                                                      appear in the group's
                                                                                      sample for each module or
                                                                                      preventive care measure.
                                                                                      If the pool of eligible
                                                                                      assigned beneficiaries is
                                                                                      less than 411, then report
                                                                                      on 100 percent of assigned
                                                                                      beneficiaries.
                                                                                     In addition, the group
                                                                                      practice must report all
                                                                                      CG CAHPS survey measures
                                                                                      via certified survey
                                                                                      vendor.

[[Page 74487]]

 
12-month (Jan 1-Dec 31)............  Qualified Registry....  2+ eligible             Report at least 9 measures
                                                              professionals.          covering at least 3 of the
                                                                                      NQS domains, OR, if less
                                                                                      than 9 measures covering
                                                                                      at least 3 NQS domains
                                                                                      apply to the group
                                                                                      practice, report 1-8
                                                                                      measures covering 1-3 NQS
                                                                                      domains for which there is
                                                                                      Medicare patient data, AND
                                                                                      report each measure for at
                                                                                      least 50 percent of the
                                                                                      group practice's Medicare
                                                                                      Part B FFS patients seen
                                                                                      during the reporting
                                                                                      period to which the
                                                                                      measure applies. Measures
                                                                                      with a 0 percent
                                                                                      performance rate would not
                                                                                      be counted.
                                                                                     For a group practice who
                                                                                      reports fewer than 9
                                                                                      measures via the registry-
                                                                                      based reporting mechanism,
                                                                                      the group practice would
                                                                                      be subject to the MAV
                                                                                      process, which would allow
                                                                                      us to determine whether a
                                                                                      group practice should have
                                                                                      reported on additional
                                                                                      measures and/or measures
                                                                                      covering additional NQS
                                                                                      domains.
12-month (Jan 1-Dec 31)............  Qualified Registry....  2+ eligible             Report at least 3 measures
                                                              professionals.          covering at least 1 of the
                                                                                      NQS domains, OR, if less
                                                                                      than 3 measures covering 1
                                                                                      NQS domain apply to the
                                                                                      group practice, report 1-2
                                                                                      measures covering 1 NQS
                                                                                      domain for which there is
                                                                                      Medicare patient data, AND
                                                                                      report each measure for at
                                                                                      least 50 percent of the
                                                                                      group practice's Medicare
                                                                                      Part B FFS patients seen
                                                                                      during the reporting
                                                                                      period to which the
                                                                                      measure applies. Measures
                                                                                      with a 0 percent
                                                                                      performance rate would not
                                                                                      be counted.
                                                                                     For a group practice who
                                                                                      reports fewer than 3
                                                                                      measures covering 1 NQS
                                                                                      domain via the registry-
                                                                                      based reporting mechanism,
                                                                                      the group practice would
                                                                                      be subject to the MAV
                                                                                      process, which would allow
                                                                                      us to determine whether a
                                                                                      group practice should have
                                                                                      reported on additional
                                                                                      measures.
** 12-month (Jan 1-Dec 31).........  Direct EHR product      2+ eligible             Report 9 measures covering
                                      that is CEHRT/EHR       professionals.          at least 3 of the NQS
                                      data submission                                 domains. If a group
                                      vendor that is CEHRT.                           practice's CEHRT does not
                                                                                      contain patient data for
                                                                                      at least 9 measures
                                                                                      covering at least 3
                                                                                      domains, then the group
                                                                                      practice must report the
                                                                                      measures for which there
                                                                                      is Medicare patient data.
                                                                                     A group practice must
                                                                                      report on at least 1
                                                                                      measure for which there is
                                                                                      Medicare patient data.
12-month (Jan 1-Dec 31.............  CMS-certified survey    25+ eligible            Report all CG CAHPS survey
                                      vendor + qualified      professionals.          measures via a CMS-
                                      registry, direct EHR                            certified survey vendor,
                                      product, EHR data                               AND report at least 6
                                      submission vendor, or                           measures covering at least
                                      GPRO web interface.                             2 of the NQS domains using
                                                                                      a qualified registry,
                                                                                      direct EHR product, EHR
                                                                                      data submission vendor, or
                                                                                      GPRO web interface.
----------------------------------------------------------------------------------------------------------------
* Subject to the Measure Application Validity (MAV) process.
** Criteria finalized in the CY 2013 PFS final rule (77 FR 69200).

9. Statutory Requirements and Other Considerations for the Selection of 
PQRS Quality Measures for Meeting the Criteria for Satisfactory 
Reporting for 2014 and Beyond for Individual Eligible Professionals and 
Group Practices
    CMS underwent an annual Call for Measures that solicited new 
measures from the public for possible inclusion in the PQRS for 2014 
and beyond. During the Call for Measures, we requested measures for 
inclusion in PQRS that meet the following statutory and non-statutory 
criteria.
    Sections 1848(k)(2)(C) and 1848(m)(3)(C)(i) of the Act, 
respectively, govern the quality measures reported by individual 
eligible professionals and group practices reporting under the PQRS. 
Under section 1848(k)(2)(C)(i) of the Act, the PQRS 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 section 1890(a) of the Act (currently, 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 PQRS quality measure must 
be endorsed by the NQF. Additionally, section 1848(k)(2)(D) of the Act 
requires that for each PQRS quality measure, ``the Secretary shall 
ensure that eligible professionals have the opportunity to provide 
input during the development, endorsement, or selection of measures 
applicable to services they furnish.''
    The statutory requirements under section 1848(k)(2)(C) of the Act, 
subject to the exception noted previously, 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) of the 
Act (that is, the NQF) and are silent for how the measures that are 
submitted to the NQF for endorsement were developed. The basic steps 
for developing measures applicable to physicians and other eligible 
professionals 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 process of development 
of physician measures, such as restricting the initial development to 
physician-controlled

[[Page 74488]]

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 
for purposes of the PQRS.
    In addition to section 1848(k)(2)(C) of the Act, section 1890A of 
the Act, which was added by section 3014(b) of the Affordable Care Act, 
requires that the entity with a contract with the Secretary under 
section 1890(a) of the Act (currently, that is the NQF) convene multi-
stakeholder groups to provide input to the Secretary on the selection 
of certain categories of quality and efficiency measures. These 
categories are described in section 1890(b)(7)(B) of the Act, and 
include such measures as the quality measures selected for reporting 
under the PQRS. Under section 3014 of the Affordable Care Act, the NQF 
convened multi-stakeholder groups by creating the Measure Applications 
Partnership (MAP). Section 1890(A)(a) of the Act requires that the 
Secretary establish a pre-rulemaking process in which the Secretary 
must make publicly available by December 1st of each year a list of the 
quality and efficiency measures that the Secretary is considering for 
selection through rulemaking for use in the Medicare program. The NQF 
must provide CMS with the MAP's input on selecting measures by February 
1st of each year. The list of measures under consideration for 2013 is 
available at http://www.qualityforum.org/map/.
    As we noted above, 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). We may select measures under this 
exception if there is a specified area or medical topic for which a 
feasible and practical measure has not been endorsed by the entity, as 
long as due consideration is given to measures that have been endorsed 
or adopted by a consensus organization identified by the Secretary. We 
requested that stakeholders apply the following considerations when 
submitting measures for possible inclusion in the PQRS measure set:
     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.
     Measures that address gaps in the quality of care 
delivered to Medicare beneficiaries.
     Address Gaps in the PQRS measure set.
     Measures impacting chronic conditions (chronic kidney 
disease, diabetes mellitus, heart failure, hypertension and 
musculoskeletal).
     Measures applicable across care settings (such as, 
outpatient, nursing facilities, domiciliary, etc.).
     Broadly applicable measures that could be used to create a 
core measure set required of all participating eligible professionals.
     Measures groups that reflect the services furnished to 
beneficiaries by a particular specialty.
10. PQRS Quality Measures
    Taking into consideration the statutory and non-statutory criteria 
we described previously, this section contains our proposals for the 
inclusion or removal of measures in PQRS for 2014 and beyond. We are 
classifying all measures against six domains based on the NQS's six 
priorities, as follows:
    (1) Person and Caregiver-Centered Experience and Outcomes. These 
are measures that reflect the potential to improve patient-centered 
care and the quality of care delivered to patients. They emphasize the 
importance of collecting patient-reported data and the ability to 
impact care at the individual patient level, as well as the population 
level through greater involvement of patients and families in decision 
making, self-care, activation, and understanding of their health 
condition and its effective management.
    (2) Patient Safety. These are measures that reflect the safe 
delivery of clinical services in both hospital and ambulatory settings 
and include processes that would reduce harm to patients and reduce 
burden of illness. These measures should enable longitudinal assessment 
of condition-specific, patient-focused episodes of care.
    (3) Communication and Care Coordination. These are measures that 
demonstrate appropriate and timely sharing of information and 
coordination of clinical and preventive services among health 
professionals in the care team and with patients, caregivers, and 
families to improve appropriate and timely patient and care team 
communication.
    (4) Community/Population Health. These are measures that reflect 
the use of clinical and preventive services and achieve improvements in 
the health of the population served. These are outcome-focused and have 
the ability to achieve longitudinal measurement that will demonstrate 
improvement or lack of improvement in the health of the US population.
    (5) Efficiency and Cost Reduction. These are measures that reflect 
efforts to significantly improve outcomes and reduce errors. These 
measures also impact and benefit a large number of patients and 
emphasize the use of evidence to best manage high priority conditions 
and determine appropriate use of healthcare resources.
    (6) Effective Clinical Care. These are measures that reflect 
clinical care processes closely linked to outcomes based on evidence 
and practice guidelines.
    Please note that the PQRS quality measure specifications for any 
given PQRS quality measure may differ from specifications for the same 
quality measure used in prior years. For example, for the PQRS quality 
measures that were selected for reporting in 2013 and beyond, please 
note that detailed measure specifications, including the measure's 
title, for the individual PQRS quality measures for 2013 and beyond may 
have been updated or modified during the NQF endorsement process or for 
other reasons. In addition, due to our desire to align measure titles 
with the measure titles that are finalized for 2013, 2014, 2015, and 
potentially subsequent years of the EHR Incentive Program, we note that 
the measure titles for measures available for reporting via EHRs may 
change from year to year. We note that the EHR Incentive Program has 
updated its measure titles to include version numbers, and these 
version numbers are referenced in the tables containing the final PQRS 
measures set below. Please note that any changes reflected below are 
not substantive. We will continue to work toward complete alignment, 
where possible, of measure specifications across programs, and do so in 
both rulemaking and subregulatory communication, as applicable, 
including through guidance such as in the detailed quality measure 
specifications PQRS publishes each year at http://www.cms.gov/Medicare/
Quality-Initiatives-Patient-Assessment-Instruments/PQRS/index.html.
    Through NQF's measure maintenance process, NQF endorsed measures 
are sometimes updated to incorporate changes that we believe do not 
substantively change the nature of the measure. Examples of such 
changes could be updated diagnosis or procedure codes or changes to 
exclusions to the patient population or definitions. We believe these 
types of maintenance changes are distinct from more substantive changes 
to measures that result in what are considered new or different 
measures, and that they do not trigger the same agency obligations 
under the Administrative Procedure

[[Page 74489]]

Act. In the CY 2013 PFS final rule with comment period, we finalized 
our proposal providing that if the NQF updates an endorsed measure that 
we have adopted for the PQRS in a manner that we consider to not 
substantively change the nature of the measure, we would use a 
subregulatory process to incorporate those updates to the measure 
specifications that apply to the program (77 FR 69207). We believe this 
adequately balances our need to incorporate non-substantive NQF updates 
to NQF-endorsed measures in the most expeditious manner possible, while 
preserving the public's ability to comment on updates that so 
fundamentally change an endorsed measure that it is no longer the same 
measure that we originally adopted. We also noted that the NQF process 
incorporates an opportunity for public comment and engagement in the 
measure maintenance process. We will revise the Specifications Manual 
and post notices to clearly identify the updates and provide links to 
where additional information on the updates can be found. Updates will 
also be available on the CMS PQRS Web site at http://www.cms.gov/
Medicare/Quality-Initiatives-Patient-Assessment-Instruments/PQRS/
index.html.
    Additionally, eligible professionals and registry vendors should be 
aware that the 2014 Physician Quality Reporting System (PQRS) Claims/
Registry Measure Specifications Manual and other supporting 
documentation may be published with placeholder quality-data codes 
(represented as GXXXX) in a sub-set of measures' numerator options. 
PQRS participants should note that these placeholder codes should not 
be submitted and will not count toward satisfactory reporting. In the 
event the specifications are published with the placeholder codes, we 
will revise the measure specifications and post notices to clearly 
identify the updates and provide links to where additional information 
on the updates can be found. Updates will also be available on the CMS 
PQRS Web site at http://www.cms.gov/Medicare/Quality-Initiatives-
Patient-Assessment-Instruments/PQRS/index.html.
    For the PQRS EHR measures that are also reportable under the EHR 
Incentive Program (that is, electronically specified clinical quality 
measures), please note that the updates to these measures will be 
provided on the EHR Incentive Program Web site. We understand that the 
EHR Incentive Program may accept versions of electronically specified 
clinical quality measures that may be outdated. We proposed that for 
purposes of the PQRS, eligible professionals must report the most 
recent, updated version of a clinical quality measure (78 FR 43371). We 
solicited and received no public comment on this proposal. However, we 
are not finalizing this proposal. To avoid confusion on which measure 
version to report for the PQRS, rather than redirecting eligible 
professionals to the EHR Incentive Program Web site, although actual 
measure specifications will be provided on the EHR Incentive Program 
Web site, the electronic measure version that must be reported under 
the PQRS for a specific year will be found in the Measure 
Specifications List updated for that year. For example, for purposes of 
reporting clinical quality measures that are electronically specified 
during the PQRS reporting periods that occur in 2014, we would only 
accept the version of clinical quality measures that will be found in 
the 2014 Measure Specifications List, which will be made available at 
the PQRS Web site at http://www.cms.gov/Medicare/Quality-Initiatives-
Patient-Assessment-Instruments/PQRS/index.html. However, please note 
that the 2014 PQRS Measures List will to the EHR Incentive Program's 
Web site for the measure specifications for the 2014 EHR measures.
    We also understand, for purposes of the EHR Incentive Program, that 
once direct EHR products and EHR data submission vendors are issued a 
2014 Edition certification for clinical quality measures, they will not 
necessarily be required to have such technology retested and 
recertified against the most recent, updated version of a clinical 
quality measure when such versions are made available. We proposed that 
for purposes of PQRS, however, that the eligible professional's direct 
EHR product or EHR data submission vendor must be tested and certified 
to the most updated, recent versions of electronically specified 
clinical quality measures for that year (78 FR 43371-43372). We 
solicited but received no public comment on this proposal to require 
eligible professionals to use a direct EHR product or EHR data 
submission vendor that has been tested and certified to the most 
recent, updated version of the clinical quality measure's electronic 
specifications for PQRS purposes. However, we are not finalizing this 
proposal. Instead, for purposes of PQRS, the eligible professional's 
direct EHR product or EHR data submission vendor must be tested and 
certified to the versions of electronically specified clinical quality 
measures listed in the Measure Specifications List for the particular 
program year. For example, for purposes of reporting clinical quality 
measures that are electronically specified during the PQRS reporting 
periods that occur in 2014, we would only accept the reporting of 
clinical quality measures from direct EHR products or EHR data 
submission vendors that have been tested and certified to versions of 
the electronic specifications that will be found in the 2014 PQRS 
Measure Specifications List that will be released following the display 
of this final rule with comment period. Since the PQRS Measure 
Specifications List is not typically released until late November/
December of the year prior to the January 1 start of the reporting 
periods for a particularly year, we understand that vendors may be 
concerned with having enough time to update their systems with the most 
recent measure specifications in time prior to the start of the year. 
Please note that, unless there are errors discovered in updated 
electronic measure specifications, the PQRS intends to use the most 
recent, updated versions of electronically specified clinical quality 
measures for that year. For example, for 2014, the PQRS will accept the 
June 2013 versions of electronically specified clinical quality 
measures under the EHR Incentive Program, except for the following 
measure--CMS140v2, Breast Cancer Hormonal Therapy for Stage IC-IIIC 
Estrogen Receptor/Progesterone Receptor (ER/PR) Positive Breast Cancer 
(NQF 0387). As a substantive error which would result in a, erroneous 
zero percent performance rate when reported this measure was discovered 
in the June 2013 version of this electronically specified clinical 
quality measure, the PQRS will require the use of the prior, December 
2012 version of this measure, which is CMS140v1.
a. Individual PQRS Measures and Measures Within Measures Groups 
Available for Reporting for 2014 and Beyond
(1) PQRS Core Measures Available for Reporting for 2014 and Beyond
    In the CY 2013 PFS final rule with comment period, we finalized the 
HHS Million Hearts Measures as a recommended set of core measures for 
which we encourage eligible professionals to report in PQRS (77 FR 
69209). In addition to the HHS Million Hearts Measures we previously 
finalized, we proposed to include the measures specified in the EHR 
Incentive Program as additional recommended core measures for 2014 and 
beyond (78 FR 43372-43378, Table 28). These additional proposed 
recommended core

[[Page 74490]]

measures were also finalized as recommended core measures in the EHR 
Incentive Program for 2014. Therefore, due to our desire to align with 
the recommended measures available under the EHR Incentive Program, we 
proposed the additional recommended measures specified in Table 51 for 
2014 and beyond. We solicited and received the following public comment 
on this proposal:
    Comment: Several commenters generally supported our proposal to 
align, when possible, the clinical quality measures found under the 
PQRS and the clinical quality measures found under the EHR Incentive 
Program.
    Response: We appreciate the commenters' general support in aligning 
measures under the PQRS and the EHR Incentive Program. In response to 
the comment and for the reasons we discussed above, we are finalizing 
our proposal to add these measures as recommended core measures under 
the PQRS for 2014 and beyond. Table 51 shows the final measures 
classified as the PQRS recommended core measures for 2014 and beyond.
BILLING CODE 4120-01-P

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(2) Individual PQRS Measures Available for Reporting for 2014 and 
Beyond
    In the CY 2014 PFS proposed rule, we proposed to include additional 
measures in the PQRS measure set for 2014 and beyond (see Table 52, 78 
FR 43379). We solicited and received public comment on these proposed 
measures.
    Table 52 provides the individual quality measures and measures 
included in the PQRS measures groups we are finalizing for 2014 and 
beyond. The comments received and our responses to these comments are 
also contained in Table 52. Please note that Table 52 also provides 
certain measures we previously finalized for 2013 or 2014 and beyond in 
the CY 2013 PFS final rule with comment period (see Table 95, 77 FR 
69215). Please also note that, in the CY 2014 proposed rule, in an 
effort to move away from claims-based process measures, we proposed to 
change the reporting mechanisms for which certain measures were 
previously reportable (78 FR 43474). Please note that the comments we 
received on these proposed reporting mechanism changes, as well as our 
responses are also specified in Table 52.
    Furthermore, CMS recognizes that updated clinical guidelines for 
cholesterol screening were recently released. The measures related to 
cholesterol screening contained in Table 52 do not reflect these 
recently updated guidelines. CMS will work to address any potential 
changes related to these new guidelines in future rulemaking

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Vol. 78

Tuesday,

No. 237

December 10, 2013

Part II--Continued

Department of Health and Human Services

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Centers for Medicare & Medicaid Services

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42 CFR Parts 405, 410, 411, et al.

Medicare Program; Revisions to Payment Policies Under the Physician Fee 
Schedule, Clinical Laboratory Fee Schedule & Other Revisions to Part B 
for CY 2014; Final Rule

Federal Register / Vol. 78 , No. 237 / Tuesday, December 10, 2013 / 
Rules and Regulations

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b. PQRS Measures Groups
    Section 414.90(b) defines a measures group as ``a subset of four or 
more Physician Quality Reporting System 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.''
    In the CY 2014 PFS proposed rule, we proposed (78 FR 43448) to 
modify the minimum amount of measures that may be included in a PQRS 
measures group from four to six (78 FR 43448). Therefore, we proposed 
(78 FR 43448) to modify the definition of a measures group at Sec.  
414.90(b) to indicate that a measures group would consist of at least 
six measures. Consequently, we proposed (78 FR 43448) to add additional 
measures to each measures group that previously contained less than six 
measures (see Tables 31 through 56 at 78 FR 43449 through 43474). We 
solicited and received the following public comments on these 
proposals:
    Comment: Several commenters did not support our proposal to modify 
the definition of a measures group at Sec.  414.90(b) to indicate that 
a measures group would consist of at least six measures. Commenters 
believed that the proposal to increase the minimum number of measures 
in a measures group from four to six measures seemed arbitrary. Some of 
these commenters suggested that the measures CMS proposed to add to 
measures groups that previously contained less than six measures were 
not appropriate to these measures groups as they did not address the 
specific clinical topic or condition addressed in the measures groups.
    Response: We understand the commenters' concerns regarding this 
proposal. Although we still plan to increase the minimum number of 
measures in a measures group in the future, we are not finalizing this 
proposal at this time. As such, we are not finalizing our proposals to 
add additional measures to measures groups that previously contained 
less than six measures. We will work with the measure developers and 
owners of these measures groups to appropriately add measures to 
measures groups that only contain four measures within the measures 
group.
    In addition, we solicited and received the following comment on our 
specific proposed measures groups:
    Comment: Chronic Kidney Disease Measures Group--One commenter 
supported all proposed measures in the Chronic Kidney Disease (CKD) 
measures group as they represent important aspects of care that can 
delay CKD progression and protect patients from adverse outcomes.
    Response: Since we are not finalizing the proposal to increase the 
number of measures in a measures group from four to six, the Chronic 
Kidney Disease (CKD) measures group will remain as it was finalized in 
2013. Therefore, we are not including PQRS measure  130: 
Documentation of Current Medications in the Medical Record and PQRS 
measure 226: Preventive Care and Screening: Tobacco use: 
Screening and Cessation Intervention, in the measures group as 
proposed.
    Comment: Hypertension Measures Group--One commenter agrees with the 
Hypertension measures group but recommends replacing PQRS measure 
300 Hypertension: Blood Pressure Control, with PQRS measure 
236 Hypertension: Controlling High Blood Pressure, citing the 
reason of the expanded age range to 90 as inconsistent and creating 
confusion.
    Response: We appreciate the commenters' feedback. However, we note 
that the age range of all of the measures within the Hypertension 
measures group is 18 through 90, and the existing measures have been 
examined to determine the ability to report and analyze the measures 
contained within the measures group as a whole, whereas the suggested 
PQRS measure has not been analyzed to determine the feasibility of 
reporting these measures together within a measures group.
    Comment: Another commenter showed support for screening for chronic 
kidney disease in people with hypertension, but recommended replacing 
PQRS measure 297 Hypertension: Urine Protein Test and PQRS 
measure 298 Hypertension: Annual Serum Creatinine Test with a 
measure of documented eGFR and urine albumin-creatinine ration.
    Response: CMS appreciates the commenters' suggestions, but as the 
suggested changes to the measures group have not been analyzed, nor 
were they included in the CY2014 PFS proposed rule, CMS is retaining 
the Hypertension measures group as it was finalized in the CY 2013 PFS 
final rule (77 FR 69272).
    Comment: Cataracts Measures Group--Two commenters expressed concern 
with the proposed inclusion of Patient-Centered Surgical Risk 
Assessment and Communication in the Cataracts measures group, stating 
that this measure is not reportable for cataract surgeons.
    Response: Since we are not finalizing the proposal to increase the 
number of measures in a measures group from four to six, we are 
retaining the composition of the Cataracts measures group for 2014 as 
it was finalized in the CY 2013 PFS final rule (77 FR 69272). 
Therefore, we are not including PQRS measure  130: 
Documentation of Current Medications in the Medical Record, PQRS 
measure 226: Preventive Care and Screening: Tobacco use: 
Screening and Cessation Intervention, and Patient-Centered Surgical 
Risk Assessment and Communication in the measures group as proposed.
    Comment: Sleep Apnea Measures Group--Several commenters support the 
Sleep Apnea measures group. There was however, concern regarding the 
addition of PQRS measures 128: Preventive Care and Screening: 
Body Mass Index (BMI) Screening and Follow-Up,  130: 
Documentation of Current Medications in the Medical Record, and 
226: Preventive Care and Screening: Tobacco use: Screening and 
Cessation Intervention.
    Response: Since we are not finalizing the proposal to increase the 
number of measures in a measures group from four to six, we are 
retaining the Sleep Apnea measures group for 2014 as it was finalized 
in CY 2013 PFS final rule (77 FR 69272). Therefore, we are not 
including PQRS measures 128, 130 and 226 in 
the measures group as proposed.
    Comment: Dementia Measures Group--Several commenters expressed 
support for the retention of the Dementia measures group. One commenter 
urged that even though the measures are not NQF-endorsed they are 
retained for continued use in PQRS and other agency programs. One 
commenter did suggest the inclusion of three additional measures: (1) A 
measure that requires physicians to assess cognitive impairment using a 
standardized assessment tool; (2) a measure that requires documentation 
of a diagnosis in the medical record; and (3) the American Medical 
Association's (AMA) dementia performance measure on palliative care 
counseling and advance care planning.
    Response: CMS appreciates the suggestions, however as previously 
stated, the existing measures have been examined to determine the 
ability to report and analyze the measures contained within the 
measures group as a whole, whereas the suggested measured have not been 
analyzed to determine the feasibility of reporting these measures 
together within a measures group. Additionally, the suggested measures 
were not included

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in the CY2014 PFS proposed rule. Therefore, CMS is retaining the 
Dementia measures group as it was finalized in the CY 2013 PFS final 
rule (77 FR 69272).
    Comment: Perioperative Care Measures Group--Two commenters 
expressed concern with the proposed inclusion of the following measures 
in the Perioperative Care measures group: Patient-Centered Surgical 
Risk Assessment and Communication, PQRS measure  130: 
Documentation of Current Medications in the Medical Record and PQRS 
measure 226: Preventive Care and Screening: Tobacco use: 
Screening and Cessation Intervention.
    Response: Since we are not finalizing the proposal to increase the 
number of measures in a measures group from four to six, we are 
retaining the Perioperative Care measures group for 2014 as it was 
finalized in CY 2013 PFS final rule (77 FR 69272). Therefore, we are 
not including Patient-Centered Surgical Risk Assessment and 
Communication, PQRS 130 and PQRS 226 in the measures 
group as proposed.
    Comment: Ischemic Vascular Disease Measures Group--One commenter 
recommended not removing PQRS measure 201: Ischemic Vascular 
Disease (IVD): Blood Pressure Management from the IVD measures group 
without adding a measure focused on people with IVD. CMS appreciates 
the commenters' suggestions, but disagrees due to CMS' efforts to 
reduce duplicity in measures and the fact that this measure was not 
proposed for inclusion in the CY2014 PFS proposed rule. One commenter 
agreed with the CMS proposal to revise the Ischemic Vascular Disease 
measures group to include additional quality measures. CMS appreciates 
the commenters' support, but is not finalizing the proposal to increase 
the number of measures in a measures group from four to six.
    Response: CMS is finalizing the Ischemic Vascular Disease measures 
group as it was finalized in CY 2013 PFS final rule (77 FR 69272), 
without PQRS measures 128: Preventive Care and Screening: Body 
Mass Index (BMI) Screening and Follow-Up and 130: 
Documentation of Current Medications in the Medical Record.
    Comment: Asthma Measures Group--One commenter noted that the Asthma 
measures group is an important measures group that is of interest to 
the pulmonary, critical care and sleep provider community. One 
commenter expressed concern with the inclusion of PQRS measures 
110: Preventive Care and Screening: Influenza Immunization and 
130: Documentation of Current Medications in the Medical 
Record, stating concern that is will create additional confusion for 
providers reporting on the measure group.
    Response: Since we are not finalizing the proposal to increase the 
number of measures in a measures group from four to six, we are 
retaining the Asthma measures group for 2014 as it was finalized in CY 
2013 PFS final rule (77 FR 69272) and not including PQRS 110 
and PQRS 130 in the measures group as proposed.
    Comment: Chronic Obstructive Pulmonary Disease (COPD) Measures 
Group--One commenter noted that the COPD measures group is an important 
measures group that is of interest to the pulmonary, critical care and 
sleep provider community.
    Response: Since we are not finalizing the proposal to increase the 
number of measures in a measures group from four to six, we are 
retaining the COPD measures group for 2014 as it was finalized in CY 
2013 PFS final rule (77 FR 69272) and not including PQRS 130 
in the measures group as proposed.
    Comment: Total Knee Replacement Measures Group--One commenter 
expressed support for the Total Knee Replacement measures group, 
including PQRS measures 130: Documentation of Current 
Medications in the Medical Record and 226: Preventive Care and 
Screening: Tobacco use: Screening and Cessation Intervention. They did 
suggest that in future year's measure 226 be replaced with a 
measure similar to the functional status assessment for knee 
replacement measure finalized in the EHR Incentive Program Stage 2 
Final Rule. CMS appreciates the commenters' suggestion.
    Response: Since we are not finalizing the proposal to increase the 
number of measures in a measures group from four to six, we are 
retaining the Total Knee Replacement measures group for 2014 as 
finalized in the CY 2013 PFS final rule (77 FR 69272), without PQRS 
130 and PQRS 226 in the measures group as proposed.
    Comment: General Surgery Measures Group--We received several 
comments supporting the inclusion of a General Surgery measures group.
    Response: Based on comments received and the decision to not 
finalize the proposal to increase the number of measures in a measures 
group from four to six, we are finalizing the General Surgery measures 
group for 2014, and not including PQRS measure  130: 
Documentation of Current Medications in the Medical Record, PQRS 
measure 226: Preventive Care in the measures group as 
proposed. Additionally, CMS has decided to combine the proposed 
Gastrointestinal Surgery measures group with the General Surgery 
measures group to decrease reporting burden on eligible professionals. 
The Iatrogenic Injury to Adjacent Organ/Structure measure proposed for 
the General Surgery and Gastrointestinal Surgery measures groups is not 
being finalized.
    Comment: Optimizing Patient Exposure to Ionizing Radiation Measures 
Group--Several commenters expressed support for this measures group, 
stating it will allow for more reporting opportunities for radiologists 
and will encourage physicians to monitor and consider prior radiation 
exposure, in an effort to reduce unnecessary radiation exposure to 
Medicare beneficiaries. One commenter agreed with the intent of the 
measures group but questioned the inclusion of the following measure: 
Count of Potential High Dose Radiation Imaging Studies, and suggested 
replacing it with three existing PQRS measures: 322 Cardiac 
Stress Imaging Not Meeting Appropriate Use Criteria: Preoperative 
Evaluation in Low-Risk Surgery Patients, 323 Cardiac Stress 
Imaging Not Meeting Appropriate Use Criteria: Routine Testing After 
Percutaneous Coronary Intervention (PCI) and 324 Cardiac 
Stress Imaging Not Meeting Appropriate Use Criteria: Testing in 
Asymptomatic, Low-Risk Patients. CMS appreciates the commenters' 
suggestions, but since we did not propose including these measures as 
part of the measures group in the CY2014 PFS Proposed Rule, we are not 
addressing these comments in this final rule. We received several 
comments supporting the Optimizing Patient Exposure to Ionizing 
Radiation Measures Group in general; however they encouraged CMS to 
finalize this measures group only after the individual measures have 
received NQF endorsement.
    Response: While we appreciate the commenters' feedback, we believe 
there are circumstances (such as when a measure addresses a gap in the 
PQRS measure set) where we may believe that it is important to include 
a non-NQF endorsed measure to be available for reporting under PQRS. 
Section 1848(k) (2) (C) (ii) of the Act authorizes the Secretary to 
include measures available for reporting under PQRS that are not NQF 
endorsed. Therefore, we are finalizing the Optimizing Patient Exposure 
to Ionizing Radiation measures group with all of the proposed component 
measures for 2014.
    Comment: Diabetes Measures Group--One commenter recommended not 
removing PQRS measure 3: Diabetes

[[Page 74732]]

Mellitus: High Blood Pressure Control from the Diabetes measures group 
without adding a measure focused on blood pressure control for people 
with Diabetes.
    Response: CMS appreciates the commenters' suggestions, but 
disagrees due to CMS' efforts to reduce duplicity in measures and the 
fact that this measure was not proposed for inclusion in the CY2014 PFS 
proposed rule. Additionally, CMS is not finalizing the proposal to 
increase the number of measures in a measures group from four to six. 
Therefore, CMS is finalizing the Diabetes measures group without PQRS 
measure 130: Documentation of Current Medications in the 
Medical Record.
    The following measures groups received no public comments:
     Back Pain Measures Group--measures 130 and 
131 will not be finalized for inclusion in this measures group 
as proposed.
     Hepatitis C Measures Group--measures 130 and 
226 will not be finalized for inclusion in this measures group 
as proposed.
     Heart Failure Measures Group--measures 128 and 
130 will not be finalized for inclusion in this measures group 
as proposed.
     Coronary Artery Disease (CAD) Measures Group--measures 
128 and 130 will not be finalized for inclusion in 
this measures group as proposed.
     HIV/AIDS Measures Group--measure 130 will not be 
finalized for inclusion in this measures group as proposed.
     Inflammatory Bowel Disease Measures Group--this measures 
group is finalized as proposed.
     Cardiovascular Prevention Measures Group--this measures 
group is finalized as proposed.
     Oncology Measures Group--this measures group is finalized 
as proposed.
     Preventive Care Measures Group--this measures group is 
finalized as proposed.
     Coronary Artery Bypass Graft Measures Group (CABG)--this 
measures group is finalized as proposed.
     Rheumatoid Arthritis (RA) Measures Group--this measures 
group is finalized as proposed.
    Tables 55 through 79 specify the final measures groups that are 
reportable for the PQRS for 2014 and beyond. Please note that, as we 
are not finalizing our proposal to modify the definition of a measures 
group to require that a measures group contain at least 6 measures, the 
measures groups we finalized in the CY 2013 PFS final rule (77 FR 
69272) will remain unchanged. Please note that, since we are finalizing 
our proposal to eliminate the reporting of measures groups via claims, 
all measures groups in the 2014 Physician Quality Reporting System are 
reportable through registry-based reporting only.
    [yen] Measure details including titles, descriptions and measure 
owner information may vary during a particular program year. This is 
due to the timing of measure specification preparation and the measure 
versions used by the various reporting options/methods. Please refer to 
the measure specifications that apply for each of the reporting 
options/methods for specific measure details.

                                   Table 55--Diabetes Mellitus Measures Group
----------------------------------------------------------------------------------------------------------------
                NQF/PQRS                   Measure title and description             Measure developer
----------------------------------------------------------------------------------------------------------------
0059/1..................................  Diabetes: Hemoglobin A1c Poor    NCQA.
                                           Control: Percentage of
                                           patients 18-75 years of age
                                           with diabetes who had
                                           hemoglobin A1c >9.0% during
                                           the measurement period.
0064/2..................................  Diabetes: Low Density            NCQA.
                                           Lipoprotein (LDL-C) Control
                                           (dL): Percentage of
                                           patients 18-75 years of age
                                           with diabetes whose LDL-C was
                                           adequately controlled (
                                           dL) during the measurement
                                           period.
0055/117................................  Diabetes: Eye Exam: Percentage   NCQA.
                                           of patients 18 through 75
                                           years of age with a diagnosis
                                           of diabetes (type 1 and type
                                           2) who had a retinal or
                                           dilated eye exam in the
                                           measurement period or a
                                           negative retinal or dilated
                                           eye exam (negative for
                                           retinopathy) in the year prior
                                           to the measurement period.
0062/119................................  Diabetes: Medical Attention for  NCQA.
                                           Nephropathy: The percentage of
                                           patients 18-75 years of age
                                           with diabetes who had a
                                           nephropathy screening test or
                                           evidence of nephropathy during
                                           the measurement period.
0056/163................................  Diabetes: Foot Exam: Percentage  NCQA.
                                           of patients aged 18-75 years
                                           of age with diabetes who had a
                                           foot exam during the
                                           measurement period.
----------------------------------------------------------------------------------------------------------------
Finalized in the CY 2013 PFS final rule (see Table 97 at 77 FR 69273).

                              Table 56--Chronic Kidney Disease (CKD) Measures Group
----------------------------------------------------------------------------------------------------------------
                NQF/PQRS                   Measure title and description             Measure developer
----------------------------------------------------------------------------------------------------------------
0041/110................................  Preventive Care and Screening:   AMA-PCPI.
                                           Influenza Immunization:
                                           Percentage of patients aged 6
                                           months and older seen for a
                                           visit between October 1 and
                                           March 31 who received an
                                           influenza immunization OR who
                                           reported previous receipt of
                                           an influenza immunization.
1668/121................................  Adult Kidney Disease:            AMA-PCPI.
                                           Laboratory Testing (Lipid
                                           Profile): Percentage of
                                           patients aged 18 years and
                                           older with a diagnosis of
                                           chronic kidney disease (CKD)
                                           (stage 3, 4, or 5, not
                                           receiving Renal Replacement
                                           Therapy [RRT]) who had a
                                           fasting lipid profile
                                           performed at least once within
                                           a 12-month period.
AQA adopted/122.........................  Adult Kidney Disease: Blood      AMA-PCPI.
                                           Pressure Management:
                                           Percentage of patient visits
                                           for those patients aged 18
                                           years and older with a
                                           diagnosis of chronic kidney
                                           disease (CKD) (stage 3, 4, or
                                           5, not receiving Renal
                                           Replacement Therapy [RRT]) and
                                           proteinuria with a blood
                                           pressure 80 mmHg OR >=130/
                                           80 mmHg with a documented plan
                                           of care.

[[Page 74733]]

 
1666/123................................  Adult Kidney Disease: Patients   AMA-PCPI.
                                           On Erythropoiesis-Stimulating
                                           Agent (ESA)--Hemoglobin Level
                                           >12.0 g/dL: Percentage of
                                           calendar months within a 12-
                                           month period during which a
                                           hemoglobin level is measured
                                           for patients aged 18 years and
                                           older with a diagnosis of
                                           advanced chronic kidney
                                           disease (CKD) (stage 4 or 5,
                                           not receiving Renal
                                           Replacement Therapy [RRT]) or
                                           End Stage Renal Disease (ESRD)
                                           (who are on hemodialysis or
                                           peritoneal dialysis) who are
                                           also receiving erythropoiesis-
                                           stimulating agent (ESA)
                                           therapy have a hemoglobin
                                           level >12.0 g/dL.
----------------------------------------------------------------------------------------------------------------
Finalized in the CY 2013 PFS final rule (see Table 98 at 77 FR 69273).

                Table 57--Preventive Care Measures Group
------------------------------------------------------------------------
                                   Measure title and         Measure
           NQF/PQRS                   description           developer
------------------------------------------------------------------------
0046/39.......................  Screening or Therapy    AMA-PCPI/NCQA.
                                 for Osteoporosis for
                                 Women Aged 65 Years
                                 and Older: Percentage
                                 of female patients
                                 aged 65 years and
                                 older who have a
                                 central dual-energy X-
                                 ray absorptiometry
                                 (DXA) measurement
                                 ordered or performed
                                 at least once since
                                 age 60 or
                                 pharmacologic therapy
                                 prescribed within 12
                                 months.
0098/48.......................  Urinary Incontinence:   AMA-PCPI/NCQA.
                                 Assessment of
                                 Presence or Absence
                                 of Urinary
                                 Incontinence in Women
                                 Aged 65 Years and
                                 Older: Percentage of
                                 female patients aged
                                 65 years and older
                                 who were assessed for
                                 the presence or
                                 absence of urinary
                                 incontinence within
                                 12 months.
0041/110......................  Preventive Care and     AMA-PCPI.
                                 Screening: Influenza
                                 Immunization:
                                 Percentage of
                                 patients aged 6
                                 months and older seen
                                 for a visit between
                                 October 1 and March
                                 31 who received an
                                 influenza
                                 immunization OR who
                                 reported previous
                                 receipt of an
                                 influenza
                                 immunization.
0043/111......................  Pneumonia Vaccination   NCQA.
                                 Status for Older
                                 Adults: Percentage of
                                 patients 65 years of
                                 age and older who
                                 have ever received a
                                 pneumococcal vaccine.
N/A/112.......................  Breast Cancer           NCQA.
                                 Screening: Percentage
                                 of women 50 through
                                 74 years of age who
                                 had a mammogram to
                                 screen for breast
                                 cancer within 27
                                 months.
0034/113......................  Colorectal Cancer       NCQA.
                                 Screening: Percentage
                                 of patients 50
                                 through 75 years of
                                 age who had
                                 appropriate screening
                                 for colorectal cancer.
0421/128......................  Preventive Care and
                                 Screening: Body Mass
                                 Index (BMI) Screening
                                 and Follow-Up:
                                 Percentage of
                                 patients aged 18
                                 years and older with
                                 a documented BMI
                                 during the current
                                 encounter or during
                                 the previous 6 months
                                 AND when the BMI is
                                 outside of normal
                                 parameters, a follow-
                                 up plan is documented
                                 during the encounter
                                 or during the
                                 previous 6 months of
                                 the encounter.
                                Normal Parameters: Age  CMS.
                                 65 years and older
                                 BMI >23 and =18.5 and 173...............  Preventive Care and     AMA-PCPI.
                                 Screening: Unhealthy
                                 Alcohol Use--
                                 Screening: Percentage
                                 of patients aged 18
                                 years and older who
                                 were screened for
                                 unhealthy alcohol use
                                 using a systematic
                                 screening method
                                 within 24 months.
0028/226......................  Preventive Care and     AMA-PCPI.
                                 Screening: Tobacco
                                 Use: Screening and
                                 Cessation
                                 Intervention:
                                 Percentage of
                                 patients 18 years and
                                 older who were
                                 screened for tobacco
                                 use one or more times
                                 within 24 months AND
                                 who received
                                 cessation counseling
                                 intervention if
                                 identified as a
                                 tobacco user.
------------------------------------------------------------------------
Finalized in the CY 2013 PFS final rule (see Table 99 at 77 FR 69273).

                          Table 58--Coronary Artery Bypass Graft (CABG) Measures Group
----------------------------------------------------------------------------------------------------------------
                NQF/PQRS                   Measure title and description             Measure developer
----------------------------------------------------------------------------------------------------------------
0134/43.................................  Coronary Artery Bypass Graft     STS.
                                           (CABG): Use of Internal
                                           Mammary Artery (IMA) in
                                           Patients with Isolated CABG
                                           Surgery: Percentage of
                                           patients aged 18 years and
                                           older undergoing isolated CABG
                                           surgery who received an IMA
                                           graft.
0236/44.................................  Coronary Artery Bypass Graft     CMS.
                                           (CABG): Preoperative Beta-
                                           Blocker in Patients with
                                           Isolated CABG Surgery:
                                           Percentage of isolated
                                           Coronary Artery Bypass Graft
                                           (CABG) surgeries for patients
                                           aged 18 years and older who
                                           received a beta-blocker within
                                           24 hours prior to surgical
                                           incision.
0129/164................................  Coronary Artery Bypass Graft     STS.
                                           (CABG): Prolonged Intubation:
                                           Percentage of patients aged 18
                                           years and older undergoing
                                           isolated CABG surgery who
                                           require postoperative
                                           intubation >24 hours.

[[Page 74734]]

 
0130/165................................  Coronary Artery Bypass Graft     STS.
                                           (CABG): Deep Sternal Wound
                                           Infection Rate: Percentage of
                                           patients aged 18 years and
                                           older undergoing isolated CABG
                                           surgery who, within 30 days
                                           postoperatively, develop deep
                                           sternal wound infection
                                           involving muscle, bone, and/or
                                           mediastinum requiring
                                           operative intervention.
0131/166................................  Coronary Artery Bypass Graft     STS.
                                           (CABG): Stroke: Percentage of
                                           patients aged 18 years and
                                           older undergoing isolated CABG
                                           surgery who have a
                                           postoperative stroke (i.e.,
                                           any confirmed neurological
                                           deficit of abrupt onset caused
                                           by a disturbance in blood
                                           supply to the brain) that did
                                           not resolve within 24 hours.
0114/167................................  Coronary Artery Bypass Graft     STS.
                                           (CABG): Postoperative Renal
                                           Failure: Percentage of
                                           patients aged 18 years and
                                           older undergoing isolated CABG
                                           surgery (without pre-existing
                                           renal failure) who develop
                                           postoperative renal failure or
                                           require dialysis.
0115/168................................  Coronary Artery Bypass Graft     STS.
                                           (CABG): Surgical Re-
                                           Exploration: Percentage of
                                           patients aged 18 years and
                                           older undergoing isolated CABG
                                           surgery who require a return
                                           to the operating room (OR)
                                           during the current
                                           hospitalization for
                                           mediastinal bleeding with or
                                           without tamponade, graft
                                           occlusion, valve dysfunction,
                                           or other cardiac reason.
0116/169................................  Coronary Artery Bypass Graft     STS.
                                           (CABG): Antiplatelet
                                           Medications at Discharge:
                                           Percentage of patients aged 18
                                           years and older undergoing
                                           isolated CABG surgery who were
                                           discharged on antiplatelet
                                           medication.
0117/170................................  Coronary Artery Bypass Graft     STS.
                                           (CABG): Beta-Blockers
                                           Administered at Discharge:
                                           Percentage of patients aged 18
                                           years and older undergoing
                                           isolated CABG surgery who were
                                           discharged on beta-blockers.
0118/171................................  Coronary Artery Bypass Graft     STS.
                                           (CABG): Anti-Lipid Treatment
                                           at Discharge: Percentage of
                                           patients aged 18 years and
                                           older undergoing isolated CABG
                                           surgery who were discharged on
                                           a statin or other lipid-
                                           lowering regimen.
----------------------------------------------------------------------------------------------------------------
Finalized in the CY 2013 PFS final rule (see Table 100 at 77 FR 69274).

           Table 59--Rheumatoid Arthritis (RA) Measures Group
------------------------------------------------------------------------
                                   Measure title and         Measure
           NQF/PQRS                   description           developer
------------------------------------------------------------------------
0054/108......................  Rheumatoid Arthritis    NCQA.
                                 (RA): Disease
                                 Modifying Anti-
                                 Rheumatic Drug
                                 (DMARD) Therapy:
                                 Percentage of
                                 patients aged 18
                                 years and older who
                                 were diagnosed with
                                 RA and were
                                 prescribed,
                                 dispensed, or
                                 administered at least
                                 one ambulatory
                                 prescription for a
                                 DMARD.
AQA adopted/176...............  Rheumatoid Arthritis    AMA-PCPI.
                                 (RA): Tuberculosis
                                 Screening: Percentage
                                 of patients aged 18
                                 years and older with
                                 a diagnosis of
                                 rheumatoid arthritis
                                 (RA) who have
                                 documentation of a
                                 tuberculosis (TB)
                                 screening performed
                                 and results
                                 interpreted within 6
                                 months prior to
                                 receiving a first
                                 course of therapy
                                 using a biologic
                                 disease-modifying
                                 anti-rheumatic drug
                                 (DMARD).
AQA adopted/177...............  Rheumatoid Arthritis    AMA-PCPI.
                                 (RA): Periodic
                                 Assessment of Disease
                                 Activity: Percentage
                                 of patients aged 18
                                 years and older with
                                 a diagnosis of
                                 rheumatoid arthritis
                                 (RA) who have an
                                 assessment and
                                 classification of
                                 disease activity
                                 within 12 months.
AQA adopted/178...............  Rheumatoid Arthritis    AMA-PCPI.
                                 (RA): Functional
                                 Status Assessment:
                                 Percentage of
                                 patients aged 18
                                 years and older with
                                 a diagnosis of
                                 rheumatoid arthritis
                                 (RA) for whom a
                                 functional status
                                 assessment was
                                 performed at least
                                 once within 12 months.
AQA adopted/179...............  Rheumatoid Arthritis    AMA-PCPI.
                                 (RA): Assessment and
                                 Classification of
                                 Disease Prognosis:
                                 Percentage of
                                 patients aged 18
                                 years and older with
                                 a diagnosis of
                                 rheumatoid arthritis
                                 (RA) who have an
                                 assessment and
                                 classification of
                                 disease prognosis at
                                 least once within 12
                                 months.
AQA adopted/180...............  Rheumatoid Arthritis    AMA-PCPI.
                                 (RA): Glucocorticoid
                                 Management:
                                 Percentage of
                                 patients aged 18
                                 years and older with
                                 a diagnosis of
                                 rheumatoid arthritis
                                 (RA) who have been
                                 assessed for
                                 glucocorticoid use
                                 and, for those on
                                 prolonged doses of
                                 prednisone >= 10 mg
                                 daily (or equivalent)
                                 with improvement or
                                 no change in disease
                                 activity,
                                 documentation of
                                 glucocorticoid
                                 management plan
                                 within 12 months.
------------------------------------------------------------------------
Finalized in the CY 2013 PFS final rule (see Table 101 at 77 FR 69274).

[[Page 74735]]

               Table 60--Perioperative Care Measures Group
------------------------------------------------------------------------
                                   Measure title and         Measure
           NQF/PQRS                   description           developer
------------------------------------------------------------------------
0270/20.......................  Perioperative Care:     AMA-PCPI/NCQA.
                                 Timing of
                                 Prophylactic
                                 Parenteral
                                 Antibiotic--Ordering
                                 Physician: Percentage
                                 of surgical patients
                                 aged 18 years and
                                 older undergoing
                                 procedures with the
                                 indications for
                                 prophylactic
                                 parenteral
                                 antibiotics, who have
                                 an order for
                                 prophylactic
                                 parenteral antibiotic
                                 to be given within
                                 one hour (if
                                 fluoroquinolone or
                                 vancomycin, two
                                 hours), prior to the
                                 surgical incision (or
                                 start of procedure
                                 when no incision is
                                 required).
0268/21.......................  Perioperative Care:     AMA-PCPI/NCQA.
                                 Selection of
                                 Prophylactic
                                 Antibiotic--First OR
                                 Second Generation
                                 Cephalosporin:
                                 Percentage of
                                 surgical patients
                                 aged 18 years and
                                 older undergoing
                                 procedures with the
                                 indications for a
                                 first OR second
                                 generation
                                 cephalosporin
                                 prophylactic
                                 antibiotic, who had
                                 an order for a first
                                 OR second generation
                                 cephalosporin for
                                 antimicrobial
                                 prophylaxis.
0271/22.......................  Perioperative Care:     AMA-PCPI/NCQA.
                                 Discontinuation of
                                 Prophylactic
                                 Parenteral
                                 Antibiotics (Non-
                                 Cardiac Procedures):
                                 Percentage of non-
                                 cardiac surgical
                                 patients aged 18
                                 years and older
                                 undergoing procedures
                                 with the indications
                                 for prophylactic
                                 parenteral
                                 antibiotics AND who
                                 received a
                                 prophylactic
                                 parenteral
                                 antibiotic, who have
                                 an order for
                                 discontinuation of
                                 prophylactic
                                 parenteral
                                 antibiotics within 24
                                 hours of surgical end
                                 time.
0239/23.......................  Perioperative Care:     AMA-PCPI/NCQA.
                                 Venous
                                 Thromboembolism (VTE)
                                 Prophylaxis (When
                                 Indicated in ALL
                                 Patients): Percentage
                                 of surgical patients
                                 aged 18 years and
                                 older undergoing
                                 procedures for which
                                 VTE prophylaxis is
                                 indicated in all
                                 patients, who had an
                                 order for Low
                                 Molecular Weight
                                 Heparin (LMWH), Low-
                                 Dose Unfractionated
                                 Heparin (LDUH),
                                 adjusted-dose
                                 warfarin,
                                 fondaparinux or
                                 mechanical
                                 prophylaxis to be
                                 given within 24 hours
                                 prior to incision
                                 time or within 24
                                 hours after surgery
                                 end time.
------------------------------------------------------------------------
Finalized in the CY 2013 PFS final rule (see Table 102 at 77 FR 69275).

                   Table 61--Back Pain Measures Group
------------------------------------------------------------------------
                                   Measure title and         Measure
           NQF/PQRS                   description           developer
------------------------------------------------------------------------
0322/148......................  Back Pain: Initial      NCQA.
                                 Visit: The percentage
                                 of patients aged 18
                                 through 79 years with
                                 a diagnosis of back
                                 pain or undergoing
                                 back surgery who had
                                 back pain and
                                 function assessed
                                 during the initial
                                 visit to the
                                 clinician for the
                                 episode of back pain.
0319/149/.....................  Back Pain: Physical     NCQA.
                                 Exam: Percentage of
                                 patients aged 18
                                 through 79 years with
                                 a diagnosis of back
                                 pain or undergoing
                                 back surgery who
                                 received a physical
                                 examination at the
                                 initial visit to the
                                 clinician for the
                                 episode of back pain.
0314/150......................  Back Pain: Advice for   NCQA.
                                 Normal Activities:
                                 The percentage of
                                 patients aged 18
                                 through 79 years with
                                 a diagnosis of back
                                 pain or undergoing
                                 back surgery who
                                 received advice for
                                 normal activities at
                                 the initial visit to
                                 the clinician for the
                                 episode of back pain.
0313/151......................  Back Pain: Advice       NCQA.
                                 Against Bed Rest: The
                                 percentage of
                                 patients aged 18
                                 through 79 years with
                                 a diagnosis of back
                                 pain or undergoing
                                 back surgery who
                                 received advice
                                 against bed rest
                                 lasting four days or
                                 longer at the initial
                                 visit to the
                                 clinician for the
                                 episode of back pain.
------------------------------------------------------------------------
Finalized in the CY 2013 PFS final rule (see Table 103 at 77 FR 69275).

                  Table 62--Hepatitis C Measures Group
------------------------------------------------------------------------
                                   Measure title and         Measure
           NQF/PQRS                   description           developer
------------------------------------------------------------------------
0395/84.......................  Hepatitis C:            AMA-PCPI.
                                 Ribonucleic Acid
                                 (RNA) Testing Before
                                 Initiating Treatment:
                                 Percentage of
                                 patients aged 18
                                 years and older with
                                 a diagnosis of
                                 chronic hepatitis C
                                 who started antiviral
                                 treatment within the
                                 12 month reporting
                                 period for whom
                                 quantitative
                                 hepatitis C virus
                                 (HCV) RNA testing was
                                 performed within 12
                                 months prior to
                                 initiation of
                                 antiviral treatment.
0396/85.......................  Hepatitis C: HCV        AMA-PCPI.
                                 Genotype Testing
                                 Prior to Treatment:
                                 Percentage of
                                 patients aged 18
                                 years and older with
                                 a diagnosis of
                                 chronic hepatitis C
                                 who started antiviral
                                 treatment within the
                                 12 month reporting
                                 period for whom
                                 hepatitis C virus
                                 (HCV) genotype
                                 testing was performed
                                 within 12 months
                                 prior to initiation
                                 of antiviral
                                 treatment.

[[Page 74736]]

 
0398/87.......................  Hepatitis C: Hepatitis  AMA-PCPI.
                                 C Virus (HCV)
                                 Ribonucleic Acid
                                 (RNA) Testing Between
                                 4-12 Weeks After
                                 Initiation of
                                 Treatment: Percentage
                                 of patients aged 18
                                 years and older with
                                 a diagnosis of
                                 chronic hepatitis C
                                 who are receiving
                                 antiviral treatment
                                 for whom quantitative
                                 hepatitis C virus
                                 (HCV) RNA testing was
                                 performed between 4-
                                 12 weeks after the
                                 initiation of
                                 antiviral treatment.
0399/183......................  Hepatitis C: Hepatitis  AMA-PCPI.
                                 A Vaccination in
                                 Patients with
                                 Hepatitis C Virus
                                 (HCV): Percentage of
                                 patients aged 18
                                 years and older with
                                 a diagnosis of
                                 chronic hepatitis C
                                 who have received at
                                 least one injection
                                 of hepatitis A
                                 vaccine, or who have
                                 documented immunity
                                 to hepatitis A.
------------------------------------------------------------------------
Finalized in the CY 2013 PFS final rule (see Table 104 at 77 FR 69275).

               Table 63--Heart Failure (HF) Measures Group
------------------------------------------------------------------------
                                   Measure title and         Measure
           NQF/PQRS                   description           developer
------------------------------------------------------------------------
0081/5........................  Heart Failure (HF):     AMA-PCPI/ACCF/
                                 Angiotensin-            AHA.
                                 Converting Enzyme
                                 (ACE) Inhibitor or
                                 Angiotensin Receptor
                                 Blocker (ARB) Therapy
                                 for Left Ventricular
                                 Systolic Dysfunction
                                 (LVSD): Percentage of
                                 patients aged 18
                                 years and older with
                                 a diagnosis of heart
                                 failure (HF) with a
                                 current or prior left
                                 ventricular ejection
                                 fraction (LVEF) 8........................  Heart Failure (HF):     AMA-PCPI/ACCF/
                                 Beta-Blocker Therapy    AHA.
                                 for Left Ventricular
                                 Systolic Dysfunction
                                 (LVSD): Percentage of
                                 patients aged 18
                                 years and older with
                                 a diagnosis of heart
                                 failure (HF) with a
                                 current or prior left
                                 ventricular ejection
                                 fraction (LVEF) 198......................  Heart Failure: Left     AMA-PCPI/ACCF/
                                 Ventricular Ejection    AHA.
                                 Fraction (LVEF)
                                 Assessment:
                                 Percentage of
                                 patients aged 18
                                 years and older with
                                 a diagnosis of heart
                                 failure for whom the
                                 quantitative or
                                 qualitative results
                                 of a recent or prior
                                 [any time in the
                                 past] LVEF assessment
                                 is documented within
                                 a 12 month period.
0028/226......................  Preventive Care and     AMA-PCPI.
                                 Screening: Tobacco
                                 Use: Screening and
                                 Cessation
                                 Intervention:
                                 Percentage of
                                 patients 18 years and
                                 older who were
                                 screened for tobacco
                                 use one or more times
                                 within 24 months AND
                                 who received
                                 cessation counseling
                                 intervention if
                                 identified as a
                                 tobacco user.
------------------------------------------------------------------------
Finalized in the CY 2013 PFS final rule (see Table 105 at 77 FR 69276).

         Table 64--Coronary Artery Disease (CAD) Measures Group
------------------------------------------------------------------------
                                   Measure title and         Measure
           NQF/PQRS                   description           developer
------------------------------------------------------------------------
0067/6........................  Coronary Artery         AMA-PCPI/ACCF/
                                 Disease (CAD):          AHA.
                                 Antiplatelet Therapy:
                                 Percentage of
                                 patients aged 18
                                 years and older with
                                 a diagnosis of
                                 coronary artery
                                 disease seen within a
                                 12 month period who
                                 were prescribed
                                 aspirin or
                                 clopidogrel.
0074/197......................  Coronary Artery         AMA-PCPI/ACCF/
                                 Disease (CAD): Lipid    AHA.
                                 Control: Percentage
                                 of patients aged 18
                                 years and older with
                                 a diagnosis of
                                 coronary artery
                                 disease seen within a
                                 12 month period who
                                 have a LDL-C result
                                 dL OR
                                 patients who have a
                                 LDL-C result >=100 mg/
                                 dL and have a
                                 documented plan of
                                 care to achieve LDL-C
                                 dL, including
                                 at a minimum the
                                 prescription of a
                                 statin.
0028/226......................  Preventive Care and     AMA-PCPI.
                                 Screening: Tobacco
                                 Use: Screening and
                                 Cessation
                                 Intervention:
                                 Percentage of
                                 patients 18 years and
                                 older who were
                                 screened for tobacco
                                 use one or more times
                                 within 24 months AND
                                 who received
                                 cessation counseling
                                 intervention if
                                 identified as a
                                 tobacco user.
N/A/242.......................  Coronary Artery         AMA-PCPI/ACCF/
                                 Disease (CAD):          AHA.
                                 Symptom Management:
                                 Percentage of
                                 patients aged 18
                                 years and older with
                                 a diagnosis of
                                 coronary artery
                                 disease seen within a
                                 12 month period with
                                 results of an
                                 evaluation of level
                                 of activity and an
                                 assessment of whether
                                 anginal symptoms are
                                 present or absent
                                 with appropriate
                                 management of anginal
                                 symptoms within a 12
                                 month period.
------------------------------------------------------------------------
Finalized in the CY 2013 PFS final rule (see Table 106 at 77 FR 69276).

[[Page 74737]]

        Table 65--Ischemic Vascular Disease (IVD) Measures Group
------------------------------------------------------------------------
                                   Measure title and         Measure
           NQF/PQRS                   description           developer
------------------------------------------------------------------------
0068/204......................  Ischemic Vascular       NCQA.
                                 Disease (IVD): Use of
                                 Aspirin or Another
                                 Antithrombotic:
                                 Percentage of
                                 patients 18 years of
                                 age and older who
                                 were discharged alive
                                 for acute myocardial
                                 infarction (AMI),
                                 coronary artery
                                 bypass graft (CABG)
                                 or percutaneous
                                 coronary
                                 interventions (PCI)
                                 in the 12 months
                                 prior to the
                                 measurement period,
                                 or who had an active
                                 diagnosis of ischemic
                                 vascular disease
                                 (IVD) during the
                                 measurement period
                                 and who had
                                 documentation of use
                                 of aspirin or another
                                 antithrombotic during
                                 the measurement
                                 period.
0028/226......................  Preventive Care and     AMA-PCPI.
                                 Screening: Tobacco
                                 Use: Screening and
                                 Cessation
                                 Intervention:
                                 Percentage of
                                 patients 18 years and
                                 older who were
                                 screened for tobacco
                                 use one or more times
                                 within 24 months AND
                                 who received
                                 cessation counseling
                                 intervention if
                                 identified as a
                                 tobacco user.
0018/236......................  Controlling High Blood  NCQA.
                                 Pressure: Percentage
                                 of patients 18-85
                                 years of age who had
                                 a diagnosis of
                                 hypertension and
                                 whose blood pressure
                                 was adequately
                                 controlled (90
                                 mmHg) during the
                                 measurement period..
0075/241......................  Ischemic Vascular       NCQA.
                                 Disease (IVD):
                                 Complete Lipid
                                 Profile and LDL-C
                                 Control (dL):
                                 Percentage of
                                 patients 18 years of
                                 age and older who
                                 were discharged alive
                                 for acute myocardial
                                 infarction (AMI),
                                 coronary artery
                                 bypass graft (CABG)
                                 or percutaneous
                                 coronary
                                 interventions (PCI)
                                 in the 12 months
                                 prior to the
                                 measurement period,
                                 or who had an active
                                 diagnosis of ischemic
                                 vascular disease
                                 (IVD) during the
                                 measurement period,
                                 and who had each of
                                 the following during
                                 the measurement
                                 period: a complete
                                 lipid profile and LDL-
                                 C was adequately
                                 controlled (
                                 dL).
------------------------------------------------------------------------
Finalized in the CY 2013 PFS final rule (see Table 107 at 77 FR 69277).

                                        Table 66--HIV/AIDS Measures Group
----------------------------------------------------------------------------------------------------------------
                NQF/PQRS                   Measure title and description             Measure developer
----------------------------------------------------------------------------------------------------------------
0404/159................................  HIV/AIDS: CD4+ Cell Count or     NCQA.
                                           CD4+ Percentage Performed:
                                           Percentage of patients aged 6
                                           months and older with a
                                           diagnosis of HIV/AIDS for whom
                                           a CD4+ cell count or CD4+ cell
                                           percentage was performed at
                                           least once every 6 months.
0405/160................................  HIV/AIDS: Pneumocystis Jiroveci  NCQA.
                                           Pneumonia (PCP) Prophylaxis:
                                           Percentage of patients aged 6
                                           weeks and older with a
                                           diagnosis of HIV/AIDS who were
                                           prescribed Pneumocystis
                                           Jiroveci Pneumonia (PCP)
                                           prophylaxis.
0409/205................................  HIV/AIDS: Sexually Transmitted   AMA-PCPI/NCQA.
                                           Disease Screening for
                                           Chlamydia, Gonorrhea, and
                                           Syphilis: Percentage of
                                           patients aged 13 years and
                                           older with a diagnosis of HIV/
                                           AIDS for whom chlamydia,
                                           gonorrhea and syphilis
                                           screenings were performed at
                                           least once since the diagnosis
                                           of HIV infection.
2082/N/A................................  HIV Viral Load Suppression: The  HRSA.
                                           percentage of patients,
                                           regardless of age, with a
                                           diagnosis of HIV with a HIV
                                           viral load less than 200
                                           copies/mL at last HIV viral
                                           load test during the
                                           measurement year.
2083/N/A................................  Prescription of HIV              HRSA.
                                           Antiretroviral Therapy:
                                           Percentage of patients,
                                           regardless of age, with a
                                           diagnosis of HIV prescribed
                                           antiretroviral therapy for the
                                           treatment of HIV infection
                                           during the measurement year.
2079/N/A................................  HIV Medical Visit Frequency:     HRSA.
                                           Percentage of patients,
                                           regardless of age with a
                                           diagnosis of HIV who had at
                                           least one medical visit in
                                           each 6 month period of the 24
                                           month measurement period, with
                                           a minimum of 60 days between
                                           medical visits.
2080/N/A................................  Gap in HIV Medical Visits:       HRSA.
                                           Percentage of patients,
                                           regardless of age, with a
                                           diagnosis of HIV who did not
                                           have a medical visit in the
                                           last 6 months.
----------------------------------------------------------------------------------------------------------------
Finalized in the CY 2013 PFS final rule (see Table 108 at 77 FR 69277).

                     Table 67--Asthma Measures Group
------------------------------------------------------------------------
                                   Measure title and         Measure
           NQF/PQRS                   description           developer
------------------------------------------------------------------------
0047/53.......................  Asthma: Pharmacologic   AMA-PCPI/NCQA.
                                 Therapy for
                                 Persistent Asthma--
                                 Ambulatory Care
                                 Setting: Percentage
                                 of patients aged 5
                                 through 64 years with
                                 a diagnosis of
                                 persistent asthma who
                                 were prescribed long-
                                 term control
                                 medication.

[[Page 74738]]

 
0001/64.......................  Asthma: Assessment of   AMA-PCPI/NCQA.
                                 Asthma Control--
                                 Ambulatory Care
                                 Setting: Percentage
                                 of patients aged 5
                                 through 64 years with
                                 a diagnosis of asthma
                                 who were evaluated at
                                 least once during the
                                 measurement period
                                 for asthma control
                                 (comprising asthma
                                 impairment and asthma
                                 risk).
N/A/231.......................  Asthma: Tobacco Use:    AMA-PCPI/NCQA.
                                 Screening--Ambulatory
                                 Care Setting:
                                 Percentage of
                                 patients aged 5
                                 through 64 years with
                                 a diagnosis of asthma
                                 (or their primary
                                 caregiver) who were
                                 queried about tobacco
                                 use and exposure to
                                 second hand smoke
                                 within their home
                                 environment at least
                                 once during the one-
                                 year measurement
                                 period.
N/A/232.......................  Asthma: Tobacco Use:    AMA-PCPI/NCQA.
                                 Intervention--Ambulat
                                 ory Care Setting:
                                 Percentage of
                                 patients aged 5
                                 through 64 years with
                                 a diagnosis of asthma
                                 who were identified
                                 as tobacco users (or
                                 their primary
                                 caregiver) who
                                 received tobacco
                                 cessation
                                 intervention at least
                                 once during the one-
                                 year measurement
                                 period.
------------------------------------------------------------------------
Finalized in the CY 2013 PFS final rule (see Table 109 at 77 FR 69277).

                      Table 68--Chronic Obstructive Pulmonary Disease (COPD) Measures Group
----------------------------------------------------------------------------------------------------------------
                NQF/PQRS                   Measure title and description             Measure developer
----------------------------------------------------------------------------------------------------------------
0091/51.................................  Chronic Obstructive Pulmonary    AMA-PCPI.
                                           Disease (COPD): Spirometry
                                           Evaluation: Percentage of
                                           patients aged 18 years and
                                           older with a diagnosis of COPD
                                           who had spirometry evaluation
                                           results documented.
0102/52.................................  Chronic Obstructive Pulmonary    AMA-PCPI.
                                           Disease (COPD): Inhaled
                                           Bronchodilator Therapy:
                                           Percentage of patients aged 18
                                           years and older with a
                                           diagnosis of COPD and who have
                                           an FEV1/FVC less than 60% and
                                           have symptoms who were
                                           prescribed an inhaled
                                           bronchodilator.
0041/110................................  Preventive Care and Screening:   AMA-PCPI.
                                           Influenza Immunization:
                                           Percentage of patients aged 6
                                           months and older seen for a
                                           visit between October 1 and
                                           March 31 who received an
                                           influenza immunization OR who
                                           reported previous receipt of
                                           an influenza immunization.
0043/111................................  Pneumonia Vaccination Status     NCQA.
                                           for Older Adults: Percentage
                                           of patients 65 years of age
                                           and older who have ever
                                           received a pneumococcal
                                           vaccine.
0028/226................................  Preventive Care and Screening:   AMA-PCPI.
                                           Tobacco Use: Screening and
                                           Cessation Intervention:
                                           Percentage of patients 18
                                           years and older who were
                                           screened for tobacco use one
                                           or more times within 24 months
                                           AND who received cessation
                                           counseling intervention if
                                           identified as a tobacco user.
----------------------------------------------------------------------------------------------------------------
Finalized in the CY 2013 PFS final rule (see Table 110 at 77 FR 69278).

                            Table 69--Inflammatory Bowel Disease (IBD) Measures Group
----------------------------------------------------------------------------------------------------------------
                NQF/PQRS                   Measure title and description             Measure developer
----------------------------------------------------------------------------------------------------------------
0028/226................................  Preventive Care and Screening:   AMA-PCPI.
                                           Tobacco Use: Screening and
                                           Cessation Intervention:
                                           Percentage of patients 18
                                           years and older who were
                                           screened for tobacco use one
                                           or more times within 24 months
                                           AND who received cessation
                                           counseling intervention if
                                           identified as a tobacco user.
N/A/269.................................  Inflammatory Bowel Disease       AGA.
                                           (IBD): Type, Anatomic Location
                                           and Activity All Documented:
                                           Percentage of patients aged 18
                                           years and older with a
                                           diagnosis of inflammatory
                                           bowel disease who have
                                           documented the disease type,
                                           anatomic location and
                                           activity, at least once during
                                           the reporting period.
N/A/270.................................  Inflammatory Bowel Disease       AGA.
                                           (IBD): Preventive Care:
                                           Corticosteroid Sparing
                                           Therapy: Percentage of
                                           patients aged 18 years and
                                           older with a diagnosis of
                                           inflammatory bowel disease who
                                           have been managed by
                                           corticosteroids greater than
                                           or equal to 10 mg/day for 60
                                           or greater consecutive days
                                           that have been prescribed
                                           corticosteroid sparing therapy
                                           in the last reporting year.
N/A/271.................................  Inflammatory Bowel Disease       AGA.
                                           (IBD): Preventive Care:
                                           Corticosteroid Related
                                           Iatrogenic Injury--Bone Loss
                                           Assessment: Percentage of
                                           patients aged 18 years and
                                           older with a diagnosis of
                                           inflammatory bowel disease who
                                           have received dose of
                                           corticosteroids greater than
                                           or equal to 10 mg/day for 60
                                           or greater consecutive days
                                           and were assessed for risk of
                                           bone loss once per the
                                           reporting year.
N/A/272.................................  Inflammatory Bowel Disease       AGA.
                                           (IBD): Preventive Care:
                                           Influenza Immunization:
                                           Percentage of patients aged 18
                                           years and older with
                                           inflammatory bowel disease for
                                           whom influenza immunization
                                           was recommended, administered
                                           or previously received during
                                           the reporting year.

[[Page 74739]]

 
N/A/273.................................  Inflammatory Bowel Disease       AGA.
                                           (IBD): Preventive Care:
                                           Pneumococcal Immunization:
                                           Percentage of patients aged 18
                                           years and older with a
                                           diagnosis of inflammatory
                                           bowel disease that had
                                           pneumococcal vaccination
                                           administered or previously
                                           received.
N/A/274.................................  Inflammatory Bowel Disease       AGA.
                                           (IBD): Testing for Latent
                                           Tuberculosis (TB) Before
                                           Initiating Anti-TNF (Tumor
                                           Necrosis Factor) Therapy:
                                           Percentage of patients aged 18
                                           years and older with a
                                           diagnosis of inflammatory
                                           bowel disease for whom a
                                           tuberculosis (TB) screening
                                           was performed and results
                                           interpreted within 6 months
                                           prior to receiving a first
                                           course of anti-TNF (tumor
                                           necrosis factor) therapy.
N/A/275.................................  Inflammatory Bowel Disease       AGA.
                                           (IBD): Assessment of Hepatitis
                                           B Virus (HBV) Status Before
                                           Initiating Anti-TNF (Tumor
                                           Necrosis Factor) Therapy:
                                           Percentage of patients aged 18
                                           years and older with a
                                           diagnosis of inflammatory
                                           bowel disease (IBD) who had
                                           Hepatitis B Virus (HBV) status
                                           assessed and results
                                           interpreted within 1 year
                                           prior to receiving a first
                                           course of anti-TNF (tumor
                                           necrosis factor) therapy.
----------------------------------------------------------------------------------------------------------------
Finalized in the CY 2013 PFS final rule (see Table 111 at 77 FR 69278).

                                      Table 70--Sleep Apnea Measures Group
----------------------------------------------------------------------------------------------------------------
                NQF/PQRS                   Measure title and description             Measure developer
----------------------------------------------------------------------------------------------------------------
N/A/276.................................  Sleep Apnea: Assessment of       AMA-PCPI/NCQA.
                                           Sleep Symptoms: Percentage of
                                           visits for patients aged 18
                                           years and older with a
                                           diagnosis of obstructive sleep
                                           apnea that includes
                                           documentation of an assessment
                                           of sleep symptoms, including
                                           presence or absence of snoring
                                           and daytime sleepiness.
N/A/277.................................  Sleep Apnea: Severity            AMA-PCPI/NCQA.
                                           Assessment at Initial
                                           Diagnosis: Percentage of
                                           patients aged 18 years and
                                           older with a diagnosis of
                                           obstructive sleep apnea who
                                           had an apnea hypopnea index
                                           (AHI) or a respiratory
                                           disturbance index (RDI)
                                           measured at the time of
                                           initial diagnosis.
N/A/278.................................  Sleep Apnea: Positive Airway     AMA-PCPI/NCQA.
                                           Pressure Therapy Prescribed:
                                           Percentage of patients aged 18
                                           years and older with a
                                           diagnosis of moderate or
                                           severe obstructive sleep apnea
                                           who were prescribed positive
                                           airway pressure therapy.
N/A/279.................................  Sleep Apnea: Assessment of       AMA-PCPI/NCQA.
                                           Adherence to Positive Airway
                                           Pressure Therapy: Percentage
                                           of visits for patients aged 18
                                           years and older with a
                                           diagnosis of obstructive sleep
                                           apnea who were prescribed
                                           positive airway pressure
                                           therapy who had documentation
                                           that adherence to positive
                                           airway pressure therapy was
                                           objectively measured.
----------------------------------------------------------------------------------------------------------------
Finalized in the CY 2013 PFS final rule (see Table 112 at 77 FR 69279).

                                        Table 71--Dementia Measures Group
----------------------------------------------------------------------------------------------------------------
                NQF/PQRS                   Measure title and description             Measure developer
----------------------------------------------------------------------------------------------------------------
N/A/280.................................  Dementia: Staging of Dementia:   AMA-PCPI.
                                           Percentage of patients,
                                           regardless of age, with a
                                           diagnosis of dementia whose
                                           severity of dementia was
                                           classified as mild, moderate
                                           or severe at least once within
                                           a 12 month period.
N/A/281.................................  Dementia: Cognitive Assessment:  AMA-PCPI.
                                           Percentage of patients,
                                           regardless of age, with a
                                           diagnosis of dementia for whom
                                           an assessment of cognition is
                                           performed and the results
                                           reviewed at least once within
                                           a 12 month period.
N/A/282.................................  Dementia: Functional Status      AMA-PCPI.
                                           Assessment: Percentage of
                                           patients, regardless of age,
                                           with a diagnosis of dementia
                                           for whom an assessment of
                                           functional status is performed
                                           and the results reviewed at
                                           least once within a 12 month
                                           period.
N/A/283.................................  Dementia: Neuropsychiatric       AMA-PCPI.
                                           Symptom Assessment: Percentage
                                           of patients, regardless of
                                           age, with a diagnosis of
                                           dementia and for whom an
                                           assessment of neuropsychiatric
                                           symptoms is performed and
                                           results reviewed at least once
                                           in a 12 month period.
N/A/284.................................  Dementia: Management of          AMA-PCPI.
                                           Neuropsychiatric Symptoms:
                                           Percentage of patients,
                                           regardless of age, with a
                                           diagnosis of dementia who have
                                           one or more neuropsychiatric
                                           symptoms who received or were
                                           recommended to receive an
                                           intervention for
                                           neuropsychiatric symptoms
                                           within a 12 month period.
N/A/285.................................  Dementia: Screening for          AMA-PCPI.
                                           Depressive Symptoms:
                                           Percentage of patients,
                                           regardless of age, with a
                                           diagnosis of dementia who were
                                           screened for depressive
                                           symptoms within a 12 month
                                           period.

[[Page 74740]]

 
N/A/286.................................  Dementia: Counseling Regarding   AMA-PCPI.
                                           Safety Concerns: Percentage of
                                           patients, regardless of age,
                                           with a diagnosis of dementia
                                           or their caregiver(s) who were
                                           counseled or referred for
                                           counseling regarding safety
                                           concerns within a 12 month
                                           period.
N/A/287.................................  Dementia: Counseling Regarding   AMA-PCPI.
                                           Risks of Driving: Percentage
                                           of patients, regardless of
                                           age, with a diagnosis of
                                           dementia or their caregiver(s)
                                           who were counseled regarding
                                           the risks of driving and the
                                           alternatives to driving at
                                           least once within a 12 month
                                           period.
N/A/288.................................  Dementia: Caregiver Education    AMA-PCPI.
                                           and Support: Percentage of
                                           patients, regardless of age,
                                           with a diagnosis of dementia
                                           whose caregiver(s) were
                                           provided with education on
                                           dementia disease management
                                           and health behavior changes
                                           AND referred to additional
                                           sources for support within a
                                           12 month period.
----------------------------------------------------------------------------------------------------------------
Finalized in the CY 2013 PFS final rule (see Table 113 at 77 FR 69279).

                                  Table 72--Parkinson's Disease Measures Group
----------------------------------------------------------------------------------------------------------------
                NQF/PQRS                   Measure title and description             Measure developer
----------------------------------------------------------------------------------------------------------------
N/A/289.................................  Parkinson's Disease: Annual      AAN.
                                           Parkinson's Disease Diagnosis
                                           Review: All patients with a
                                           diagnosis of Parkinson's
                                           disease who had an annual
                                           assessment including a review
                                           of current medications (e.g.,
                                           medications that can produce
                                           Parkinson-like signs or
                                           symptoms) and a review for the
                                           presence of atypical features
                                           (e.g., falls at presentation
                                           and early in the disease
                                           course, poor response to
                                           levodopa, symmetry at onset,
                                           rapid progression [to Hoehn
                                           and Yahr stage 3 in 3 years],
                                           lack of tremor or
                                           dysautonomia) at least
                                           annually.
N/A/290.................................  Parkinson's Disease:             AAN.
                                           Psychiatric Disorders or
                                           Disturbances Assessment: All
                                           patients with a diagnosis of
                                           Parkinson's disease who were
                                           assessed for psychiatric
                                           disorders or disturbances
                                           (e.g., psychosis, depression,
                                           anxiety disorder, apathy, or
                                           impulse control disorder) at
                                           least annually.
N/A/291.................................  Parkinson's Disease: Cognitive   AAN.
                                           Impairment or Dysfunction
                                           Assessment: All patients with
                                           a diagnosis of Parkinson's
                                           disease who were assessed for
                                           cognitive impairment or
                                           dysfunction at least annually.
N/A/292.................................  Parkinson's Disease: Querying    AAN.
                                           about Sleep Disturbances: All
                                           patients with a diagnosis of
                                           Parkinson's disease (or
                                           caregivers, as appropriate)
                                           who were queried about sleep
                                           disturbances at least annually.
N/A/293.................................  Parkinson's Disease:             AAN.
                                           Rehabilitative Therapy
                                           Options: All patients with a
                                           diagnosis of Parkinson's
                                           disease (or caregiver(s), as
                                           appropriate) who had
                                           rehabilitative therapy options
                                           (e.g., physical, occupational,
                                           or speech therapy) discussed
                                           at least annually.
N/A/294.................................  Parkinson's Disease:             AAN.
                                           Parkinson's Disease Medical
                                           and Surgical Treatment Options
                                           Reviewed: All patients with a
                                           diagnosis of Parkinson's
                                           disease (or caregiver(s), as
                                           appropriate) who had the
                                           Parkinson's disease treatment
                                           options (e.g., non-
                                           pharmacological treatment,
                                           pharmacological treatment, or
                                           surgical treatment) reviewed
                                           at least once annually.
----------------------------------------------------------------------------------------------------------------
Finalized in the CY 2013 PFS final rule (see Table 114 at 77 FR 69279).

                                      Table 73--Hypertension Measures Group
----------------------------------------------------------------------------------------------------------------
                NQF/PQRS                   Measure title and description             Measure developer
----------------------------------------------------------------------------------------------------------------
0028/226................................  Preventive Care and Screening:   AMA-PCPI.
                                           Tobacco Use: Screening and
                                           Cessation Intervention:
                                           Percentage of patients aged 18
                                           years and older who were
                                           screened for tobacco use one
                                           or more times within 24 months
                                           AND who received cessation
                                           counseling intervention if
                                           identified as a tobacco user.
N/A/295.................................  Hypertension: Use of Aspirin or  ABIM.
                                           Other Antithrombotic Therapy:
                                           Percentage of patients aged 30
                                           through 90 years old with a
                                           diagnosis of hypertension and
                                           are eligible for aspirin or
                                           other antithrombotic therapy
                                           who were prescribed aspirin or
                                           other antithrombotic therapy.
N/A/296.................................  Hypertension: Complete Lipid     ABIM.
                                           Profile: Percentage of
                                           patients aged 18 through 90
                                           years old with a diagnosis of
                                           hypertension who received a
                                           complete lipid profile within
                                           60 months.
N/A/297.................................  Hypertension: Urine Protein      ABIM.
                                           Test: Percentage of patients
                                           aged 18 through 90 years old
                                           with a diagnosis of
                                           hypertension who either have
                                           chronic kidney disease
                                           diagnosis documented or had a
                                           urine protein test done within
                                           36 months.
N/A/298.................................  Hypertension: Annual Serum       ABIM.
                                           Creatinine Test: Percentage of
                                           patients aged 18 through 90
                                           years old with a diagnosis of
                                           hypertension who had a serum
                                           creatinine test done within 12
                                           months.

[[Page 74741]]

 
N/A/299.................................  Hypertension: Diabetes Mellitus  ABIM.
                                           Screening Test: Percentage of
                                           patients aged 18 through 90
                                           years old with a diagnosis of
                                           hypertension who had a
                                           diabetes screening test within
                                           36 months.
N/A/300.................................  Hypertension: Blood Pressure     ABIM.
                                           Control: Percentage of
                                           patients aged 18 through 90
                                           years old with a diagnosis of
                                           hypertension whose most recent
                                           blood pressure was under
                                           control (90 mmHg).
N/A/301.................................  Hypertension: Low Density        ABIM.
                                           Lipoprotein (LDL-C) Control:
                                           Percentage of patients aged 18
                                           through 90 years old with a
                                           diagnosis of hypertension
                                           whose most recent LDL
                                           cholesterol level was under
                                           control (at goal).
N/A/302.................................  Hypertension: Dietary and        ABIM.
                                           Physical Activity
                                           Modifications Appropriately
                                           Prescribed: Percentage of
                                           patients aged 18 through 90
                                           years old with a diagnosis of
                                           hypertension who received
                                           dietary and physical activity
                                           counseling at least once
                                           within 12 months.
----------------------------------------------------------------------------------------------------------------
Finalized in the CY 2013 PFS final rule (see Table 115 at 77 FR 69280).

           Table 74--Cardiovascular Prevention Measures Group
------------------------------------------------------------------------
                                   Measure title and         Measure
           NQF/PQRS                   description           developer
------------------------------------------------------------------------
0064/2........................  Diabetes: Low Density   NCQA.
                                 Lipoprotein (LDL-C)
                                 Control (dL):
                                 Percentage of
                                 patients 18-75 years
                                 of age with diabetes
                                 whose LDL-C was
                                 adequately controlled
                                 (dL) during
                                 the measurement.
0068/204......................  Ischemic Vascular       NCQA.
                                 Disease (IVD): Use of
                                 Aspirin or Another
                                 Antithrombotic:
                                 Percentage of
                                 patients 18 years of
                                 age and older who
                                 were discharged alive
                                 for acute myocardial
                                 infarction (AMI),
                                 coronary artery
                                 bypass graft (CABG)
                                 or percutaneous
                                 coronary
                                 interventions (PCI)
                                 in the 12 months
                                 prior to the
                                 measurement period,
                                 or who had an active
                                 diagnosis of ischemic
                                 vascular disease
                                 (IVD) during the
                                 measurement period
                                 and who had
                                 documentation of use
                                 of aspirin or another
                                 antithrombotic during
                                 the measurement
                                 period.
0028/226......................  Preventive Care and     AMA-PCPI.
                                 Screening: Tobacco
                                 Use: Screening and
                                 Cessation
                                 Intervention:
                                 Percentage of
                                 patients 18 years and
                                 older who were
                                 screened for tobacco
                                 use one or more times
                                 within 24 months AND
                                 who received
                                 cessation counseling
                                 intervention if
                                 identified as a
                                 tobacco user.
0018/236......................  Controlling High Blood  NCQA.
                                 Pressure: Percentage
                                 of patients 18-85
                                 years of age who had
                                 a diagnosis of
                                 hypertension and
                                 whose blood pressure
                                 was adequately
                                 controlled (90
                                 mmHg) during the
                                 measurement period.
0075/241......................  Ischemic Vascular       NCQA.
                                 Disease (IVD):
                                 Complete Lipid
                                 Profile and LDL-C
                                 Control (dL):
                                 Percentage of
                                 patients 18 years of
                                 age andolder who were
                                 discharged alive for
                                 acute myocardial
                                 infarction (AMI),
                                 coronary artery
                                 bypass graft (CABG)
                                 or percutaneous
                                 coronary
                                 interventions (PCI)
                                 in the 12 months
                                 prior to the
                                 measurement period,
                                 or who had an active
                                 diagnosis of ischemic
                                 vascular disease
                                 (IVD) during the
                                 measurement period,
                                 and who had each of
                                 the following during
                                 the measurement
                                 period: a complete
                                 lipid profile and LDL-
                                 C was adequately
                                 controlled (
                                 dL).
N/A/317.......................  Preventive Care and     CMS.
                                 Screening: Screening
                                 for High Blood
                                 Pressure and Follow-
                                 Up Documented:
                                 Percentage of
                                 patients aged 18
                                 years and older seen
                                 during the reporting
                                 period who were
                                 screened for high
                                 blood pressure (BP)
                                 AND a recommended
                                 follow-up plan is
                                 documented based on
                                 the current blood
                                 pressure reading as
                                 indicated.
------------------------------------------------------------------------
Finalized in the CY 2013 PFS final rule (see Table 116 at 77 FR 69280).

                   Table 75--Cataracts Measures Group
------------------------------------------------------------------------
                                   Measure title and         Measure
           NQF/PQRS                   description           developer
------------------------------------------------------------------------
0565/191......................  Cataracts: 20/40 or     AMA-PCPI/NCQA.
                                 Better Visual Acuity
                                 within 90 Days
                                 Following Cataract
                                 Surgery: Percentage
                                 of patients aged 18
                                 years and older with
                                 a diagnosis of
                                 uncomplicated
                                 cataract who had
                                 cataract surgery and
                                 no significant ocular
                                 conditions impacting
                                 the visual outcome of
                                 surgery and had best-
                                 corrected visual
                                 acuity of 20/40 or
                                 better (distance or
                                 near) achieved within
                                 90 days following the
                                 cataract surgery.

[[Page 74742]]

 
0564/192......................  Cataracts:              AMA-PCPI/NCQA.
                                 Complications within
                                 30 Days Following
                                 Cataract Surgery
                                 Requiring Additional
                                 Surgical Procedures:
                                 Percentage of
                                 patients aged 18
                                 years and older with
                                 a diagnosis of
                                 uncomplicated
                                 cataract who had
                                 cataract surgery and
                                 had any of a
                                 specified list of
                                 surgical procedures
                                 in the 30 days
                                 following cataract
                                 surgery which would
                                 indicate the
                                 occurrence of any of
                                 the following major
                                 complications:
                                 retained nuclear
                                 fragments,
                                 endophthalmitis,
                                 dislocated or wrong
                                 power IOL, retinal
                                 detachment, or wound
                                 dehiscence.
N/A/303.......................  Cataracts: Improvement  AAO.
                                 in Patient's Visual
                                 Function within 90
                                 Days Following
                                 Cataract Surgery:
                                 Percentage of
                                 patients aged 18
                                 years and older in
                                 sample who had
                                 cataract surgery and
                                 had improvement in
                                 visual function
                                 achieved within 90
                                 days following the
                                 cataract surgery,
                                 based on completing a
                                 pre-operative and
                                 post-operative visual
                                 function survey.
N/A/304.......................  Cataracts: Patient      AAO.
                                 Satisfaction within
                                 90 Days Following
                                 Cataract Surgery:
                                 Percentage of
                                 patients aged 18
                                 years and older in
                                 sample who had
                                 cataract surgery and
                                 were satisfied with
                                 their care within 90
                                 days following the
                                 cataract surgery,
                                 based on completion
                                 of the Consumer
                                 Assessment of
                                 Healthcare Providers
                                 and Systems Surgical
                                 Care Survey.
------------------------------------------------------------------------
Finalized in the CY 2013 PFS final rule (see Table 117 at 77 FR 69281).

                    Table 76--Oncology Measures Group
------------------------------------------------------------------------
                                   Measure title and         Measure
           NQF/PQRS                   cescription           developer
------------------------------------------------------------------------
0387/71.......................  Breast Cancer:          AMA-PCPI/ASCO/
                                 Hormonal Therapy for    NCCN.
                                 Stage IC-IIIC
                                 Estrogen Receptor/
                                 Progesterone Receptor
                                 (ER/PR) Positive
                                 Breast Cancer:
                                 Percentage of female
                                 patients aged 18
                                 years and older with
                                 Stage IC through
                                 IIIC, ER or PR
                                 positive breast
                                 cancer who were
                                 prescribed tamoxifen
                                 or aromatase
                                 inhibitor (AI) during
                                 the 12-month
                                 reporting period.
0385/72.......................  Colon Cancer:           AMA-PCPI/ASCO/
                                 Chemotherapy for AJCC   NCCN.
                                 Stage III Colon
                                 Cancer Patients:
                                 Percentage of
                                 patients aged 18
                                 through 80 years with
                                 AJCC Stage III colon
                                 cancer who are
                                 referred for adjuvant
                                 chemotherapy,
                                 prescribed adjuvant
                                 chemotherapy, or have
                                 previously received
                                 adjuvant chemotherapy
                                 within the 12-month
                                 reporting period.
0041/110......................  Preventive Care and     AMA-PCPI.
                                 Screening: Influenza
                                 Immunization:
                                 Percentage of
                                 patients aged 6
                                 months and older seen
                                 for a visit between
                                 October 1 and March
                                 31 who received an
                                 influenza
                                 immunization OR who
                                 reported previous
                                 receipt of an
                                 influenza
                                 immunization.
0419/130......................  Documentation of        CMS.
                                 Current Medications
                                 in the Medical
                                 Record: Percentage of
                                 visits for patients
                                 aged 18 years and
                                 older for which the
                                 eligible professional
                                 attests to
                                 documenting a list of
                                 current medications
                                 using all immediate
                                 resources available
                                 on the date of the
                                 encounter. This list
                                 must include ALL
                                 known prescriptions,
                                 over-the-counters,
                                 herbals, and vitamin/
                                 mineral/dietary
                                 (nutritional)
                                 supplements AND must
                                 contain the
                                 medications' name,
                                 dosage, frequency and
                                 route of
                                 administration.
0384/143......................  Oncology: Medical and   AMA-PCPI.
                                 Radiation--Pain
                                 Intensity Quantified:
                                 Percentage of
                                 patients, regardless
                                 of patient age, with
                                 a diagnosis of cancer
                                 currently receiving
                                 chemotherapy or
                                 radiation therapy in
                                 which pain intensity
                                 is quantified.
0383/144......................  Oncology: Medical and   AMA-PCPI.
                                 Radiation--Plan of
                                 Care for Pain:
                                 Percentage of visits
                                 for patients,
                                 regardless of age,
                                 with a diagnosis of
                                 cancer currently
                                 receiving
                                 chemotherapy or
                                 radiation therapy who
                                 report having pain
                                 with a documented
                                 plan of care to
                                 address pain.
0386/194......................  Oncology: Cancer Stage  AMA-PCPI/ASCO.
                                 Documented:
                                 Percentage of
                                 patients, regardless
                                 of age, with a
                                 diagnosis of cancer
                                 who are seen in the
                                 ambulatory setting
                                 who have a baseline
                                 American Joint
                                 Committee on Cancer
                                 (AJCC) cancer stage
                                 or documentation that
                                 the cancer is
                                 metastatic in the
                                 medical record at
                                 least once during the
                                 12 month reporting
                                 period.
0028/226......................  Preventive Care and     AMA-PCPI.
                                 Screening: Tobacco
                                 Use: Screening and
                                 Cessation
                                 Intervention:
                                 Percentage of
                                 patients 18 years and
                                 older who were
                                 screened for tobacco
                                 use one or more times
                                 within 24 months AND
                                 who received
                                 cessation counseling
                                 intervention if
                                 identified as a
                                 tobacco user.
------------------------------------------------------------------------
Finalized in the CY 2013 PFS final rule (see Table 118 at 77 FR 69281).

[[Page 74743]]

             Table 77--Total Knee Replacement Measures Group
------------------------------------------------------------------------
                                                             Measure
           NQF/PQRS                  Measure title          developer
------------------------------------------------------------------------
N/A/N/A.......................  Total Knee              AAHKS.
                                 Replacement: Shared
                                 Decision-Making:
                                 Trial of Conservative
                                 (Non-surgical)
                                 Therapy: Percentage
                                 of patients
                                 regardless of age or
                                 gender undergoing a
                                 total knee
                                 replacement with
                                 documented shared
                                 decision-making with
                                 discussion of
                                 conservative (non-
                                 surgical) therapy
                                 prior to the
                                 procedure.
N/A/N/A.......................  Total Knee              AAHKS.
                                 Replacement: Venous
                                 Thromboembolic and
                                 Cardiovascular Risk
                                 Evaluation:
                                 Percentage of
                                 patients regardless
                                 of age or gender
                                 undergoing a total
                                 knee replacement who
                                 are evaluated for the
                                 presence or absence
                                 of venous
                                 thromboembolic and
                                 cardiovascular risk
                                 factors within 30
                                 days prior to the
                                 procedure including
                                 history of Deep Vein
                                 Thrombosis, Pulmonary
                                 Embolism, Myocardial
                                 Infarction,
                                 Arrhythmia and Stroke.
N/A/N/A.......................  Total Knee              AAHKS.
                                 Replacement:
                                 Preoperative
                                 Antibiotic Infusion
                                 with Proximal
                                 Tourniquet:
                                 Percentage of
                                 patients regardless
                                 of age undergoing a
                                 total knee
                                 replacement who had
                                 the prophylactic
                                 antibiotic completely
                                 infused prior to the
                                 inflation of the
                                 proximal tourniquet.
N/A/N/A.......................  Total Knee              AAHKS.
                                 Replacement:
                                 Identification of
                                 Implanted Prosthesis
                                 in Operative Report:
                                 Percentage of
                                 patients regardless
                                 of age or gender
                                 undergoing total knee
                                 replacement whose
                                 operative report
                                 identifies the
                                 prosthetic implant
                                 specifications
                                 including the
                                 prosthetic implant
                                 manufacturer, the
                                 brand name of the
                                 prosthetic implant
                                 and the size of
                                 prosthetic implant.
------------------------------------------------------------------------
Finalized in the CY 2013 PFS final rule (see Table 120 at 77 FR 69283).

                Table 78--General Surgery Measures Group
------------------------------------------------------------------------
                                                             Measure
           NQF/PQRS                  Measure title          developer
------------------------------------------------------------------------
N/A/N/A.......................  Anastomotic Leak        ACS.
                                 Intervention:
                                 Percentage of
                                 patients aged 18
                                 years and older who
                                 required an
                                 anastomotic leak
                                 intervention
                                 following gastric
                                 bypass or colectomy
                                 surgery.
N/A/N/A.......................  Unplanned Reoperation   ACS.
                                 within the 30 Day
                                 Postoperative Period:
                                 Percentage of
                                 patients aged 18
                                 years and older who
                                 had any unplanned
                                 reoperation within
                                 the 30 day
                                 postoperative period.
N/A/N/A.......................  Unplanned Hospital      ACS.
                                 Readmission within 30
                                 Days of Principal
                                 Procedure: Percentage
                                 of patients aged 18
                                 years and older who
                                 had an unplanned
                                 hospital readmission
                                 within 30 days of
                                 principal procedure.
N/A/N/A.......................  Surgical Site           ACS.
                                 Infection (SSI):
                                 Percentage of
                                 patients aged 18
                                 years and older who
                                 had a surgical site
                                 infection (SSI).
N/A/N/A.......................  Patient-Centered        ACS.
                                 Surgical Risk
                                 Assessment and
                                 Communication:
                                 Percentage of
                                 patients who
                                 underwent a non-
                                 emergency surgery who
                                 had their
                                 personalized risks of
                                 postoperative
                                 complications
                                 assessed by their
                                 surgical team prior
                                 to surgery using a
                                 clinical data-based,
                                 patient-specific risk
                                 calculator and who
                                 received personal
                                 discussion of those
                                 risks with the
                                 surgeon.
------------------------------------------------------------------------

  Table 79--Optimizing Patient Exposure to Ionizing Radiation Measures
                                  Group
------------------------------------------------------------------------
                                                             Measure
           NQF/PQRS                  Measure title          developer
------------------------------------------------------------------------
N/A/N/A.......................  Optimizing Patient      AMA-PCPI.
                                 Exposure to Ionizing
                                 Radiation:
                                 Utilization of a
                                 Standardized
                                 Nomenclature for
                                 Computed Tomography
                                 (CT) Imaging
                                 Description:
                                 Percentage of
                                 computed tomography
                                 (CT) imaging reports
                                 for all patients,
                                 regardless of age,
                                 with the imaging
                                 study named according
                                 to a standardized
                                 nomenclature and the
                                 standardized
                                 nomenclature is used
                                 in institution's
                                 computer systems.
N/A/N/A.......................  Optimizing Patient      AMA-PCPI.
                                 Exposure to Ionizing
                                 Radiation: Count of
                                 Potential High Dose
                                 Radiation Imaging
                                 Studies: Computed
                                 Tomography (CT) and
                                 Cardiac Nuclear
                                 Medicine Studies:
                                 Percentage of
                                 computed tomography
                                 (CT) and cardiac
                                 nuclear medicine
                                 (myocardial perfusion
                                 studies) imaging
                                 reports for all
                                 patients, regardless
                                 of age, that document
                                 a count of known
                                 previous CT (any type
                                 of CT) and cardiac
                                 nuclear medicine
                                 (myocardial
                                 perfusion) studies
                                 that the patient has
                                 received in the 12-
                                 month period prior to
                                 the current study.

[[Page 74744]]

 
N/A/N/A.......................  Optimizing Patient      AMA-PCPI.
                                 Exposure to Ionizing
                                 Radiation: Reporting
                                 to a Radiation Dose
                                 Index Registry:
                                 Percentage of total
                                 computed tomography
                                 (CT) studies
                                 performed for all
                                 patients, regardless
                                 of age, that are
                                 reported to a
                                 radiation dose index
                                 registry AND that
                                 include at a minimum
                                 selected data
                                 elements.
N/A/N/A.......................  Optimizing Patient      AMA-PCPI.
                                 Exposure to Ionizing
                                 Radiation: Computed
                                 Tomography (CT)
                                 Images Available for
                                 Patient Follow-up and
                                 Comparison Purposes:
                                 Percentage of final
                                 reports for computed
                                 tomography (CT)
                                 studies performed for
                                 all patients,
                                 regardless of age,
                                 which document that
                                 Digital Imaging and
                                 Communications in
                                 Medicine (DICOM)
                                 format image data are
                                 available to non-
                                 affiliated external
                                 entities on a secure,
                                 media free,
                                 reciprocally
                                 searchable basis with
                                 patient authorization
                                 for at least a 12-
                                 month period after
                                 the study.
N/A/N/A.......................  Optimizing Patient      AMA-PCPI.
                                 Exposure to Ionizing
                                 Radiation: Search for
                                 Prior Computed
                                 Tomography (CT)
                                 Imaging Studies
                                 Through a Secure,
                                 Authorized, Media-
                                 Free, Shared Archive:
                                 Percentage of final
                                 reports of computed
                                 tomography (CT)
                                 studies performed for
                                 all patients,
                                 regardless of age,
                                 which document that a
                                 search for Digital
                                 Imaging and
                                 Communications in
                                 Medicine (DICOM)
                                 format images was
                                 conducted for prior
                                 patient CT imaging
                                 studies completed at
                                 non-affiliated
                                 external entities
                                 within the past 12-
                                 months and are
                                 available through a
                                 secure, authorized,
                                 media free, shared
                                 archive prior to an
                                 imaging study being
                                 performed.
N/A/N/A.......................  Optimizing Patient      AMA-PCPI.
                                 Exposure to Ionizing
                                 Radiation:
                                 Appropriateness:
                                 Follow-up CT Imaging
                                 for Incidentally
                                 Detected Pulmonary
                                 Nodules According to
                                 Recommended
                                 Guidelines:
                                 Percentage of final
                                 reports for CT
                                 imaging studies of
                                 the thorax for
                                 patients aged 18
                                 years and older with
                                 documented follow-up
                                 recommendations for
                                 incidentally detected
                                 pulmonary nodules
                                 (eg, follow-up CT
                                 imaging studies
                                 needed or that no
                                 follow-up is needed)
                                 based at a minimum on
                                 nodule size AND
                                 patient risk factors.
------------------------------------------------------------------------

c. Final Measures Available for Reporting in the GPRO Web Interface
    For ease of reference, Table 80 specifies the measures that are 
available for reporting in the GPRO web interface for 2014 and beyond. 
Please note that this is a total list of the measures that will be 
reported by a group practice using the GPRO web interface in 2014, and 
all measures contained within this table were previously finalized in 
the CY 2013 PFS final rule (77 FR 69269).
BILLING CODE 4120-01-P

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BILLING CODE 4120-01-C
d. The Clinician Group (CG) Consumer Assessment of Healthcare Providers 
and Systems (CAHPS) Survey
    Because we believed these patient surveys are important tools for 
assessing beneficiary experience of care and outcomes, under our 
authority under section 1848(m)(3)(C) of the Act to select the measures 
for which a group practice must report, we proposed a new satisfactory 
reporting criterion in this the proposed rule to provide group 
practices comprised of 25 or more eligible professionals the option to 
complete the CG CAHPS survey for purposes of satisfying the 2014 PQRS 
incentive and 2016 PQRS payment adjustment (78 FR 43476). Specifically, 
we proposed the following 12 summary the survey measures to use for the 
PQRS program:
     Getting timely care, appointments, and information.
     How well providers Communicate.
     Patient's Rating of Provider.
     Access to Specialists.
     Health Promotion & Education.
     Shared Decision Making.
     Health Status/Functional Status.
     Courteous and Helpful Office Staff.
     Care Coordination.
     Between Visit Communication.
     Helping Your to Take Medication as Directed.
     Stewardship of Patient Resources.
    The first seven measures proposed above are the same ones used in 
the Medicare Shared Savings Programs. We believe it is important to 
align measures across programs to the extent possible. The remaining 
five measures proposed above address areas of high importance to 
Medicare and are areas where patient experience can inform the quality 
of care related to care coordination and efficiency. We noted that 
under this proposal, the group practice would bear the cost of having 
this survey administered. We solicited and received the following 
public comments on these proposed measures:
    Comment: Several commenters generally supported the addition of a 
GPRO option to report the CG CAHPS survey measures for the 2014 PQRS 
incentive. However, some commenters have concerns that, since the 
survey's questions focus on primary care issues, the surveys are not 
widely applicable to services provided by certain specialists. Some of 
these commenters requested that, in addition to allowing reporting of 
the CG CAHPS survey measures, surgical group practices in the GPRO also 
be allowed to report on the Consumer Assessment of Healthcare Providers 
Surgical Care Survey (S-CAHPS) as these survey measures are more 
relevant to their practice.
    Response: We appreciate the commenters' positive feedback and are 
therefore finalizing this proposed criterion, as proposed. For the 
commenters' request to allow surgical group practices to report on S-
CAHPS survey measures, we generally agree that the S-CAHPS survey 
measures would be more relevant to a surgical group practice than the 
CG CAHPS measures. Unfortunately, at this time, we cannot introduce the 
S-CAHPS measures for reporting in the PQRS GPRO for 2014, since the 
Measure Applications Partnership (MAP) has not yet had an opportunity 
to review the S-CAHPS survey measures. Please note that section 1890A 
of the Act, which was added by section 3014(b) of the Affordable Care 
Act, requires that the entity with a contract with the Secretary under 
section 1890(a) of the Act (currently that, is the NQF) convene multi-
stakeholder groups, currently the MAP, to provide input to the 
Secretary on the selection of certain categories of quality and 
efficiency measures. As such, prior to inclusion in the PQRS measure 
set, the S-CAHPS survey measures must be submitted to the MAP for 
review.
    Comment: One commenter expressed concern with ``survey fatigue.'' 
This commenter is concerned that some patients will receive multiple 
surveys

[[Page 74751]]

asking very similar questions, which will likely to result in low 
response rates.
    Response: We appreciate the comment and concern raised regarding 
``survey fatigue.'' CMS recognizes that there are multiple CAHPS survey 
efforts and takes steps to ensure that we are not duplicating patients 
in survey samples, as well as varies the timing in which it 
disseminates the survey.
    Based on the comments received and for the reasons stated 
previously, we are finalizing the CG CAHPS measures, as proposed. A 
full description of the CG CAHPS survey measures is available at http://acocahps.cms.gov/Content/Default.aspx#aboutSurvey.
11. Statutory Requirements and Other Considerations for the Selection 
of PQRS Quality Measures for Meeting the Criteria for Satisfactory 
Participation in a Qualified Clinical Data Registry for 2014 and Beyond 
for Individual Eligible Professionals
    For the measures for which eligible professionals participating in 
a qualified clinical data registry must report, section 1848(m)(3)(D) 
of the Act, as amended and added by section 601(b) of the American Tax 
Relief Act of 2012, provides that the Secretary shall treat eligible 
professionals as satisfactorily submitting data on quality measures if 
they satisfactorily participate in a qualified clinical data registry. 
Section 1848(m)(3)(E) of the Act, as added by section 601(b) of the 
ATRA, provides some flexibility with regard to the types of measures 
applicable to satisfactory participation in a qualified clinical data 
registry, by specifying that for measures used by a qualified clinical 
data registry, sections 1890(b)(7) and 1890A(a) of the Act shall not 
apply, and measures endorsed by the entity with a contract with the 
Secretary under section 1890(a) of the Act may be used.
    We proposed to provide to qualified clinical data registries 
flexibility with regard to choosing the quality measures data available 
for individual eligible professionals to choose from to report to CMS 
using these qualified clinical data registries (78 FR 43476). We 
believe it is preferable for the qualified clinical data registries 
with flexibility in selecting measures since we believe these clinical 
data registries would know best what measures should be reported to 
achieve the goal of improving the quality of care furnished by their 
eligible professionals. Although we proposed to allow these clinical 
data registries to determine the quality measures from which individual 
eligible professionals would choose to have reported to CMS, to ensure 
that CMS receives the same type of data that could be uniformly 
analyzed by CMS and sufficient measure data, we believe it is important 
to set parameters on the measures to be reported on and the types of 
measures should be reported to CMS. Therefore, we proposed requirements 
for the measures that would have to be reported to CMS by a qualified 
clinical data registry for the purpose of its individual eligible 
professionals meeting the criteria for satisfactory participation under 
the PQRS (78 FR 43476-43477). Below we have listed those proposed 
requirements and provided a summary of the comments received and our 
responses directly following each proposed requirement. We also 
received the following general comments on these proposals:
    Comment: Several commenters generally supported our proposal to 
allow qualified clinical data registries to choose which measures will 
be reported to the PQRS on behalf of its participating eligible 
professional, as this provides flexibility in this reporting option. 
However, one commenter opposed allowing qualified clinical data 
registries to choose which measures its participants will report for 
purposes of the PQRS, because the measures reported by a qualified 
clinical data registry on behalf of an eligible professional may not be 
as robust as the measures finalized in the PQRS measure set.
    Response: We appreciate the commenters' positive feedback and agree 
that it provides flexibility. For the opposing comment, we understand 
the commenter's concerns and expect that the measures reported by 
qualified clinical data registries are as robust and meaningful as 
those finalized in the PQRS measure set. We are finalizing 
requirements--such as the requirements related to bench marking and the 
risk adjustment of certain measures--for the qualified clinical data 
registries that ensure that entities selected to become qualified 
clinical data registries have measures that are as robust as the 
measures contained in the PQRS measure set. Therefore, we believe our 
desire to provide flexibility in the measures that may be reported by a 
qualified clinical data registry outweighs our concern that the 
measures reported by a qualified clinical data registry may not be as 
robust as the measures finalized in the PQRS measure set.
    We invited and received the following public comments on the 
proposed requirements for the measures the qualified clinical data 
registry would report to CMS for the individual eligible professional:
     The qualified clinical data registry must have at least 9 
measures, covering at least 3 of the 6 NQS domains, available for 
reporting. The 6 NQS domains are as follows:
    ++ Person and Caregiver-Centered Experience and Outcomes. These are 
measures that reflect the potential to improve patient-centered care 
and the quality of care delivered to patients. They emphasize the 
importance of collecting patient-reported data and the ability to 
impact care at the individual patient level, as well as the population 
level through greater involvement of patients and families in decision 
making, self-care, activation, and understanding of their health 
condition and its effective management.
    ++ Patient Safety. These are measures that reflect the safe 
delivery of clinical services in both hospital and ambulatory settings 
and include processes that would reduce harm to patients and reduce 
burden of illness. These measures should enable longitudinal assessment 
of condition-specific, patient-focused episodes of care.
    ++ Communication and Care Coordination. These are measures that 
demonstrate appropriate and timely sharing of information and 
coordination of clinical and preventive services among health 
professionals in the care team and with patients, caregivers, and 
families to improve appropriate and timely patient and care team 
communication.
    ++ Community/Population Health. These are measures that reflect the 
use of clinical and preventive services and achieve improvements in the 
health of the population served. These are outcome-focused and have the 
ability to achieve longitudinal measurement that will demonstrate 
improvement or lack of improvement in the health of the US population.
    ++ Efficiency and Cost Reduction. These are measures that reflect 
efforts to significantly improve outcomes and reduce errors. These 
measures also impact and benefit a large number of patients and 
emphasize the use of evidence to best manage high priority conditions 
and determine appropriate use of healthcare resources.
    ++ Effective Clinical Care. These are measures that reflect 
clinical care processes closely linked to outcomes based on evidence 
and practice guidelines.
    We solicited and received the following public comment on this 
proposal:

[[Page 74752]]

    Comment: Some commenters supported our proposal to require that 
measures are reported according to their NQS domains. However, some 
commenters suggested that we use domains created by AHRQ rather than 
the NQS domains.
    Response: We appreciate the commenters' support. For the commenters 
who suggested that we use domains created by AHRQ, in an effort to 
align how these measures are analyzed, we prefer to use the NQS 
domains. Based on the comments received and since we are finalizing 
satisfactory participation criterion relating to the reporting of 9 
measures covering at least 3 NQS domains, we are finalizing the 
requirement that a qualified clinical data registry must have at least 
9 measures, covering at least 3 of the 6 NQS domains, available for 
reporting, as proposed.
     The qualified clinical data registry must have at least 1 
outcome measure available for reporting, which is a measure that 
assesses the results of health care that are experienced by patients 
(that is, patients' clinical events; patients' recovery and health 
status; patients' experiences in the health system; and efficiency/
cost). We solicited and received the following public comment on this 
proposal:
    Comment: Some commenters generally supportedthis proposal. Some 
commenters requested further clarification regarding the definition of 
an outcome measure.
    Response: An outcome measure, as defined within the CMS Measures 
Management System Blueprint v10.0, indicates the result of the 
performance (or nonperformance) of functions or processes. It is a 
measure that focuses on achieving a particular state of health. PY 2014 
examples of outcome measures within the PQRS include Measure 
1: Diabetes: Hemoglobin A1c Poor Control, Measure 
258: Rate of Open Repair of Small or Moderate Non-Ruptured 
Abdominal Aortic Aneurysms (AAA) without Major Complications 
(Discharged to Home by Post-Operative Day 7), or Measure 
303: Cataracts: Improvement in Patient's Visual Function 
within 90 Days Following Cataract Surgery.
    Please note that, even though the one of the criterion for 
satisfactory participation in a qualified clinical data registry does 
not require the reporting of at least 1 outcome measure, we are still 
finalizing this requirement, as proposed.
     The qualified clinical data registry may report on process 
measures, which are measures that focus on a process which leads to a 
certain outcome, meaning that a scientific basis exists for believing 
that the process, when executed well, will increase the probability of 
achieving a desired outcome. We solicited and received the following 
public comment on this proposal:
    Comment: Some commenters generally supported this proposal.
    Response: We appreciate the commenters' support for this proposal. 
For the reasons stated above and based on the comments received, we are 
finalizing this requirement, as proposed.
     The outcome and process measures reported must contain 
denominator data. That is, the lower portion of a fraction used to 
calculate a rate, proportion, or ratio. The denominator must describe 
the population eligible (or episodes of care) to be evaluated by the 
measure. This should indicate age, condition, setting, and timeframe 
(when applicable). For example, ``Patients aged 18 through 75 years 
with a diagnosis of diabetes.'' We solicited and received the following 
public comment on this proposal:
    Comment: Some commenters generally supported this proposal. Other 
commenters suggested that this requirement was overly restrictive. The 
commenters believed that qualified clinical data registries should be 
free to report on measures that do not conform to the way a PQRS 
measure is structured (such as requiring that measures contain 
denominator data).
    Response: We appreciate the commenters' support for this proposal. 
For commenters who believe that the qualified clinical data registries 
should be free to report on measures that do not conform to the PQRS 
measure structure, particularly containing denominator data, we agree 
that there are measures that are not structured like PQRS measures that 
achieve the same goal as PQRS-structured measures of monitoring 
processes and outcomes. However, for CMS to be able to accept and 
analyze quality measures data, it is necessary that the measures follow 
a basic and familiar structure. Since we have had experience analyzing 
PQRS-structured measures, it is necessary to implement restrictions on 
the structure of measures submitted by qualified clinical data 
registries. For the reasons stated above and based on the comments 
received, we are finalizing this requirement, as proposed.
     The outcome and process measures reported must contain 
numerator data. That is, the upper portion of a fraction used to 
calculate a rate, proportion, or ratio. The numerator must detail the 
quality clinical action expected that satisfies the condition(s) and is 
the focus of the measurement for each patient, procedure, or other unit 
of measurement established by the denominator (that is, patients who 
received a particular service or providers that completed a specific 
outcome/process). We solicited and received the following public 
comment on this proposal:
    Comment: Some commenters generally supported this proposal. The 
commenters believed that qualified clinical data registries should be 
free to report on measures that do not conform to the way a PQRS 
measure is structured (such as requiring that measures contain 
numerator data).
    Response: We appreciate the commenters' support for this proposal. 
For commenters who believe that the qualified clinical data registries 
should be free to report on measures that do not conform to the PQRS 
measure structure, particularly containing numerator data, we agree 
that there are measures that are not structured like PQRS measures that 
achieve the same goal as PQRS-structured measures of monitoring 
processes and outcomes. However, for CMS to be able to accept and 
analyze quality measures data, it is necessary that the measures follow 
a basic and familiar structure. Since we have had experience analyzing 
PQRS-structured measures, it is necessary to implement restrictions on 
the structure of measures submitted by qualified clinical data 
registries. For the reasons stated above and based on the comments 
received, we are finalizing this requirement, as proposed.
     The qualified clinical data registry must provide 
denominator exceptions for the measures, where appropriate. That is, 
those conditions that should remove a patient, procedure or unit of 
measurement from the denominator of the performance rate only if the 
numerator criteria are not met. Denominator exceptions allow for 
adjustment of the calculated score for those providers with higher risk 
populations. Denominator exceptions allow for the exercise of clinical 
judgment and should be specifically defined where capturing the 
information in a structured manner fits the clinical workflow. Generic 
denominator exception reasons used in measures fall into three general 
categories: Medical, Patient, or System reasons. We solicited and 
received the following public comment on this proposal:
    Comment: Some commenters generally supported this proposal. The 
commenters believed that qualified clinical data registries should be 
free to report on measures that do not conform

[[Page 74753]]

to the way a PQRS measure is structured.
    Response: We appreciate the commenters' support for this proposal. 
For commenters who believe that the qualified clinical data registries 
should be free to report on measures that do not conform to the PQRS 
measure structure, we agree that there are measures that are not 
structured like PQRS measures that achieve the same goal as PQRS-
structured measures of monitoring processes and outcomes. However, for 
CMS to be able to accept and analyze quality measures data, it is 
necessary that the measures follow a basic and familiar structure. 
Since we have had experience analyzing PQRS-structured measures, it is 
necessary to implement restrictions on the structure of measures 
submitted by qualified clinical data registries. For the reasons stated 
above and based on the comments received, we are finalizing this 
requirement, as proposed.
     The qualified clinical data registry must provide 
denominator exclusions for the measures for which it will report to 
CMS, where appropriate. That is, those patients with conditions who 
should be removed from the measure population and denominator before 
determining if numerator criteria are met. (For example, Patients with 
bilateral lower extremity amputations would be listed as a denominator 
exclusion for a measure requiring foot exams.) We solicited and 
received the following public comment on this proposal:
    Comment: Some commenters generally supported this proposal. The 
commenters believed that qualified clinical data registries should be 
free to report on measures that do not conform to the way a PQRS 
measure is structured.
    Response: We appreciate the commenters' support for this proposal. 
For commenters who believe that the qualified clinical data registries 
should be free to report on measures that do not conform to the PQRS 
measure structure, we agree that there are measures that are not 
structured like PQRS measures that achieve the same goal as PQRS-
structured measures of monitoring processes and outcomes. However, for 
CMS to be able to accept and analyze quality measures data, it is 
necessary that the measures follow a basic and familiar structure. 
Since we have had experience analyzing PQRS-structured measures, it is 
necessary to implement restrictions on the structure of measures 
submitted by qualified clinical data registries. For the reasons stated 
above and based on the comments received, we are finalizing this 
requirement, as proposed.
     The qualified clinical data registry must provide to CMS 
descriptions for the measures for which it will report to CMS by no 
later than March 31, 2014. The descriptions must include: name/title of 
measures, NQF  (if NQF endorsed), descriptions of the 
denominator, numerator, and when applicable, denominator exceptions and 
denominator exclusions of the measure. We solicited and received public 
comment on this proposal:
    Comment: Some commenters generally supported this proposal.
    Response: We appreciate the commenters' support for this proposal. 
For the reasons stated above and based on the comments received, we are 
finalizing this requirement, as proposed.
    We note that last year we introduced the reporting of composite 
measures in the PQRS measure set. While we have had years of experience 
analyzing measures structured like traditional PQRS measures, we are 
only in the initial stages of learning how to analyze composite 
measures. To the extent that we qualified clinical data registries wish 
to submit composite measures for reporting for the PQRS, we are 
requiring that the qualified clinical data registry calculate the 
composite score for CMS and provide to CMS the formula used for 
calculating the composite score. It is necessary that qualified 
clinical data registries be able to calculate the composite score, as 
well as provide us with their formula for calculating the score as CMS 
will likely be unable to analyze the data received on composite 
measures.
    Please note that we are specifying the final requirements we are 
adopting regarding quality measures for satisfactory participation in a 
qualified clinical data registry under Sec.  414.90(g).
12. PQRS Informal Review
    Section 414.90(j) provides that eligible professionals and group 
practices may request an informal review of the determination that an 
eligible professional or group practice did not satisfactorily submit 
data on quality measures under the PQRS. Because we believe it is 
important to also allow eligible professionals who attempt to 
satisfactorily participate in a qualified clinical data registry to be 
able to request an informal review of the determination that the 
eligible professional satisfactorily participated in a qualified 
clinical data registry, we proposed to modify Sec.  414.90(j) to allow 
individual eligible professionals who attempt to satisfactorily 
participate in a qualified clinical data registry the opportunity to 
request an informal review. We solicited and received public comment on 
this proposal:
    Comment: Several commenters supported our proposal to modify Sec.  
414.90(j) to allow individual eligible professionals who attempt to 
satisfactorily participate in a qualified clinical data registry the 
opportunity to request an informal review.
    Response: Based on the commenters' positive feedback and for the 
reasons we set forth above, we are finalizing this proposal, as 
proposed. We are therefore modifying newly designated Sec.  414.90(m) 
to specify allowing individual eligible professionals who attempt to 
satisfactorily participate in a qualified clinical data registry the 
opportunity to request an informal review.

I. Electronic Health Record (EHR) Incentive Program

    The HITECH Act (Title IV of Division B of the ARRA, together with 
Title XIII of Division A of the ARRA) authorizes incentive payments 
under Medicare and Medicaid for the adoption and meaningful use of 
certified EHR technology (CEHRT). Section 1848(o)(2)(B)(iii) of the Act 
requires that in selecting clinical quality measures (CQMs) for 
eligible professionals (EPs) to report under the EHR Incentive Program, 
and in establishing the form and manner of reporting, the Secretary 
shall seek to avoid redundant or duplicative reporting otherwise 
required. As such, we have taken steps to establish alignments among 
various quality reporting and payment programs that include the 
submission of CQMs.
    For CY 2012 and subsequent years, Sec.  495.8(a)(2)(ii) requires an 
EP to successfully report the clinical quality measures selected by CMS 
to CMS or the states, as applicable, in the form and manner specified 
by CMS or the states, as applicable. In the EHR Incentive Program Stage 
2 Final Rule, we established clinical quality measure reporting options 
for the Medicare EHR Incentive Program for CY 2014 and subsequent years 
that include one individual reporting option that aligns with the 
PQRS's EHR reporting option (77 FR 54058) and two group reporting 
options that align with the PQRS GPRO and Medicare Shared Savings 
Program (MSSP) and Pioneer ACOs (77 FR 54076 to 54078). In the CY 2014 
PFS proposed rule, we proposed two additional aligned options for EPs 
to report CQMs for the Medicare EHR Incentive Program for CY 2014 and 
subsequent years with the intention of minimizing the reporting burden 
on EPs (78 FR 43479-43481). Please note that, during the comment period 
following the proposed

[[Page 74754]]

rule, we received comments that were not related to our specific 
proposals for the EHR Incentive Program in the CY 2014 PFS proposed 
rule. While we appreciate the commenters' feedback, these comments will 
not be specifically addressed in this CY 2014 PFS final rule with 
comment period, as they are beyond the scope of this rule.
1. Qualified Clinical Data Registry Reporting Option
    For purposes of meeting the CQM reporting component of meaningful 
use for the Medicare EHR Incentive Program for the EHR reporting 
periods in 2014 and subsequent years, we proposed to allow EPs to 
submit CQM information using qualified clinical data registries, 
according to the proposed definition and requirements for qualified 
clinical data registries under the PQRS (78 FR 43360). We refer readers 
to the discussion in the proposed rule for further explanation of the 
PQRS qualified clinical data registry reporting option and the reasons 
given in support of our proposals (78 FR 43479).
    In addition to the criteria that are ultimately established for 
PQRS, we proposed the following additional criteria that an EP who 
seeks to report CQMs for the Medicare EHR Incentive Program using a 
qualified clinical data registry must satisfy: (1) The EP must use 
CEHRT as required under the Medicare EHR Incentive Program; (2) the 
CQMs reported must be included in the Stage 2 final rule (see Table 8, 
77 FR 54069) and use the same electronic specifications established for 
the EHR Incentive Program; (3) report 9 CQMs covering at least 3 
domains; (4) if an EP's CEHRT does not contain patient data for at 
least 9 CQMs covering at least 3 domains, then the EP must report the 
CQMs for which there is patient data and report the remaining CQMs as 
``zero denominators'' as displayed by the EP's CEHRT; and (5) an EP 
must have CEHRT that is certified to all of the certification criteria 
required for CQMs, including certification of the qualified clinical 
data registry itself for the functions it will fulfill (for example, 
calculation, electronic submission). We noted that these proposed 
additional criteria are already final policies for the CQM reporting 
options that we established for EPs in the EHR Incentive Program Stage 
2 final rule. We referred readers to that final rule for further 
explanation of the policies related to clinical quality measure 
reporting under the EHR Incentive Program (77 FR 54049-54089). The 
electronic specifications for the clinical quality measures can be 
found at http://www.cms.gov/Regulations-and-Guidance/Legislation/EHRIncentivePrograms/eCQM_Library.html.
    We proposed the qualified clinical data registry reporting option 
only for those EPs who are beyond their first year of demonstrating 
meaningful use (MU). For purposes of avoiding a payment adjustment 
under Medicare, EPs who are in their first year of demonstrating MU in 
the year immediately preceding a payment adjustment year must satisfy 
their CQM reporting requirements by October 1 of such preceding year 
(for example, by October 1, 2014 to avoid a payment adjustment in 
2015). We noted that the proposed qualified clinical data registry 
reporting option would not enable an EP to meet the deadline to avoid a 
payment adjustment because these qualified clinical data registries 
would be submitting data on CQMs by the last day of February following 
the 2014 PQRS incentive reporting periods, which would occur after 
October 1, 2013. Therefore, EPs who are first-time meaningful EHR users 
must report CQMs via attestation as established in the EHR Incentive 
Program Stage 2 final rule (77 FR 54050). The reporting periods 
established in the EHR Incentive Program Stage 2 final rule would 
continue to apply to EPs who would choose to report CQMs under this 
proposed qualified clinical data registry reporting option for purposes 
of the Medicare EHR Incentive Program (77 FR 54049-54051). We noted 
that this may not satisfy requirements for other quality reporting 
programs that have established 12-month reporting periods, such as the 
PQRS.
    As EPs are required to use CEHRT under section 1848(o)(2)(A)(iii) 
of the Act, we proposed that, for the Medicare EHR Incentive Program, 
an EP who seeks to report using a qualified clinical data registry that 
meets the criteria established for PQRS must also ensure that the 
registry selected is certified for the functionality that it is 
intended to fulfill and is a certified EHR Module that is part of the 
EP's CEHRT.
    We solicited and received the following public comments on these 
proposals:
    Comment: One commenter opposed our general proposal to allow EPs to 
submit CQM information using qualified clinical data registries, 
according to the definition and requirements for qualified clinical 
data registries under the PQRS. The commenter indicated that 
incorporating a qualified clinical data registry option for the EHR 
Incentive Program would undermine the integrity of the requirements to 
meet the CQM component of meaningful use. Specifically, the commenter 
believed the proposed requirements to participate in a qualified 
clinical data registry were less stringent than the requirements 
finalized in the EHR Incentive Program Stage 2 final rule with regard 
to CQM reporting.
    Response: We disagree with the commenter's concerns and do not 
believe the qualified clinical data registry option would be less 
stringent than the other reporting options already established in the 
EHR Incentive Program Stage 2 final rule. To the contrary, as discussed 
above, we proposed certain additional requirements for EPs who report 
using a qualified clinical data registry for purposes of the Medicare 
EHR Incentive Program, which were established previously for other 
reporting methods in the EHR Incentive Program Stage 2 final rule, such 
as the requirement that an EP that reports using a qualified clinical 
data registry must use a product that is CEHRT.
    Comment: Several commenters opposed our proposed requirement to 
only allow reporting of the CQMs included in the Stage 2 final rule 
(see Table 8, 77 FR 54069), as well as to use the same electronic 
specifications established for the EHR Incentive Program. The 
commenters believed EPs should be allowed to report on measures outside 
of the CQMs included in the Stage 2 final rule to align with the 
reporting criteria finalized under the PQRS that allows qualified 
clinical data registries to report on measures outside the PQRS and EHR 
Incentive Program measure set.
    Response: We understand the commenters' desire to create 
flexibility in the measures that may be reported under this qualified 
clinical data registry option.
    However, the CQMs selected for the EHR Incentive Program were 
established in the Stage 2 final rule prior to the passage of the 
American Taxpayer Relief Act of 2012, and we have not proposed to add 
additional measures to that set. Therefore, we are finalizing this 
proposal. Please note that, in addition, as we also finalized for EPs 
using the qualified clinical data registry reporting mechanism for the 
PQRS, an EP who chooses to report using a qualified clinical data 
registry to meet the CQM component of meaningful use in 2014 must 
report the most recent version (that is, the June 2013 version) of the 
electronic specification of the measures. The exception to this policy 
is for the measure CMS140v2, Breast Cancer Hormonal Therapy for Stage 
IC-IIIC Estrogen Receptor/Progesterone

[[Page 74755]]

Receptor (ER/PR) Positive Breast Cancer (NQF 0387). As explained below, 
since CMS discovered an error in this measure, EPs reporting this 
measure must use the December 2012 version of this CQM.
    We understand the commenters' desire to allow more flexibility in 
reporting via a qualified clinical data registry and, in the future, we 
will work towards developing a more flexible program policies and 
certification criteria that would allow eCQMs developed by QCDRs to be 
reported to CMS in future rulemaking.
    Comment: The majority of the commenters supported this proposal. 
Many of these commenters were pleased to see a qualified clinical data 
registry reporting option for the EHR Incentive Program that aligns 
with the qualified clinical data registry option for the PQRS.
    Response: We appreciate the commenters' positive feedback.
    Comment: Some commenters opposed our proposed requirement that an 
EP who seeks to report using a qualified clinical data registry that 
meets the criteria established for PQRS must also ensure that the 
registry selected is certified for the functionality that it is 
intended to fulfill and is a certified EHR Module that is part of the 
EP's CEHRT. Some of these commenters believe this requirement would 
bring the qualified clinical data registry option for the EHR Incentive 
Program out of alignment with the PQRS qualified clinical data registry 
option for 2014.
    Response: Indeed, this additional requirement departs from the 
product and vendor requirements for a qualified clinical data registry 
for the PQRS in 2014. However, as we noted in the CY 2014 PFS proposed 
rule, under section 1848(o)(2)(A)(iii) of the Act, EPs are required to 
use CEHRT to submit information on clinical quality measures for the 
EHR Incentive Program. The 2014 Edition certification criteria 
established by the ONC set the requirements for certification that 
cover the functionality needed to ``capture and export'' (45 CFR 
170.314(c)(1)), ``import and calculate'' (45 CFR 170.314(c)(2)), and 
for ``electronic submission'' (45 CFR 170.314(c)(3)) of each CQM that 
will be reported. In order for the EP's CEHRT to meet these criteria, 
the qualified clinical data registry would need to test and certify to 
the functionality that it will fulfill for the EP's CQM reporting, and 
the qualified clinical data registry's certified module would need to 
be part of the EP's CEHRT.
    After consideration of the public comments received, we are 
finalizing as proposed our proposal to allow EPs to submit CQM 
information for purposes of the Medicare EHR Incentive Program 
beginning with the reporting periods in 2014 using qualified clinical 
data registries, according to the definition and requirements for 
qualified clinical data registries under the PQRS discussed in section 
IV.I. of this final rule with comment period and with the additional 
criteria for the EHR Incentive Program discussed above. We are 
finalizing this reporting option only for EPs who are beyond their 
first year of demonstrating meaningful use.
    The registry will need to be certified for the CQM criteria listed 
at 45 CFR 170.314(c)(2) (``import and calculate'') for each CQM that 
will be submitted and 45 CFR 170.314(c)(3) (``electronic submission''). 
EPs will still need to include a certified EHR Module as part of their 
CEHRT that is certified to the CQM criteria listed at 45 CFR 
170.314(c)(1) (``capture and export'') for each of the CQMs that would 
be submitted to CMS for the purposes of meeting the CQM requirements of 
the Medicare EHR Incentive Program. If the qualified clinical data 
registry is performing the function of data capture for the CQMs that 
would be submitted to CMS, then the registry would need to be certified 
to the ``capture and export'' criteria listed at 45 CFR 170.314(c)(1), 
and the certified EHR Module must be part of the EP's CEHRT. Please 
note that, similar to what is finalized for the PQRS in this final rule 
with comment period, a qualified clinical data registry would be 
required to submit quality measures data in a QRDA-III format as 
proposed (78 FR 43480) and finalized in this final rule with comment 
period. Although we mentioned allowing for submission of quality 
measures data in a QRDA-I format, we are not finalizing the proposal to 
allow for submission of quality measures data in a QRDA-I format.
2. Group Reporting Option--Comprehensive Primary Care Initiative
    The Comprehensive Primary Care (CPC) Initiative, under the 
authority of section 3021 of the Affordable Care Act, is a multi-payer 
initiative fostering collaboration between public and private health 
care payers to strengthen primary care. Under this initiative, CMS will 
pay participating primary care practices a care management fee to 
support enhanced, coordinated services. Simultaneously, participating 
commercial, State, and other federal insurance plans are also offering 
support to primary care practices that provide high-quality primary 
care. There are approximately 500 CPC participants across 7 health care 
markets in the U.S. More details on the CPC Initiative can be found at 
http://innovation.cms.gov/initiatives/Comprehensive-Primary-Care-Initiative/index.html.
    Under the CPC Initiative, CPC practice sites are required to report 
to CMS a subset of the CQMs that were selected in the EHR Incentive 
Program Stage 2 final rule for EPs to report under the EHR Incentive 
Program beginning in CY 2014 (77 FR 54069-54075). In a continuing 
effort to align quality reporting programs and innovation initiatives, 
we propose to add a group reporting option for CQMs to the Medicare EHR 
Incentive Program beginning in CY 2014 for EPs who are part of a CPC 
practice site that successfully submits at least 9 electronically 
specified CQMs covering 3 domains. We proposed that each of the EPs in 
the CPC practice site would satisfy the CQM reporting component of 
meaningful use for the relevant reporting period if the CPC practice 
site successfully submits and meets the reporting requirements of the 
CPC Initiative. We proposed that only those EPs who are beyond their 
first year of demonstrating meaningful use may use this proposed CPC 
group reporting option, for the reasons explained in the preceding 
section in regard to avoiding a payment adjustment under Medicare. We 
proposed that EPs who successfully submit as part of a CPC practice 
site in accordance with the requirements established for the CPC 
Initiative and using CEHRT would satisfy their CQM reporting 
requirement for the Medicare EHR Incentive Program.
    If a CPC practice site fails the requirements established for the 
CPC Initiative, we noted that the EPs who are part of the site would 
have the opportunity to report CQMs per the requirements and deadlines 
established in the EHR Incentive Program Stage 2 final rule for EPs to 
report under the EHR Incentive Program beginning in CY 2014 (77 FR 
54049). We invited and received the following public comments on these 
proposals:
    Comment: Commenters generally supported our proposal to add a group 
reporting option for CQMs for the Medicare EHR Incentive Program 
beginning in CY 2014 for EPs who are part of a CPC practice site that 
successfully submits at least 9 electronically specified CQMs covering 
3 domains. Commenters were also pleased that, should a CPC practice 
site fails the requirements established for the CPC Initiative, EPs in 
the practice site would still have the opportunity to report CQMs per 
the requirements

[[Page 74756]]

established in the EHR Incentive Program Stage 2 final rule for EPs to 
report under the EHR Incentive Program beginning in CY 2014. These 
commenters are pleased that we are proposing to give these EPs another 
mechanism by which they can meet their reporting requirements under the 
EHR Incentive Program if they do not meet those requirements vis-
[agrave]-vis their participation in the CPC Initiative.
    Response: We appreciate the commenters' support for this proposal. 
In consideration of the comments received and for the reasons stated 
previously, we are finalizing a group reporting option for the Medicare 
EHR Incentive Program, beginning in CY 2014 that is aligned with the 
CPC Initiative. Under this option, EPs that successfully report at 
least 9 electronically specified CQMs covering at least 3 domains for 
the relevant reporting period as part of a CPC practice site in 
accordance with the requirements established for the CPC Initiative and 
using CEHRT would satisfy the CQM reporting component of meaningful use 
for the Medicare EHR Incentive Program. EPs reporting under the aligned 
group reporting option can only report on CQMs that were selected for 
the EHR Incentive Program in the Stage 2 final rule. If a CPC practice 
site is not successful in reporting, EPs who are part of the site would 
still have the opportunity to report CQMs in accordance with the 
requirements established for the EHR Incentive Program in the Stage 2 
final rule. Additionally, only those EPs who are beyond their first 
year of demonstrating meaningful use may use this CPC group reporting 
option. Please note that the CPC practice sites must submit the CQM 
data in the form and manner required by the CPC Initiative. Therefore, 
whether the CPC practice site requires electronic submission or 
attestation of CQMs, the CPC practice site must submit the CQM data in 
the form and manner required by the CPC Initiative.
3. Reporting of Electronically Specified Clinical Quality Measures for 
the Medicare EHR Incentive Program
    In the EHR Incentive Program Stage 2 final rule, we finalized the 
CQMs from which EPs would report beginning in CY 2014 under the EHR 
Incentive Program (77 FR 54069, Table 8). These CQMs are electronically 
specified and updated annually to account for issues such as changes in 
billing and diagnosis codes. The requirements specified in the EHR 
Incentive Program Stage 2 final rule for EPs to report under the EHR 
Incentive Program beginning in CY 2014 allow for the reporting of 
different versions of the CQMs. However, it is not technically feasible 
for CMS to accept data that is electronically reported according to the 
specifications of the older versions of the CQMs, including versions 
that may be allowed for reporting under the EHR Incentive Program. We 
stated in the EHR Incentive Program Stage 2 final rule that, consistent 
with section 1848(o)(2)(B)(ii) of the Act, in the event that the 
Secretary does not have the capacity to receive CQM data 
electronically, EPs may continue to report CQM data through attestation 
(77 FR 54076). Therefore, we proposed that EPs who seek to report CQMs 
electronically under the Medicare EHR Incentive Program must use the 
most recent version of the electronic specifications for the CQMs and 
have CEHRT that is tested and certified to the most recent version of 
the electronic specifications for the CQMs. For example, for the 
reporting periods in 2014, EPs who want to report CQM data 
electronically for purposes of satisfying the quality measure reporting 
component of meaningful use would be required to use the June 2013 
version of the CQMs electronic specifications (available at http://www.cms.gov/Regulations-and-Guidance/Legislation/EHRIncentivePrograms/eCQM_Library.html) and ensure that their CEHRT has been tested and 
certified to the June 2013 version of the CQMs for purposes of 
achieving the CQM component of meaningful use in 2014. EPs who do not 
wish to report CQMs electronically using the most recent version of the 
electronic specifications (for example, if their CEHRT has not been 
certified for that particular version) would be allowed to report CQM 
data to CMS by attestation for the Medicare EHR Incentive Program.
    We invited and received public comments on these proposals:
    Comment: Some commenters supported our proposal to allow EPs to 
report on older versions of the CQM electronic specifications to CMS by 
attestation for the Medicare EHR Incentive Program.
    Response: We appreciate the commenters' support for this proposal.
    Comment: Some commenters recommended that, in lieu of requiring 
that all EPs report the most recent version of the electronic 
specifications for the CQMs and attest to older versions of the 
electronic specifications for the CQMs, CMS work with ONC to revise the 
current development and implementation timeline to ensure one set of 
measure specifications for all EPs.
    Response: In the future, we hope to improve our development and 
implementation timelines so that all EPs would report on only one 
version of the CQMs. Unfortunately, at this time, it is not technically 
feasible for CMS to modify our development and implementation timelines 
to achieve this goal in 2014.
    Comment: One commenter opposed our proposal to require EPs who seek 
to report CQMs electronically under the Medicare EHR Incentive Program 
to use the most recent version of the electronic specifications for the 
CQMs and have CEHRT that is tested and certified to the most recent 
version of the electronic specifications for the CQMs, as it creates 
unnecessary burden on EHR vendors.
    Response: We appreciate the commenter's response. We respectfully 
disagree with the commenter's opposition to require EPs who seek to 
report CQMs electronically under the Medicare EHR Incentive Program to 
use the most recent version of the electronic specifications for the 
CQMs and have CEHRT that is tested and certified to the most recent 
version of the electronic specifications for the CQMs. We believe it is 
important for EPs to electronically report the most recent versions of 
the electronic specifications for the CQMs as updated measure versions 
correct minor inaccuracies found in prior measure versions. To ensure 
that CEHRT products can successfully transmit CQM data using the most 
recent version of the electronic specifications for the CQMs, it is 
important that the product be tested and certified to the most recent 
version of the electronic specifications for the CQMs. As noted in the 
proposed rule, at this time, it is not technically feasible for CMS to 
accept more than one version of the electronic measure specifications 
for the CQMs. For these reasons, except for the measure CMS140v2, 
Breast Cancer Hormonal Therapy for Stage IC-IIIC Estrogen Receptor/
Progesterone Receptor (ER/PR) Positive Breast Cancer (NQF 0387), we are 
not accepting older versions of the electronic specifications for the 
CQMs.
    Comment: The majority of commenters supported our proposal to 
require EPs who seek to report CQMs electronically under the Medicare 
EHR Incentive Program to use the most recent version of the electronic 
specifications for the CQMs and have CEHRT that is tested and certified 
to the most recent version of the electronic specifications for the 
CQMs. Some commenters had concerns regarding whether there would be 
sufficient time for EHR technology developers to update their systems 
and timely distribute the updated CQM versions in a way that would 
enable EPs to report

[[Page 74757]]

on the updated versions. A commenter stated that the 6-month release in 
June for implementation for reporting in the EHR Incentive Program 
beginning in January 1, 2014 may not provide enough time for CEHRT 
systems to be updated. Therefore, the commenter requested that any 
updates made to measure specifications be minimal. Any major changes to 
the measure itself, the measure logic, or the value sets would require 
additional time to address all necessary steps in the implementation 
process, and should be avoided.
    Response: We understand the commenter's concerns regarding the 
implementation timeline. We agree that any changes to the electronic 
specifications for the CQMs should be non-substantive. Indeed, please 
note that, as we noted in the EHR Incentive Program Stage 2 final rule, 
any substantive changes that will be made to the CQM electronic measure 
specifications will be non-substantive (77 FR 54055-54056).
    Therefore, after consideration of the comments received and for the 
reasons stated previously, we are finalizing the following proposal: 
EPs who seek to report CQMs electronically under the Medicare EHR 
Incentive Program must use the most recent version of the electronic 
specifications for the CQMs and have CEHRT that is tested and certified 
to the most recent version of the electronic specifications for the 
CQMs.
    We are also finalizing the policy that EPs who do not wish to 
report CQMs electronically using the most recent version of the 
electronic specifications (for example, if their CEHRT has not been 
certified for that particular version) will be allowed to report CQM 
data to CMS by attestation for the Medicare EHR Incentive Program. For 
further explanation of reporting CQMs by attestation, we refer readers 
to the EHR Incentive Program Stage 1 final rule (77 FR 44430 through 
44434) and the EHR Incentive Program's Registration and Attestation 
page (available at https://ehrincentives.cms.gov/hitech/login.action). 
Please note that for attestation we are not requiring that products 
reporting on older versions of the electronic specifications for the 
CQMs have CEHRT that is tested and certified to the most recent version 
of the electronic specifications for the CQMs. Rather, if attesting to 
older versions of the electronic specifications for the CQMs, it is 
sufficient that the product is CEHRT certified to the 2014 Edition 
certification criteria.
    For the reporting periods in 2014, EPs who want to report CQM data 
electronically (through a qualified clinical data registry or other 
product that is CEHRT) to satisfy the quality measure reporting 
component of meaningful use must use the June 2013 version of the CQMs 
electronic specifications (available at http://www.cms.gov/Regulations-and-Guidance/Legislation/EHRIncentivePrograms/eCQM_Library.html). CQM 
data must be submitted using either the QRDA-I or QRDA-III format as 
finalized in the Stage 2 final rule (77 FR 54076). In addition, EPs 
must ensure that their CEHRT has been tested and certified to the June 
2013 version of the CQMs for purposes of achieving the CQM component of 
meaningful use in 2014. Please note that, for 2014 only, we are 
providing one exception to this rule for the measure CMS140v2, Breast 
Cancer Hormonal Therapy for Stage IC-IIIC Estrogen Receptor/
Progesterone Receptor (ER/PR) Positive Breast Cancer (NQF 0387) because 
an error was found in the June 2013 logic of this measure. The June 
2013 version of this measure was posted on CMS's Web site on June 29, 
2013. The error relates to the relative timing of the diagnosis of 
breast cancer and the diagnosis of ER or PR positive breast cancer. In 
clinical practice, a diagnosis of breast cancer should precede the more 
specific diagnosis of ER or PR positive breast cancer. The logic in 
CMS140v2 reverses this order. The expected impact of this error is that 
very few but most likely no patients will meet the denominator 
criteria. Therefore, if EPs want to report this measure electronically, 
we are requiring that EPs report on the measure CMS140v1, which is the 
prior, December 2012 version of the measure CMS140v2, Breast Cancer 
Hormonal Therapy for Stage IC-IIIC Estrogen Receptor/Progesterone 
Receptor (ER/PR) Positive Breast Cancer (NQF 0387). To the extent that 
an EP reports another version of this measure other than CMS140v1, (for 
example, if their certified EHR technology includes the other version), 
we require EPs to report the other version by attestation. Should an EP 
report on CMS140v2, the June 2013 version of the measure titled Breast 
Cancer Hormonal Therapy for Stage IC-IIIC Estrogen Receptor/
Progesterone Receptor (ER/PR) Positive Breast Cancer (NQF 0387), the EP 
must report this June 2013 version of the measure by attestation.
4. Reporting Periods in CY 2014
    In the Stage 2 final rule, we established the EHR reporting periods 
in CY 2014 for EPs that have previously demonstrated meaningful use (77 
FR 53975). Specifically, we finalized a three-month CY quarter EHR 
reporting period for 2014, which means that Medicare EPs will attest 
using an EHR reporting period of January 1, 2014 through March 31, 
2014; April 1, 2014 through June 30, 2014; July 1, 2014 through 
September 30, 2014; or October 1, 2014 through December 31, 2014. We 
also established the reporting periods for CQMs in CY 2014, which are 
generally the same as the EHR reporting period (77 FR 54049-54051). 
Although we did not propose to change these established reporting 
periods, we understand that there may be instances where an EP may 
prefer to report CQM data for a certain quarter and report the 
meaningful use objectives and measures for a different quarter. For 
example, a technical problem could arise for a submission of CQM data 
that would not affect an EP's submission of meaningful use functional 
measures, or vice versa. To provide additional flexibility for EPs, we 
will accept reporting periods of different quarters for CQMs and for 
meaningful use functional measures, as long as the quarters are within 
CY 2014. We note that if an EP chooses to use a reporting option for 
the Medicare EHR Incentive Program that aligns with another CMS quality 
reporting program, the EP should be mindful of the reporting period 
required by that program if the EP seeks to meet the quality measure 
reporting requirements for both the Medicare EHR Incentive Program and 
the aligned quality reporting program.

J. Medicare Shared Savings Program

    Under section 1899 of the Act, CMS has established the Medicare 
Shared Savings Program (Shared Savings Program) to facilitate 
coordination and cooperation among providers to improve the quality of 
care for Medicare Fee-For-Service (FFS) beneficiaries and reduce the 
rate of growth in healthcare costs. Eligible groups of providers and 
suppliers, including physicians, hospitals, and other healthcare 
providers, may participate in the Shared Savings Program by forming or 
participating in an Accountable Care Organization (ACO). The final rule 
implementing the Shared Savings Program appeared in the November 2, 
2011 Federal Register (Medicare Shared Savings Program: Accountable 
Care Organizations Final Rule (76 FR 67802)).
    ACOs are required to completely and accurately report on all 
quality performance measures for all quality measurement reporting 
periods in each performance year of their agreement period. There are 
currently 33 quality performance measures under the Shared

[[Page 74758]]

Savings Program. For Shared Savings Program ACOs beginning their 
agreement period in April or July, 2012, there will be two reporting 
periods in the first performance year, corresponding to calendar years 
2012 and 2013. For ACOs beginning their agreement periods in 2013 or 
later, both the performance year and reporting period will correspond 
to the calendar year. Reporting on measures associated with a reporting 
period will generally be done in the spring of the following calendar 
year. For example, an ACO will submit quality measures for the 2015 
reporting period in early 2016.
1. Medicare Shared Savings Program and Physician Quality Reporting 
System Payment Adjustment
    Section 1899(b)(3)(D) of the Act affords the Secretary discretion 
to ``. . . incorporate reporting requirements and incentive payments 
related to the physician quality reporting initiative (PQRI), under 
section 1848, including such requirements and such payments related to 
electronic prescribing, electronic health records, and other similar 
initiatives under section 1848 . . .'' and permits the Secretary to 
``use alternative criteria than would otherwise apply [under section 
1848 of the Act] for determining whether to make such payments.'' Under 
this authority, we incorporated certain Physician Quality Reporting 
System (PQRS) reporting requirements and incentive payments into the 
Shared Savings Program, including: (1) the 22 GPRO quality measures 
identified in Table 1 of the final rule (76 FR 67889 through 67890); 
(2) reporting via the GPRO web interface; (3) criteria for satisfactory 
reporting; and (4) set January 1 through December 31 as the reporting 
period. The regulation governing the incorporation of PQRS incentives 
and reporting requirements under the Shared Savings Program is set 
forth at Sec.  425.504.
    Under section 1848(a)(8) of the Act, a payment adjustment will 
apply under the PQRS beginning in 2015 based on quality reporting 
during the applicable reporting period. Eligible professionals who do 
not satisfactorily report quality data in 2013 will be subject to a 
downward payment adjustment applied to the PFS amount for covered 
professional services furnished by the eligible professional during 
2015. For eligible professionals subject to the 2015 PQRS payment 
adjustment, the fee schedule amount is equal to 98.5 percent (and 98 
percent for 2016 and each subsequent year) of the fee schedule amount 
that would otherwise apply to such services. To continue to align 
Shared Savings Program requirements with PQRS, for the 2013 reporting 
period (which will be used to determine the 2015 PQRS payment 
adjustment to PFS amounts), in the CY 2013 PFS final rule with comment 
(77 FR 69372), we amended Sec.  425.504 to include the PQRS reporting 
requirements necessary for eligible professionals in an ACO to avoid 
the 2015 PQRS payment adjustment. Specifically, we required ACOs on 
behalf of eligible professionals that are ACO providers/suppliers to 
successfully report one ACO GPRO measure in 2013 to avoid the payment 
adjustment in 2015. We also provided that ACO providers/suppliers that 
are eligible professionals may only participate under their ACO 
participant tax identification number (TIN) as a group practice for 
purposes of avoiding the PQRS payment adjustment in 2015. Thus, ACO 
providers/suppliers who are eligible professionals may not seek to 
avoid the payment adjustment by reporting either as individuals under 
the traditional PQRS or under the traditional PQRS GPRO under their ACO 
participant TIN. We note, however, that eligible professionals may bill 
Medicare under more than one TIN (for example, eligible professionals 
may bill Medicare under a non-ACO participant TIN in one practice 
location and also bill Medicare under the TIN of an ACO participant at 
another practice location). As a result, ACO providers/suppliers who 
are eligible professionals that bill under a non-ACO participant TIN 
during the year could and should participate under the traditional PQRS 
as either individual EPs or a group practice for purposes of avoiding 
the PQRS payment adjustment for the claims billed under the non-ACO 
participant TIN. In fact, such EPs would have to do so to avoid the 
PQRS payment adjustment with respect to those claims because the 
regulation at Sec.  425.504 only applies to claims submitted by ACO 
providers/suppliers that are eligible professionals billing under an 
ACO participant TIN. If eligible professionals within an ACO meet the 
requirements for avoiding the PQRS payment adjustment established under 
the Shared Savings Program, only the claims billed through the TIN of 
the ACO participant will avoid the payment adjustment in 2015.
    For the 2014 reporting period and subsequent reporting periods 
(which would apply to the PQRS payment adjustment for 2016 and 
subsequent payment years), we proposed to align with the requirements 
for reporting under the traditional PQRS GPRO through the CMS web 
interface by amending Sec.  425.504 to require that ACOs on behalf of 
their ACO providers/suppliers who are eligible professionals 
satisfactorily report the 22 ACO GPRO measures during the 2014 and 
subsequent reporting periods to avoid the PQRS payment adjustment for 
2016 and subsequent payment years (78 FR 43482). Additionally, we 
proposed to continue the current requirement that ACO providers/
suppliers who are eligible professionals may only participate under 
their ACO participant TIN for purposes of the payment adjustment in 
2016 and subsequent years.
    As we stated in the proposed rule (78 FR 43482), we believe that 
the proposal to modify the requirements for ACOs to satisfactorily 
report the 22 ACO GPRO measures to avoid the 2016 payment adjustments 
would not increase burden on ACOs or on ACO providers/suppliers that 
are eligible professionals because ACOs must already report these 
measures in order to satisfy the Shared Savings Program quality 
performance standard. Thus, this proposal would not increase the total 
number of measures that must be reported by the ACO and its ACO 
providers/suppliers that are eligible professionals. We also noted that 
these proposals would not affect the Shared Savings Program quality 
performance standard reporting requirement under which ACOs are 
currently required to report on 33 quality performance measures, which 
includes all 22 of the ACO GPRO quality measures.
    Comment: We received several comments in favor of continued 
alignment with PQRS reporting requirements and ongoing efforts to 
harmonize the program. We received no comments against continued 
alignment. One commenter said alignment minimizes the additional 
reporting burden on ACOs and is consistent with ongoing quality 
initiatives. Another commenter said alignment between programs eases 
administrative burden. In addition we received some comments about the 
Pioneer ACO Model's alignment with PQRS that are out of the scope of 
this proposed rule. We have shared these comments with our colleagues 
in the Innovation Center. In addition, two commenters stated that when 
a physician leaves an ACO, the ACO should not be responsible for 
reporting quality measures for that physician.
    Response: We appreciate the comments in support of our proposal, 
and for the reasons discussed above and in the proposed rule, we are 
finalizing our proposal to align with PQRS GPRO

[[Page 74759]]

web interface reporting requirements, finalized elsewhere in this PFS, 
for eligible professionals (EPs) and their participant TINs in ACOs to 
avoid the payment adjustment in 2016 and subsequent years. We are also 
finalizing our proposal to add a new paragraph (c) to the regulation at 
Sec.  425.504 to reflect these reporting requirements for 2016 and 
subsequent years. Although we are finalizing this policy as proposed, 
we have made some technical corrections to the text and formatting of 
Sec.  425.504(c) in order to remove inconsistent language that was 
inadvertently included in this provision as it appeared in the proposed 
rule. With respect to the comments about changes in the ACO 
participants and ACO providers/suppliers and the effect on ACO quality 
reporting, these issues are out of the scope of this rule. We note, 
however, that we have addressed the effect of changes in ACO 
participants on ACO quality reporting in subregulatory guidance 
available at http://www.cms.gov/Medicare/Medicare-Fee-for-Service-Payment/sharedsavingsprogram/Updating-ACO-Participant-List.html. 
Additionally, ACOs are required to report certain measures using the 
GPRO web interface tool. Specifically, Sec.  425.504(a)(1) and (b)(1) 
require that ACOs submit quality measures using the GPRO web interface 
to qualify on behalf of their eligible professionals for the PQRS 
incentive or to avoid the PQRS payment adjustment. This reporting 
mechanism is also referenced in Sec.  425.308(e), which provides that 
quality measures that ACOs report using the GPRO web interface will be 
reported by CMS on the Physician Compare Web site.
    Under Sec.  414.90(h)(3)(i), group practices may report data under 
the traditional PQRS GPRO through a CMS web interface. The Shared 
Savings Program regulations at Sec.  425.504(a)(1) and (b)(1) and Sec.  
425.308(e) specifically reference the use of the GPRO web interface for 
quality reporting purposes. We proposed to amend these regulations to 
replace references to GPRO web interface with CMS web interface. We 
believe this change will ensure consistency with the reporting 
mechanism used under Sec.  414.90(h)(3)(i) and will also allow for the 
flexibility to use a similar web interface in the event that 
operational issues are encountered with the use of the GPRO web 
interface. We invited public comment on this proposal.
    Comment: We did not receive direct comments against broadening our 
reference to the web interface; however, one commenter expressed 
concern that the suggested change signaled that CMS intends to change 
the reporting mechanism and the commenter opposed any change in 
reporting mechanism saying, it took time and resources to learn the 
current reporting mechanism.
    Response: We are finalizing our proposal to use the more broad term 
CMS web interface to align with PQRS, and are also finalizing the 
proposed revisions to our regulations at Sec. Sec.  425.308(e) and 
425.504(a)(1) and (b)(1) to reflect this change. We would like to 
reassure Shared Saving Program ACOs that we do not currently have plans 
to change the reporting mechanism for Shared Savings Program ACOs from 
the GPRO web interface. However, broadening the term to ``CMS web 
interface'' aligns with PQRS and gives CMS the flexibility to use an 
alternative web interface in the event that PQRS requirements change or 
operational issues with the GPRO web interface adversely impact ACO 
quality reporting.
    We also received a comment making suggestions about the reporting 
mechanism used under the Pioneer ACO Model. This comment is out of the 
scope of the proposed rule, but we have shared the comment with our 
colleagues in the Innovation Center.
2. Medicare Shared Savings Program-Establishing the Quality Performance 
Benchmark
    Section 1899(b)(3)(C) of the Act directs the Secretary to ``. . . 
establish quality performance standards to assess the quality of care 
furnished by ACOs . . .'' and to ``improve the quality of care 
furnished by ACOs over time by specifying higher standards, new 
measures, or both for purposes of assessing such quality of care.'' In 
the Shared Savings Program final rule, we finalized the following 
requirements with regard to establishing a performance benchmark for 
measures: (1) During the first performance year for an ACO, the quality 
performance standard is set at the level of complete and accurate 
reporting; (2) during subsequent performance years, the quality 
performance standard will be phased in such that ACOs will be assessed 
on their performance on each measure; (3) CMS designates a performance 
benchmark and minimum attainment level for each measure, and 
establishes a point scale for the measures; and (4) contingent upon 
data availability, performance benchmarks are defined by CMS based on 
national Medicare fee-for-service rates, national Medicare Advantage 
(MA) quality measure rates, or a national flat percentage. In the final 
rule, we indicated that we would not compare an ACO's quality 
performance to the performance of other ACOs for purposes of 
determining an ACO's overall quality score. We acknowledged, however, 
that in future program years, we should seek to incorporate actual ACO 
performance on quality measures into the quality benchmarks after 
seeking industry input through rulemaking.
a. Data Sources Used To Establish Performance Benchmarks
    The regulation governing the data that CMS will use to establish 
the performance benchmarks for quality performance measures under the 
Shared Savings Program is set forth at Sec.  425.502(b)(2). This 
provision states that CMS will define the performance benchmarks based 
on national Medicare fee-for-service rates, national MA quality measure 
rates, or a national flat percentage. In the Shared Savings Program 
final rule, we responded to comments suggesting that quality 
performance benchmarks be set based on actual historical data submitted 
by ACOs. We stated that although we agreed that we should seek to 
incorporate actual ACO performance on quality scores into the quality 
benchmark, we would do so only in future rulemaking so that we could 
seek industry input. In addition, we noted that we expected to update 
the quality benchmarks over time, consistent with section 1899(b)(3)(C) 
of the Act, which requires CMS to seek to improve the quality of care 
furnished by ACOs participating in the Shared Savings Program over 
time.
    Consistent with our stated intention to incorporate actual ACO 
experience into quality measure benchmarks, for the 2014 reporting 
period, we proposed to amend Sec.  425.502(b)(2) to permit CMS to use 
all available and applicable national Medicare Advantage and Medicare 
FFS performance data to set the quality performance benchmarks. 
Specifically, in addition to using available national Medicare FFS 
rates, which include data reported through PQRS, and national MA 
quality measure rates, we proposed to use data submitted by Shared 
Savings Program and Pioneer ACOs in 2013 for the 2012 reporting period 
to set the performance benchmarks for the 2014 reporting period. We 
proposed to publish the quality benchmarks based upon these data prior 
to the beginning of the 2014 reporting period through subregulatory 
guidance. As stated in the Shared Savings Program final rule, we 
establish benchmarks using the most currently available data source and 
the most recent available year of benchmark data prior to the start of 
the reporting period. In other words, data collected in 2014

[[Page 74760]]

from the 2013 reporting period would be used in conjunction with other 
available data to set benchmarks for the 2015 reporting period, and so 
on. We proposed to retain the option of using flat percentages when 
data are unavailable, inadequate or unreliable to set quality 
performance benchmarks. Further, we clarified our intent to combine 
data derived from national Medicare Advantage and national Medicare FFS 
to set performance benchmarks when the measure specifications used 
under Medicare Advantage and FFS Medicare are the same. We proposed to 
revise Sec.  425.502(b)(2)(i) to reflect this clarification. We 
solicited comment on these proposals, and whether there are other data 
sources that should be considered in setting performance benchmarks.
    Comment: We received a generally favorable response to 
incorporating ACO data into setting the benchmarks, and a few 
commenters supported using all available data, including ACO data, to 
establish benchmarks; one commenter in favor of using all data stated 
more data are better for setting benchmarks, and including ACO data 
emphasizes that CMS expects all providers to improve quality. However, 
most commenters opposed the proposal to use ACO data alone when no 
other data were available to set benchmarks, stating that they believed 
that when only ACO data were available it would unfairly narrow the 
data set. They stated that ACOs should be assessed against the broader 
FFS population instead of only against themselves. A few commenters 
stated that culture and the socioeconomic status of some patient 
populations could adversely affect scoring for these organizations if 
they were compared only to other ACOs, particularly on the CAHPS 
measures, and that each community and its resources and characteristics 
should be taken into account when establishing benchmarks, including 
rewarding ACOs on the basis of individual improvement. Similarly, other 
commenters felt that using ACO data alone would inflate the benchmarks 
and make them unattainable to new ACOs entering into the program the 
following year. A few commenters suggested that CMS not move to pay for 
performance, but rather continue pay for reporting when there are only 
ACO data available to set the benchmark. One commenter stated ``Among 
[Pioneer] ACOs, some metrics had a wide variation of interpretation 
that resulted in a bimodal distribution. When there is such a bimodal 
distribution, separate benchmarks should be used based on [ACO] 
interpretation [of the measure]--higher benchmarks for wide 
interpretation, lower benchmarks for stricter interpretation. . . . We 
recommend that benchmarks be based only on the subset of data 
consistent with the [ACO] interpretation that was chosen.'' When data 
other than ACO data are available, many commenters were opposed to 
combining it with MA data, stating that the structure of the MA 
program, with closed networks and the opt-in of beneficiaries, enables 
MA plans to attain higher performance scores. Some commenters also 
stated it was not fair to include PQRS GPRO data in developing quality 
performance benchmarks for ACOs because groups reporting under the PQRS 
GPRO are more advanced or integrated organizations that have multiple 
years of experience in collecting and reporting medical record data.
    On the other hand, regarding use of flat percentages, one of the 
commenters said flat percentages should never be used. Another 
commenter suggested that flat percentages should only be used if the 
60th percentile had a value of 70 percent or greater, particularly in 
relation to measures that are clustered. A commenter suggested starting 
with a flat percentage that is lower than actual ACO data, and then 
increasing the benchmark as more data become available in order to 
measure and reward ACO improvement over time.
    Regarding our proposal to set benchmarks yearly based on the 
previous year's ACO reporting, a commenter expressed concern about 
fluctuating benchmarks in the event that CMS finalized its proposal to 
set benchmarks yearly based on the previous year's ACO data submission. 
Commenters noted that such a policy may unfairly disadvantage ACOs 
joining the program, particularly when only ACO data are available to 
set benchmarks.
    Response: We are finalizing our proposal to use fee-for-service 
data, including data submitted by Shared Savings Program and Pioneer 
ACOs to set the performance benchmarks for the 2014 and subsequent 
reporting periods. Although we continue to believe it is appropriate to 
combine data from MA and PQRS reporting when the quality measure 
specifications are the same, or to use MA data when FFS data are 
unavailable, we are swayed by commenters who request that in light of 
the different structure of the MA program, we reconsider using MA data 
to set benchmarks in the early stages of the program. Therefore, we 
will not finalize our proposal to use MA data alone or in combination 
with fee-for-service data in the short-term. We intend to revisit the 
policy of using MA data in future rulemaking when we have more 
experience setting benchmarks for ACOs. However, we are finalizing our 
proposal to combine all available Medicare fee-for-service quality 
data, including data gathered under PQRS (through both the GPRO tool 
and other quality reporting mechanisms). We continue to believe that it 
is appropriate to use PQRS GPRO data to set benchmarks because the 
measure specifications are the same and are submitted by FFS providers. 
We do not agree with commenters who suggested that PQRS GPROs have an 
unfair advantage over other providers because PQRS GPROs range in size 
and capability. Nor do we agree with commenters that recommended 
setting benchmarks that take into consideration ACO interpretation of 
measure specifications. The GPRO web interface and measure 
specifications, as well as education on how to report the measures, are 
equally available to all Medicare enrolled providers, and the measure 
specifications are not subject to ACO interpretation.
    Finally, we recognize the concerns raised by commenters that 
setting benchmarks based on ACO data alone, particularly in the early 
years of the Shared Savings Program, could result in punishing 
relatively high performers for quality measures where performance is 
high among most ACOs. Additionally, we appreciate the suggestions by 
commenters who incorporated our proposed de-clustering methodology on 
when and how to use flat percentages to reward high performance. We are 
finalizing an approach that makes use of a combination of actual data 
and flat percentages; specifically, we will use all available FFS data 
to calculate benchmarks, including ACO data, except where performance 
at the 60th percentile is equal to or greater than 80 percent for 
individual measures, regardless of whether or not the measure is 
clustered. In these cases, a flat percentage will be used to set the 
benchmark for the measure. By way of example, please refer to Table 81. 
This policy allows ACOs with high scores to earn maximum or near 
maximum quality points while allowing room for improvement and 
rewarding that improvement in subsequent years. We chose 80 percent 
because this level of attainment indicates a high level of performance 
and we believe ACOs achieving an 80 percent performance rate should not 
be penalized as low performers.

[[Page 74761]]

                       Table 81--Methodology for Setting Benchmarks Using Flat Percentages
----------------------------------------------------------------------------------------------------------------
                   Percentile                       30th     40th     50th     60th     70th     80th     90th
----------------------------------------------------------------------------------------------------------------
Performance rates using all available FFS data..    85.83    86.21    86.76    87.15    87.65    88.21     89.23
Revised benchmark using flat percentages when       30.00    40.00    50.00    60.00    70.00    80.00     90.00
 the 60th percentile is 80 percent or more......
Quality points earned by the ACO**..............     1.10     1.25     1.40     1.55     1.70     1.85      2.0
----------------------------------------------------------------------------------------------------------------
Example is for illustration purposes only and is not based on actual data.
** Note: Points are double the points shown here for the EHR measure.

    We are also finalizing our proposal to set benchmarks prior to the 
reporting year for which they would apply. Specifically, we are 
finalizing our proposal to set the quality performance benchmarks for 
the 2014 reporting period using data submitted in 2013 for the 2012 
reporting period. We will publish the quality performance benchmarks 
for the 2014 reporting period through subregulatory guidance. However, 
we are not finalizing our proposal to modify the benchmarks on a yearly 
basis. We recognize commenters' concerns that for some measures in the 
first few years, we will only have a limited amount of data which may 
cause benchmarks to fluctuate in early program years, making it 
difficult for ACOs to improve upon their previous year's performance. 
Instead, we will set the benchmarks for the 2014 reporting year in 
advance using data submitted in 2013 for the 2012 reporting year, and 
continue to use those benchmarks for 2 reporting years (specifically, 
the 2014 and 2015 reporting years). We intend to readdress this issue 
in future rulemaking to allow for public comment on the appropriate 
number of years before updating benchmarks going forward. We have 
revised the regulation at Sec.  425.502(b)(2) to reflect these final 
policies with respect to defining the quality benchmarks.
b. Ensuring Meaningful Differences in Performance Rates
    Data collected by CMS from the GPRO and Physician Group Practice 
Demonstration participants in 2012 coupled with previous CMS experience 
indicates that using actual data to calculate quality performance may 
result in some measures' performance rates being tightly clustered. In 
this case, quality scores for the measure may not reflect clinically 
meaningful differences between the performance rates achieved by 
reporters of quality. For example, for some measures, the distribution 
of performance rates may have a spread of less than 2.0 percentage 
points between the 30th and 90th percentiles. In such an instance, even 
though there is little distinction in actual performance rates, a 
slight difference in performance on the measure may result in a 
significant difference in the number of quality points obtained under 
the Shared Savings Program. For example, two separate ACOs at the 50th 
percentile and the 90th percentile may have only a few tenths of a 
percentage point difference in their actual performance, but under the 
Shared Savings Program scoring methodology, the difference between 
their quality scores for that measure would be more noteworthy (1.4 
points versus 2.0 points).
    We continue to believe it is desirable to use performance rates for 
measures based on actual data because doing this creates benchmarks 
that are simple to understand and apply, even if the rates are 
clustered, as the data reflect achievable performance on quality 
measures. However, allowing clustered performance rates for a measure 
may result in payment differences that are not associated with 
clinically meaningful differences in patient care, as noted in the 
example above.
    Keeping these issues in mind, we proposed to develop a methodology 
to spread clustered performance on measures. The first step in 
developing that methodology is to identify when performance on a 
measure is clustered. Clustering could be defined as less than a 
certain spread between performance rates in an identified range; for 
example, less than 6.0 percentage points between the performance rates 
associated with the 30th and 90th percentiles, or less than 10.0 
percentage points between the minimum and maximum values achieved by 
previous reporters of the quality measure. Alternatively, clustering 
could be defined as a spread of performance rates of less than x 
percentage points between any two deciles, for example, less than a 1.0 
percentage point difference between the 60th and 70th decile.
    Once a clustered measure has been identified, the next step is to 
apply a methodology to spread or separate the performance rates within 
the measure. It is important to establish a meaningful performance 
rate, or starting point, around which to differentiate or spread the 
performance. For example, selecting a certain percentile or median 
value may represent one option for establishing a reasonable starting 
point. Once the starting point is set, then we could implement a series 
of fixed percentage point intervals around the starting point in both a 
positive and negative direction to increase the spread, for example, 
applying a fixed 1.0 percentage point interval between scored deciles. 
For example, if the starting point is the 60th percentile, and the 
performance rates at the 60th and 70th percentiles were observed to be 
77.15 and 77.65 respectively, there would be only a 0.5 spread between 
the deciles. In contrast, applying a fixed 1.0 percentage point 
interval to increase spread would result in a 1.0 difference between 
these rates, and the new performance rates would be 77.15 and 78.15 at 
the 60th and 70th percentiles, respectively. In the alternative, we 
could take the spread calculated from a subset (for example, ACO 
performance only) of the underlying performance data if we believe that 
data reported by ACOs show a different variability than other data 
sources. For example, the spread between the measure's percentiles 
could be based on historical ACO distribution only, not the historical 
distribution of Medicare Advantage and/or national fee-for-service, 
PQRS, and ACO data. The historical ACO distribution could then be 
applied to the Medicare Advantage and/or national fee-for-service, 
PQRS, and ACO percentile distribution to establish the measure's 
percentiles.
    In the proposed rule, we stated that we believe that a clinically 
meaningful assessment of ACO quality is important. We also noted that 
we are interested in providing a pathway for ACOs new to quality 
reporting to achieve the quality reporting standard, and an incentive 
for experienced ACOs to continue improving and performing at high 
levels. We therefore proposed to use a standardized method for 
calculating benchmark rates when a measure's performance rates are 
tightly clustered. We proposed that the application of a methodology to 
reduce measure clustering would only apply to quality

[[Page 74762]]

measures whose performance rates are calculated as percentiles, that 
is, the methodology would not apply to measures whose performance rates 
are calculated as ratios, for example, measures such as the two ACO 
Ambulatory Sensitive Conditions Admissions and the All Condition 
Readmission measure. We believe that measures whose performance rates 
are calculated as ratios already demonstrate a high degree of 
clinically meaningful differences because they are risk adjusted to 
reflect the health status of the patient population being measured.
    We proposed to define a tightly clustered measure, including 
clinical process and outcome measures reported through the GPRO web 
interface and CAHPS measures, as one that demonstrates less than a 6.0 
percentage point spread in performance rates between the 30th and 90th 
percentiles. As discussed in the proposed rule, we believe using the 
30th and 90th percentiles as the lower and upper bounds is reasonable 
because these bounds have been given some significance in earlier 
rulemaking; specifically, the Shared Savings Program regulations set 
the ACO's minimum attainment level at the 30th percentile, below which 
the ACO achieves no points, and the ACO achieves full points for 
quality reporting at or above the 90th percentile. Further, we proposed 
to establish the starting point at the 60th percentile, the midpoint 
between the 30th and 90th percentiles, and then to apply a positive 1.0 
fixed percentage point interval for each decile above the 60th 
percentile and a negative 1.0 fixed percentage point interval for each 
decile below the 60th percentile.
    We recognized that spreading tightly clustered performance measures 
would decrease the lower bound necessary to meet the minimum attainment 
level for the measure, giving ACOs new to quality reporting a greater 
opportunity to meet the quality performance standard. At the same time, 
spreading tightly clustered performance rates would increase the upper 
bound necessary for achieving the maximum available quality points for 
the measure, giving already experienced ACOs an incentive to continue 
improving quality. Applying a 1.0 fixed percentage point interval 
achieves the goal of creating meaningful differences in performance. 
Further, we stated that we believe that applying a 1.0 fixed percentage 
point interval represents a tempered and reasonable interval that does 
not spread performance rates to levels that are too easy to achieve on 
the lower bound or too difficult to achieve on the upper bound.
    For example, Table 82 demonstrates the original spread of a quality 
measure, based on all available data, which is compressed from a range 
of 75.83 at the 30th percentile to 79.23 at the 90th percentile, that 
is, a spread of less than 6.0 percentage points. When the proposed 
methodology is applied, the 60th percentile (or 77.15 percent), serving 
as the starting point, remains unchanged. The spread increases 6.0 
percentage points from 74.15 at the 30th percentile to 80.15 at the 
90th percentile. As demonstrated and explained above, this methodology 
improves the distinction in performance between the minimum attainment 
level (30th percentile) and the maximum attainment level (90th 
percentile).

                      Table 82--Proposed Methodology To Reduce Clustered Performance Rates
----------------------------------------------------------------------------------------------------------------
                    Percentile                       30th     40th     50th     60th     70th     80th     90th
----------------------------------------------------------------------------------------------------------------
Original performance rates using all available       75.83    76.21    76.76    77.15    77.65    78.21    79.23
 data............................................
Performance rates using methodology to reduce        74.15    75.15    76.15    77.15    78.15    79.15    80.15
 clustering......................................
----------------------------------------------------------------------------------------------------------------
* Example is for illustration purposes only and is not based on actual data.

    We proposed to amend Sec.  425.502(b) to reflect this methodology 
to reduce clustering. We solicited comment on these proposals. 
Specifically, we sought comment on whether or not a methodology should 
be applied to spread out clustered performance on measures. We also 
solicited comment on the proposal to define clustered performance on a 
measure as one in which the spread of performance rates between the 
30th and 90th percentiles is less than 6.0 percentage points, or 
whether other values should be used to define clustered measure 
performance, for example, when the minimum and maximum reported values 
are spread by less than 10.0 percentage points. We also solicited 
comment on whether there are alternative methodologies that should be 
considered to spread out clustered performance on measures. In 
addition, we solicited comment on whether measures that are calculated 
as ratios should be excluded from this methodology. We also requested 
comment on whether all available relevant data should be considered 
when developing the spread between measures, or whether only the 
relevant performance data from a subset of reporters, such as ACO-
reported data, as discussed above, should be used to determine the 
appropriate spread between deciles.
    Comment: We received many comments against creating a larger spread 
when quality measure benchmarks are clustered. No commenters were in 
favor of spreading benchmarks when they are clustered. Alternatives 
proposed by commenters were to continue pay for reporting when the 
scores are clustered, or to develop a methodology that rewards 
improvement in individual ACO quality scores and to structure points to 
reward ``positive outliers'' when scores are clustered at the lower 
scores. A commenter said, ``While there may not be a significant spread 
for comparison, those entities that do perform at a relatively close 
level of quality performance should be recognized for their actual 
level of performance.'' A commenter suggested considering approaches 
that are not threshold- and benchmark-based, but instead reward every 
single instance when correct care was provided. Another commenter 
suggested using fewer points of differentiation such as quartile scores 
rather than decile scores for clustered measures. A commenter suggested 
CMS adopt a methodology that rewards all the good performing programs 
and further rewards the excellent ``best practices.'' A commenter 
suggested using a flat percentage if the 60th percentile value is above 
an absolute rate of 70 percent as an alternate approach to addressing 
tightly clustered measures.
    Response: We appreciate the comments and suggestions for 
alternatives for addressing tightly clustered measures. We are not 
finalizing the proposal to create a spread when benchmarks are tightly 
clustered. We are convinced by commenters who said that spreading 
benchmarks could create artificial clinically meaningful differences in 
quality reporting and payment, particularly when underlying performance 
relative to peers would remain unchanged. However, we reserve the right 
to revisit this issue in future

[[Page 74763]]

rulemaking when we have more experience and data.
    Instead, we will use the method described above which will take 
into account actual ACO performance on measures by using FFS data 
(including ACO and PQRS reported data) where available to set 
benchmarks except where performance at the 60th percentile is equal to 
or greater than 80 percent, in which case, flat percentages will be 
used to set the benchmark. We chose this threshold for the reasons 
noted above. This method will both reduce clustering for these measures 
and reward ACOs for actual performance. Additionally, as we move toward 
using ACO data to set benchmarks, we will continue to consider how 
clustering of measures intersects with our ability to determine both an 
appropriate minimum standard for a quality measure as well as how the 
overall performance on that measure is scored for the ACO, or whether 
these concepts should be decoupled.
    Finally, in response to comments on alternative explicit ways to 
reward improvement, we note that the Shared Savings Program methodology 
rewards organizations with a greater share of savings for higher 
quality performance in pay for performance years; however, we will 
continue to consider this issue and may address it further in future 
rulemaking.
c. Scoring CAHPS Measures Within the Patient Experience of Care Domain
    The preamble to the Shared Savings Program final rule (76 FR 67895-
67900) outlines the total potential points available per domain as 
demonstrated in Table 83. As indicated in Table 83, under the final 
rule the Patient/Caregiver Experience Domain is weighted equally with 
the other three quality domains at 25 percent and consists of 2 
measures: A composite of six Clinician and Group (CG) CAHPS summary 
survey measures (1) Getting Timely Care, Appointments and Information, 
(2) How Well Your Doctors Communicate, (3) Patient's Rating of Doctor, 
(4) Access to Specialists, (5) Health Promotion and Education, (6) 
Shared Decision Making, and a Health Status/Functional Status measure. 
The six measures included in the composite will transition to pay-for-
performance starting in the second year of an ACO's agreement period. 
In contrast, the Health Status/Functional Status measure will remain 
pay-for-reporting throughout the ACO's entire agreement period.

                 Table 83--Total Points for Each Domain Within the Quality Performance Standard
----------------------------------------------------------------------------------------------------------------
                                             Total                                         Total
                                           individual     Total measures for scoring     potential      Domain
                 Domain                     measures               purposes              points per   weight (in
                                           (table F1)                                      domain      percent)
----------------------------------------------------------------------------------------------------------------
Patient/Caregiver Experience............            7  1 measure, with 6 survey module            4           25
                                                        measures combined, plus 1
                                                        individual measure.
Care Coordination/Patient Safety........            6  6 measures, plus the EHR                  14           25
                                                        measure double-weighted (4
                                                        points).
Preventative Health.....................            8  8 measures.....................           16           25
At Risk Population......................           12  7 measures, including 5                   14           25
                                                        component diabetes composite
                                                        measure and 2 component CAD
                                                        composite measure.
                                         -----------------------------------------------------------------------
    Total...............................           33  23                                        48          100
----------------------------------------------------------------------------------------------------------------
* From Table 4 in the Shared Savings Program Final Rule (76 FR 67899).

    The result of this point system is that performance on the six 
patient experience measures is worth only 12.5 percent of an ACO's 
total performance score because the other 12.5 percent of the Patient/
Caregiver Experience domain is the Health Status/Functional Status 
measure, which is a pay-for-reporting measure for all performance 
years. However, as we stated in the proposed rule, we believe that each 
of these seven measures is equally important within the Patient/
Caregiver Experience domain, and that scoring within the domain should 
better reflect performance on these measures, thereby placing a greater 
emphasis on the voice of the patient through patient-reported outcomes 
and experiences. We believe that increasing the weight of the 6 
measures that will become pay-for-performance in the second year of the 
agreement period will incentivize ACOs to improve their performance on 
these measures. A policy to place a greater emphasis on patient-
reported outcomes and experiences is consistent with our goal to 
improve the quality of care furnished by ACOs over time.
    Therefore, we proposed to modify the point scoring for the Patient/
Caregiver Experience domain as demonstrated in Table 84. As modified, 
each of the 7 survey module measures within the domain would be 
assigned a maximum value of 2 points. The Patient/Caregiver Experience 
domain would then be worth a total of 14 points, rather than 4 points. 
The end result would be that each of the 7 measure modules in the 
domain would have equal weight. We noted that this change would not 
affect the weighting of the domain itself in relationship to the other 
three domains; it would remain 25 percent of the ACO's total quality 
performance score.

             Table 84--Modified Total Points for Each Domain Within the Quality Performance Standard
----------------------------------------------------------------------------------------------------------------
                                             Total                                         Total
                                           individual     Total measures for scoring     potential      Domain
                 Domain                     measures               purposes              points per   weight (in
                                           (table F1)                                      domain      percent)
----------------------------------------------------------------------------------------------------------------
Patient/Caregiver Experience............            7  7 individual survey module                14           25
                                                        measures.
Care Coordination/Patient Safety........            6  6 measures, plus the EHR                  14           25
                                                        measure double-weighted (4
                                                        points).
Preventative Health.....................            8  8 measures.....................           16           25
At Risk Population......................           12  7 measures, including 5                   14           25
                                                        component diabetes composite
                                                        measure and 2 component CAD
                                                        composite measure.
                                         -----------------------------------------------------------------------

[[Page 74764]]

 
    Total...............................           33  28                                        58          100
----------------------------------------------------------------------------------------------------------------

    We stated that we believe giving equal weight to each of the 
Patient/Caregiver Experience measures modules is appropriate because it 
places greater emphasis on patient-reported experiences, promotes 
clinically meaningful differences in ACO performance within the domain, 
and is consistent with the statutory mandate to improve quality of care 
furnished by ACOs over time. The proposed change would also bring the 
total points for the domain in line with the points available in other 
domains.
    We solicited comments on our proposal to modify the point scoring 
within the Patient/Caregiver Experience domain.
    Comment: A majority of comments received were in support of 
reweighting the CAHPS measure modules. Commenters stated that assigning 
each measure module equal weight would be consistent with the patient 
centric goals of the ACO program. We received two comments against 
reweighting before the end of the first ACO agreement period. These 
commenters stated that the weighting should remain as it is to allow 
ACOs to ``cement this capability.'' Finally, a commenter made the 
comment that the CAHPS data is not timely or actionable.
    Response: We appreciate the comments in support of reweighting the 
CAHPS measure module scoring and, for the reasons discussed above and 
in the proposed rule, are finalizing our proposal to assign 2 points to 
each of the 6 CAHPS survey measure modules (12 points) instead of 
scoring them as one component worth only two points. Reweighting will 
take effect for the 2014 reporting period for all Shared Savings 
Program ACOs and will increase the value of the patient experience of 
care domain from 4 points to 14 points and result in the six survey 
measure module in the patient experience of care survey accounting for 
86 percent of the domain score. We note that the overall domain's 
weight would remain the same in relation to the other three domains, 
and therefore do not believe this reweighting will impact an ACO's 
ability to `cement' its capabilities. Finally, we disagree that the 
information gathered from the patient experience of care survey is not 
actionable. The survey results, in conjunction with information derived 
from the ACO's process to promote internal cost and quality reporting, 
as required under the Shared Savings Program regulations, can be used 
by ACOs to identify areas for improvement, monitor care for its patient 
population, and improve, as well as measure the ACO's performance in 
this domain.

K. Value-Based Payment Modifier and Physician Feedback Program

1. Overview
    Section 1848(p) of the Act requires that we establish a value-based 
payment modifier and apply it to specific physicians and groups of 
physicians the Secretary determines appropriate starting January 1, 
2015 and to all physicians and groups of physicians by January 1, 2017. 
On or after January 1, 2017, section 1848(p)(7) of the Act provides the 
Secretary discretion to apply the value-based payment modifier to 
eligible professionals as defined in section 1848(k)(3)(B) of the Act. 
Section 1848(p)(4)(C) of the Act requires the value-based payment 
modifier to be budget neutral.
    In this final rule with comment period, we are finalizing our 
proposed policies to continue to phase in implementation of the value-
based payment modifier by applying it to smaller groups of physicians 
and to increase the amount of payment at risk. We also are finalizing 
our proposals to refine the methodologies used in our quality-tiering 
approach to calculating the value-based payment modifier in order to 
better identify both high and low performers for upward and downward 
payment adjustments. We note two changes from our proposals that we are 
finalizing after considering the public comments we received. First, we 
are adopting a single plurality attribution approach for the Medicare 
Spending per Beneficiary cost measure rather than the proposed multiple 
attribution approach. Second, we are adopting a threshold of 50 percent 
(rather than the proposed 70 percent) for the percentage of individual 
eligible professionals in a group of physicians that must meet the 
criteria to avoid the CY 2016 PQRS payment adjustment in order to 
calculate a group quality score.
2. Governing Principles for Physician Value-Based Payment Modifier 
Implementation
    In the CY 2013 PFS final rule with comment period (77 FR 69306), we 
stated that the value-based payment modifier has the potential to help 
transform Medicare from a passive payer to an active purchaser of 
higher quality, more efficient and more effective healthcare by 
providing upward payment adjustments under the PFS to high performing 
physicians (and groups of physicians) and downward adjustments for low 
performing physicians (and groups of physicians). We also noted that 
Medicare is implementing value-based payment adjustments for other 
types of services, including inpatient hospital services. Further, in 
implementing value-based purchasing initiatives generally, we seek to 
recognize and reward high quality care and quality improvements, and to 
promote more efficient and effective care through the use of evidence-
based measures, the reduction in administrative burden and duplication, 
and less fragmented care.
    In the CY 2013 PFS final rule with comment period, we established 
that the following specific principles should govern the implementation 
of the value-based payment modifier (77 FR 69307).
     A focus on measurement and alignment. Measures for the 
value-based payment modifier should consistently reflect differences in 
performance among physicians and physician groups, reflect the 
diversity of services furnished, and be consistent with the National 
Quality Strategy and other CMS quality initiatives, including the PQRS, 
the Medicare Shared Savings Program, and the Medicare EHR Incentive 
Program.
     A focus on physician choice. Physicians should be able to 
choose the level (individual or group) at which their quality 
performance will be assessed, reflecting physicians' choice over their 
practice configurations. The choice of level should align with the 
requirements of other physician quality reporting programs.
     A focus on shared accountability. The value-based payment 
modifier can facilitate shared accountability by assessing performance 
at the group

[[Page 74765]]

practice level and by focusing on the total costs of care, not just the 
costs of care furnished by an individual physician.
     A focus on actionable information. The Quality and 
Resource Use Reports (QRURs) should provide meaningful and actionable 
information to help groups of physicians and physicians identify 
clinical areas where they are doing well, as well as areas in which 
performance could be improved by providing groups of physicians with 
QRURs on the quality and cost of care they furnish to their patients.
     A focus on a gradual implementation. The value-based 
payment modifier should focus initially on identifying high and low 
performing groups of physicians. Moreover, groups of physicians should 
be able to elect how the value-based payment modifier would apply to 
their payment under the PFS starting in CY 2015. As we gain more 
experience with physician measurement tools and methodologies, we can 
broaden the scope of measures assessed, refine physician peer groups, 
create finer payment distinctions, and provide greater payment 
incentives for high performance.
3. Overview of Existing Policies for the Physician Value-Based Payment 
Modifier
    In the CY 2013 PFS final rule with comment period, we finalized 
policies to phase-in the value-based payment modifier by applying it 
starting January 1, 2015 to payments under the Medicare PFS for 
physicians in groups of 100 or more eligible professionals. A summary 
of the existing policies that we finalized for the CY 2015 value-based 
payment modifier can be found in the proposed rule (78 FR 43486 through 
43488).
4. Provisions of This Final Rule With Comment Period
    We proposed additions and refinements to the existing value-based 
payment modifier policies. Specifically, the proposed rule included the 
following proposals:
     To apply the value-based payment modifier to groups of 
physicians with 10 or more eligible professionals in CY 2016.
     To make quality-tiering mandatory for groups within 
Category 1 for the CY 2016 value-based payment modifier, except that 
groups of physicians with between 10 and 99 eligible professionals 
would be subject only to any upward or neutral adjustment determined 
under the quality-tiering methodology, and groups of physicians with 
100 or more eligible professionals would be subject to upward, neutral, 
or downward adjustments determined under the quality-tiering 
methodology.
     To increase the amount of payment at risk under the value-
based payment modifier from 1.0 percent to 2.0 percent in CY 2016.
     To align the quality measures and quality reporting 
mechanisms for the value-based payment modifier with those available to 
groups of physicians under the PQRS during the CY 2014 performance 
period.
     To include the Medicare Spending Per Beneficiary (MSPB) 
measure in the total per capita costs for all attributed beneficiaries 
domain of the cost composite.
     To refine the cost measure benchmarking methodology to 
account for the specialties of the physicians in the group.
    In this final rule with comment period, we discuss each of the 
proposed policies, the comments received, our responses to the 
comments, and a brief statement of our final policy.
a. Group Size
    In the CY 2013 PFS final rule with comment period, we stated that 
we would gradually phase in the value-based payment modifier in CY 2015 
by first applying it to large groups (77 FR 69308), which we defined as 
groups of physicians with 100 or more eligible professionals. We noted 
our view that it would be reasonable to focus on groups with 100 or 
more eligible professionals before expanding the application of the 
value-based payment modifier to more groups and solo practitioners in 
CY 2016 and beyond.
    To continue our phase-in of the value-based payment modifier, we 
proposed to apply the value-based payment modifier in CY 2016 to groups 
of physicians with 10 or more eligible professionals. We estimated that 
this proposal would apply to approximately 17,000 groups (TINs) and 
nearly 60 percent of physicians under the value-based payment modifier 
in CY 2016. We believed this proposal would continue our policy to 
phase in the value-based payment modifier by ensuring that the majority 
of physicians are covered in CY 2016 before it applies to all 
physicians in CY 2017. Given the results of the statistical reliability 
analyses on the PQRS quality measures and the cost measures contained 
in the 2010 and 2011 groups and individual QRURs (78 FR 43500 through 
43502), we stated that we believed we can reliably apply a value-based 
payment modifier to groups of physicians with 10 or more eligible 
professionals in CY 2016 and to smaller groups and to solo 
practitioners in future years. Accordingly, we proposed to revise the 
regulations at Sec.  414.1210 to reflect that the CY 2016 value-based 
payment modifier would be applicable to physicians that are in groups 
with 10 or more eligible professionals. We solicited comments on this 
proposal.
    The following is a summary of the comments we received regarding 
this proposal.
    Comment: Several commenters supported our proposal to apply the 
value-based payment modifier to groups of 10 or more eligible 
professionals in 2016. Some commenters indicated that the proposed 
phased approach for increasing the number of physicians to which the 
value-based payment modifier applies was appropriate since the statute 
requires that the value-based payment modifier apply to all physicians 
in 2017.
    Many commenters were opposed to our proposed policy. Some of these 
commenters stated that broadening the implementation of the value-based 
payment modifier to groups of 10 or more eligible professionals so 
quickly is premature because CMS did not have the opportunity to assess 
the impact on smaller groups, while others stated that implementation 
of the value-based payment modifier should be delayed until CMS can 
assure the accuracy and consistency of performance scoring. Some 
commenters were concerned about whether the groups that are currently 
subject to the value-based payment modifier have enough Medicare 
patients to ensure that cost and quality variation is truly measuring 
differences in performance rather than random risks. Commenters also 
noted that more than 10,500 groups will be 8 or 9 months into their 
first performance year before they see one of the confidential QRURs 
that are the key to CMS' value-based payment modifier outreach and 
education campaign. Other commenters suggested that there were too few 
subspecialist measures in the PQRS and that it would mean that small to 
mid-size groups would not have sufficient measures to be successful in 
the PQRS. Other commenters stated that groups of physicians with 
between 10 and 24 EPs would not have a QRUR until the summer of 2014 
and thus should not be subject to the value-based payment modifier. 
Some commenters indicated that the value-based payment modifier is yet 
another regulatory burden as they transition to ICD-10. Still other 
comments objected to the entire concept of the value-based payment 
modifier and urged us not to implement it. Several commenters suggested 
that we apply the value-based payment modifier to groups of 25 or more 
eligible

[[Page 74766]]

professionals or to groups of 50 or more eligible professionals.
    Response: Our focus as we gradually implement the value-based 
payment modifier is to increase quality measurement, because without 
measurement we do not believe that we can have consistent and sustained 
quality of care improvements for Medicare FFS beneficiaries. 
Furthermore, our approach to apply the value-based payment modifier to 
groups of 10 or more EPs is consistent with our principle to focus on a 
gradual implementation of the value-based payment modifier. Therefore, 
we disagree with commenters' suggestions that we not finalize our 
proposal to apply the value-based payment modifier to groups of 10 or 
more EPs, or that we instead apply the value-based payment modifier to 
groups of 25 or more EPs or 50 or more EPs, because this would delay 
improving quality of care furnished by groups of 10 or more EPs to FFS 
beneficiaries. We also continue to believe that we can validly and 
reliably apply a value-based payment modifier to groups of physicians 
with 10 or more eligible professionals in CY 2016 because we will be 
basing the quality score on the measures selected, and reported on, by 
the group of physicians or the individual EPs in the group. In 
addition, as discussed below, we are including an additional cost 
measure in the value-based payment modifier (the Medicare Spending per 
Beneficiary measure) and are adjusting our cost comparison approach to 
consider the medical specialty composition of the group of physicians.
    Moreover, based on an analysis of our CY 2012 QRURs that we made 
available to groups of 25 or more eligible professionals on September 
16, 2013, the PQRS quality measures and the cost measures used for the 
value-based payment modifier have high average statistical reliability. 
High statistical reliability in this context means we would arrive at 
consistent results under similar conditions. Moreover, these findings 
corroborate the findings from our group and individual CY 2010 and 2011 
QRURs (78 FR 43500 through 43502) that found high reliability among the 
measures used for the value-based payment modifier. We found that the 
PQRS quality measures, even those reported at the individual level, 
were reliable; therefore, we believe that the PQRS quality measures for 
groups of 10 or more EPs will also be reliable. Further, because we use 
a minimum case size of 20 in order for a quality or cost measure to be 
included in the quality of care or cost composites of the value-based 
payment modifier, we believe that the composites will not only be 
valid, but also statistically reliable. Therefore, we disagree with the 
commenters' concerns about the statistical reliability of the PQRS 
quality measure performance rates. Furthermore, we will continue to 
monitor the value-based payment modifier program and continue to 
examine the characteristic of those groups of physicians that could be 
subject to an upward or downward payment adjustment under our quality-
tiering methodology to determine whether our policies create anomalous 
effects in ways that do not reflect consistent differences in 
performance among physicians and physician groups.
    In the CY 2012 QRURs, we attributed, on average, 3007 beneficiaries 
to groups of 25 or more EPs. Moreover, approximately 65 percent of 
primary care services received by attributed beneficiaries were 
rendered by physicians in the group. Therefore, we do not agree with 
commenters' concerns about whether groups subject to the value-based 
payment modifier have enough Medicare patients to ensure that the 
variation in cost and quality is measuring differences in performance 
rather than random risk. And, as noted above, we also use a minimum 
case size of 20 when including quality and cost measures in the quality 
of care and cost composites of the value-based payment modifier.
    Several commenters expressed concern regarding the number of PQRS 
measures applicable to subspecialists and suggested that small to mid-
size groups do not have a sufficient number of measures in the PQRS to 
report. For purposes of the value-based payment modifier, we will use 
the performance on those measures that are reported through the PQRS 
reporting mechanisms adopted for the value-based payment modifier, even 
if fewer than three measures are reported, to calculate a group of 
physicians' quality composite score so long as the group of physicians 
(or at least 50 percent of the EPs in the group, if reporting as 
individuals under the PQRS) meet the criteria to avoid the 2016 PQRS 
payment adjustment. As discussed above in section H.4, we are modifying 
some of the satisfactory critieria for the 2016 PQRS payment adjustment 
that we believe addresses this concern so that such physicians will not 
be adversely affected under the value-based payment modifier.
    In response to the commenters who objected to applying the value-
based payment modifier to groups of 10 or more eligible professionals 
because groups of 10-24 eligible professionals have not seen how they 
would fare under the value-based payment modifier because they will not 
have a QRUR until midway through the CY 2014 performance period, we 
note that in the late summer of 2014, we plan to disseminate QRURs 
based on CY 2013 data to all physicians (that is, TINs of any size). 
These QRURs will contain performance information on the quality and 
cost measures used to score the quality and cost composites of the 
value-based payment modifier and will show how all TINs would fare 
under the value-based payment modifier policies finalized in this final 
rule with comment period. Please note that as discussed in section 
III.K.4.b. below, we are also finalizing our proposed policy to hold 
harmless groups with 10-99 eligible professionals from any downward 
payment adjustments under quality-tiering in CY 2016, thus shielding 
these groups from any downward payment adjustments in 2016.
    Comment: Several commenters recommended that CMS reconsider its 
decision to exclude Accountable Care Organizations (ACOs) from the 
value-based payment modifier. These commenters indicated that ACOs 
should have the opportunity to be rewarded for their practice to the 
extent these groups provide high quality and, low cost care. Commenters 
recommended that ACOs be permitted to optionally participate in the 
value-based payment modifier or that CMS should provide a plan for 
addressing how innovators participating in the Medicare ACO programs 
will be affected by the value-based payment modifier.
    Response: We finalized in the CY 2013 PFS final rule with comment 
period (77 FR 69313) that we will not apply the value-based payment 
modifier in CY 2015 and CY 2016 to groups of physicians that are 
participating in the Medicare Shared Savings Program Accountable Care 
Organizations (ACOs), the testing of the Pioneer ACO model, the 
Comprehensive Primary Care Initiative, or other similar Innovation 
Center or CMS initiatives. From an operational perspective, we will 
apply this policy to any group of physicians that otherwise would be 
subject to the value-based payment modifier, if one or more 
physician(s) in the group participate(s) in one of these programs or 
initiatives during the relevant performance period (CY 2013 for the CY 
2015 value-based payment modifier, and CY 2014 for the CY 2016 value-
based payment modifier). We will take these comments into consideration 
as we develop proposals for the value-

[[Page 74767]]

based payment modifier and ACOs in future years.
    After consideration of the comments received and for the reasons 
stated previously, we are finalizing that the value-based payment 
modifier will apply to groups of physicians with 10 or more eligible 
professionals in CY 2016.
    We proposed to identify groups of physicians that would be subject 
to the value-based payment modifier (for example, for CY 2016, groups 
of physicians with 10 or more eligible professionals) using the same 
procedures that we finalized in the CY 2013 PFS final rule with comment 
period (for a description of those procedures, we refer readers to 77 
FR 69309 through 69310). Rather than querying Medicare's PECOS data 
base as of October 15 or another date certain, however, we proposed to 
perform the query within 10 days of the close of the PQRS group self-
nomination/registration process during the relevant performance period 
year. We proposed to revise the regulations at Sec.  414.1210(c) to 
reflect that identification of the groups of physicians subject to the 
value-based payment modifier is based on a query of PECOS at the close 
of the PQRS registration period and that groups of physicians are 
removed from this list if, based on a claims analysis, the group of 
physicians did not have the required number of eligible professionals, 
as defined in Sec.  414.1210(a), that submitted claims during the 
performance period for the applicable calendar year payment adjustment 
period. We solicited comment on this proposal.
    We did not receive any comments on this proposal; therefore, we are 
finalizing this proposal without modification.
b. Approach To Setting the Value-Based Payment Modifier Adjustment 
Based on PQRS Participation
    In the CY 2013 PFS final rule with comment period (77 FR 69311), we 
adopted a policy to categorize groups of physicians subject to the 
value-based payment modifier in CY 2015 based on a group's 
participation in the PQRS. Specifically, we categorize groups of 
physicians eligible for the CY 2015 value-based payment modifier into 
two categories. Category 1 includes groups that either (a) self-
nominate for the PQRS as a group and report at least one measure or (b) 
elect the PQRS Administrative Claims option as a group for CY 2013. 
Groups of physicians in Category 1 may elect to have their value-based 
payment modifier for CY 2015 calculated using the quality-tiering 
methodology, which could result in an upward, neutral, or downward 
adjustment amount. The value-based payment modifier for groups of 
physicians in Category 1 that do not elect quality tiering is 0.0 
percent, meaning that physicians in these groups will not receive a 
payment adjustment under the value-based payment modifier for CY 2015. 
Category 2 includes groups of physicians that do not fall within 
Category 1. For those groups of physicians in Category 2, the value-
based payment modifier for CY 2015 is -1.0 percent.
    We proposed to use a similar two-category approach for the CY 2016 
value-based payment modifier based on a group of physicians' 
participation in the PQRS but with different criteria for inclusion in 
Category 1 (78 FR 43489 through 43490). Category 2 would include those 
groups of physicians that are subject to the CY 2016 value-based 
payment modifier and do not fall within Category 1. Our proposal was 
intended to accommodate the various ways in which physicians can 
participate in the PQRS in CY 2014--either as a group practice 
participating in the PQRS GPRO or individually. We established in the 
CY 2013 PFS final rule with comment period that groups of physicians 
that wish to participate as a group in the PQRS during CY 2014 must 
self-nominate and select one of three PQRS GPRO reporting mechanisms: 
GPRO web interface, qualified registry, or EHR (77 FR 69199-69200 
(Table 93)). We also established the criteria for satisfactory 
reporting of data on PQRS quality measures via the GPRO for the PQRS 
payment adjustment for CY 2016 (77 FR 69200-69202), and we proposed to 
modify these criteria as described in Table 27 of the CY 2014 PFS 
proposed rule (78 FR 43370). In order to maintain alignment with the 
PQRS, for purposes of the CY 2016 value-based payment modifier, we 
proposed that Category 1 would include those groups of physicians that 
meet the criteria for satisfactory reporting of data on PQRS quality 
measures via the GPRO (through use of the web-interface, EHRs, or 
qualified registry reporting mechanisms) for the CY 2016 PQRS payment 
adjustment.
    We explained in the CY 2014 PFS proposed rule (78 FR 43489-43490) 
that not all groups of physicians may want to participate in PQRS as a 
group under the GPRO in CY 2014. These groups of physicians may prefer 
to have all of their eligible professionals continue to report PQRS 
measures as individuals so that physicians and other eligible 
professionals in the group are able to report data on quality measures 
that reflect their own clinical practice. In addition, eligible 
professionals in these groups of physicians may wish to use different 
reporting mechanisms to report data for PQRS, such as the claims-based 
reporting mechanism, EHRs, qualified registries, or the proposed 
qualified clinical data registry reporting mechanism. Therefore, for 
the CY 2016 value-based payment modifier, we proposed to include in 
Category 1 groups of physicians that do not self-nominate to 
participate in the PQRS as a group practice in CY 2014 and that have at 
least 70 percent of the group's eligible professionals meet the 
criteria for satisfactory reporting of data on PQRS quality measures as 
individuals for the CY 2016 PQRS payment adjustment, or in lieu of 
satisfactory reporting, satisfactorily participate in a PQRS-qualified 
clinical data registry for the CY 2016 PQRS payment adjustment. Our 
intention with this proposal was to align the criteria for inclusion in 
Category 1 with the criteria that are established for the CY 2016 PQRS 
payment adjustment.
    We also proposed to revise the regulation text at Sec.  414.1225, 
which was previously specific to the CY 2013 performance period and 
only referred to quality measures reported by groups of physicians 
rather than individual eligible professionals within a group. We 
solicited comment on these proposals. The following is summary of the 
comments we received regarding these proposals.
    Comment: The vast majority of commenters supported our proposal to 
continue to align the value-based payment modifier with the PQRS 
reporting mechanisms and to place groups of physicians into two 
categories for purposes of the value-based payment modifier based upon 
PQRS participation. Several commenters suggested that such alignment 
was essential to reduce physician burden. Other commenters highlighted 
the importance of physicians continuing to have the option to select 
the clinical quality measures via PQRS (and the appropriate reporting 
mechanism) that will be used for the calculation of the value-based 
payment modifier.
    Response: We appreciate commenters' support for our proposals. One 
of the principles governing our implementation of the value-based 
payment modifier is to align program requirements to the extent 
possible. Thus, we expect to continue to align the value-based payment 
modifier with the PQRS program requirements and reporting mechanisms to 
ensure physicians and groups of physicians report data on quality 
measures that reflect their practice. We appreciate

[[Page 74768]]

commenters' support for our continuation of the two category approach 
that we proposed for the CY 2016 value-based payment modifier.
    Comment: Many commenters supported our proposal to include in 
Category 1 groups of physicians that do not participate in the PQRS as 
a group practice in CY 2014 but who have at least 70 percent of the 
group's EPs meet the criteria for satisfactory reporting of data on 
PQRS quality measures as individuals for the CY 2016 PQRS payment 
adjustment, or in lieu of satisfactory reporting, satisfactorily 
participate in a PQRS-qualified clinical data registry for the CY 2016 
payment adjustment. Commenters suggested this proposal is essential for 
those small group practices that do not participate in the PQRS GPRO 
and whose individual EPs have reported via the claims reporting 
mechanism for the past several years. Several commenters, however, 
suggested that we lower the proposed 70 percent threshold to 50 percent 
so that more groups can fall into Category 1 through reporting at the 
individual level. Several commenters supported a lower threshold 
because of (a) the increased reporting thresholds to avoid the 2016 
PQRS payment adjustment, (b) the minimal participation in the PQRS 
GPRO, which would make this option more attractive, (c) lack of 
measures for certain sub-specialists that practice in smaller groups, 
and (d) the transition to ICD-10. One commenter suggested that we 
utilize a tiered approach by setting the threshold at 25 percent in the 
first year, 50 percent in the second year, and 75 percent in the third 
year (and thereafter) in order to allow more groups to be successful in 
reporting under this option.
    Response: We appreciate commenters' support for our proposal to 
provide a way to combine individually reported PQRS measures into a 
group score for purposes of the CY 2016 value-based payment modifier. 
We believe that the value-based payment modifier should recognize the 
diversity of physician practices and the various measures used to 
assess quality of care furnished by these practices.
    We are persuaded, however, by commenters' suggestion to lower the 
70 percent threshold to 50 percent for many of the reasons the 
commenters stated. We expect to propose in future rulemaking to raise 
the 50 percent threshold in order to provide a more comprehensive 
assessment of the quality of care furnished by a group of physicians 
across a richer set of quality dimensions.
    By setting the threshold to 50 percent, we estimate that 76 percent 
of groups of physicians with between 10 and 19 EPs (based on 2011 PQRS 
participation) would meet the 50 percent threshold and 45 percent of 
groups with 100 or more EPs would meet the 50 percent threshold.
    Accordingly, we are finalizing our proposal to align the criteria 
for inclusion in Category 1 with the criteria for the CY 2016 PQRS 
payment adjustment as referenced above in PQRS Tables 48 and 50, which 
show the criteria to avoid the CY 2016 PQRS payment adjustment for 
group practices reporting through the GPRO and individual EPs. For the 
CY 2016 value-based payment modifier, Category 1 will include those 
groups of physicians that meet the criteria for satisfactory reporting 
of data on PQRS quality measures through the GPRO for the CY 2016 PQRS 
payment adjustment. Category 1 will also include those groups of 
physicians that do not register to participate in the PQRS as a group 
practice in CY 2014 and that have at least 50 percent of the group's 
eligible professionals meet the criteria for satisfactory reporting of 
data on PQRS quality measures as individuals for the CY 2016 PQRS 
payment adjustment, or in lieu of satisfactory reporting, 
satisfactorily participate in a PQRS-qualified clinical data registry 
for the CY 2016 PQRS payment adjustment. For a group of physicians that 
is subject to the CY 2016 value-based payment modifier to be included 
in Category 1, the criteria for satisfactory reporting (or the criteria 
for satisfactory participation, in the case of the 50 percent option) 
must be met during the CY 2014 performance period for the PQRS CY 2016 
payment adjustment. Category 2 will include those groups of physicians 
that are subject to the CY 2016 value-based payment modifier and do not 
fall within Category 1. We also are finalizing our proposed revisions 
to the regulation text at Sec.  414.1225, which was previously specific 
to the CY 2013 performance period and only referred to quality measures 
reported by groups of physicians rather than individual eligible 
professionals within a group.
    We proposed to more fully phase-in the quality-tiering methodology 
for calculating the value-based payment modifier for CY 2016 based on 
the number of eligible professionals in the group. We proposed that 
groups in Category 1 would no longer have the option to elect quality 
tiering for the CY 2016 value-based payment modifier (as was the case 
for the CY 2015 value-based payment modifier) and instead would be 
subject to mandatory quality tiering. We proposed to apply the quality-
tiering methodology to all groups in Category 1 for the value-based 
payment modifier for CY 2016, except that groups of physicians with 
between 10 and 99 eligible professionals would be subject only to 
upward or neutral adjustments derived under the quality-tiering 
methodology, while groups of physicians with 100 or more eligible 
professionals would be subject to upward, neutral, or downward 
adjustments derived under the quality-tiering methodology. In other 
words, we proposed that groups of physicians in Category 1 with between 
10 and 99 eligible professionals would be held harmless from any 
downward adjustments derived from the quality-tiering methodology for 
the CY 2016 value-based payment modifier. We stated our belief that 
this proposed approach would reward groups of physicians that provide 
high-quality/low-cost care, reduce program complexity, and more fully 
engage groups of physicians in our plans to implement the value-based 
payment modifier. Accordingly, we proposed to revise the regulations at 
Sec.  414.1270 to reflect the proposal to make the quality-tiering 
methodology mandatory, with the exception noted above, for all groups 
of physicians subject to the value-based payment modifier in CY 2016 
that fall within Category 1. We solicited comment on this proposal.
    Comment: Many commenters opposed this proposal for the following 
reasons: (1) the proposed new PQRS quality reporting mechanisms and 
requirements for 2014 make it difficult for groups (as identified by 
the Taxpayer Identification Number (TIN)) to estimate their quality 
score; (2) the lack of a PQRS aggregate reporting mechanism makes it 
difficult for medical groups that use multiple TINs to bill Medicare to 
report on all of its TINs using one reporting mechanism; (3) groups of 
100 or more do not yet understand how their cost composites would 
change given our proposals to add a new cost measure (MSPB) and to 
change our peer group methodology; (4) groups of 100 or more have not 
yet seen their 2012 Quality and Resource Use Report, (available 
September 16, 2013), and which contains how they would fare under the 
quality-tiering methodology; and (5) not enough time to understand the 
impact of the new beneficiary attribution method used in the reports 
and then to use the patient level data in the 2012 QRURs to improve 
performance before the next performance period (CY 2014).
    Some commenters supported the proposal and suggested that the only 
way to truly drive quality improvements

[[Page 74769]]

in the health care delivery system was to measure performance on 
quality measures and to attach payment consequences to that 
performance. Several commenters urged us to move away from the ``pay 
for reporting'' approach that we had adopted for the value-based 
payment modifier for CY 2015.
    Response: We are not persuaded by commenters' concerns with our 
proposal to require mandatory quality tiering for calculating the 
value-based payment modifier for CY 2016 and exempt groups of 
physicians with between 10 and 99 EPs from any downward adjustments 
derived under the quality-tiering methodology. Based on an analysis of 
the CY 2012 QRURs that we made available to groups of 25 or more 
eligible professionals on September 16, 2013, over 80 percent of 3,876 
groups for which we could compute both a quality and cost composite 
score were classified as average quality and average cost, meaning no 
payment adjustment under the quality-tiering methodology. Slightly over 
8 percent of groups of 25 or more EPs would be classified in tiers that 
would earn an upward adjustment (11 percent of such groups would earn 
an additional bonus for treating high-risk beneficiaries) and slightly 
less than 11 percent of groups of 25 or more EPs would be classified in 
tiers that would involve a downward payment adjustment. Moreover, for 
the 1,236 groups of 100 or more eligible professionals based on 2012 
data, 68 groups would earn an upward adjustments (with 10 groups 
earning the additional bonus for treating high-risk beneficiaries) and 
88 groups would receive a downward adjustment using the quality-tiering 
methodology. These results suggest that our quality-tiering methodology 
identifies a small number of groups of physicians that are outliers--
both high and low performers--in terms of whose payments would be 
affected by the value-based payment modifier, thus limiting any 
widespread unintended consequences. In addition, we are adopting 
policies in this final rule to address certain aspects of our 
previously established methodologies so that beginning in CY 2016 we 
better assess the group of physicians' quality of care furnished or the 
cost of that care. These policies include our refinement of the cost 
composite peer group methodology and the use of PQRS quality data 
reported by individual EPs. As explained above in section III.K.4.a, we 
will continue to monitor the value-based payment modifier program and 
continue to examine the characteristics of those groups of physicians 
that could be subject to an upward or downward payment adjustment under 
our quality-tiering methodology to determine whether our policies 
create anomalous effects in ways that do not reflect consistent 
differences in performance among physicians and physician groups.
    To address commenters' specific concerns about mandatory quality 
tiering, we believe groups of physicians will report data for quality 
measures under PQRS on which they expect their performance would be 
high, regardless of whether it is a new reporting mechanism or the 
reporting requirements may have changed for CY 2014. Thus, we disagree 
with the assertion that groups of physicians must receive a QRUR from 
CMS before they can understand their performance on quality measures on 
which they choose to report data. Notwithstanding this observation, the 
PQRS since 2007 has provided feedback reports to physicians on their 
performance on reported quality measures so that physicians can see how 
they compare against others who report the same measures. We also 
disagree with commenters who suggest that we do not have a quality 
reporting system that allows large health systems that use multiple 
TINs to bill Medicare to use one method. The Medicare Shared Savings 
Program provides a way for large systems (a) to use one reporting 
mechanism that aggregates their multiple TINs into one organization, 
(b) to fulfill their PQRS obligations, and (c) to earn savings for 
furnishing high quality/low cost care.
    Further, on September 16, 2013, we made available to all groups of 
25 or more EPs an annual QRUR based on 2012 data to help groups 
estimate their quality and cost composites, thus groups of 100 ore more 
eligible professionals have had access to their reports. Moreover, 
these reports provide beneficiary specific information, including 
hospitalization information for attributed beneficiaries that enables 
groups of physicians to examine which beneficiaries are driving 
performance on quality outcome measures and the cost measures. We 
intend to provide QRURs to all groups of physicians and solo 
practitioners during the summer of 2014 (based on 2013 performance) 
that include their performance on the MSPB measure and the new peer 
group methodologies. Thus, we believe all groups of 100 or more have, 
or will soon have, the data necessary to begin to improve performance. 
Although we are sensitive to providing groups of physicians with 
adequate lead time to understand the impact of the beneficiary 
attribution method used for the value-baed payment modifier, we believe 
our policy of holding groups of between 10 and 99 EPs harmless from any 
downward payment adjustment would likely mitigate unintended 
consequences that could occur. In addition, the attributed 
beneficiaries in the 2012 QRURs had, on average, at least three primary 
care services furnished by physicians in the group. We believe such 
information could help groups of physicians estimate which 
beneficiaries in their patient population may be attributed to them 
prior to receiving a QRUR that includes data from the relevant 
performance period.
    Comment: Many commenters appreciated the policy to hold harmless 
groups of physicians with between 10 and 99 EPs from any negative 
payment adjustments and supported our proposal. A few commenters 
suggested that applying the value-based payment modifier negative 
payment adjustment only to groups of 100 or more EPs is an unjust 
payment methodology because CMS is not holding smaller group practices 
to the same quality standards as larger group practices. Several 
commenters also suggested that by eliminating the negative payment 
adjustment for small group practices, CMS is decreasing the maximum 
incentive amount a high quality/low cost large group practice could 
receive under the quality-tiering approach.
    Response: We appreciate commenters' support for our proposal. Our 
focus as we implement the value-based payment modifier is to increase 
quality measurement, because without measurement we do not believe that 
we can have consistent and sustained quality of care improvements for 
Medicare FFS beneficiaries. Large groups practices are more likely to 
have the ability and means to track and monitor quality of care and 
resource use whereas many smaller groups are now just developing these 
capabilities. Thus, we believe it is appropriate to hold groups of 
physicians with between 10 and 99 EPs harmless from any downward 
adjustments, which is similar to the policy we are applying to groups 
of 100 or more EPs during the first year the value-based payment 
modifier applies to them (2015). We recognize that until the value-
based payment modifier is fully implemented, with both upside and 
downside adjustment applied to all groups of physicians and solo 
practitioners, we will have disparate impacts and the pool of money 
available for upward adjustments will be reduced. We believe, however, 
this policy is

[[Page 74770]]

consistent with our overall approach to gradually phase in the value-
based payment modifier and reinforces our goal to increase quality 
reporting while not increasing reporting burdens on physicians.
    For these reasons, we are finalizing our proposal that groups of 
physicians in Category 1 will not have the option to elect quality 
tiering for the CY 2016 value-based payment modifier and instead will 
be subject to mandatory quality tiering. We also are finalizing our 
proposal that groups of physicians in Category 1 with between 10 and 99 
eligible professionals will be held harmless from any downward 
adjustments derived from the quality-tiering methodology for the CY 
2016 value-based payment modifier. We are also finalizing the revision 
to the regulations at Sec.  414.1270 to clarify that for the CY 2015 
payment adjustment period a group may be determined under the quality-
tiering methodology to have low performance based on low quality and 
high costs, low quality and average costs, or average quality and high 
costs.
c. Payment Adjustment Amount
    Section 1848(p) of the Act does not specify the amount of payment 
that should be subject to the adjustment for the value-based payment 
modifier; however, section 1848(p)(4)(C) of the Act requires the value-
based payment modifier be implemented in a budget neutral manner. 
Budget neutrality means that payments will increase for some groups of 
physicians based on high performance and decrease for others based on 
low performance, but the aggregate amount of Medicare spending in any 
given year for physicians' services will not change as a result of 
application of the value-based payment modifier.
    In the CY 2013 PFS final rule with comment period, we adopted a 
modest payment reduction of 1.0 percent for groups of physicians in 
Category 1 that elected quality tiering and were classified as low 
quality/high cost and for groups of physicians in Category 2 (77 FR 
69323-24).
    As discussed in the CY 2014 proposed rule (78 FR 43500 through 
43502), we conducted statistical reliability analysis on the PQRS 
quality measures and the cost measures contained in the 2010 and 2011 
group and individual QRURs. These QRURs contained the quality measures 
that were reported under the PQRS and five per capita cost measures 
that we will use for the value-based payment modifier. The quality and 
cost measures in the group QRURs were very statistically reliable. 
Moreover, the average reliability was high for 98 percent of the 
individually reported PQRS measures and for all of the cost measures 
(with a case size of at least 20) included in the individual QRURs. 
Thus, we noted our belief that we can increase the amount of payment at 
risk because we can reliably apply a value-based payment modifier in CY 
2016 to groups of physicians with 10 or more eligible professionals and 
to smaller groups and to solo practitioners in future years. Therefore, 
we proposed to increase the downward adjustment under the value-based 
payment modifier from 1.0 percent in CY 2015 to 2.0 percent for CY 
2016. That is, for CY 2016, a -2.0 percent value-based payment modifier 
would apply to groups of physicians subject to the value-based payment 
modifier that fall in Category 2. In addition, we proposed to increase 
the maximum downward adjustment under the quality-tiering methodology 
to -2.0 percent for groups of physicians classified as low quality/high 
cost and to set the adjustment to -1.0 percent for groups classified as 
either low quality/average cost or average quality/high cost. We 
proposed to revise Sec.  414.1270 and Sec.  414.1275(c) and (d) to 
reflect the proposed increase to a 2.0 percent adjustment under the 
value-based payment modifier for the CY 2016 payment adjustment period. 
We also made a technical correction to Sec.  414.1275(c) to clarify the 
PQRS GPRO reporting mechanisms available in CY 2013. Table 85 shows the 
proposed quality-tiering payment adjustment amounts for CY 2016 (based 
on CY 2014 performance).

           Table 85--2016 Value-Based Payment Modifier Amounts
------------------------------------------------------------------------
                                 CY 2016
-------------------------------------------------------------------------
                                                  Average        High
           Cost/Quality            Low quality    quality      quality
------------------------------------------------------------------------
Low cost.........................        +0.0%       +1.0x*       +2.0x*
Average cost.....................        -1.0%        +0.0%       +1.0x*
High cost........................        -2.0%        -1.0%        +0.0%
------------------------------------------------------------------------
* Groups of physicians eligible for an additional +1.0x if reporting
  Physician Quality Reporting System quality measures and average
  beneficiary risk score is in the top 25 percent of all beneficiary
  risk scores.

    Consistent with the policy adopted in the CY 2013 PFS final rule 
with comment period, the upward payment adjustment factor (``x'') would 
be determined after the performance period has ended based on the 
aggregate amount of downward payment adjustments. We noted that any 
funds derived from the application of the downward adjustments to 
groups of physicians with 100 or more eligible professionals and the 
downward 2.0 percent adjustment applied to those groups of physicians 
subject to the value-based payment modifier that fall in Category 2, 
would be available to all groups of physicians eligible for value-based 
payment modifier upward payment adjustments. The quality-tiering 
methodology would continue to provide an additional upward payment 
adjustment of +1.0x to groups of physicians that care for high-risk 
beneficiaries (as evidenced by the average HCC risk score of the 
attributed beneficiary population). We solicited comments on our 
proposal to increase the downward value-based payment modifier to 2.0 
percent for those groups of physicians with 10 or more eligible 
professionals that are in Category 2 and for groups of physicians with 
100 or more eligible professionals that are classified as low quality/
high cost groups for the CY 2016 payment adjustment period.
    The following is summary of the comments we received regarding this 
proposal.
    Comment: A number of commenters supported our proposal to increase 
the amount of payment at risk under the value-based payment modifier in 
CY 2016. Some commenters stated that the payment adjustment must be of 
significant weight in order to drive physician behavior toward 
achieving high quality and low cost care. A few commenters suggested 
that the value-based payment modifier should represent a larger 
percentage of

[[Page 74771]]

physician payments under the PFS and stated that the amount of the 
payment differential should be closer to 10.0 percent, increased 
incrementally from 2.0 percent and subject to annual review.
    Many commenters, however, were opposed to our proposed policy. 
Several commenters suggested that CMS should not increase the amount of 
payment at risk under the value-based payment modifier in CY 2016 and 
recommended keeping the amounts at the CY 2015 levels. A few commenters 
urged CMS to delay increasing the maximum downward adjustment under the 
program until at least CY 2017 to allow CMS to gain experience with 
applying the value-based payment modifier to a broader variety of 
groups, and to allow physician groups to increase their understanding 
of their performance under quality-tiering. Some commenters suggested 
keeping the downward adjustments for groups subject to the value-based 
payment modifier at -1.0 percent during the first year and then 
increasing it to -2.0 percent during the second year. Some commenters 
indicated that groups that report data and choose to elect quality-
tiering should not be at the same risk as groups that did not report at 
all. Some commenters also indicated that a large number of physicians 
could see both a two percent PQRS and a two percent value-based payment 
modifier adjustment in 2016, and when added to a potential two percent 
sequester reduction, and possibly another two percent EHR adjustment, 
this could push some older physicians to retire or close their 
practices to Medicare patients. One commenter indicated that it does 
not agree that the size of PQRS and value-based payment modifier 
adjustments is the driving factor in physicians' decisions on whether 
to participate in these incentive programs.
    Response: We agree with the commenters who stated that the amount 
of payment at risk should be higher than the 1.0 percent amount of 
payment at risk in 2015 in order to incentivize physicians to provide 
high quality and low cost care. Our experience under PQRS has shown us 
that a 1.0 or 2.0 percent incentive payment was insufficient to obtain 
widespread participation in the PQRS, thus, we believe that we need to 
increase the amount of payment at risk for the CY 2016 value-based 
payment modifier in order to incentivize physicians and groups of 
physicians to report PQRS data, which will be used to calculate the 
value-based payment modifier. Therefore, we are finalizing our proposal 
to increase the maximum downward adjustment for the CY 2016 value-based 
payment modifier to 2.0 percent for those groups of physicians with 10 
or more eligible professionals that are in Category 2 and for groups of 
physicians with 100 or more eligible professionals that are in Category 
1 and are classified as low quality/high cost groups. We also believe 
that our final policy, as described above in section III.K.4.b, to 
calculate for a group of physicians the performance on PQRS quality 
measures reported by individual eligible professionals in the group 
will enable more groups to fall under Category 1 and avoid Category 2's 
automatic -2.0 percent payment adjustment. Even though several 
commenters suggested that we increase incrementally the amount of 
payment at risk to 10 percent, we believe that it is premature in this 
final rule with comment period to lay out the roadmap for future years 
as suggested by these commenters.
    After consideration of the comments received and for the reasons 
stated previously, we are finalizing our proposed policies as described 
above.
d. Performance Period
    In the CY 2013 PFS final rule with comment period (77 FR 69314), we 
adopted a policy that performance on quality and cost measures in CY 
2014 will be used to calculate the value-based payment modifier that is 
applied to items and services for which payment is made under the PFS 
during CY 2016. We received comments in response to the CY 2013 PFS 
proposed rule requesting that we close the gap between the end of the 
performance period (for example, December 31, 2014) and the beginning 
of the payment adjustment period (for example, January 1, 2016), in 
order to strengthen the connection between the performance of 
physicians and groups of physicians and the financial incentives for 
quality improvement.\3\ We understand that many private sector plans 
start to provide payment adjustment within 7 months of close of the 
performance period.\4\
---------------------------------------------------------------------------

    \3\ See, e.g., Comment of the American College of Surgeons 
comment on the CY 2013 PFS proposed rule (Aug. 31, 2012).
    \4\ US GAO, Medicare Physician Payment: Private-Sector 
Initiatives Can Help Inform CMS Quality and Efficiency Incentive 
Efforts, GAO-13-160 (Dec. 2012), available at http://www.gao.gov/assets/660/651102.pdf.
---------------------------------------------------------------------------

    Since the payment adjustment periods for the value-based payment 
modifier are tied to the PFS, which is updated on an annual calendar 
year basis, options to close the 1-year gap between the close of the 
performance period and the start of the payment adjustment period are 
limited and primarily are centered around altering the start and end 
dates of the performance period. As discussed previously in section 
III.H. of this final rule with comment period, one option could be to 
adjust the performance period for quality data reported through the 
PQRS. In addition, we could calculate the total per capita cost 
measures on an April 1 through March 31 basis, thus closing the gap by 
3 months.
    However, a byproduct of altering the performance periods is that 
the deadline for submitting quality information would have to occur 
promptly at the end of the performance period. In addition, the review 
period during which groups of physicians will be able to review the 
calculation of the value-based payment modifier would be shortened to 
allow the necessary system changes to implement the adjustment by the 
January 1 deadline for implementation of the annual PFS. We solicited 
comment on the potential merits of altering our current performance 
periods.
    We proposed to use CY 2015 as the performance period for the value-
based payment modifier adjustments that will apply during CY 2017. We 
believe it is important to propose the performance period for the 
payment adjustments that will apply in CY 2017, because section 
1848(p)(4)(B)(iii) of the Act requires all physicians and groups of 
physicians to be subject to the value-based payment modifier beginning 
not later than January 1, 2017. Accordingly, we proposed to add a new 
paragraph (c) to Sec.  414.1215 to indicate that the performance period 
is CY 2015 for value-based payment modifier adjustments made in the CY 
2017 payment adjustment period. We solicited comment on this proposal.
    The following is a summary of the comments we received.
    Comment: Many commenters expressed the opinion that shortening the 
gap between the performance year and the adjustment year for the value-
based payment modifier by 3 months does not represent a significant 
improvement. Commenters indicated that CMS should continue to seek ways 
to reduce the current 1-year gap between the close of the performance 
period and the beginning of the payment adjustment period. A number of 
commenters recommended that CMS adjust the performance period for 
quality data reported through PQRS and calculate the total per capita 
cost measures on an April 1 through March 31 basis, thus closing the 
gap by 3 months. Other commenters indicated

[[Page 74772]]

that the increasing use of the new PQRS qualified clinical data 
registry reporting option can provide a window to reduce this gap 
considerably, a rolling 12-month cycle reported on a quarterly basis 
may be most effective for measurements with small sample populations, 
and a longer period of time may be required to show any improvement.
    Response: A majority of the commenters did not support the option 
to adjust the performance period for quality data reported through PQRS 
and calculate the total per capita cost measures on an April 1 through 
March 31 basis and claimed that closing the gap by 3 months would not 
be a significant improvement. Also, there was not sufficient support 
among commenters for reporting PQRS data on a quarterly basis because 
it would be operationally difficult and burdensome on physicians. 
Therefore, we are finalizing a policy to use CY 2015 as the performance 
period for the value-based payment modifier adjustments that will apply 
during CY 2017. In the meantime, we will continue to consider options 
to close the gap between the performance period and the payment 
adjustment period and will continue to provide timely feedback to 
physician groups through the QRURs. One potential mechanism to close 
the gap would be to require quarterly reporting by eligible 
professionals or to truncate the time allowed for reporting after the 
performance period closes; however, we have not received comments from 
physicians and other clinicians supporting these approaches. Moreover, 
we believe it is critical to calculate cost measures using a full 90 
day claims runout so that measures accurately assess the cost of care. 
We encourage stakeholders to share their thoughts and ideas on options 
to close the gap without imposing an undue administrative burden and 
while still allowing for meaningful quality and costs measurement. In 
the meantime, we expect that groups of physicians will become even more 
proficient at the use of EHR technology and establish real-time 
feedback on quality measures so that they have relevant performance 
information that they can act on at the point of care.
e. Quality Measures
    In the CY 2013 PFS final rule with comment period (77 FR 69315), we 
aligned our policies for the value-based payment modifier for CY 2015 
with the PQRS reporting mechanisms available to groups of physicians in 
CY 2013, such that data that a group of physicians submitted for 
quality reporting purposes through any of the PQRS group reporting 
mechanisms in CY 2013 would be used for calculating the quality 
composite under the quality-tiering approach for the value-based 
payment modifier for CY 2015. Moreover, all of the quality measures for 
which groups of physicians are eligible to report under the PQRS in CY 
2013 are used to calculate the group of physicians' value-based payment 
modifier for CY 2015, to the extent the group of physicians submits 
data on such measures. We also established a policy to include three 
additional quality measures (outcome measures) for all groups of 
physicians subject to the value-based payment modifier: (1) a composite 
of rates of potentially preventable hospital admissions for heart 
failure, chronic obstructive pulmonary disease, and diabetes; (2) a 
composite rate of potentially preventable hospital admissions for 
dehydration, urinary tract infections, and bacterial pneumonia, and (3) 
rates of an all-cause hospital readmissions measure (77 FR 69315).
    PQRS Reporting Mechanisms: We noted in the proposed rule that we 
believe it is important to continue to align the value-based payment 
modifier for CY 2016 with the requirements of the PQRS, because quality 
reporting is a necessary component of quality improvement. We also seek 
not to place an undue burden on physicians to report such data. 
Accordingly, for purposes of the value-based payment modifier for CY 
2016, we proposed to include all of the PQRS GPRO reporting mechanisms 
available to group practices for the PQRS reporting periods in CY 2014 
and all of the PQRS reporting mechanisms available to individual 
eligible professionals for the PQRS reporting periods in CY 2014. In 
addition, we proposed that groups of physicians with 25 or more 
eligible professionals would be able to elect to include the patient 
experience of care measures collected through the PQRS CAHPS survey for 
CY 2014 in their value-based payment modifier for CY 2016. These 
reporting mechanisms are described in Tables 24 through 27 of the CY 
2014 PFS proposed rule (78 FR 43367-43370). We also proposed to update 
our regulations at Sec.  414.1220 to reflect this proposal. We noted in 
our proposal that the criteria for satisfactory reporting of data on 
PQRS quality measures for individual eligible professionals via 
qualified registries for the CY 2014 PQRS incentive and CY 2016 PQRS 
payment adjustment permits the use of a 6-month reporting period. We 
stated that we believed that data submitted via qualified registries 
for this 6-month reporting period would be sufficiently reliable on 
which to base a group of physicians' quality composite score under the 
value-based payment modifier because in order for us to use the data to 
calculate the score, we would require data for each quality measure on 
at least 20 beneficiaries, which is the reliability standard for the 
value-based payment modifier (77 FR 69322-69323). Given this level of 
reliability, we believe a 6-month reporting period would be sufficient 
for the purpose of evaluating the quality of care furnished by a group 
of physicians subject to the value-based payment modifier. We solicited 
comment on this proposal. The following is a summary of the comments we 
received on this proposal.
    Comment: The majority of commenters supported our proposal to 
permit groups practices and individual EPs to use all of the PQRS 
reporting mechanisms available to them in CY 2014 for the value-based 
payment modifier, including the use of the PQRS CAHPS survey. 
Commenters indicated that there should be a wide range of reporting 
options available in order to increase participation in the PQRS. 
Others commenters urged us to the retain the PQRS Administrative Claims 
reporting option that we have in place for CY 2013 and to include in 
Category 1 those groups of physicians that elect the Administrative 
Claims option.
    Response: We appreciate the comments received in support of our 
proposal. As discussed previously, one of the principles governing our 
implementation of the value-based payment modifier is that physicians 
should be able to choose the level (individual or group) at which their 
quality performance will be assessed, reflecting physicians' choice 
over their practice configurations. We believe that the various PQRS 
reporting mechanisms--which include both individual and group reporting 
mechanisms allow physicians to choose how best to report quality 
information given their practice configuration. In response to the 
commenters' suggestion that we continue to use the PQRS Administrative 
Claims reporting option for the value-based payment modifier, we 
believe this option does not match our long-term goals to encourage 
reporting by physicians and groups of physicians of quality measures 
that best match their practices. In addition, our analysis of the CY 
2012 QRURs shows that average reliability is substantially higher for 
the PQRS measures reported by physicians and groups of physicians

[[Page 74773]]

than the reliability of many of the 14 Administrative Claims measures.
    Accordingly, we are finalizing our proposal to include for the CY 
2016 value-based payment modifier all of the PQRS GPRO reporting 
mechanisms available to group practices for the PQRS reporting periods 
in CY 2014 and all of the PQRS reporting mechanisms available to 
individual eligible professionals for the PQRS reporting periods in CY 
2014. In addition, we are finalizing our proposal that groups of 
physicians with 25 or more eligible professionals would be able to 
elect to include the patient experience of care measures collected 
through the PQRS CAHPS survey for CY 2014 in their value-based payment 
modifier for CY 2016. We are finalizing the corresponding changes to 
Sec.  414.1220 as proposed.
    PQRS Quality Measures: We also proposed to use all of the quality 
measures that are available to be reported under these various PQRS 
reporting mechanisms, including quality measures reported through 
qualified clinical data registries, to calculate a group of physicians' 
value-based payment modifier in CY 2016 to the extent that a group of 
physicians submits data on these measures. We noted that the three 
outcome measures that we finalized in the CY 2013 PFS final rule with 
comment period and in Sec.  414.1230--the two composites of rates of 
potentially preventable hospital admissions and the all-cause hospital 
readmission measure--would continue to be included in the quality 
measures used for the value-based payment modifier in CY 2016.
    For those groups of physicians subject to the value-based payment 
modifier in CY 2016 whose eligible professionals participate in the 
PQRS as individuals rather than as a group practice under the GRPO 
(that is, groups of physicians that are assessed under the finalized 50 
percent threshold), we proposed to calculate the group's performance 
rate for each measure reported by at least one eligible professional in 
the group of physicians by combining the weighted average of the 
performance rates of those eligible professionals reporting the 
measure. We noted that if all of the eligible professionals in a group 
of physicians subject to the CY 2016 value-based payment modifier 
satisfactorily participate in a PQRS qualified clinical data registry 
in CY 2014 and we are unable to receive quality performance data for 
those eligible professionals, for purposes of the value-based payment 
modifier, we proposed to classify the group's quality composite score 
as ``average'' under the quality-tiering methodology, because we would 
not have data to reliably indicate whether the group should be 
classified as high or low quality under the quality-tiering 
methodology. We also proposed to add a new subsection to our 
regulations at Sec.  414.1270 to reflect our proposals about how to 
assess quality performance for groups assessed under the proposed 70 
percent threshold ((which is being finalized as 50 percent, as 
discussed above). We solicited comment on these proposals.
    The following is a summary of the comments we received regarding 
these proposals.
    Comment: Most commenters supported use of all PQRS measures 
available to groups of physicians and individual physicians and 
eligible professionals for the CY 2014 PQRS reporting periods. The 
commenters appreciated ``CMS' flexibility in allowing performance on 
all PQRS measures to be included in the value-based payment modifier.'' 
Several commenters expressed concern over the lack of measures in the 
PQRS measure set that are appropriate for certain specialties and urged 
that these specialties not be penalized under the value-based payment 
modifier solely based on the limited availability of quality measures 
for those specialties. One commenter, however, suggested that rather 
than straining Medicare's limited resources to implement dozens of 
process measures and shortening reporting times, we should use a small 
number of outcome measures (calculated at the population level within a 
specified geographic area) that are important to taxpayers and 
beneficiaries for the value-based payment modifier.
    We did not receive comments on our proposal to calculate a group's 
performance rate for each measure reported by at least one eligible 
professional in the group of physicians by combining the weighted 
average of the performance rates of those eligible professionals 
reporting the measure. Despite the lack of comments on how we should 
calculate a group score when EPs in the group report PQRS quality 
measures as individuals, commenters cited our proposal to address the 
potential scenario of not receiving data from qualified clinical data 
registries as a ``reasonable way'' to tier groups whose EPs report 
using a PQRS qualified clinical data registry in CY 2014.
    Response: We appreciate commenters' support for our proposals. We 
believe that the PQRS measure set is robust and, as described above, we 
have included new measures to address measure gaps (section III.H.9. 
above). In addition, we have collaborated with the specialty societies 
in order to increase the number of measures available specifically for 
specialists. We appreciate the suggestion to use a small number of 
outcome measures calculated at the population level, and we will 
continue to examine ways to add to the three outcome measures that we 
currently utilize for the value-based payment modifier as we continue 
our implementation of the value-based payment modifier.
    We also note that we expect to receive data in a timely manner for 
EPs who report using qualified clinical data registries (see discussion 
above section III.H). For that reason, it is not absolutely necessary 
that we finalize our proposal to classify as ``average'' under the 
quality-tiering methodology a group of physicians subject to the CY 
2016 value-based payment modifier that falls under Category 1 and whose 
individual EPs satisfactorily participate in a PQRS qualified clinical 
data registry in CY 2014. Nonetheless, out of an abundance of caution, 
we are finalizing the proposal as a precaution to address the scenario 
where in fact we would be unable to receive data in a timely manner for 
a group's EPs.
    Accordingly, we are finalizing our proposal to use all of the 
quality measures that are available to be reported under the various 
PQRS reporting mechanisms to calculate a group of physicians' CY 2016 
value-based payment modifier to the extent that the group (or 
individual EPs in the group, in the case of the 50 percent threshold 
option) submits data on those measures. We also are finalizing our 
proposal for those groups of physicians availing themselves of the ``50 
percent threshold option'' discussed above to calculate the group's 
performance rate for each measure reported by at least one eligible 
professional in the group of physicians by combining the weighted 
average of the performance rates of those eligible professionals 
reporting the measure. In addition, for those groups assessed under the 
``50 percent threshold option,'' we are finalizing our proposal to 
classify a group's quality composite score as ``average'' under the 
quality-tiering methodology, if all of the eligible professionals in 
the group satisfactorily participate in a PQRS qualified clinical data 
registry in CY 2014 and we are unable to receive quality performance 
data for those eligible professionals. We clarify that if some EPs in 
the group report data using a qualified clinical data registry and we 
are unable to obtain the data, but other EPs in the group report data 
using claims, registry, or EHR reporting

[[Page 74774]]

mechanism, we would calculate the group's score based on the reported 
performance data that we obtain through claims, registries, or EHRs. We 
are finalizing our proposed addition to the regulations at Sec.  
414.1270 without modification.
    We noted that when the value-based payment modifier applies to all 
physicians and groups of physicians in CY 2017 based on performance 
during CY 2015, we anticipate continuing our policy to align with the 
PQRS group reporting for all groups of physicians of two or more 
eligible professionals, and we anticipate permitting physicians who are 
solo practitioners to use any of the PQRS reporting mechanisms 
available to them under the PQRS for reporting periods in CY 2015 for 
purposes of the value-based payment modifier in CY 2017. Although we 
did not propose to adopt this policy, we solicited comment on this 
approach to align certain aspects of the CY 2017 value-based payment 
modifier with the quality measures and reporting mechanisms used in the 
PQRS.
    Comment: Commenters supported the approach to align the CY 2017 
value-based payment modifier with the PQRS quality measures and the 
available PQRS reporting mechanisms. The commenters recognize that with 
the PQRS they have a choice of measures that serve as the basis for 
assessment. They also believe that alignment between the PQRS and the 
value-based payment modifier helps to minimize administrative burden to 
physician practices. Commenters encouraged ``CMS to continue in future 
rulemaking cycles to allow physicians the flexibility to choose 
measures that are applicable to their scope of practice.''
    Response: We appreciate the commenters' support for our overall 
approach to the CY 2017 value-based payment modifier. We anticipate 
making proposals in future rulemaking to apply the value-based payment 
modifier to all physicians and groups of physicians in 2017.
f. Inclusion of the Medicare Spending per Beneficiary Measure in the 
Value-Based Payment Modifier Cost Composite
    In the CY 2014 PFS proposed rule, we summarized the five cost 
measures that we previously finalized for the value-based payment 
modifier cost composite and restated our previously expressed belief 
that the value-based payment modifier should incorporate additional 
measures that are consistent with the National Quality Strategy and 
other CMS quality initiatives. As a step toward that goal, beginning 
with the CY 2016 value-based payment modifier, we proposed to expand 
the cost composite to include an additional measure, the Medicare 
Spending per Beneficiary (MSPB) measure (with one modification as 
discussed in the CY 2014 PFS proposed rule) (78 FR 43493 through 94). 
We proposed that the MSPB measure would be added to the total per 
capita costs for all attributed beneficiaries domain of the value-based 
payment modifier. We proposed that the MSPB measure would be equally 
weighted with the other cost measure in that domain--the total per 
capita cost measure. We stated that the rationale for our proposal to 
include the MSPB measure in the total per capita costs for all 
attributed beneficiaries domain, rather than the total per capita costs 
for all attributed beneficiaries with specific conditions domain, was 
that the MSPB measure is similar to the total per capita costs measure.
    In addition, we stated our intent to propose, in future rulemaking, 
to replace the four measures in the total per capita costs for all 
attributed beneficiaries with specific conditions domain with cost 
measures derived from the CMS Episode Grouper and other episode-based 
costs. We solicited comments on these potential changes to the 
condition-specific cost measures as well as on the other elements of 
the cost composite in preparation for the CY 2015 performance period 
affecting payment adjustment year CY 2017.
    In the proposed rule, we provided background on the MSPB measure, 
which we have already finalized for inclusion in the Hospital Inpatient 
Quality Reporting (IQR) and Value-Based Purchasing (VBP) Programs. We 
stated that, when viewed in light of other quality measures, as a part 
of the value-based payment modifier measure set, we believe that 
inclusion of the MSPB measure would enable us to align incentives and 
similarly recognize physician groups involved in the provision of high-
quality care at a lower cost to Medicare.
    Construction of the MSPB measure. In the CY 2014 PFS proposed rule, 
we summarized the construction of the MSPB measure used for the 
Hospital IQR and VBP Programs (78 FR 43494). We stated that the measure 
includes all Medicare Part A and Part B payments during an MSPB episode 
spanning from 3 days prior to an index hospital admission through 30 
days post discharge with certain exclusions. Costs for each episode are 
risk adjusted and the included payments are standardized to remove 
differences attributable to geographic payment adjustments and other 
payment factors. The payment standardization is the same methodology 
used for the existing total per capita cost measures included in the 
value-based payment modifier. We explained that, under the Hospital IQR 
and VBP Programs, the payment-standardized costs for all index 
admissions are summed and divided by the sum of the expected costs from 
the risk adjustment model. This ratio is then multiplied by the 
national average MSPB episode cost to give the hospital's MSPB amount. 
We then divide an individual hospital's MSPB amount by the national 
median MSPB amount to calculate a ratio, which we publicly report on 
Hospital Compare and use to generate a measure score for the Efficiency 
domain under the Hospital VBP Program. We referred readers to the FY 
2012 IPPS/LTCH PPS final rule (76 FR 51618 through 51627) for a 
detailed description of the MSPB measure used in the Hospital IQR and 
VBP Programs and noted that a detailed specification document (entitled 
``MSPB Measure Information Form'') and the payment standardization 
methodology (entitled ``CMS Price Standardization'') can be found in 
the ``Measure Methodology'' section at http://qualitynet.org/dcs/ContentServer?c=Page&pagename=QnetPublic%2FPage%2FQnetTier3&cid=1228772053996.
    We proposed a slightly revised calculation for inclusion of the 
MSPB measure in the value-based payment modifier. We proposed not to 
convert the MSPB amount to a ratio as is done to compute a hospital's 
MSPB measure under the Hospital IQR and VBP Programs, but rather to use 
the MSPB amount as the measure's performance rate. We solicited comment 
on our proposals to include the MSPB measure (as modified per the 
discussion above) in the value-based payment modifier cost composite 
and to add the measure to the total per capita costs for all attributed 
beneficiaries domain. We also proposed to revise the regulations at 
Sec.  414.1235 to include the Medicare Spending per Beneficiary measure 
in the set of cost measures for the value-based payment modifier and 
Sec.  414.1260(b)(1)(i) to include the Medicare Spending per 
Beneficiary measure in the total per capita costs for all attributed 
beneficiaries domain. We received many comments on our proposal to 
include the MSPB measure as a part of the cost composite for the 
Physician Value-Based Payment Modifier beginning with the CY 2014 
performance period and CY 2016 payment adjustment year.
    Comment: Many commenters opposed our proposal to include the MSPB 
measure in the cost composite. While

[[Page 74775]]

several of these acknowledged the importance of promoting efficiency 
for physicians and incentivizing coordination of care and reduction in 
delivery system fragmentation, they expressed reservations regarding 
implementation of the measure for the CY 2014 performance year and the 
CY 2016 value-based payment modifier. The reasons given for the lack of 
support for this measure's addition to the cost composite included: 
lack of experience with this measure as it applies to physicians and 
physician groups, with the suggestion that it first be piloted or 
included in PQRS or Quality and Resources Use Reports (QRURs) before it 
is included in the value-based payment modifier; lack of NQF 
endorsement; perceived lack of physician control over care plan; 
concerns about actionability, that is, whether the information from the 
measure can be used by physician groups to improve performance; or 
perceived lack of measure specification or testing at the physician 
level. One commenter suggested that the measure first be piloted on 
populations with clearly inappropriate spending patterns. One commenter 
questioned the applicability of the measure to physician groups 
practicing in dedicated cancer centers, and two expressed that measure 
variation was not reflective of pathology services. One of these 
commenters suggested that the Hospital VBP Program total performance 
score for the hospital in which a pathologist practices should be used 
in the value-based payment modifier, rather than the MSPB measure rate.
    Response: We agree with the commenters that coordination of care 
and reduction of delivery system fragmentation are important goals and 
inclusion of this measure in the value-based payment modifier is an 
important step toward incentivizing quality improvements. We also agree 
that it is important for physician groups to gain experience with the 
measure. Accordingly, we will begin including information on the MSPB 
measure (that is, performance rate, beneficiary information) in the 
QRURs that will be disseminated to all groups in 2014 based on 2013 
performance (and going forward), before it is included in the CY 2016 
value-based payment modifier that will adjust physician groups' 
payments based on 2014 performance. We also note that during the first 
year the measure is included in the value-based payment modifier, 
groups of physicians with 10-99 eligible professionals in Category 1 
will not receive any downward payment adjustments under the quality-
tiering methodology. Because we are finalizing our proposal to ``hold 
harmless'' groups of physicians with 10-99 EPs in Category 1 from any 
downward payment adjustment in CY 2016, we believe this policy 
addresses commenters' concerns, because it means that these groups will 
have at least 2 years' experience with the measure before it could 
affect payments. We believe that piloting the measure is not necessary, 
because hospitals already are being assessed with this measure under 
the Hospital IQR and VBP Programs, and we seek to align incentives 
among hospitals and physicians as quickly as possible. We thank the 
same commenter for the suggestion to use the total performance score 
for the hospital in which a pathologist practices rather than the MSPB 
measure, and will take this proposal under consideration in future 
rulemaking. While groups of 100 or more eligible professionals could 
potentially receive a downward payment adjustment under the CY 2016 
value-based payment modifier (based on their CY 2014 performance), 
those groups also will have received a QRUR of their measure 
performance in advance of the performance being used in the value-based 
payment modifier. We also note that all groups of 25 or more eligible 
professionals were able to obtain a QRUR based on CY 2012 performance 
that provided detailed information about the beneficiaries attributed 
to their groups. These 2012 reports provided details about the 
beneficiaries' hospitalizations, so that physician groups may begin to 
work with the hospitals that treat their attributed beneficiaries to 
improve care coordination, decrease fragmentation, and improve 
efficiency. We believe that these steps are sufficient to allow 
physician groups to gain experience with the MSPB measure and do not 
believe that it would be necessary to first implement the measure on 
some subset of physician groups that might be expected to have 
inappropriately high spending. We disagree that the measure is not 
adequately specified for application to physician groups. As we noted 
in the proposed rule (78 FR 43494), the measure's detailed 
specifications are available in the ``Measure Information Form'' 
located under the ``Measure Methodology'' section on Quality Net 
(http://www.qualitynet.org/dcs/ContentServer?pagename=QnetPublic%2FPage%2FQnetTier3&cid=1228772053996).

    We disagree with commenters' suggestion that physicians have little 
control over the care provided to beneficiaries who are hospitalized. 
As noted by some commenters on this proposed rule, as well as on the FY 
2013 IPPS proposed rule, there is value in aligning incentives between 
hospitals and the physicians who practice in them. We acknowledge that 
physician groups may contribute to the MSPB episode cost to varying 
degrees. As discussed in more detail below, we are finalizing an 
attribution methodology that we believe addresses commenters' concerns 
regarding the degree to which a given physician group contributed to 
the costs for a given MSPB episode. By attributing episodes included in 
the MSPB measure only to the physician group that provided the 
plurality of Part B services during the hospital stay, we believe we 
are recognizing the group of physicians that is in a strong position to 
improve coordination, decrease fragmentation, and control Medicare 
expenditures. In addition, the physician group that provided the 
plurality of Part B services during the stay is in a strong position to 
coordinate care with the hospital, addressing commenter concerns about 
measure actionability discussed above. While we appreciate the value of 
NQF endorsement, we note that it is not required for inclusion of a 
measure in the value-based payment modifier. We intend to submit the 
physician version of the MSPB measure through a future endorsement 
project; however, at this time, we have proposed a measure that is 
substantially similar to that currently undergoing the NQF endorsement 
process, which is a measure used to assess spending for hospitals, 
rather than physician groups. We believe that inclusion of the MSPB 
measure in the value-based payment modifier will help to align 
incentives and promote coordination of care and improved efficiency 
across provider types, including hospitals and the physician groups who 
practice in them.
    We do not believe it would be appropriate to exclude any physician 
specialty from inclusion in the measure, as such an exclusion could 
undermine the effort to incentivize care coordination. We also note 
that the MSPB measure is built around index admissions at IPPS 
hospitals, not PPS-exempt cancer hospitals.
    Comment: Several commenters expressed their support for inclusion 
of the MSPB measure in the cost composite. The reasons these commenters 
provided for their support included: the belief that a robust cost 
measure set will further transform the Medicare payment system to a 
system that rewards efficient, effective care and helps address the 
critical issue of health care; valuing consistency with the use of

[[Page 74776]]

this measure in the Hospital VBP Program; and the belief that inclusion 
of this measure could incentivize team-based care among hospitals and 
their physicians, including improved discharge planning better 
discharge instructions and education. One commenter also noted that 
measurement using the MSPB measure enables providers to develop their 
own care delivery processes in order to improve performance on the 
measure. One commenter supported the inclusion of the MSPB measure 
while suggesting that CMS also continue to explore how cost measures 
for specific conditions or treatments might be used to further expand 
the cost composite.
    Response: We thank the commenters for their support of our proposal 
to include the MSPB measure in the cost composite for the value-based 
payment modifier. We agree that this measure's inclusion will 
contribute to the continued development of a more robust cost measure 
set for the value-based payment modifier and that it will incent 
improved care coordination among physicians and hospitals, improved 
efficiency, and control of health care costs, and it will help to align 
incentives across our incentive payment programs. We agree that 
continuing to expand the cost composite measure set would benefit the 
value-based payment modifier, and we will consider including specific 
episode cost measures through future rulemaking.
    Comment: We received several comments related to the construction 
of the MSPB measure itself. One commenter expressed concern with the 
measure's inability to assess physician groups and their ability to 
avoid hospitalization for their patients, while several suggested that 
the risk adjustment methodology should go further to address factors 
including: socioeconomic status, dual eligibility for Medicare and 
Medicaid, a frailty factor, functional status, sub-specialty of the 
physician; place of service; or CPT codes, rather than Major Diagnostic 
Categories (MDCs). A few commenters expressed concern that a lack of 
specialty mix could penalize physician practices that focus on home 
health, skilled nursing facility care, or rehabilitation. A few 
commenters stated that a measure of provider-level care would be more 
reliable than one of facility-level or mixed facility- and provider-
level care. A few commenters also expressed concern that the measure 
does not include Part D data. Finally, a few commenters expressed 
concern that the fact that the MSPB measure does not reflect other 
aspects of care quality could lead to the unintended consequence of 
reduced access to or provision of needed care or avoidance of complex 
patients. One of these commenters suggested that MSPB should therefore 
not be weighted more heavily than patient experience or outcome 
measures.
    Response: We appreciate the commenters' consideration of the MSPB 
measure, and we will continue to consider ongoing refinements to it, as 
we gain experience with the measure. We proposed to use the MSPB amount 
as the measure rate under the physician value-based payment modifier, 
rather than converting it to a ratio as we do under the Hospital IQR 
and VBP Programs. For each cost measure finalized for use in the 
physician value-based payment modifier, including the MSPB amount, we 
also are finalizing use of a specialty adjustment that allows for peer 
group comparisons while factoring in specialty mix (see section 
III.K.4.g.2. below). The specialty adjustments are made to risk-
adjusted dollar amounts, rather than to ratios such as those used under 
the Hospital IQR and VBP programs. Aside from that proposed difference 
in expression of the measure rate, we believe that it is important to 
maintain the measure's construction as closely as possible to that used 
under the Hospital VBP and IQR Programs, in the interest of alignment 
across programs and to provide consistent information to both hospitals 
and their physicians so that they are assessed against the same 
yardstick. We disagree that inclusion of this measure would incentive 
physicians to reduce provision of needed care to the beneficiaries they 
serve and avoid hospitalizations. As we stated in the FY 2013 IPPS/LTCH 
Final Rule (77 FR 53586), we do not believe that the Medicare Spending 
per Beneficiary measure itself should assess both cost and quality. We 
believe that a distinct measure of cost, independent of quality, 
enables us to identify providers involved in the provision of high 
quality care at a lower cost to Medicare. Because the MSPB measure 
would be only one of six measures included in the value-based payment 
modifier's cost composite, we believe that physicians' consideration 
for their patients' well-being as well as their performance on the 
other measures used for the value-based payment modifier would outweigh 
any potential incentive to reduce needed care to Medicare 
beneficiaries. We therefore believe that a cost composite weight that 
is equal to the quality composite weight provides a balance between 
incentives for physician groups to improve quality and to control cost. 
We will monitor for changes in utilization patterns. We disagree that 
the costs of care provided in the facility should be separated from 
those provided post-discharge. This would be counter to the goal of 
incentivizing coordination between hospitals and physician group to 
ensure that Medicare beneficiaries receive effective, efficient care 
during and after hospitalization. We refer the reader to section 
III.K.4.g.2., Cost Composite Benchmarking and Peer Groups, for a 
discussion of the specialty adjustment for the MSPB measure, which 
addresses the commenter suggestion about specialty adjustment. That 
adjustment is made outside the construction of the MSPB measure itself 
and will be performed after the measure is calculated for a group of 
physicians. We do not believe that payments included in the MSPB 
measure should be adjusted for differences in site of service, as these 
differences reflect actual costs to the Medicare program. The payments 
included in the measure are adjusted according to the CMS Price 
Standardization methodology located at http://www.qualitynet.org/dcs/ContentServer?c=Page&pagename=QnetPublic%2FPage%2FQnetTier4&cid=1228772057350, and they are standardized to remove differences attributable to 
geographic payment adjustments and other payment factors. Because many 
Medicare fee-for-service beneficiaries obtain outpatient prescription 
drug coverage outside of Medicare Part D, including Part D data in the 
MSPB measure would incorrectly indicate higher costs for these 
beneficiaries compared to others. We are considering possible 
approaches to payment-standardizing and operationalizing Part D costs. 
Regarding the comments related to the MSPB's risk adjustment 
methodology, we addressed similar comments in the IPPS/LTCH Final Rule 
and refer readers to that discussion (77 FR 53586 through 53588).
    We did not receive any comments on our proposed regulation text 
changes at Sec.  414.1235 or Sec.  414.1260(b)(1)(i) and are, 
therefore, finalizing the proposed changes without modification.
    Attribution of the MSPB measure to physician groups. In the CY 2014 
PFS proposed rule, we proposed to attribute an MSPB episode to a group 
of physicians subject to the value-based payment modifier (as 
identified by a single TIN), when any eligible professional in the 
group submits a Part B Medicare claim under the group's TIN for a 
service rendered during an inpatient hospitalization that is an index 
admission for the MSPB measure

[[Page 74777]]

during the performance period for the applicable calendar year payment 
adjustment period. Thus, the same index admission and MSPB episode 
could be attributed to more than one group of physicians.
    We stated that attribution of the MSPB episode to all groups of 
physicians from which an eligible professional submits a Part B claim 
for a service rendered during the hospitalization is the best way to 
assign responsibility for, and encourage greater coordination of, care 
furnished to Medicare beneficiaries who are hospitalized. We stated 
that, based on CY 2011 claims data, the proposed approach would enable 
approximately 11,419 groups of physicians with at least 10 eligible 
professionals to have an MSPB measure score included in their cost 
composite (78 FR 43494). We noted that many of these groups would 
otherwise not receive a cost composite score, because they do not 
provide the requisite primary care services of the five annual total 
per capita cost measures and, therefore, are not attributed 
beneficiaries. We stated that our proposed approach incentivizes 
hospitals and physicians to furnish efficient, effective care during a 
hospitalization and to coordinate post-discharge care to avoid 
unnecessary services and preventable readmissions. Further, we believe 
that this attribution approach fosters shared accountability between 
hospitals and physicians for the care they furnish to Medicare 
beneficiaries who are hospitalized. We proposed to add a new paragraph 
(b) to Sec.  414.1240 to indicate that a MSPB episode would be 
attributed to a group of physicians subject to the value-based payment 
modifier if any eligible professional in the group submits a Part B 
Medicare claim under the group's TIN for a service rendered during an 
inpatient hospitalization that is an index admission for the MSPB 
measure during the performance period for the applicable calendar year 
payment adjustment period. Groups of physicians would have a Medicare 
Spending per Beneficiary measure score included in their cost composite 
based on the proposed attribution methodology for the MSPB.
    In the CY 2014 PFS proposed rule, we also sought comment on the 
alternative MSPB measure attribution approaches. We considered 
attributing an MSPB episode to a physician group when any eligible 
professional in the group billed a Part B claim for a service rendered 
at any time during the Medicare Spending per Beneficiary episode (that 
is, from 3 days prior to an index admission through 30 days post-
discharge). We stated that this attribution approach would place an 
even stronger emphasis on shared accountability for care provided to 
Medicare beneficiaries who are hospitalized, both during and after 
their hospitalization. Based on 2011 claims data, we estimate that this 
attribution approach would enable an additional 3,017 groups of 
physicians with 10 or more eligible professionals to receive an MSPB 
measure performance rate for inclusion in the cost composite, as 
compared to our proposed attribution approach which considers only 
those eligible professionals who bill a Part B claim during the index 
admission. As with our proposed approach, the same index admission and 
MSPB episode could be attributed to more than one group of physicians 
under this alternative approach. We welcomed public comment on the 
alternative attribution approach under which we would attribute an MSPB 
episode to a physician group if any eligible professional in the group 
billed a Part B service during the 3 days prior to an index admission 
through 30 days post hospital discharge.
    We also considered two alternative methods which would attribute 
each MSPB episode to a single physician group. The MSPB episode could 
be attributed solely to the group of physicians that provided the 
plurality of Part B services either: (1) during the entire MSPB episode 
(that is, from three days prior to an index admission through 30 days 
post discharge); or (2) during the index admission only. We wish to 
clarify the explanation of ``plurality'' of services that we provided 
in the proposed rule. By ``plurality,'' of services, we mean the 
highest total Medicare allowed amount for Part B services billed by any 
group of physicians who provided Part B services during a given portion 
of an MSPB episode (either the full episode or the index admission 
only). The group of physicians need not have billed the majority of the 
charges allowed by Medicare for Part B services furnished during a 
given portion of an episode, but rather the group's total allowed 
charges must be greater than any other group of physicians for that 
portion of the episode. These methods are single attribution 
approaches, unlike our proposal which is a multi-attribution approach.
    Using 2011 claims, we analyzed the number of TINs, comprised of 10 
or more eligible professionals, that would be attributed an MSPB 
measure rate under these alternative attribution methods given a 
minimum of 20 MSPB episodes required. Our analyses revealed that 7,799 
TINs (out of approximately 17,000 TINs) would be eligible to receive an 
MSPB measure rate, if MSPB episodes were attributed to the group of 
physicians that provided the plurality of Medicare Part B services 
during the entire MSPB episode. This represents a 46 percent decrease 
in the number of TINs that would receive an MSPB measure rate, were it 
attributed to a group from which an eligible professional rendered any 
Part B service during the entire episode. Our analysis also showed that 
7,582 TINs would be eligible to receive an MSPB measure rate, if MSPB 
episodes were attributed to the physician group that billed the 
plurality of Medicare Part B payments during the index admission. This 
represents a 34 percent decrease in the TINs that would receive an MSPB 
measure rate, were it attributed to a group from which an eligible 
professional rendered any Part B service during the index admission.
    In the proposed rule, we explained that we considered these two 
single attribution methods because they represent methods to identify 
groups of physicians that were ``most responsible'' for the Part B 
Medicare payments made during the episode. We did not propose these 
methods, because we believed our proposed multiple attribution approach 
better incentivizes a team approach to accountability for Medicare 
beneficiaries' care during a hospitalization. We stated our belief that 
our proposed attribution approach is further supported by the higher 
number of TINs that will be able to receive an MSPB measure rate under 
that methodology. We solicited comment, however, on these two 
alternative single attribution approaches we considered: Attributing an 
MSPB episode to the group of physicians that provided the plurality of 
Part B services billed either during the entire MSPB episode or during 
the index admission only.
    In the proposed rule, we also explained two versions of a 
``hybrid'' attribution method we considered. This methodology would 
attribute MSPB episodes to all TINs from which an eligible professional 
provided services representing at least 35 percent of the total 
Medicare Part B payments made either: (1) during the entire MSPB 
episode (that is, from three days prior to an index admission through 
30 days post discharge); or (2) during the index admission only. This 
alternative could result in multiple attribution, if two eligible 
professionals from different TINs each provided services representing 
at least 35 percent of the Part B Medicare payments during one of the 
episode portions described above (either the full episode or during the

[[Page 74778]]

index admission only). The rationale for this attribution approach is 
that it ensures that the MSPB measure would be attributed to a group of 
physicians who had responsibility for a significant portion of the 
Medicare beneficiary's care during a given portion of the MSPB episode. 
We did not propose this alternative, because we believed that our 
proposed attribution approach better incentivizes a team approach to 
accountability for Medicare beneficiaries' care during and after a 
hospitalization. We welcomed public comment on this alternative 
attribution approach based on provision of services representing at 
least 35 percent of Medicare Part B payments made either during the 
entire MSPB episode or during the index admission only.
    The following is a summary of the comments we received regarding 
the proposed attribution method and alternative methods.
    Comment: One commenter tentatively supported our proposal to 
attribute MSPB episodes to any physician group from which an eligible 
professional billed a Part B service during an index admission for the 
MSPB measure. A few commenters stated that they would prefer either 
single attribution based on the plurality of Part B services during the 
hospital stay or attribution based on the ``hybrid'' approach of 
attributing to any group from which an eligible professional provided 
at least 35 percent of the Part B services billed during the hospital 
stay. One commenter supported attribution based either on plurality of 
Part B services provided during the hospital stay or on a hybrid 
attribution during either the hospital stay or the entire episode. The 
majority of commenters stated that they would prefer attribution to a 
single physician group that provided the plurality of Part B services 
during the hospital stay. The commenters expressed their belief that 
our proposed attribution to any physician group from which an eligible 
professional billed a Part B claim during the index admission or 
episode was too broad, stating that it would not recognize physician 
groups' varying degrees of involvement in the patient's care during the 
episode, that it would not incentivize coordination of care, that the 
physician group to which the episode is attributed should have a 
minimum level of association with the patient's care, and that further 
analysis was needed before adopting such a broad attribution approach. 
One commenter expressed concern that attribution could inadvertently 
penalize inpatient physicians (for example, hospitalists) for costs 
beyond their control such as those occurring in the post-acute and 
outpatient settings or those incurred by specialists due to inadequate 
primary care. One commenter asked that we ensure that calculations used 
to specifically allocate costs associated with physician care versus 
care provided for the same patient in other settings or by other 
physicians/specialists are calculated and attributed accurately. One 
commenter stated that the measure could routinely penalize physicians 
whose practices focus on care settings such as nursing home or home 
care. One commenter stated that attribution should not be based on 
plurality of E&M services, and one commenter asked for clarification on 
how the measure would be attributed to groups that span a state or 
multiple regional hospitals.
    Response: After considering the comments we received, we have 
decided not to finalize the attribution methodology that we proposed 
and instead will finalize the alternative, single attribution 
methodology that we considered, wherein an MSPB episode is attributed 
to the physician group (as identified by the Tax Identification Number) 
that furnished the plurality of Part B services during the index 
admission. This approach was the one most favored by commenters. This 
approach recognizes physician groups' varying degrees of involvement in 
the patient's care during the episode, incentivizes coordination of 
care, and helps ensure that the physician group to which the episode is 
attributed has a minimum level of association with the patient's care. 
We are finalizing this policy in appreciation of the commenters' 
concern that the group to which an episode is attributed should have 
been involved in a significant portion of the beneficiary's care. The 
hospital and the physician group providing the plurality of care during 
the hospitalization will be best able to coordinate care and discharge 
and reduce fragmentation and unnecessary service provision. We believe 
this approach addresses commenters' concerns that a specialist might be 
attributed an episode for which they were not primarily responsible. We 
also prefer this attribution approach to one in which there is a set 
minimum level of involvement (such as the ``hybrid'' 35 percent 
approach we considered), because such an alternative attribution 
approach could result in some episodes not being attributed to any 
physician group, because the groups with the plurality of care did not 
reach the minimum percentage of care (for example, 30 percent). We 
believe that omitting such episodes from the measure would be counter 
to our interest in incentivizing a team approach to care provision for 
the beneficiaries with the most complicated cases.
    We do not intend to attribute portions of an MSPB episode to 
different physician groups depending on the setting in which the care 
was provided, as suggested by one commenter. The MSPB measure is not 
constructed in that manner. Rather, it is attributed to an entity that 
is responsible for provision of a significant portion of the 
beneficiary's care and is capable of improving the efficiency of care 
throughout the episode. We do not believe the plurality of care during 
the stay approach to attribution will have a disproportionately adverse 
effect on those physician groups involved primarily in provision of 
home health or skilled nursing facility care, because the physician 
whose group is attributed the episode must have provided more in-
hospital care than any other physician. We wish to clarify that 
attribution of the MSPB measure would not be based on plurality of E&M 
services, but on plurality of all Part B services furnished during the 
index admission. In the case of a large physician group spanning 
multiple regions, the same policy would apply and the episode would be 
attributed to the TIN that billed the plurality of Part B services 
during the index admission. We appreciate the commenters' request for 
additional analysis of the effect of the attribution options we 
considered. As described in the proposed rule, we discussed the 
differences in the number of TINs that would receive an MSPB measure 
rate using a single attribution methodology based on plurality of care 
during the index admission, as compared to the number of TINs that 
would receive an MSPB measure rate under our proposed multiple 
attribution approach. We conducted additional analyses on the 
application of a minimum percentage of Medicare allowed charges that a 
physician group must have billed in order to be attributed an episode. 
As compared to a single attribution based on plurality with no minimum 
percentage, a multiple attribution approach requiring a group to have 
billed at least 35 percent of Medicare allowed charges resulted in a 
decrease from 7,582 attributed TINs to 7,389 attributed TINs, a 
decrease of 2.5 percent. This reduction is minimal, because while the 
floor precludes attribution of some episodes, multiple attribution 
allows some episodes to be attributed to more than one TIN. We found 
minimal difference in the number

[[Page 74779]]

of TINs receiving an MSPB measure rate under the single attribution 
based on plurality and the multiple attribution based on a minimum 35 
percent of charges approaches. Since imposing a minimum floor such as 
35 percent of charges would lead to having un-attributed MSPB episodes 
that are not supported by these findings, we are finalizing the 
attribution approach recommended by the majority of commenters--a 
single attribution based on plurality of Part B services during the 
hospital stay with no floor. As stated previously, we believe that 
attributing the MSPB episode to the physician group that provided the 
plurality of care during the hospitalization is the best approach to 
recognizing the group of physicians in the best position to affect 
improved coordination, decrease fragmentation, and control Medicare 
expenditures. We will monitor and examine the effects of this 
attribution approach as we implement the MSPB measure and may consider 
changes to this policy through future rulemaking.
    Reliability standard for the Medicare Spending per Beneficiary 
measure for the value-based payment modifier. We proposed that a group 
of physicians would have to be attributed a minimum of 20 MSPB episodes 
during the performance period to have their performance on this measure 
included in the value-based payment modifier cost composite. Table 86 
shows the MSPB measure's reliability at various minimum numbers of 
episodes for all Medicare-enrolled TINs with at least one EP (not just 
TINs of 10 or more eligible professionals) from May 2011 through 
December 2011. (We note that Table 86 does not consider the specialty 
adjustment that we are finalizing in section III.K.4.g.2. below.) In 
this context, reliability is defined as the extent to which variation 
in the measure's performance rate is due to variation in the cost of 
services furnished by groups of physicians rather than random variation 
due to the sample of cases observed. Potential reliability values 
(known in statistics as the correlation coefficient) range from zero to 
one, where one (highest possible reliability) signifies that all 
variation in the measure's rates is the result of variation in the 
difference in performance across groups of physicians and is not due to 
random variation. Generally, reliabilities in the 0.40-0.70 range are 
often considered moderate and values greater than 0.70 high.

   Table 86--Reliability of Medicare Spending Per Beneficiary Measure for All TINs With at Least One Eligible
                                                  Professional
                                            [May 2011-December 2011]
----------------------------------------------------------------------------------------------------------------
                                                                                      Mean risk-
                                                         Number of    Percent of       adjusted        Average
               MSPB Episodes attributed                     TINs         TINs     standardized cost  reliability
                                                                                   per MSPB episode
----------------------------------------------------------------------------------------------------------------
1-9...................................................       59,419           47            $20,493         0.65
10-19.................................................       12,332           10             21,260         0.79
20-29.................................................        7,774            6             21,225         0.83
30-39.................................................        5,839            5             21,340         0.85
40-49.................................................        4,511            4             21,324         0.87
50-99.................................................       12,648           10             21,353         0.89
100-124...............................................        3,702            3             21,403         0.91
125-149...............................................        2,761            2             21,342         0.92
150-174...............................................        2,134            2             21,316         0.93
175-199...............................................        1,673            1             21,119         0.93
200+..................................................       14,933           12             20,562         0.96
----------------------------------------------------------------------------------------------------------------

    We also considered a minimum number of 10 episodes. The advantage 
of this lower minimum number is that it would enable us to calculate 
the MSPB measure for an additional 12,332 physician groups once we 
apply the value-based payment modifier to all physicians and groups of 
physicians. With a minimum of 10 cases, the measure is still very 
reliable, as illustrated in the Table 86. We proposed the minimum of 20 
cases for initial implementation of this measure in the cost composite 
beginning with the CY 2016 value-based payment modifier because it 
strikes a balance between maintaining high reliability and including a 
large number of physician groups. We noted that this reliability 
standard we proposed is the same one we adopted in the CY 2013 PFS 
final rule with comment period that applies to quality and cost 
measures used in the value-based payment modifier (77 FR 69323). We 
welcomed public comment on our proposed minimum of 20 episodes for 
inclusion of the Medicare Spending per Beneficiary measure in the cost 
composite for the value-based payment modifier and on the alternative 
10 episode minimum that we considered.
    Comment: We received several comments on our proposed 20 episode 
minimum and the alternative 10 episode minimum we considered. Several 
commenters supported a minimum of 10 cases, in order to enable more 
groups to receive an MSPB measure performance rate for inclusion in the 
cost composite. These commenters noted that the MSPB measure is still 
very reliable at 0.70 with a minimum of 10 cases. Several commenters 
also stated that the proposed minimum of 20 cases was appropriate. One 
commenter suggested a minimum of 30 cases would be appropriate.
    Response: We agree that the MSPB measure is still very reliable 
with a minimum of 10 cases, and we recognize that increasing the cost 
composite measure set for physician groups is a positive outcome of 
reducing the case minimum from our proposed minimum of 20. We believe 
that, because the measure is new, and a minimum of 20 cases still 
allows a substantial number of physician groups to have an MSPB measure 
rate in their cost composites, the proposed minimum of 20 cases is most 
appropriate for this measure's initial inclusion in the value-based 
payment modifier. We believe that a minimum of 20 cases strikes a good 
balance between preserving high reliability and maximizing the number 
of physician groups that receive an MSPB measure rate as part of their 
cost composite. After consideration of all public comments on the 
inclusion of the MSPB measure in the cost composite for the CY 2016 
physician value-based payment modifier, we are finalizing the following 
policies:

[[Page 74780]]

    We proposed a slightly revised calculation for inclusion of the 
MSPB measure in the value-based payment modifier. We proposed not to 
convert the MSPB amount to a ratio as is done to compute a hospital's 
MSPB measure under the Hospital IQR and VBP Programs, but rather to use 
the MSPB amount as the measure's performance rate.
    We are finalizing inclusion of the MSPB measure as proposed in the 
cost composite beginning with the CY 2016 value-based payment modifier, 
with a CY 2014 performance period. As we proposed, we will use the MSPB 
amount as the measure's performance rate rather than converting it to a 
ratio as is done under the Hospital IQR and VBP Programs.
    We are finalizing that the MSPB measure will be added to the total 
per capita costs for all attributed beneficiaries domain and equally 
weighted with the total per capita cost measure. It will not be added 
to the total per capita costs for all attributed beneficiaries with 
specific conditions domain.
    We are finalizing the method under which an MSPB episode will be 
attributed to a single group of physicians that provides the plurality 
of Part B services during the index admission, for the purpose of 
calculating that group's MSPB measure rate.
    We are finalizing a minimum of 20 MSPB episodes for inclusion of 
the MSPB measure in a physician group's cost composite.
    We are finalizing regulation text as proposed at Sec.  414.1235 and 
Sec.  414.1260(b)(1)(i).
    We are finalizing the regulation text at Sec.  414.1240(b) to read: 
For the MSPB measure, an MSPB episode is attributed to the group of 
physicians subject to the value-based payment modifier whose eligible 
professionals submitted the plurality of claims (as measured by 
allowable charges) under the group's TIN for Medicare Part B services, 
rendered during an inpatient hospitalization that is an index admission 
for the MSPB measure during the applicable performance period described 
at Sec.  414.1215.
g. Refinements to the Cost Measure Composite Methodology
(1) Average Cost Designations in Certain Circumstances
    In the CY 2013 PFS final rule with comment period (77 FR 69322), we 
established a policy to create a cost composite for each group of 
physicians subject to the value-based payment modifier that includes 
five payment-standardized and risk-adjusted annual per capita cost 
measures. To calculate each group's per capita cost measures, we first 
attribute beneficiaries to the group of physicians. We attribute 
beneficiaries using a two-step attribution methodology that is used for 
the Medicare Shared Savings Program and the PQRS GPRO and that focuses 
on the delivery of primary care services (77 FR 69320). We have 
observed that groups of physicians that do not provide primary care 
services are not attributed beneficiaries or are attributed fewer than 
20 beneficiaries and, thus, we are unable to calculate reliable cost 
measures for those groups of physicians (77 FR 69323). Given this 
development, we proposed that, to the extent that we are unable to 
attribute a sufficient number of beneficiaries to a group of physicians 
subject to the value-based payment modifier and thus are unable to 
calculate any of the cost measures with at least 20 cases, the group of 
physicians' cost composite score would be classified as ``average'' 
under the quality-tiering methodology. We believe this policy is 
reasonable because we would have insufficient information on which to 
classify the group of physicians' costs as ``high'' or ``low'' under 
the quality-tiering methodology. Moreover, we believe that to the 
extent a group of physicians' quality composite is classified as 
``high'' or ``low,'' the groups of physicians' value-based payment 
modifier should reflect that classification. Accordingly, we proposed 
to add a new paragraph at Sec.  414.1270 to reflect this proposal that 
groups of physicians in Category 1 for which we attribute fewer than 20 
cases to calculate any cost measure would have their cost composite 
classified as ``average'' cost. We solicited comment on this proposal. 
The following is summary of the comments we received regarding this 
proposal.
    Comment: The majority of comments received on this proposal were 
from commenters who supported our proposal and agreed that this was a 
reasonable proposal because CMS would have insufficient information to 
classify the group's cost as high or low, and other assumptions would 
be unfair to practices attributed fewer than 20 beneficiaries. The few 
commenters who opposed the proposal believed that it would unfairly 
advantage physician groups that have unnecessarily high costs and 
disadvantage providers who provided exceptional care at very low costs. 
One of the two commenters who opposed this proposal suggested that CMS 
could remove costs from the value-based payment modifier determination 
for such groups.
    Response: We continue to believe that groups that are attributed 
fewer than the minimum case size of 20 beneficiaries would not allow 
for the calculation of reliable cost measures. We are concerned that 
not classifying the group as average when it has fewer than 20 
attributed beneficiaries would increase the likelihood that its cost 
measures could fluctuate greatly from year to year, so we disagree with 
some of the commenters who stated that it would unfairly advantage or 
disadvantage different physician groups.
    After consideration of the comments received, we are finalizing our 
proposal and adding a new paragraph at Sec.  414.1270 to reflect the 
proposal that groups of physicians in Category 1 for which we attribute 
fewer than 20 cases to calculate any cost measure have their cost 
composite classified as ``average'' cost.
    Comment: Some commenters expressed or reiterated previously stated 
concerns about CMS' use of total per capita cost measures for the 
value-based payment modifier. In the CY 2012 PFS final rule with 
comment period (76 FR 73434), we finalized the use of total per capita 
cost measures and per capita cost measures for beneficiaries with four 
chronic conditions (chronic obstructive pulmonary disease, coronary 
artery disease, diabetes, and heart failure) in the value-based payment 
modifier. In the CY 2013 PFS final rule with comment period (77 FR 
69318), we finalized the use of the CMS Hierarchical Condition Category 
(HCC) model to risk adjust these total per capita cost measures in the 
value-based payment modifier. Arguments against the total per capita 
cost measures that commenters raised in response to the CY 2014 PFS 
proposed rule included that the cost measures reflect the total amount 
billed per patient by Medicare overall rather than the amount billed 
per patient by just the medical group, may not be appropriate for some 
specialists, and was not developed for nor tested in physician 
practices. Some commenters expressed concerns that the risk adjustment 
used in the total per capita cost measures is inadequate, either 
because of concerns about the CMS Hierarchical Condition Category (HCC) 
model or because the risk adjustment method lacked adjusters for 
physicians that tend to treat non-compliant patients. One commenter 
requested that CMS ensure that the expenditures are adjusted for 
geographic differences in input costs.
    Other concerns raised by commenters included the potential for 
groups to shift

[[Page 74781]]

drug costs from Part B to Part D, since Part D is not included in the 
cost measure. Several other commenters requested that CMS not use total 
per capita cost measures in the value-based modifier until we have 
developed and tested more focused episode-based cost measures. One 
commenter expressed concern about potential problems in shifting from 
the ICD-9-CM to the ICD-10-CM system, since the HCC model assigns prior 
year ICD-9-CM diagnosis codes to 70 high cost clinical conditions.
    Response: We continue to believe that the total per capita cost 
measures provide useful information and are appropriate to incent 
physician groups who are in a good position to oversee annual costs to 
do so. We refer readers to previous CMS responses to a number of 
concerns raised again this year (about, for example, the 
appropriateness of the total per capita cost measure for some 
specialists and the adequacy of the risk adjustment used for the 
measure) that were discussed in the CY 2012 (76 FR 73433 through 73436) 
and CY 2013 PFS final rules (77 FR 69315 through 69318). We also 
reiterate that the total per capita cost measures are payment-
standardized (77 FR 69316 through 69317), which removes regional or 
local price differences that may lead to cost variation that a 
physician group cannot influence. We are aware of the commenters' 
concerns with total per capita cost measures and the risk adjustment 
approach, and we will monitor the situation as we implement the value-
based payment modifier. If warranted, we will propose modifications to 
the total per capita cost measures and the risk adjustment approach in 
future rulemaking.
    Regarding the potential to shift drug costs from Part B to Part D, 
we will take this comment into consideration as we monitor the impacts 
when the value-based payment modifier is implemented. Regarding testing 
episode-based cost measures, we have not yet proposed using output from 
the CMS episode grouper--that is currently under development and 
discussed in the Physician Feedback Program section (see section 
III.K.5.c.)--in the value-based payment modifier. We will consider 
proposing to include episode-based cost measures in future years' 
value-based payment modifiers (beyond 2016) through future rulemaking 
after we have thoroughly tested the CMS episode grouper and groups have 
seen their performance on them. We believe, however, that total per 
capita cost is a useful measure of total volume of healthcare services 
to Medicare beneficiaries and encourages shared accountability for 
beneficiary care and we have shared the results of this measure with 
all groups of 25 or more eligible professionals. Therefore, we disagree 
with the commenters who are calling for a delay in the use of the total 
per capita cost measure in the value-based payment modifier. Finally, 
we are studying the impacts of the planned ICD-9 to ICD-10 conversion 
across the Medicare program.
    Comment: Some commenters expressed concerns about CMS using cost 
measures that have not been endorsed by the National Quality Forum 
(NQF), while others stated agreement with some of the concerns about 
the total per capita cost measure that were raised by the NQF Cost and 
Resource Use Committee (for example, concerns about the total per 
capita cost measure's reliability, validity, and usability, as well as 
lack of inclusion of Part D costs in the measure). One commenter 
expressed appreciation to CMS for taking a thoughtful approach to the 
implementation of the cost measures (via NQF submission).
    Response: We submitted the total per capita cost measure for NQF 
endorsement in January 2013. (For further information, please see 
materials related to the submission of NQF candidate measure 
2165 (Payment-Standardized Total Per Capita Cost Measure for 
Medicare Fee-for-Service (FFS) Beneficiaries) in the Cost and Resource 
Use 2012: Phase 1 section of the NQF Web site--http://www.qualityforum.org/Projects/c-d/Cost_and_Resource_2012_Phases_1_and_2/Cost_and_Resource_Use_2012_Phase_1.aspx#t=2&s=&p=5%7C.) 
In the final voting in September 2013, the NQF Cost and Resource Use 
Committee narrowly voted against the measure by a count of 12 in 
support and 13 in opposition. We anticipate addressing the Committee's 
concerns in future rulemaking, especially regarding our attribution 
model and how best to incorporate socioeconomic status in our measure, 
after the NQF provides additional guidance regarding risk adjustment 
for resource use measures.
    Consistent with the policy we established in the CY 2013 PFS final 
rule, we will continue to use the total per capita cost measures in the 
value-based payment modifier, and we will continue to evaluate the 
measure methodology and update the measure as appropriate.
(2) Cost Composite Benchmarking and Peer Groups
    Once we calculate the cost measures for each group of physicians 
subject to the value-based payment modifier, we create the cost 
composite by calculating a standardized score for each cost measure and 
then placing the measures into one of two equally weighted domains: (1) 
the total per capita costs for all attributed beneficiaries domain; and 
(2) the total per capita costs for attributed beneficiaries with 
specific conditions domain. This standardized score is referred to in 
statistical terms as a Z-score. To arrive at the standardized score for 
each cost measure, we compare the performance for each group's cost 
measures to the benchmark (national mean) of other groups subject to 
the value-based payment modifier (peer group) for the same performance 
year. Specifically, we calculate the benchmark for each cost measure as 
the national mean of the performance rates among all groups of 
physicians to which beneficiaries are attributed and that are subject 
to the value-based payment modifier.
    Using 2011 claims data, we examined the distribution of the overall 
total per capita cost measure among all groups of physicians with one 
or more eligible professionals to determine whether comparisons at the 
group level would be appropriate once we apply the value-based payment 
modifier to smaller groups of physicians and solo practitioners. We 
found that our current peer grouping methodology could have varied 
impacts on groups of physicians that are comprised of different 
physician specialties. This result occurs because the peer group for 
the per capita cost benchmarks is based on a national mean calculated 
among all groups of physicians subject to the value modifier rather 
than determined more narrowly (for example, within a physician 
specialty).
    To address this issue beginning with the CY 2016 value-based 
payment modifier, we considered two methods that account for the group 
practice's specialty composition so that our quality-tiering 
methodology produces fair peer group comparisons and, ultimately, 
correctly ranks group of physicians based on actual performance. Taking 
account of physician specialties in making cost comparisons is similar 
to the approach we have used in the CY 2010 and CY 2011 Quality and 
Resource Use Reports (QRURs) for individual physicians in which we made 
cost comparisons at the individual physician specialty level.
    The first method, ``specialty adjustment,'' accounts for the 
specialty composition of the group prior to computing the standardized 
score for each cost measure. This method enables us to develop 
comparable benchmarks for the risk-adjusted cost measures

[[Page 74782]]

against which to evaluate groups of physicians of smaller size who 
often have fewer or single specialty composition. More specifically, 
this method adjusts the standardized score methodology to account for a 
group's specialty composition using three steps:
    Step 1: Create a specialty-specific expected cost based on the 
national average for each cost measure (referred to as the ``national 
specialty-specific expected costs''). To do so, we attribute 
beneficiaries to a group using the plurality of primary care services 
methodology that we finalized in the CY 2013 PFS final rule with 
comment period (77 FR 69316). For each specialty, we calculate the 
average cost of beneficiaries attributed to groups of physicians with 
that specialty, weighted by the number of EPs in each group.
    Step 2: Calculate the ``specialty-adjusted expected cost'' for each 
group of physicians by weighting the national specialty-specific 
expected costs by the group's specialty composition of Part B payments. 
That is, the specialty-adjusted expected cost for each group is the 
weighted average of the national specialty-specific expected cost of 
all the specialties in the group, where the weights are each 
specialty's proportion of the group's Part B payments. The Part B 
payments for each specialty are determined based on the payments to 
each EP in the group, and each EP is identified with one specialty 
based on its claims.
    Step 3: Divide the total per capita cost by the specialty-adjusted 
expected cost, and multiply this ratio by the national average per 
capita cost so that we can convert this ratio to a dollar amount 
(referred to as the ``specialty-adjusted total per capita cost'') that 
can then be used in the standardized (Z-) score to determine whether a 
group can be classified as high cost, low cost, or average.
    Below, we illustrate the three steps of the specialty adjustment to 
the standardized score with an example. Assume for simplicity that only 
two TINs and two specialties exist: TIN 1 and TIN 2, and Specialty A 
and Specialty B. For this example, assume that the total per capita 
costs and specialty shares are as shown in Table 87.

                                 Table 87--Example of Calculating Specialty-Adjusted Total Per Capita Cost: Assumptions
--------------------------------------------------------------------------------------------------------------------------------------------------------
                                                     Number of
             TIN                 Risk-adjusted      attributed       Number of EPs in TIN by     Specialty share of EPs in    Specialty share of part B
                                per capita cost    beneficiaries      specialty type A or B                 TIN                    payments in TIN
--------------------------------------------------------------------------------------------------------------------------------------------------------
TIN 1........................           $12,000             1,500  A: 10; B: 30...............  A: 25%; B: 75%.............  A: 35%; B: 65%
TIN 2........................             8,000             2,000  A: 21; B: 39...............  A: 35%; B: 65%.............  A: 60%; B: 40%
--------------------------------------------------------------------------------------------------------------------------------------------------------

    Step 1: To compute the national specialty-specific expected cost 
for a specialty across all TINs, we first calculate the numerator, 
which is the product of each TIN's total per capita cost times its 
weight (the number of attributed beneficiaries times that specialty's 
share of the TIN's EPs times the number of EPs of that specialty in 
that TIN), summed across all TINs. This sum is divided by the 
denominator, which is the sum across all TINs of the same weights that 
were used in the numerator. For this example, the national specialty-
specific expected cost for Specialty A is ($12,000 * 1,500 * 25%*10 + 
$8,000 * 2,000 * 35%*21)/(1,500 * 25%*10 + 2,000 * 35%*21) = $8,813. 
Similarly, the national specialty-specific expected cost for Specialty 
B is ($12,000 * 1,500 * 75%*30 + $8,000 * 2,000 * 65%*39)/(1,500 * 
75%*30 + 2,000 * 65%*39) = $9,599.
National Specialty-Specific Expected Cost, by Specialty (Step 1)
Specialty A: $8,813
Specialty B: $9,599

    Step 2: To calculate the specialty-adjusted expected cost for each 
group (TIN), we would multiply the above national specialty-specific 
expected costs by each group's proportion of specialty-specific Part B 
payments. For each TIN, we compute the product of the TIN's proportion 
of specialty-specific Part B payments, summed across all specialty 
types of the TIN. In our example, the specialty-adjusted expected cost 
for TIN 1 would be computed as 35% * $8,813 + 65% * $9,599 = $9,324. 
Similarly, the specialty-adjusted expected cost for TIN 2 would be 60% 
* $8,813 + 40% *$9,599 = $9,127.
Specialty-Adjusted Expected Cost, by TIN (Step 2)
TIN 1: $9,324
TIN 2: $9,127

    Step 3: We divide the total per capita cost by the specialty-
adjusted expected cost and multiply this ratio by the national average 
per capita cost, to convert this ratio to a dollar amount. Assuming the 
national average per capita cost is $9,714, we can compute the 
specialty-adjusted total per capita cost for each TIN, as shown in 
Table 88.

             Table 88--Example of Calculating Specialty-Adjusted Total Per Capita Cost: Calculations
----------------------------------------------------------------------------------------------------------------
                    Column                            A               B               C                D
----------------------------------------------------------------------------------------------------------------
                                                                                                   Specialty-
                                                                 Specialty-       National       adjusted total
                     TIN                          Total per       adjusted      average  per    per capita cost:
                                                 capita cost    expected cost    capita cost   ((column A/column
                                                                                                B) *  column C)
----------------------------------------------------------------------------------------------------------------
TIN 1........................................         $12,000          $9,324          $9,714            $12,502
TIN 2........................................           8,000           9,127           9,714              8,514
----------------------------------------------------------------------------------------------------------------

    The figure in the rightmost column (column D) is the specialty-
adjusted total per capita cost that is used to compute a group's 
standardized (Z-) score. As can be seen, the specialty-adjusted total 
per capita cost for use in the standardized score is $12,502 for TIN 1 
and $8,514 for TIN 2.
    To illustrate the impact of the specialty adjustment methodology, 
we examined the distribution, by specialty, of the overall specialty-
adjusted total

[[Page 74783]]

annual per capita cost measure based on 2011 claims for group of 
physicians with 1 or more eligible professionals. Please see Table 66 
of the CY 2014 proposed rule (78 FR 43498 through 43499) for the 
results of this analysis.
    Under this methodology, we perform this specialty adjustment prior 
to computing the standardized score for all six cost measures included 
in the value-based payment modifier: the total per capita cost measure, 
the four total per capita cost measures for beneficiaries with specific 
conditions, and the MSPB measure. The specialty adjustment for the four 
condition-specific total per capita cost measures is identical to the 
total per capita cost measure that was described above. The specialty 
adjustment for the MSPB cost measure is analogous to that described 
above for the total per capita cost measure, except that ``number of 
beneficiaries'' is replaced with ``number of episodes'' and ``per 
capita cost'' is replaced with ``per episode cost.'' Thus, each cost 
measure will have its own set of specialty-specific expected costs.
    We considered and tested a second method, ``comparability peer 
grouping,'' which constructs peer groups for each physician group 
practice by identifying group practices with the nearest comparable 
specialty mix.\5\ Under this approach, two group practices would be 
considered to have the same specialty mix if the share of physicians of 
each specialty is within a defined range for both group practices. 
Group practices that had a specialty mix more comparable to the 
practice's own mix would receive greater weight in the peer group. 
Among the identified peers sharing the same specialty mix, those with 
the most cases would receive the greatest weight.
---------------------------------------------------------------------------

    \5\ For a description of this type of method, see, for example, 
Margaret M. Byrne, et al., Method to Develop Health Care Peer Groups 
for Quality and Financial Comparisons Across Hospitals. April 2009. 
HSR: Health Services Research 44:2, Part I: 577-592.
---------------------------------------------------------------------------

    We stated in the proposed rule that, on balance, we believe that 
the first method, the specialty benchmarking method, is preferable to 
account for the specialty composition of the group of physicians when 
making peer group comparisons and creating the standardized score for 
the cost measures for the value-based payment modifier. We also stated 
that this methodology allows us to apply the value-based payment 
modifier to smaller size groups and solo practitioners. This 
methodology creates one national benchmark for each cost measure. 
Moreover, all groups of physicians (regardless of size) are assessed 
against that benchmark in creating the group of physicians' 
standardized score. Although the calculations discussed above may be 
very detailed, they are transparent and we can provide each group of 
physicians with information on how its costs were benchmarked in its 
Quality and Resource Use Report.
    By contrast, the second method, comparability peer grouping, would 
require us to develop a transparent way to define which groups of 
physicians are similar enough to be included in each group of 
physicians' peer group. This approach also creates a different 
benchmark for each group of physicians, which may make it more 
difficult for groups of physicians to understand how their costs are 
benchmarked.
    Given these considerations, we proposed to use the first method, 
the specialty benchmarking method, to create the standardized score for 
each group's cost measures beginning with the CY 2016 value-based 
payment modifier. Accordingly, we proposed to amend our regulations at 
Sec.  414.1255 to include this policy in our cost composite 
methodology. We solicited comment on our proposals, including comments 
on ways to streamline or enhance the calculation mechanics and to make 
the specialty adjustments more transparent and easily understood. We 
also solicited comment on the alternative method, the comparability 
peer grouping method. We proposed to identify the specialty for each EP 
based on the specialty that is listed on the largest share of the EP's 
Part B claims. We understand that many physicians believe our current 
specialty designations may mask sub-specialist care furnished. We note 
that the procedures for obtaining a CMS specialty code are available at 
http://www.cms.gov/Medicare/Provider-Enrollment-and-Certification/MedicareProviderSupEnroll/Taxonomy.html. The following is summary of 
the comments we received regarding these proposals.
    Comment: The majority of commenters supported our approach to 
consider physician specialty in our cost benchmarking. For example, one 
commenter suggested it was a significant improvement over our current 
methodology. Another commenter supported the refinement of the cost 
measure benchmarking methodology to reflect the full range of 
practitioners. A number of commenters expressed support for CMS 
refining the cost measure benchmarking methodology to account for a 
physician's specialty.
    A number of the commenters who supported the proposal, as well as 
several others who neither supported nor opposed the proposal, 
suggested that CMS study further the specialty adjustment to determine 
the impacts and potential unintended consequences prior to its 
inclusion so that future refinements can be made if necessary. Some 
commenters also asked that CMS continue to consider opportunities to 
compare physicians based on the type of patients they are seeing. A 
number of commenters urged CMS to use more subspecialty designations in 
the approach to adequately account for subspecialties and allow fair 
benchmark comparisons of cost provided by specialists. Several 
commenters suggested that we assign specialty designations based on a 
claims analysis to identify the services most typically provided by the 
individual (that is, the top 15 services the provider renders based on 
submitted claims) and assign their specialty based on the care they are 
most frequently providing. Another commenter suggested that we include 
an adjustment for site of service (for example, nursing home or long-
term care facility).
    Several commenters expressed concern that the CMS' proposed 
approach to specialty adjustment could result in a ``high cost'' 
designation for about 15 percent of some specialties (geriatricians, 
geriatric psychiatrists, neurosurgeons, medical and surgical 
oncologists), which could suggest a problem in the methodology.
    While most commenters supported the specialty adjustment approach 
over the comparability peer grouping approach, several commenters 
preferred the comparability peer grouping approach. One commenter 
indicated that they did not have sufficient information on the criteria 
that CMS would use to determine comparable peer groups if the approach 
were implemented. Although more commenters who expressed a preference 
indicated that the specialty adjustment approach was more transparent, 
several commenters stated that the comparability peer grouping method 
would likely achieve greater transparency of performance, although the 
specialty adjustment method might be simpler to calculate. The same 
commenters recommended further study by CMS of the comparability peer 
grouping approach.
    Response: We agree that the proposal is a significant improvement 
over our current methodology. We believe that the credibility of the 
quality-tiering approach depends on accurate comparisons among 
physicians to determine those physicians that are members of high- and 
low-cost groups.

[[Page 74784]]

We proposed this method to adjust our benchmarking approach for all 
cost measures to create more comparable peer groups through developing 
a benchmark for each group based on the specialty composition of the 
group. We believe that this proposal improves upon our cost benchmark 
such that it would be appropriate once we apply the value-based payment 
modifier to smaller groups and solo practitioners.
    We also believe that the specialty adjustment approach is adaptable 
to comparing physicians in solo practices, which is important because 
in 2017 we are required to apply the value-based payment modifier to 
all physicians and groups of physicians. Although we received a number 
of comments from sub-specialists about the lack of granularity among 
the available CMS physician specialties, we believe this approach is 
better than relying on group size alone. We also will explore ways to 
explain to sub-specialists the processes that we have in place to 
obtain a new or keep their CMS specialty designation current, and we 
encourage all physicians to periodically review and keep their Medicare 
enrollment information current including specialty designations.
    We agree that an adjustment for site of service (for example, 
nursing home or long-term care facility) is worthwhile to consider, and 
will take this comment into account as a potential refinement for 
further exploration.
    Regarding the concern that our proposed approach to specialty 
adjustment could result in a ``high cost'' designation for about 15 
percent of some specialists, we would like to clarify the data on Table 
66 of the proposed rule (78 FR 43498 through 43499). Table 66 provides 
the percentage of physicians practicing in groups with one or more 
eligible professionals with at least 20 beneficiaries and does not 
represent all physicians within that specialty. Therefore, it is 
incorrect to state, for example, that Table 66 (Percentage of Physician 
Practicing in Groups with 1 or more Eligible Professionals with at 
Least 20 Beneficiaries, Classified by Cost), indicates that 14.9 
percent of neurosurgeons would be classified as ``high cost.'' Rather, 
14.9 percent of neurosurgeons practicing in groups with 1 or more 
eligible professionals with at least 20 beneficiaries attributed to the 
practice would be classified as ``high cost.''
    We believe that the comparability peer group method would require 
too many assumptions to be a practical alternative to consider 
implementing in the near term. As a result, we believe that the 
comparability peer group method option would be less transparent than 
the specialty adjustment method. Although the specialty adjustment 
method process is somewhat computationally involved, the calculations 
are straightforward, and we believe that the method is transparent. We 
believe that it is not necessary to delay implementing the specialty 
adjustment method, but we do agree that it is important to monitor the 
impacts of the specialty adjustment method on physician groups as the 
method is implemented starting with the 2016 value-based payment 
modifier.
    After consideration of the comments received and the reasons given 
previously, we are finalizing our proposal to use the specialty 
adjustment method to create the standardized score for each group's 
cost measures beginning with the CY 2016 value-based payment modifier. 
That is, we are refining our current peer group methodology to account 
for specialty mix using the specialty adjustment method. We also are 
finalizing our proposal to amend our regulations at Sec.  414.1255 to 
include this policy in our cost composite methodology. Additionally, we 
are finalizing our proposal to identify the specialty for each EP based 
on the specialty that is listed on the largest share of the EP's Part B 
claims.
5. Physician Feedback Program
    Section 1848(n) of the Act requires us to provide confidential 
reports to physicians that measure the resources involved in furnishing 
care to Medicare FFS beneficiaries. Section 1848(n)(1)(A)(iii) of the 
Act also authorizes us to include information on the quality of care 
furnished to Medicare FFS beneficiaries. In the CY 2014 PFS proposed 
rule (78 FR 43500) we described the 2011 group and individual QRURs, 
which were based on CY 2011 data that we made available to certain 
physicians and groups of physicians. These reports provided physicians 
and groups of physicians with comparative performance data (both 
quality and resource use) that can be used to improve quality and 
coordinate care furnished to Medicare FFS beneficiaries. We also noted 
that in May 2013, we provided supplemental QRURs to group report 
recipients that featured episode-based costs for care of pneumonia and 
several acute and chronic cardiac conditions. We derived these episode-
based costs using the newly developed CMS Episode Grouper software 
required by section 1848(n)(9)(ii) of the Act.
a. CY 2012 Group Quality and Resource Use Reports Based on CY 2012 Data 
and Disseminated in CY 2013.
    On September 16, 2013, we made available CY 2012 QRURs to 6,779 
physician groups nationwide with 25 or more EPs. These reports covered 
approximately 400,000 physicians practicing in large medical groups. 
These reports were available eight and one-half months from the close 
of the performance period (December 31, 2012) and 5 months from the 
close of the quality data submission period (March 31, 2013)--
timeframes that are generally consistent with reporting programs in the 
commercial sector. Not only did these reports provide comparative 
quality of care and cost information like in previous years, but they 
also previewed how the groups of physicians might fare under the value-
based payment modifier. Thus, these reports were a ``first look'' at 
how the value-based payment modifier could affect their payment in the 
future. The QRURs provided groups of 100 or more EPs with quality-
tiering information on 2012 data that they could use to decide whether 
to elect to be assessed under the quality-tiering approach that we 
adopted for the value-based payment modifier that will be applied in 
2015, based on 2013 performance.
    Additionally, and in response to feedback we received from prior 
year recipients of the QRURs, the CY 2012 QRURs contained detailed 
beneficiary-specific data on each group's attributed beneficiaries and 
their hospitalizations, and the group's associated eligible 
professionals. Complementing the CY 2012 QRURs are three downloadable 
drill down tables that provide information on each beneficiary 
attributed to the group and each eligible professional billing under 
the group's Taxpayer Identification Number (TIN). We have received very 
positive feedback from report recipients and expect to enhance the 
information we provide in future years.
    Of the 6,779 physician groups nationwide with 25 or more EPs, 3,876 
groups received full QRUR reports and 2,903 groups received an 
abbreviated report since they did not have any beneficiaries attributed 
to them or did not have at least 20 eligible cases for any quality or 
cost measure. These 2,903 groups had insufficient data on which to 
compute meaningful performance measures. Given the policies that we 
have adopted in this final rule with comment period, we anticipate that 
as long as a group of physicians participates in the Physician Quality 
Reporting System (PQRS) in 2014 and

[[Page 74785]]

meets the criteria to avoid the 2016 PQRS payment adjustment such that 
group is in Category 1 (see discussion above in section III.K.4.b.), we 
will be able to produce a complete QRUR, including their quality-
tiering designation, in CY 2014 for most groups.
    Highlights of major findings of these CY 2012 reports are as 
follows:
     Of the 3,876 groups for whom the quality or cost composite 
could be calculated based on 2012 data, over 80 percent of the groups 
(80.7 percent) are in the average quality and average cost tiers under 
the quality-tiering methodology, and thus, would not receive a payment 
adjustment. Approximately 8 percent of groups are in tiers that would 
receive an upward adjustment, and slightly less than 11 percent of 
groups are in tiers that would receive a downward adjustment. Among the 
groups eligible for an upward adjustment, 11 percent would receive an 
additional 1.0 percent incentive payment due to treating high-risk 
beneficiaries. Although we expect the results to change as physician 
groups understand our methodologies and seek to maximize their upward 
payment adjustment under the value-based payment modifier, these 
results are consistent with our approach to gradually implement the 
value-based payment modifier (see 2. Governing Principles for Physician 
Value-Based Payment Modifier Implementation), that is, to focus on 
adjusting payment for those groups that are outliers (both high and low 
performers).
     Groups with high quality scores performed better than 
groups with average and low quality scores consistently across each of 
the quality domains (or groupings of quality measures) as well as 
across the three quality outcomes measures; they also tended to have 
lower average cost composite scores.
     Beneficiaries that we attributed to a group of physicians 
received an average of five primary care services in 2012 of which, on 
average, 64.3 percent were provided by the group to which the 
beneficiary was attributed. These results suggest that our attribution 
approach attributes beneficiaries to those groups of physicians that 
deliver the majority of a beneficiary's care and are well positioned to 
oversee the beneficiaries' care.
     Reliability among the quality measures was generally 
strong, with the self-reported PQRS measures having the greatest 
average reliability. Average reliabilities for all PQRS measures were 
more than 0.80, indicating high reliability. We note that statistical 
reliability scores are represented on a continuum from zero and one, 
with scores closer to zero indicating lower reliability while scores 
closer to one indicate higher reliability. While there is no 
universally agreed upon minimum reliability threshold, reliability 
scores in the 0.40-0.70 range are often considered moderate and scores 
greater than 0.70 are considered high. In addition to the PQRS 
measures, we computed 14 quality indicators from data reported in 
Medicare administrative claims. The average reliability of the claims-
based quality indicators was lower than for the PQRS quality measures 
but was still quite high with 8 of the 14 measures having average 
reliabilities above 0.70.
     The 2012 QRURs also reported on three administrative 
claims-based outcome measures. The QRURs contained each group 
practice's performance on measures of potentially avoidable 
hospitalizations for ambulatory care sensitive conditions (ACSCs). 
These Medicare claims-based measures were derived from Prevention 
Quality Indicators (PQIs) developed by the Agency for Healthcare 
Research and Quality (AHRQ). We reported on potentially avoidable 
hospitalizations for two composite measures of hospital admissions for 
acute and chronic ACSCs. The average reliability for both ACSC 
composite measures across all groups was higher than 0.70. CMS also 
reported on a medical group practice-specific all-cause 30-day rate of 
acute care hospital readmissions for beneficiaries discharged from an 
acute care or critical access hospital. Average reliability among the 
subset of groups of 100+ EPs was 0.48. We anticipate the reliability of 
this measure to increase as groups of physicians begin to focus on 
reducing unplanned readmissions.
     The QRURs include five cost-of-care measures derived from 
2012 administrative claims data: total per capita costs and per capita 
costs for beneficiaries with four common chronic conditions: diabetes; 
heart failure; COPD; and CAD. The per capita (per beneficiary) cost 
measure assesses health care services for all Medicare FFS attributed 
beneficiaries and for those with chronic conditions. The measure 
includes all Medicare Part A and Part B costs during a calendar year 
and is price-standardized and risk-adjusted to account for any 
potential differences in costs among providers that result from 
circumstances beyond the physician's control. The risk adjustment 
process reduced the overall average per capita costs from $12,815 to 
$10,788 and compressed the range of groups' total per capita costs by 
83 percent. Under our attribution rule, beneficiaries are attributed on 
the basis of the plurality of primary care services, to those medical 
group practices with the greatest potential to influence the quality 
and cost of care delivered to Medicare FFS beneficiaries. All group 
practices with 25 or more EPs achieved an average reliability score of 
0.94 for the total per capita cost measure. For all groups, average 
reliabilities for the condition-specific cost measures ranged from 0.82 
to 0.84. For larger groups with 100+ EPs, average reliability was 
higher for all beneficiaries (0.98), as well as for the condition-
specific cost measures (0.94 for all measures).
    We anticipate publicly releasing a full experience report of the CY 
2012 QRURs that will include how quality-tiering would apply to groups 
of physicians to ensure stakeholders understand the methodologies of 
the value-based payment modifier. The report will be available on the 
Physician Feedback Program Web site.
b. Episode Costs and the Supplemental QRURs
    Section 1848(n)(9)(A)(ii) of the Act, as added by section 3003 of 
the Affordable Care Act, requires CMS to develop a Medicare episode 
grouper by January 1, 2012, and to include episode-based costs in the 
QRURs. An episode of care consists of medical and/or procedural 
services that address a specific medical condition or procedure that 
are delivered to a patient within a defined time period and are 
captured by claims data. An episode grouper is software that organizes 
administrative claims data into episodes.
    We have developed a CMS prototype episode grouper that classifies 
episodes into three categories: chronic; acute; and procedural. In the 
CY 2014 PFS Proposed Rule (78 FR 43502) we described the supplemental 
QRURs we made available to 54 large group practices in June 2013 to 
illustrate how the CMS Episode Grouper works and to illustrate the 
general approach to classifying episodes of care into these three 
categories. The Supplemental QRURs included episode-based costs for 
five clinical conditions (pneumonia, acute myocardial infarction (AMI), 
coronary artery disease, percutaneous coronary intervention (PCI), and 
coronary artery bypass graft (CABG)), which also were broken into 12 
episode sub-types to account for various underlying clinical factors. 
We chose these episode types to gain experience with the prototype 
methodology of the CMS episode grouper in acute, chronic and procedural 
conditions.
    We applied different attribution rules for each episode type 
(chronic, acute, or

[[Page 74786]]

procedural) and whether the episode included a hospitalization. We 
believe that it is critical to attribute an episode to the group of 
physicians that is in the best position to oversee the quality of care 
furnished and the resources used to furnish that care. For chronic 
episodes, attribution was based on outpatient E&M visits, because these 
conditions are best managed in an outpatient setting. For acute 
inpatient-based episodes, attribution was based on Part B Physician Fee 
Schedule allowed amounts during the inpatient stay or percent of 
inpatient E&M visits; for outpatient-based acute episodes, attribution 
was based on E&M visits during the episode. For procedural episodes, 
attribution is made to the group that includes the performing surgeon. 
For chronic and acute episodes, attribution required at least 35 
percent of total allowed amounts or E&M visits, as applicable to the 
episode type. Episodes may be attributed to more than one group, 
although 85 percent of all episodes of any type were attributed to 
exactly one of the 54 medical group practices.
    We also used a slightly different risk adjustment methodology to 
adjust the costs for the underlying risk factors for the beneficiaries 
with these episodes as compared to the total per capita cost measures 
that we have used in the CY 2012 QRURs. The CMS Episode Grouper used to 
generate the 2011 episode data adjusted costs for health and treatment 
history in the 6 months prior to the beginning of the episode. More 
specific risk adjusters include demographic factors (age, gender, and 
enrollment status), health status indicators (for example, medical 
condition categories from HCC model), and procedure indicators. We are 
continuing to examine ways to refine this approach as we develop 
further episode costs for additional clinical conditions.
    The episodes we included in the reports had a high statistical 
reliability and showed a significant amount of variation across the 
groups and within the groups. From a reliability perspective, episodes 
had high or moderate reliability with six having a reliability of risk 
adjusted cost greater than 0.7 (range 0.78 for all AMI to 0.9 for 
coronary artery disease without AMI) and six between 0.5 and 0.7 (range 
0.56 for PCI without AMI to 0.69 for AMI with PCI).
    There also was variation among the groups' mean episode costs 
compared to the national mean. For four of the five conditions, about 
half of the groups had a mean episode cost that was above the national 
episode mean, while about half were below. The exception was coronary 
artery disease, for which only about 20 percent of the groups had mean 
episode costs below the cost of the national mean. Primary cost drivers 
varied by episode subtype (for example, coronary artery disease with or 
without myocardial infarction), and depended on whether or not the 
episode included inpatient hospital stays and post-acute care such as 
for skilled nursing facilities and rehabilitation facilities. As noted 
above, risk adjustment was used to account for variations in resource 
use beyond the medical group's control.
    We plan to further develop these episode reports and to include not 
only additional episodes, but to make this information available to a 
wider set of medical group practices. Additional clinical conditions 
under consideration for future QRURs include episode costs related to 
congestive heart failure, cardiac arrhythmias, hip fracture, 
osteoarthritis, cataract, glaucoma, chronic obstructive lung disease, 
and respiratory failure. In addition, we will begin to marry these 
measures of resource use with clinical quality measures included in the 
Physician Quality Reporting System, because resource use makes most 
sense in context of the quality of care furnished.
    We have worked with stakeholders and specialty societies to gain 
input for the next iteration of the CMS Episode Grouper. We received 
input to examine episode attribution, handling of transfers, relook at 
risk adjustment, and increased drill down capacity. The CMS Episode 
Grouper will continue to evolve over the next few years as more 
experience is gained. More information about the Supplemental QRURs and 
a summary slide deck of findings on episode costs for medical groups 
eligible to receive the 2011 supplemental QRURs can be found at http://www.cms.gov/Medicare/Medicare-Fee-for-Service-Payment/PhysicianFeedbackProgram/Episode-Costs-and-Medicare-Episode-Grouper.html.
c. Future Plans for the Physician Feedback Reports
    We will continue to develop and refine the annual QRURs in an 
iterative manner. As we have done in previous years, we will seek to 
further improve the reports by welcoming suggestions from recipients, 
specialty societies, professional associations, and others. We have 
worked with several specialty societies to develop episode costs or 
other cost or utilization metrics to include in the annual QRURs. We 
believe these efforts could be productive as we use the QRURs to not 
only describe how the value-based payment modifier would apply, but in 
addition to provide groups with utilization and other statistics that 
can be used for quality improvement and care coordination.
    The following is a summary of the comments we received about the 
QRURs. We appreciate commenters' suggestions, but because we did not 
make any proposals relating to the QRURs, these comments were beyond 
the scope of the proposed rule. We will consider them as we further 
implement the Physician Feedback Program.
    Comment: We received some comments in response to our description 
of updates to the QRUR program. Many commenters were very favorable 
about CMS' work with the physician community to develop the reports and 
asked that we continue to work with them to refine them. One commenter 
stated that, ``CMS has taken large strides to improve the clarity and 
usability of the QRUR reports to present cost and quality information 
in a meaningful and clear way.'' The commenter also suggested that CMS 
reconvene the stakeholder workgroup to continue to enhance the feedback 
reports for 2014 and future years. Some commenters made suggestions 
about how to improve the reports. One commenter suggested that CMS 
reduce the length of the report, tailor reports to each specialty by 
highlighting the measures/conditions of the particular specialist 
receiving the report, include more details on the physician's patient 
population, provide recommendations on action items, and accurately 
identify other providers whose data may have been used in developing 
the report. Another commenter asked CMS to continue to improve the 
timeliness and frequency of the reports. One commenter suggested that 
CMS should report data at the individual NPI level and roll the data up 
to the TIN level. Some comments suggested that CMS should give 
providers an opportunity to view their data before they were penalized 
so that they would have an opportunity to change their behavior. One 
commenter suggested that CMS should offer providers corrective action 
plans so that physicians could improve their performance before being 
impacted by the value based modifier. Some commenters stated that 
although they realized the statute requires CMS to roll out the value-
based modifier to all physicians by January 1, 2017, they were 
concerned about the aggressive timetable for implementation and noted 
that providers were being impacted by several programs at once.
    Response: We appreciate the commenters' responses to our

[[Page 74787]]

description of the QRUR program and their suggestions for how to 
improve it. We will take these suggestions into consideration as we 
further implement the Physician Feedback Program.
    We also welcome feedback about the recently released reports over 
the next few months and have several activities scheduled to allow 
physicians to give us their additional input. In the late summer of 
2014, we plan to disseminate the QRURs based on CY 2013 data to all 
physicians (that is, TINs of any size) even though groups of physicians 
with fewer than 100 eligible professionals will not be subject to the 
value-based payment modifier in CY 2015. These reports will contain 
performance on the quality and cost measures used to score the 
composites and additional information to help physicians coordinate 
care and improve the quality of care furnished. The reports will be 
based on the value-based payment modifier policies that we are 
finalizing in this rule that will take effect January 1, 2014 and that 
will affect physician payment starting January 1, 2016. Groups of 
physicians will, therefore, have an opportunity to determine how the 
policies adopted in this final rule with comment period will apply to 
them. After the reports are released we will again solicit feedback 
from physicians and continue to work with our partners to improve them. 
We note that physicians will have some time to determine the impact of 
our revised policies and revise their practices accordingly before the 
new policies impact them. We will study the recommendations submitted 
in response to this proposed rule and any later suggestions we receive 
and make plans to implement those that are feasible. We look forward to 
continue working with the physician community to improve the QRURs.

L. Updating Existing Standards for E-Prescribing Under Medicare Part D

1. Background
a. Legislative History
    Section 101 of the Medicare Prescription Drug, Improvement, and 
Modernization Act of 2003 (MMA) (Pub. L. 108-173) amended title XVIII 
of the Act to establish a voluntary prescription drug benefit program 
at section 1860D-4(e) of the Act. Among other things, these provisions 
required the adoption of Part D e-prescribing standards. Prescription 
Drug Plan (PDP) sponsors and Medicare Advantage (MA) organizations 
offering Medicare Advantage-Prescription Drug Plans (MA-PD) are 
required to establish electronic prescription drug programs that comply 
with the e-prescribing standards that are adopted under this authority. 
There is no requirement that prescribers or dispensers implement e-
prescribing. However, prescribers and dispensers who electronically 
transmit prescription and certain other information for covered drugs 
prescribed for Medicare Part D eligible beneficiaries, directly or 
through an intermediary, are required to comply with any applicable 
standards that are in effect.
    For a further discussion of the statutory basis for this final rule 
with comment period and the statutory requirements at section 1860D-
4(e) of the Act, please refer to section I. (Background) of the E-
Prescribing and the Prescription Drug Program proposed rule, published 
February 4, 2005 (70 FR 6256).
b. Regulatory History
(1) Foundation and Final Standards
    We utilized several rounds of rulemaking to adopt standards for the 
e-prescribing program. Its first rule, which was published on November 
7, 2005 (70 FR 67568), adopted three standards that were collectively 
referred to as the ``foundation'' standards. We issued a subsequent 
rule on April 7, 2008 (73 FR 18918) that adopted additional standards 
which are referred to as ``final'' standards. One of these standards, 
the NCPDP Formulary and Benefit Standard, Implementation Guide, Version 
1, Release 0 (Version 1.0, hereafter referred to as the NCPDP Formulary 
and Benefit 1.0) was a subject of the CY 2013 PFS final rule with 
comment period (77 FR 68892 at 69329) and is the subject of this final 
rule with comment period. Please see the ``Initial Standards Versus 
Final Standards'' discussion at 70 FR 67568 in the November 7, 2005 
rule for a more detailed discussion about ``foundation'' and ``final'' 
standards.
(2) Updating e-Prescribing Standards
    Transaction standards are periodically updated to take new 
knowledge, technology and other considerations into account. As CMS 
adopted specific versions of the standards when it adopted the 
foundation and final e-prescribing standards, there was a need to 
establish processes by which the standards could be updated or replaced 
over time to ensure that the standards did not hold back progress in 
the industry. CMS discussed these processes in its November 7, 2005 
final rule (70 FR 67579).
    The discussion noted that the rulemaking process will generally be 
used to retire, replace or adopt a new e-prescribing standard, but it 
also provided for a simplified ``updating process'' when a standard 
could be updated with a newer ``backward-compatible'' version of the 
adopted standard. In instances in which the user of the later version 
can accommodate users of the earlier version of the adopted standard 
without modification, it noted that notice and comment rulemaking could 
be waived, in which case the use of either the new or old version of 
the adopted standard would be considered compliant upon the effective 
date of the newer version's incorporation by reference in the Federal 
Register.
(3) The NCPDP Formulary and Benefit Standard in the Part D e-
Prescribing Regulations
    The backward compatibility concept has been used extensively to 
update the NCPDP SCRIPT standard in the Part D e-prescribing program, 
but it has not yet been used to update the adopted NCPDP Formulary and 
Benefit Standard. We proposed to update the NCPDP Formulary and Benefit 
1.0 standard for the first time in the CY 2013 PFS proposed rule (77 FR 
44722), but we did not ultimately finalize those proposals. 
Specifically, we proposed to recognize NCPDP Formulary and Benefit 
Standard 3.0 as a backward compatible version of NCPDP Formulary and 
Benefits 1.0 effective 60 days from the publication of the final rule, 
and sought comment on when we should retire NCPDP Formulary and 
Benefits 1.0 as well as when we should adopt NCPDP Formulary and 
Benefits 3.0 as the official Part D e-prescribing standard. As was 
noted in that rule, while recognition of backward compatible versions 
can be done in an interim final rule in which we waive notice and 
comment rulemaking, other Part D e-prescribing proposals that were 
being made at that time required full notice and comment rulemaking, 
so, as we did not wish to publish two e-prescribing rules 
contemporaneously, we elected to forgo our usual use of our simplified 
updating process for backward compatible standards (in which we waive 
notice and comment rulemaking and go straight to final) in favor of 
putting all of the proposals through full notice and comment 
rulemaking.
2. Proposals
a. Proposed Backward Compatible Standards
    As was discussed in the CY 2013 PFS final rule with comment period 
(77 FR 68892), we were persuaded by

[[Page 74788]]

commenters to refrain from retiring Formulary and Benefit Standard 1.0 
until NCPDP ceased supporting it on July 1, 2014. As further noted in 
that rule, we believed it best to delay implementing any of our 
Formulary and Benefits proposals, including recognitions of NCPDP 
Formulary and Benefit 3.0 as a backward compatible standard, until 
closer to that July 1, 2014 date. Our actions at that time were based 
on a belief that an extended period of use of either 3.0 or 1.0 would 
be ill-advised.
    Having come within roughly a year of the anticipated date upon 
which NCPDP will cease supporting NCPDP Formulary and Benefit 1.0, we 
believed that it was now appropriate to re-propose the recognition of 
NCPDP Formulary and Benefits 3.0 as a backward compatible version of 
Formulary and Benefits 1.0 effective 60 days after publication of a 
final rule until June 30, 2014, and, as discussed below, we also 
proposed the retirement of NCPDP Formulary and Benefits 1.0, effective 
July 1, 2014, and the adoption of NCPDP Formulary and Benefits 3.0 as 
the official Part D e-prescribing standard effective July 1, 2014.
    Also, as was seen in our prior proposal to recognize backward 
compatibility using full notice and comment in place of the backward 
compatible methodology, we also proposed to require users of 3.0 to 
support users who are still using NCPDP Formulary and Benefit 1.0 until 
such time as that version is officially retired as a Part D e-
prescribing standard and NCPDP Formulary and Benefit 3.0 is adopted as 
the official Part D e-prescribing standard.
2. Proposed Retirement of NCPDP Formulary and Benefit Standard 1.0 and 
Adoption of NCPDP Formulary and Benefit Standard 3.0
    As noted in the CY 2013 PFS proposed rule, the NCPDP Formulary and 
Benefits standard provides a uniform means for pharmacy benefit payers 
(including health plans and PBMs) to communicate a range of formulary 
and benefit information to prescribers via point-of-care (POC) systems. 
These include:
     General formulary data (for example, therapeutic classes 
and subclasses);
     Formulary status of individual drugs (that is, which drugs 
are covered);
     Preferred alternatives (including any coverage 
restrictions, such as quantity limits and need for prior 
authorization); and
     Copayment (the copayments for one drug option versus 
another).
    Also as noted in that proposed rule, standards are updated over 
time to take industry feedback and new and modified business needs into 
account. See the CY 2013 PFS proposed rule (77 FR 45023-45024) for a 
full discussion of the changes to that were made to the NCPDP Formulary 
and Benefit 1.0 as it was updated to the NCPDP Formulary and Benefit 
3.0.
    As noted above, having come within roughly a year of the 
anticipated date upon which NCPDP will cease supporting NCPDP Formulary 
and Benefit 1.0, we believed that it was now appropriate to re-propose 
the retirement of NCPDP Formulary and Benefits 1.0, effective June 30, 
2014, and also proposed the adoption of NCPDP Formulary and Benefits 
3.0 as the official Part D e-prescribing standard, effective July 1, 
2014.
    To effectuate these proposals, we proposed to revise Sec.  
423.160(b)(5). We proposed to place the existing material in a new 
paragraph (b)(5)(i), which would provide the official formulary and 
benefit standard for Part D e-prescribing until June 30, 2014. We then 
proposed to create a second new paragraph ((b)(5)(ii)) to recognize 
NCPDP Formulary and Benefit 3.0. as a backward compatible version of 
the official Part D e-prescribing standard (NCPDP Formulary and Benefit 
1.0), effective February 10, 2014 through June 30, 2014. Furthermore, 
we proposed to create a third new paragraph ((b)(5)(iii)) to reflect 
the retirement of NCPDP Formulary and Benefit 1.0 and the adoption of 
NCPDP Formulary and Benefit 3.0 as the official Part D e-prescribing 
standard, effective July 1, 2014. Finally, we proposed to make 
conforming changes to Sec.  423.160(b)(1). We solicited comment on 
these proposals.
    The following is a summary of the comments we received regarding 
our proposal to recognize NCPDP Formulary and Benefit Standard 3.0 as a 
backward compatible version of the NCPDP Formulary and Benefit Standard 
1.0, the proposed retirement of NCPDP Formulary and Benefit Standard 
1.0 and the proposed adoption of NCPDP Formulary and Benefit Standard 
3.0.
    Comment: Commenters generally supported our proposal to adopt the 
newest version of the NCPDP Formulary and Benefit Standard 3.0 as a 
backward compatible version of the adopted NCPDP Formulary and Benefit 
1.0 (60 days after the publication of the final rule), and the 
retirement of Version 1.0 as an official Part D e-prescribing standard, 
effective June 30, 2014.
    Response: We appreciate the favorable feedback that we received on 
this proposal and are in agreement with the commenters who responded.
    We received a total of 9 comments on our proposal as it related to 
the effective date of adopting Formulary and Benefit standard 3.0 on 
July 1, 2014 and the retirement of Formulary and Benefit Standard 1.0 
on June, 30 2014 as an official Part D e-prescribing standard.
    Comment: Some commenters agreed with our proposal stating that 
these types of updates are routine and reflect improvements.
    Response: We appreciate the feedback we received on the proposed 
timeline to retire Formulary and Benefit Standard 1.0 on June, 30 2014 
and to finalize adoption of the Formulary and Benefit standard 3.0 as 
the official Part D e-prescribing formulary and benefits standard on 
July 1, 2014.
    Comment: One commenter appreciated our decision in the CY 2013 
Medicare Physicians Fee Schedule to delay retiring NCPDP Formulary and 
benefits Standard 1.0 and adopting the NCPDP Formulary and Benefits 
3.0. They are concerned, however, with our proposal to go forward with 
the proposed effective dates for the adoption of the NCPDP Formulary 
and Benefits Standard 3.0 and the retirement of Version 1.0 on July 1, 
2014. The commenter stated that the current deadline for ICD-10 
conversion is October 1, 2014 and many of their resources are devoted 
to the ICD-10 conversion coding as well as additional systems 
requirements that they assert they will need to make due to the 
implementation of the health insurance exchanges on January 1, 2014. 
They urged CMS to consider delaying the adoption of the NCPDP Formulary 
and Benefits 3.0 update until early 2015. They stated that this would 
provide stakeholders with sufficient time to be able to ensure adequate 
time to address these issues that are coming online in 2014.
    Response: We appreciate the comment, but we disagree with the 
commenter's concerns about the conversion to ICD-10 on October 1, 2014. 
On October 1, 2014, the ICD-9 code sets used to report medical 
diagnoses and inpatient procedures will be replaced by ICD-10 code 
sets. The transition to ICD-10 is required for everyone subject to the 
Health Insurance Portability Accountability Act (HIPAA). Industry has 
had 3 years to prepare for this new requirement and should have already 
started preparing for the conversion to ICD-10, so we do not believe 
that the conversion to the NCPDP Formulary and Benefit Standard 3.0 
will present an undue added burden.

[[Page 74789]]

    Furthermore, we do not agree with commenter's assertion that the 
implementation of the health care exchanges on January 1, 2014 will 
impose burdens that would affect an entity's ability to implement the 
NCPDP Formulary and Benefit Standard 3.0 on July 1, 2014.
    Furthermore, we would note that the health care exchanges actually 
went live on October 1, 2013, with coverage for those who enroll 
beginning as early as January 1, 2014. Any system changes that may be 
needed will therefore have to have been made by October 1, 2013, or 
January 1, 2014, depending on what systems the commenter may have been 
referencing. As such, we do not see how the implementation of the 
health care exchanges would have any impact on the proposed 
implementation date for the NCPDP Formulary and Benefit Standard 3.0 on 
July 1, 2014.
    Comment: Two commenters recommended that we delay the proposed June 
30, 2014 and July 1, 2014 effective dates 12 months. One commenter 
stated that 7 months is insufficient time for safe and efficient 
development and implementation. They asserted that, if the proposed 
rule goes into effect, the propsed dates would leave EHR developers and 
EHR users approximately 7 months to do all of the following:
     Complete development to support for the new standard.
     Test the configuration required for the new standard.
     Move this configuration into production.
    Another commenter urged CMS to consider an 18-month timeframe 
between the effective date of this final rule and the compliance date 
for those subject to the rule. The commenter stated that 18 months 
would allow EHR developers and healthcare organizations to include the 
upgrade with other work already in progress for programs such as 
Meaningful Use and the ICD-10 transition. The commenter recommended the 
retirement of the use of the current NCPDP Formulary and Benefit 1.0 
standard June 30, 2015 and the adoption of NCPDP Formulary and Benefit 
3.0 as the official Part D e-prescribing formulary and benefits 
standard on July 1, 2015.
    Another commenter recommended that entities be allowed to use NCPDP 
Formulary Benefit Version 1.0 or Version 3.0 during a transition period 
that would end June 30, 2015, and that the NCPDP Formulary and Benefit 
3.0 should become the official Part D e-prescribing formulary and 
benefits standard effective July 1, 2015.
    Response: We appreciate the comments but do not believe that there 
is a compelling reason to allow use of NCPDP Formulary Benefit Version 
1.0 or Version 3.0 through June 30, 2015, or to wait to make NCPDP 
Formulary and Benefit 3.0 the official Part D standard until July 1, 
2015. As we have stated in the past, we do not think it is advisable to 
have extended periods in which either an adopted standard or a backward 
compatible version of that standard may be used. We believe that 
allowing the extended use of Version 3.0 as a backward compatible 
version of Version 1.0 would create confusion.
    We understand that our regulations should impose the minimum burden 
possible on the industry; we therefore re-evaluated our initial 
timeline proposal in light of recommendations from commenters. We 
concluded that a July 1, 2014 effective date may be an aggressive 
timeline for the implementation of the updated NCPDP Formulary and 
Benefits 3.0 standard, and that some of the commenters have made valid 
arguments in regards to moving the effective dates back from what we 
originally proposed.
    Commenters have convinced us that if we were to finalize the 
original timelines as proposed, the industry may not have time to 
ensure that all of the changes, testing, and implementation activities 
for the move to Version 3.0 will be completed in time. At the same 
time, however, we believe that the suggested 18 month delay in 
effective date is too long. We believe a suitable compromise would be 
to delay the effective date of our proposals to retire Version 1.0 and 
to adopt Version 3.0 as the official Part D e-prescribing standard by 
moving the originally anticipated effective date of this final rule to 
early 2015. As such, we will retire the Version 1.0 effective February 
28, 2015, and adopt Version 3.0 as the official Part D e-prescribing 
standard effective March 1, 2015. Furthermore, Version 3.0 will be 
recognized as a backward compatible version of the adopted Version 1.0 
from February 10, 2014 through February 28, 2015.
    Comment: We received a comment from NCPDP that asked for 
clarification of our statement in the proposed rule regarding the 
anticipated date upon which NCPDP would cease supporting NCPDP 
Formulary and Benefit 1.0. NCPDP stated that they do not intend to 
cease to support NCPDP Formulary and Benefit Standard Version 1.0, 
meaning that it will always be included as a a version in the listing 
of NCPDP publications. They acknowledged that versions may be retired 
over time as the industry ceases active use of them, but, as in this 
case, regulations would drive which version would be the appropriate 
version to be used.
    Response: We appreciate the comment from NCPDP clarifying that they 
will keep NCPDP Formulary and Benefits 1.0 in its list of publications 
available to its membership.
    As a result of the comments, we believe that some of the commenters 
have made valid arguments in regards to moving the effective dates back 
from what we originally proposed. We believe a suitable compromise 
would be to delay the effective date of our proposals to retire Version 
1.0 on February 28, 2015 and to adopt Version 3.0 as the official Part 
D e-prescribing standard on March 1, 2015. This would allow industry 
adequate time to implement the necessary changes and testing needed to 
implement. That means that the retirement of Version 1.0 will be 
effective February 28, 2015, and the adoption of Version 3.0 as the 
official Part D e-prescribing standard will be effective March 1, 2015.
    We are therefore finalizing recognition of the NCPDP Formulary and 
Benefits Standard 3.0 as a backward compatible version of NCPDP 
Formulary and Benefits Standard 1.0 as of the effective date of this 
final rule with comment period effective February 10, 2014, the 
retireent of NCPDP Formulary and Benefits Standard Version 1.0 
effective February 28, 2015 and the adoption of NCPDP Formulary and 
Benefits Standard Version 3.0 as the official Part D e-Prescribing 
Standard effective March 1, 2015. To effectuate this, we are revising 
Sec.  423.160(b)(5) to redesignate the current (b)(5) as (b)(5)(i), 
which will cover prior to February 7, 2014, and adding a new (b)(5)(ii) 
(which will cover February 10, 2014 until February 28, 2015) and 
(b)(5)(iii) (which will cover March 1, 2015 and beyond). Section 
(b)(5)(ii) will be applicable to the period in which Version 3.0. will 
be recognized as a backward compatible version of Version 1.0, during 
which time Version 1.0 will remain the official Part D e-prescribing 
standard. Section 423.160(b)(5)(iii) will be applicable to the period 
in which Version 3.0 is the official Part D e-prescribing standard.
    We will also amend the incorporation by reference in the Part D e-
prescribing regulations by adding a reference to the NCPDP Formulary 
and Benefit Standard 3.0 at Sec.  423.160(c)(1)(vi). Finally, we will 
make conforming changes to Sec.  423.160(b)(1) to reflect the changes 
to Sec.  423.160(b)(5).

[[Page 74790]]

M. Discussion of Budget Neutrality for the Chiropractic Services 
Demonstration

    Section 651 of MMA requires the Secretary to conduct a 
demonstration for up to 2 years to evaluate the feasibility and 
advisability of expanding coverage for chiropractic services under 
Medicare. Current Medicare coverage for chiropractic services is 
limited to treatment by means of manual manipulation of the spine to 
correct a subluxation described in section 1861(r)(5) of the Act 
provided such treatment is legal in the state or jurisdiction where 
performed. The demonstration expanded Medicare coverage to include: 
``(A) care for neuromusculoskeletal conditions typical among eligible 
beneficiaries; and (B) diagnostic and other services that a 
chiropractor is legally authorized to perform by the state or 
jurisdiction in which such treatment is provided.'' The demonstration 
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 that BN would be 
assessed by determining the change in costs based on a pre-post 
comparison of total 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 for other services.
    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 BN. In the 
``All Neuromusculoskeletal Analysis,'' which compared the total 
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 on Medicare spending was $114 million higher costs 
for beneficiaries in areas that participated in the demonstration. 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 was 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 on Medicare spending was a $50 million increase in costs.
    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, as the latter included those who 
did not use chiropractic services and who may 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, from 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.
    For the CY 2013 PFS, our Office of the Actuary (OACT) estimated 
chiropractic expenditures to be approximately $470 million, which 
reflected the statutory 26.5 percent reduction to PFS payments 
scheduled to take effect that year. The statute was subsequently 
amended to impose a zero percent PFS update for CY 2013 instead of the 
26.5 percent reduction. In large part because of the change in the PFS 
update, OACT now estimates CY 2013 chiropractic expenditures to be 
approximately $580 million. Because of the change in projected 
chiropractic expenditures, we now expect to recoup approximately $11.6 
million from the 2 percent payment reduction for chiropractic CPT codes 
in CY 2013.
    We expect to complete the required BN adjustment by recouping the 
remainder of the chiropractic expenditures in CY 2014. For each year of 
this recoupment, we have provided OACT's projected chiropractic 
expenditures based on previous year's data. While OACT's projections 
have included the statutory reductions to physician payments, the 
statute was amended in each year to avoid these reductions. As a 
result, Medicare expenditures for chiropractic services during the 
recoupment were higher than the OACT projections. Chiropractic services 
expenditures during the recoupment period have been as follows: $540 
million in 2010; $520 million in 2011; and $580 million in 2012. In 
total, CMS recouped $32.8 million over the years of 2010, 2011 and 
2012. OACT now projects chiropractic expenditures to be approximately 
$580 million in 2013. A 2 percent recoupment percentage for 
chiropractic services would result in approximately $11.6 million in 
2013. For the years 2010 through 2013, CMS would have recouped 
approximately $44.4 million of the $50 million required for budget 
neutrality.
    In 2014, CMS is reducing the recoupment percentage for the 
chiropractic codes to ensure the recoupment does not exceed the $50 
million required for budget neutrality. OACT estimates chiropractic 
expenditures in CY 2014 will be approximately $560 million based on 
Medicare spending for chiropractic services for the most recent 
available year and reflecting an approximate 20 percent reduction to 
the physician fee schedule conversion factor scheduled to take effect 
under current law. CMS

[[Page 74791]]

plans to recoup the remaining funds, approximately $5.6 million, and 
will reduce chiropractic CPT codes (CPT codes 98940, 98941, and 98942) 
by the appropriate percentage. We will reflect 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 preserves the integrity of the PFS, particularly since many 
private payers also base payment on the RVUs.
    We received no comments regarding this provision of the PFS. 
Therefore, as finalized in the CY 2010 PFS regulation and reiterated in 
the CYs 2011 through 2013 PFS regulations, we are implementing this 
methodology and recouping excess expenditures under the chiropractic 
services demonstration from PFS payment for the chiropractor codes as 
set forth above. This recoupment addresses the statutory requirement 
for BN and appropriately impacts the chiropractic profession that is 
directly affected by the demonstration. We intend for CY 2014 to be the 
last year of this required recoupment.

N. Physician Self-Referral Prohibition: Annual Update to the List of 
CPT/HCPCS Codes

1. General
    Section 1877 of the Act prohibits a physician from referring a 
Medicare beneficiary for certain designated health services (DHS) to an 
entity with which the physician (or a member of the physician's 
immediate family) has a financial relationship, unless an exception 
applies. Section 1877 of the Act also prohibits the DHS entity from 
submitting claims to Medicare or billing the beneficiary or any other 
entity for Medicare DHS that are furnished as a result of a prohibited 
referral.
    Section 1877(h)(6) of the Act and Sec.  411.351 of our regulations 
specify that the following services are DHS:
     Clinical laboratory services
     Physical therapy services
     Occupational therapy services
     Outpatient speech-language pathology services
     Radiology and certain other imaging services
     Radiation therapy services and supplies
     Durable medical equipment and supplies
     Parenteral and enteral nutrients, equipment, and supplies
     Prosthetics, orthotics, and prosthetic devices and 
supplies
     Home health services
     Outpatient prescription drugs
     Inpatient and outpatient hospital services
2. Annual Update to the Code List
a. Background
    In Sec.  411.351, we specify that the entire scope of four DHS 
categories is defined in a list of CPT/HCPCS codes (the Code List), 
which is updated annually to account for changes in the most recent CPT 
and HCPCS Level II publications. The DHS categories defined and updated 
in this manner are:
     Clinical laboratory services.
     Physical therapy, occupational therapy, and outpatient 
speech-language pathology services.
     Radiology and certain other imaging services.
     Radiation therapy services and supplies.
    The Code List also identifies those items and services that may 
qualify for either of the following two exceptions to the physician 
self-referral prohibition:
     EPO and other dialysis-related drugs (Sec.  411.355(g)).
     Preventive screening tests, immunizations, or vaccines 
(Sec.  411.355(h)).
    The definition of DHS at Sec.  411.351 excludes services that are 
reimbursed by Medicare as part of a composite rate (unless the services 
are specifically identified as DHS and are themselves payable through a 
composite rate, such as home health and inpatient and outpatient 
hospital services). Effective January 1, 2011, EPO and dialysis-related 
drugs furnished in or by an ESRD facility (except drugs for which there 
are no injectable equivalents or other forms of administration), have 
been reimbursed under a composite rate known as the ESRD prospective 
payment system (ESRD PPS) (75 FR 49030). Accordingly, EPO and any 
dialysis-related drugs that are paid for under ESRD PPS are not DHS and 
are not listed among the drugs that could qualify for the exception at 
Sec.  411.355(g) for EPO and other dialysis-related drugs furnished in 
or by an ESRD facility.
    Drugs for which there are no injectable equivalents or other forms 
of administration were scheduled to be paid under ESRD PPS beginning 
January 1, 2014 (75 FR 49044). However, on January 3, 2013, Congress 
enacted the American Taxpayer Relief Act of 2012 (ATRA), (Pub. L. 112-
240), which will delay payment of these drugs under ESRD PPS until 
January 1, 2016. In the meantime, such drugs furnished in or by an ESRD 
facility are not reimbursed as part of a composite rate and thus, are 
DHS. For purposes of the exception at Sec.  411.355(g), only those 
drugs that are required for the efficacy of dialysis may be identified 
on the List of CPT/HCPCS Codes as eligible for the exception. As we 
have explained previously in the 2010 PFS final rule (75 FR 73583), we 
do not believe that any drugs for which there are no injectable 
equivalents or other forms of administration are required for the 
efficacy of dialysis. We therefore have not included any such drugs on 
the list of drugs that can qualify for the exception.
    The Code List was last updated in Addendum J of the CY 2013 PFS 
final rule with comment period.
b. Response to Comments
    We received no public comments relating to the Code List that 
became effective January 1, 2013.
c. Revisions Effective for 2014
    The updated, comprehensive Code List effective January 1, 2014, 
appears as Addendum K in this final rule with comment period and is 
available on our Web site at http://www.cms.gov/Medicare/Fraud-and-Abuse/PhysicianSelfReferral/List_of_Codes.html.
    Additions and deletions to the Code List conform it to the most 
recent publications of CPT and HCPCS Level II, and to changes in 
Medicare coverage policy and payment status.
    Tables 89 and 90 identify the additions and deletions, 
respectively, to the comprehensive Code List that become effective 
January 1, 2014. Tables 89 and 90 also identify the additions and 
deletions to the list of codes used to identify the items and services 
that may qualify for the exceptions in Sec.  411.355(g) (regarding 
dialysis-related outpatient prescription drugs furnished in or by an 
ESRD facility) and in Sec.  411.355(h) (regarding preventive screening 
tests, immunizations, and vaccines).
    We will consider comments regarding the codes listed in Tables 89 
and 90. Comments will be considered if we receive them by the date 
specified in the DATES section of this final rule with comment period. 
We will not consider any comment that advocates a substantive change to 
any of the DHS defined in Sec.  411.351.

[[Page 74792]]

Table 89--Additions to the Physician Self-Referral List of CPT \1\/HCPCS
                                  Codes
------------------------------------------------------------------------
 
-------------------------------------------------------------------------
                      CLINICAL LABORATORY SERVICES
------------------------------------------------------------------------
{No additions{time}
------------------------------------------------------------------------
 PHYSICAL THERAPY, OCCUPATIONAL THERAPY, AND OUTPATIENT SPEECH-LANGUAGE
                           PATHOLOGY SERVICES
------------------------------------------------------------------------
92521 Evaluation of speech fluency
92522 Evaluate speech production
92523 Speech sound lang comprehen
92524 Behavral qualit analys voice
97610 Low frequency non-thermal US
G0460 Autologous PRP for ulcers
------------------------------------------------------------------------
              RADIOLOGY AND CERTAIN OTHER IMAGING SERVICES
------------------------------------------------------------------------
97610 Low frequency non-thermal US
0330T Tear film img uni/bi w/i&r
0331T Heart symp image plnr
0332T Heart symp image plnr spect
0346T+ Ultrasound elastography
A9520 Tc99 Tilmanocept diag 0.5mci
A9586 Florbetapir F18
C9734 U/S trtmt, not leiomyomata
------------------------------------------------------------------------
                 RADIATION THERAPY SERVICES AND SUPPLIES
------------------------------------------------------------------------
C9734 U/S trtmt, not leiomyomata
------------------------------------------------------------------------
                  EPO AND OTHER DIALYSIS-RELATED DRUGS
------------------------------------------------------------------------
{No additions{time}
------------------------------------------------------------------------
         PREVENTIVE SCREENING TESTS, IMMUNIZATIONS AND VACCINES
------------------------------------------------------------------------
90661 Flu vacc cell cult prsv free
90673 Flu vacc RIV3 no preserv
90685 Flu vac no prsv 4 val 6-35 m
90686 Flu vac no prsv 4 val 3 yrs+
90688 Flu vacc 4 val 3 yrs plus im
------------------------------------------------------------------------
\1\ CPT codes and descriptions only are copyright 2013 AMA. All rights
  are reserved and applicable FARS/DFARS clauses apply.

  Table 90--Deletions from the Physician Self-Referral List of CPT \1\/
                               HCPCS Codes
------------------------------------------------------------------------
 
-------------------------------------------------------------------------
                      CLINICAL LABORATORY SERVICES
------------------------------------------------------------------------
{No deletions{time}
------------------------------------------------------------------------
 PHYSICAL THERAPY, OCCUPATIONAL THERAPY, AND OUTPATIENT SPEECH-LANGUAGE
                           PATHOLOGY SERVICES
------------------------------------------------------------------------
0183T Wound Ultrasound
92506 Speech/hearing evaluation
------------------------------------------------------------------------
              RADIOLOGY AND CERTAIN OTHER IMAGING SERVICES
------------------------------------------------------------------------
{No deletions{time}
------------------------------------------------------------------------
                 RADIATION THERAPY SERVICES AND SUPPLIES
------------------------------------------------------------------------
{No deletions{time}
------------------------------------------------------------------------
                  EPO AND OTHER DIALYSIS-RELATED DRUGS
------------------------------------------------------------------------
{No deletions{time}
------------------------------------------------------------------------
         PREVENTIVE SCREENING TESTS, IMMUNIZATIONS AND VACCINES
------------------------------------------------------------------------
{No deletions{time}
------------------------------------------------------------------------
CPT codes and descriptions only are copyright 2013 AMA. All rights are
  reserved and applicable FARS/DFARS clauses apply.

[[Page 74793]]

IV. 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.
    In the CY 2014 PFS proposed rule (78 FR 43506), we solicited public 
comment on each of these issues for the following sections of this 
document that contain information collection requirements (ICRs). No 
comments were received.

A. ICRs Regarding Medical Services Coverage Decisions That Relate to 
Health Care Technology (Sec.  405.211)

    Over the past 18 years, there have been approximately 4000 IDE 
studies approved that are potentially coverable by Medicare, averaging 
to about 222 per year. If the sponsor requests a second review, the 
documents will have to be sent again. We estimate that this may happen 
5-8 percent of the time. Adding another 8 percent brings the total 
estimate to approximately 240 requests per year.
    To derive average costs, we used data from the U.S. Bureau of Labor 
Statistics for all salary estimates. The salary estimates include the 
cost of fringe benefits, calculated at 35 percent of salary, which is 
based on the May 2013 Employer Costs for Employee Compensation report 
by the Bureau. The burden associated with the requirements under Sec.  
405.211 is the time and effort it will take a study sponsor that is 
seeking Medicare coverage related to an FDA-approved Category A or B 
IDE to prepare the request and supporting documents (a copy of each of 
the following: FDA approval letter of the IDE, IDE study protocol, IRB 
approval letter, NCT number, and supporting materials (as needed).
    For the most part, the documents are copies of communications 
between the study sponsor and the FDA. Accordingly, we estimate that it 
will take 1 to 2 hours for an executive administrative assistant in a 
medical device company to prepare the required information. We estimate 
that for 240 requests per year, that the total time to be expended by 
all potential study sponsors is estimated to be between 240 to 480 
hours. In deriving costs to the public, we used the Bureau of Labor 
Statistics May 2012 estimate of $24.14 + 35% in fringe benefits for 
estimated hourly wage of $32.59 for an executive administrative 
assistant (occupation code 43-6011). We estimate the cost to be between 
$7.822-$15,643 per study, for 222 potential IDE study sponsors plus a 
potential 19 additional submissions. If the average time of a study is 
2 years, the annualized cost is $3,911-$15,643 years applications or 
$16.30-$39.59 per study.
    The higher figure is used for the burden calculation in our PRA 
submission to OMB. The preceding requirements and burden estimates will 
be submitted to OMB under OCN 0938-New (CMS-10511).

B. ICRs Regarding the Physician Quality Reporting System (PQRS) (Sec.  
414.90)

    We are making certain revisions to Sec.  414.90, primarily to 
include our final policies for the qualified clinical data registry 
option. Please note that we solicited but received no specific public 
comment either supporting or opposing the impact statements related to 
our proposals for the PQRS. Therefore, our estimates below are based on 
the final requirements for participation in the PQRS in 2014.
    We are revising Sec.  414.90(b), (c), and (e) and adding new 
paragraphs (h) and (j) of Sec.  414.90 to indicate our requirements for 
the qualified clinical data registry option, including specifying the 
criteria for satisfactory participation in a qualified clinical data 
registry for the 2014 PQRS incentive and 2016 PQRS payment adjustment. 
In addition, we are revising Sec.  414.90(g) and newly redesignated 
Sec.  414.90(i) to indicate the addition of a new PQRS reporting 
mechanism for group practices--the CMS-certified survey vendor--as well 
as to specify the satisfactory reporting criteria for the 2014 PQRS 
incentive and 2016 PQRS payment adjustment. While the sections contain 
information collection requirements regarding the input process and the 
endorsement of consensus-based quality measures, this rule does not 
revise any of the information collection requirements or burden 
estimates that are associated with those provisions.
    The preamble of this final rule with comment period discusses the 
background of the PQRS, provides information about the measures and 
reporting mechanisms that are available to eligible professionals and 
group practices who choose to participate in 2014, and provides the 
criteria for satisfactory reporting data on quality measures in 2014 
(for the 2014 PQRS incentive and the 2016 PQRS payment adjustment). 
Below are our burden estimates for participating in the PQRS in 2014 
which are subject to OMB review/approval under OCN 0938-1059. (CMS-
10276).
1. Participation in the 2014 PQRS
    In the CY 2013 PFS final rule with comment period, we provided 
estimates related to the impact of the requirements we finalized for 
the PQRS for 2014. Since we are adding and modifying certain 
requirements for the 2014 PQRS, this section modifies the impact 
statement provided in the CY 2013 PFS final rule with comment period 
for reporting in 2014. Please note that we will base our estimates on 
information found in the 2011 Physician Quality Reporting System and 
eRx Reporting Experience and Trends (hereinafter ``the PQRS Reporting 
Experience''). This report contains the latest data we have gathered on 
PQRS participation. The PQRS Reporting Experience is available at 
http://www.cms.gov/Medicare/Quality-Initiatives-Patient-Assessment-Instruments/PQRS/index.html?redirect=/PQRS/. According to the 2011 
Reporting Experience Report, over 1 million professionals were eligible 
to participate in the PQRS. A total of $261,733,236 in PQRS incentives 
was paid by CMS for the 2011 program year, which encompassed 26,515 
practices that included 266,521 eligible professionals (or 
approximately 27 percent of the professionals eligible to participate). 
The average incentive earned for PQRS in 2011 per each individually-
participating eligible professional was $1,059.
    As we noted in our impact statement last year, we expect that, due 
to the implementation of payment adjustments beginning in 2015, 
participation in the PQRS will rise incrementally to approximately 
300,000 eligible professionals and 400,000 eligible professionals in 
2013 and 2014, respectively. We believe our estimate of 400,000 
eligible professionals participating in PQRS in 2014 remains accurate.
    With respect to the estimated amount of incentives earned, for 
2014, eligible professionals can earn a 0.5 percent

[[Page 74794]]

incentive (that is, a bonus payment equal to 0.5 percent of the total 
allowed part B charges for covered professional services under the PFS 
furnished by the eligible professional during the reporting period) for 
satisfactory reporting. Based on information drawn from the 2011 
Reporting Experience and our participation estimate, we believe that, 
out of the 400,000 eligible professionals we expect to participate in 
the PQRS in 2014, the PQRS will distribute 2014 incentives to 
approximately (27 percent of 1 million eligible professionals) 270,000 
eligible professionals. At $1,059 per eligible professional, the PQRS 
will distribute approximately $286 million in incentive payments for 
2014. We believe these incentive payments will help offset the cost 
eligible professionals may undertake for participating in the PQRS for 
the applicable year.
    We note that the total burden associated with participating in the 
PQRS is the time and effort associated with indicating intent to 
participate in the PQRS, if applicable, and submitting PQRS quality 
measures data. When establishing these burden estimates, we assume the 
following:
     For an eligible professional or group practice using the 
claims, qualified registry, qualified clinical data registry, or EHR-
based reporting mechanisms, we assume that the eligible professional or 
group practice will attempt to report quality measures data with the 
intention of earning the 2014 PQRS incentive and not simply to avoid 
the 2016 PQRS payment adjustment. Therefore, an eligible professional 
or group practice will report on 9 measures.
     With respect to labor costs, we believe that a billing 
clerk will handle the administrative duties associated with 
participating, while a computer analyst will handle duties related to 
reporting PQRS quality measures. According to the Bureau of Labor 
Statistics, the mean hourly wage for a billing clerk is approximately 
$16/hour whereas the mean hourly wage for a computer analyst is 
approximately $40/hour.
    Please note that these estimates do not reflect total costs 
estimates for participating in PQRS, but rather the adjustments (+/-) 
associated with the changes for 2014.
2. Burden Estimate on Participation in the 2014 PQRS--New Individual 
Eligible Professionals: Preparation
    For an eligible professional who wishes to participate in PQRS as 
an individual, the eligible professional need not indicate his/her 
intent to participate. Instead, the eligible professional may simply 
begin reporting quality measures data. Therefore, these burden 
estimates for individual eligible professionals participating in PQRS 
are based on the reporting mechanism the individual eligible 
professional chooses. However, we believe a new eligible professional 
or group practice will spend 5 hours--which includes 2 hours to review 
PQRS measures list, review the various reporting options, and select a 
reporting option and measures on which to report and 3 hours to review 
the measure specifications and develop a mechanism for incorporating 
reporting of the selected measures into their office work flows. 
Therefore, we believe that the initial administrative costs associated 
with participating in PQRS will be approximately $80 ($16/hour x 5 
hours).
3. Burden Estimate on Participation in the 2014 PQRS via the Claims-
based Reporting Mechanism--Individual Eligible Professionals
    Historically, the claims-based reporting mechanism is the most 
widely used reporting mechanism in PQRS. In 2011, 229,282 of the 
320,422 eligible professionals (or 72 percent of eligible 
professionals) used the claims-based reporting mechanism. In the CY 
2013 PFS final rule with comment period, we estimated that 
approximately 320,000 eligible professionals, whether participating 
individually or in a group practice, will participate in PQRS by CY 
2014 (77 FR 69338). We believe this estimate should be further modified 
to reflect a lower participation estimate in 2014 for the following 
reasons:
     We are eliminating the option to report measures groups 
via claims for the 2014 PQRS incentive and 2016 PQRS payment 
adjustment.
     We are increasing the number of measures that an eligible 
professional must report to meet the criteria for satisfactory 
reporting for the 2014 PQRS incentive from 3 measures to 9, but lower 
the reporting threshold to 50 percent.
     We are removing the claims-based reporting mechanism as an 
option for reporting certain individual quality measures.
    We estimate that approximately 230,000 eligible professionals (that 
is, the same number of eligible professionals who participated in the 
PQRS using the claims-based reporting mechanism in 2011) will 
participate in the PQRS using the claims-based reporting mechanism. 
Therefore, we estimate that approximately 58 percent of the eligible 
professionals participating in PQRS will use the claims-based reporting 
mechanism.
    With respect to an eligible professional who participated in PQRS 
via claims, the eligible professional must gather the required 
information, select the appropriate quality data codes (QDCs), and 
include the appropriate QDCs on the claims they submitted for payment. 
PQRS will collect QDCs as additional (optional) line items on the 
existing HIPAA transaction 837-P and/or CMS Form 1500 (OCN 0938-0999). 
Based on our experience with Physician Voluntary Reporting Program 
(PVRP), we continue to estimate that the time needed to perform all the 
steps necessary to report each measure via claims ranges from 0.25 
minutes to 12 minutes, depending on the complexity of the measure. 
Therefore, the time spent reporting 9 measures ranges from 2.25 minutes 
to 108 minutes. Using an average labor cost of $40/hour, we estimated 
that the time cost of reporting for an eligible professional via claims 
ranges from $1.50 (2.25 minutes or 0.0375 hours x $40/hour) to $72.00 
(108 minutes or 1.8 hours x $40/hour) per reported case. With respect 
to how many cases an eligible professional will report when using the 
claims-based reporting mechanism, we established that an eligible 
professional needs to report on 50 percent of the eligible 
professional's applicable cases. The actual number of cases on which an 
eligible professional reports varies depending on the number of the 
eligible professional's applicable cases. However, in prior years, when 
the reporting threshold was 80 percent for claims-based reporting, we 
found that the median number of reporting cases for each measure was 9. 
Since we reduced the reporting threshold to 50 percent, we estimate 
that the average number of reporting cases for each measure will be 
reduced to 6. Based on these estimates, we estimate that the total cost 
of reporting for an eligible professional choosing the claims-based 
reporting mechanism ranges from ($1.50/per reported case x 6 reported 
cases) $9.00 to ($72.00/reported case x 6 reported cases) $432.
4. Burden Estimate on PQRS Participation in CY 2014 via the Qualified 
Registry, Qualified Clinical Data Registry, or EHR Reporting Mechanisms
    We noted previously that we estimated a significant reduction in 
the number of eligible professionals using the claims-based reporting 
mechanism to report PQRS quality measures data in 2014. Specifically, 
we estimated that approximately 230,000 eligible professionals would 
participate in the PQRS using the claims-based reporting

[[Page 74795]]

mechanism in 2014. Therefore, we estimated that the remainder of the 
eligible professionals (170,000) would participate in PQRS using either 
the qualified registry, qualified clinical data registry, EHR (using 
either a direct EHR or EHR data submission vendor), or the GPRO web 
interface reporting mechanisms.
    With respect to participation in a qualified registry or qualified 
clinical data registry, we are combining our estimates for the number 
of eligible professionals we believe will use the qualified registry 
and qualified clinical data registry reporting mechanisms for the 2014 
PQRS incentive and 2016 PQRS payment adjustment. We are combining these 
estimates because we believe that, at least for this initial year, many 
of the registries that become qualified clinical data registries will 
also be existing qualified registries. As such, we anticipate there 
will be little to no additional, new registries that will submit 
quality measures data on behalf of eligible professionals to the PQRS 
for purposes of the 2014 PQRS incentive and 2016 PQRS payment 
adjustment.
    In 2011, approximately 50,215 (or 16 percent) of the 320,422 
eligible professionals participating in PQRS used the registry-based 
reporting mechanism. We believe the number of eligible professionals 
and group practices using a qualified registry or qualified clinical 
data registry would remain the same, given that eligible professionals 
use registries for functions other than PQRS and therefore, would not 
obtain a qualified registry or qualified clinical data registry solely 
for PQRS reporting in CY 2014. Please note that this estimate would 
include participants choosing the new qualified clinical data registry 
reporting mechanism. At least in its initial stage, we believe most of 
the vendors that would be approved to be a qualified clinical data 
registry would be existing qualified registries.
    In 2011, 560 (or less than 1 percent) of the 320,422 eligible 
professionals participating in PQRS used the EHR-based reporting 
mechanism. We believe the number of eligible professionals and group 
practices using the EHR-based reporting mechanism will increase as 
eligible professionals become more familiar with EHR products and more 
eligible professionals participate in programs encouraging use of an 
EHR, such as the EHR Incentive Program. In particular, we believe 
eligible professionals and group practices will transition from using 
the claims-based to the EHR-based reporting mechanisms. We estimate 
that approximately 50,000 eligible professionals (which is the same 
estimate as we are providing for eligible professionals who use the 
qualified registry or qualified clinical data registry-based reporting 
mechanisms), whether participating as an individual or part of a group 
practice, will use the EHR-based reporting mechanism in CY 2014.
    With respect to an eligible professional or group practice who 
participated in PQRS via a qualified registry, qualified clinical data 
registry, direct EHR product, or EHR data submission vendor's product, 
we believe there will be little to no burden associated for an eligible 
professional to report quality measures data to CMS, because the 
eligible professional will select a reporting mechanism to submit the 
quality measures data on the eligible professional's behalf. Therefore, 
the actual reporting is performed by the reporting mechanism, not the 
eligible professional.
    While we noted that there may be start-up costs associated with 
purchasing a qualified registry, direct EHR product, or EHR data 
submission vendor, we believe that an eligible professional or group 
practice will not use a qualified registry, qualified clinical data 
registry, or EHR data submission vendor product, or purchase a direct 
EHR product, solely for the purpose of reporting PQRS quality measures. 
Therefore, we have not included the cost of using a qualified registry, 
qualified clinical data registry, or EHR data submission vendor 
product, or purchasing a direct EHR product in our burden estimates.
5. Burden Estimate on PQRS Participation in CY 2014--Group Practices
    Please note that with the exception of the estimates associated 
with a group self-nominating to participate in the PQRS under the group 
practice reporting option (GPRO), this section only contains our 
estimates for group practices who participate in the PQRS under the 
GPRO via the GPRO web interface reporting mechanism. We note that the 
burden associated with reporting quality measures for group practices 
using the qualified registry or EHR-based reporting mechanisms are 
included in the estimates we provided for the qualified registry or 
EHR-based reporting mechanisms above. According to the 2011 PQRS and 
eRx Experience report, of the 101 practices participating in the GPRO, 
54 of these practices participated using the GPRO web interface 
(formerly referred to as ``the GPRO tool''). We estimate that because 
are applying the value-based payment modifier to all group practices of 
10 or more eligible professionals, we estimate that approximately 30 
percent of such group practices, or about 5,100 group practices, will 
participate in the PQRS under the GPRO for purposes of the 2014 PQRS 
incentive and the 2016 payment adjustment. In addition, we estimate 
that of the 5,100 group practices that are expected to self-nominate to 
participate in the PQRS under the GPRO, approximately 70,000 eligible 
professionals (that is, the remainder of the eligible professionals not 
participating in PQRS using the claims, qualified registry, qualified 
clinical data registry, or EHR-based reporting mechanisms), 
representing about 30 percent of the groups with 100 or more eligible 
professionals (or about 340 groups), will choose to participate in PQRS 
using the GPRO web interface for purposes of the 2014 PQRS incentive 
and the 2016 PQRS payment adjustment.
    Unlike eligible professionals who choose to report individually, 
eligible professionals choosing to participate as part of a group 
practice under the GPRO will need to indicate their intent to 
participate in PQRS as a group practice. The total burden for group 
practices who submit PQRS quality measures data via the GPRO web-
interface will be the time and effort associated with submitting this 
data. To submit quality measures data for PQRS, a group practice needs 
to (1) be selected to participate in the PQRS GPRO and (2) report 
quality measures data. With respect to the administrative duties for 
being selected to participate in PQRS as a group practice, we believe 
it takes approximately 6 hours--including 2 hours to decide to 
participate in PQRS as a group practice; 2 hours to self-nominate, and 
2 hours to undergo the vetting process with CMS officials--for a group 
practice to be selected to participate in PQRS GPRO for the applicable 
year. Therefore, we estimate that the cost of undergoing the GPRO 
selection process is ($16/hour x 6 hours) $96.
    With respect to reporting PQRS quality measures using the GPRO web-
interface, the total reporting burden is the time and effort associated 
with the group practice submitting the quality measures data (that is, 
completed the data collection interface). Based on burden estimates for 
the PGP demonstration, which uses the same data submission methods, we 
estimate the burden associated with a group practice completing the 
data collection interface is approximately 79 hours. Therefore, we 
estimate that the report cost for a group practice to submit PQRS

[[Page 74796]]

quality measures data for an applicable year is ($40/hour x 79 hours) 
$3,160.
    In addition to the GPRO web interface, please note that we are 
finalizing a new reporting mechanism that is available to group 
practices comprised of 25+ eligible professionals: The certified survey 
vendor for CG-CAHPS measures. With respect to using a certified survey 
vendor, we believe there is little to no burden associated for a group 
practice to report the CG CAHPS survey data to CMS because the 
certified survey vendor will report the CG CAHPS survey questions on 
the group practice's behalf. Although there may be start-up costs 
associated with using a certified survey vendor, we believe that a 
group practice will not use a certified survey vendor solely for the 
purpose of reporting the CG CAHPS survey for the PQRS. Therefore, we 
have not included the cost of using a certified survey vendor in our 
burden estimates.
6. Burden Estimate on PQRS Vendor Participation in CY 2014
    Aside from the burden of eligible professionals and group practices 
participating in PQRS, we believe that entities that wish to become 
qualified clinical data registries will incur costs associated with 
participating in PQRS. However, we believe that the burden associated 
with participating in PQRS for these entities is very similar to the 
burden associated with existing qualified registries participating in 
PQRS.
    Based on the number of registries that have self-nominated to 
become a qualified PQRS registry in prior program years, we estimated 
that approximately 50 registries will self-nominate to be considered a 
qualified registry for PQRS. With respect to qualified registries and 
qualified clinical data registries, the total burden for qualified 
registries and qualified clinical data registries that submit quality 
measures data will be the time and effort associated with submitting 
this data. To submit quality measures data for the 2014 PQRS reporting 
periods, a registry needs to (1) become qualified for the applicable 
year and (2) report quality measures data on behalf of its eligible 
professionals. With respect to administrative duties related to the 
qualification process, we estimate that it takes a total of 10 hours--
including 1 hour to complete the self-nomination statement, 2 hours to 
interview with CMS, 2 hours to calculate numerators, denominators, and 
measure results for each measure the registry wished to report using a 
CMS-provided measure flow, and 5 hours to complete an XML submission--
to become qualified to report quality measures data under the PQRS. 
Therefore, we estimate that it costs a registry approximately ($16.00/
hour x 10 hours) $160 to become qualified to submit quality measures 
data on behalf of its eligible professionals.
    With respect to the reporting of quality measures data, the burden 
associated with reporting is the time and effort associated with the 
registry and qualified clinical data registry calculating quality 
measures results from the data submitted to the registry by its 
eligible professionals, submitting numerator and denominator data on 
quality measures, and calculating these measure results. In addition to 
submitting numerator and denominator data on quality measures and 
calculating these measure results, qualified clinical data registries 
are required to perform additional functions, such as providing 
feedback to its eligible professionals at least 4 times a year and 
establishing a method to benchmark and, where appropriate, risk adjust 
its quality measure results. We believe, however, that registries and 
qualified clinical data registries already perform these functions for 
their eligible professionals irrespective of participating in PQRS. 
Therefore, we believe there is little to no additional burden 
associated with reporting quality measures data. Whether there is any 
additional reporting burden varies with each registry, depending on the 
registry's level of savvy with submitting quality measures data for 
PQRS.
    For CY 2014, we are finalizing a new PQRS option that includes a 
new reporting mechanism--the qualified clinical data registry. In this 
final rule with comment period, we set forth the requirements for a 
vendor to become qualified to become a qualified clinical data 
registry. Under the final requirements, we note that a vendor can be 
both a traditional qualified registry and qualified clinical data 
registry under the PQRS. Indeed, as we noted previously, we believe 
that many of the entities that will seek to become qualified clinical 
data registries will be similar to the existing qualified registries. 
In addition, the process that we are adopting for becoming a qualified 
clinical data registry is similar to the process for becoming a 
qualified registry. Therefore, we do not believe this new reporting 
mechanism will impact our registry estimates.
7. Summary of Burden Estimates on Participation in the 2014 PQRS--
Eligible Professionals and Vendors

                              Table 91--Estimated Costs for Reporting PQRS Quality Measures Data for Eligible Professionals
--------------------------------------------------------------------------------------------------------------------------------------------------------
                                                                                          Number of                  Cost per    Number of
                                                                  Hours        Cases       measures   Hourly rate   respondent  respondents   Total cost
--------------------------------------------------------------------------------------------------------------------------------------------------------
Individual Eligible Professional (EP): Preparation...........          5.0            1          N/A          $16          $80      320,422  $32,000,000
Individual EP: Claims........................................          0.2            6            3           40          144      230,000   33,120,000
Individual EP: Registry......................................          N/A            1          N/A          N/A      Minimal       40,422      \1\ N/A
Individual EP: EHR...........................................          N/A            1          N/A          N/A      Minimal       50,000      \1\ N/A
Group Practice: Self-Nomination..............................          6.0            1          N/A           16           96        5,100      489,600
Group Practice: Reporting....................................           79            1          N/A           40        3,160          340    1,074,400
--------------------------------------------------------------------------------------------------------------------------------------------------------
\1\ We believe that eligible professionals who choose to report quality measures data to PQRS using a registry, a qualified clinical data registry, an
  EHR, or an EHR data submission vendor are already submitting quality measures data for other purposes. Therefore, there is little to no burden
  associated with reporting the quality data to CMS under PQRS.

                         Table 92--Estimated Costs to Registries to Participate in PQRS
----------------------------------------------------------------------------------------------------------------
                                                                                        Number of
                                                Hours      Hourly rate      Cost       respondents   Total cost
----------------------------------------------------------------------------------------------------------------
Registry: Self-Nomination.................           10           $16          $160            50        $8,000
----------------------------------------------------------------------------------------------------------------

[[Page 74797]]

C. The Medicare EHR Incentive Program

    The Medicare EHR Incentive Program provides incentive payments to 
eligible professionals, eligible hospitals, and CAHs that demonstrate 
meaningful use of certified EHR technology. We believe any burden or 
impact associated with this rule's changes to the EHR Incentive Program 
are already absorbed by OCN 0938-1158 and are not subject to additional 
OMB review under the authority of the Paperwork Reduction Act of 1995 
(44 U.S.C. 3501 et seq.).

D. Submission of PRA-Related Comments

    If you comment on these information collection and recordkeeping 
requirements, please submit your comments to the Office of Information 
and Regulatory Affairs, Office of Management and Budget,

Attention: CMS Desk Officer, [CMS-1600-FC]
Fax: (202) 395-6974; or
Email: OIRA_submission@omb.eop.gov.

    PRA-specifc comments must be received on/by January 9, 2014.

V. 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 considered all comments we received by 
the date and time specified in the DATES section of this preamble, and, 
when we proceeded with a subsequent document, we responded to the 
comments in the preamble to that document.

VI. Waiver of Proposed Rulemaking and Delay in Effective Date

    We ordinarily publish a notice of proposed rulemaking in the 
Federal Register and invite public comment on the proposed rule. The 
notice of proposed rulemaking includes a reference to the legal 
authority under which the rule is proposed, and the terms and substance 
of the proposed rule or a description of the subjects and issues 
involved. This procedure can be waived, however, if an agency finds 
good cause that a notice-and-comment procedure is impracticable, 
unnecessary, or contrary to the public interest and incorporates a 
statement of the finding and its reasons in the rule issued.
    We utilize HCPCS codes for Medicare payment purposes. The HCPCS is 
a national coding system comprised of Level I (CPT) codes and Level II 
(HCPCS National Codes) that are intended to provide uniformity to 
coding procedures, services, and supplies across all types of medical 
providers and suppliers. Level I (CPT) codes are copyrighted by the AMA 
and consist of several categories, including Category I codes which are 
5-digit numeric codes, and Category III codes which are temporary codes 
to track emerging technology, services, and procedures. The AMA issues 
an annual update of the CPT code set each Fall, with January 1 as the 
effective date for implementing the updated CPT codes. The HCPCS, 
including both Level I and Level II codes, is similarly updated 
annually on a CY basis. Annual coding changes are not available to the 
public until the Fall immediately preceding the annual January update 
of the PFS. Because of the timing of the release of these new codes, it 
is impracticable for us to provide prior notice and solicit comment on 
these codes and the RVUs assigned to them in advance of publication of 
the final rule that implements the PFS. Yet, it is imperative that 
these coding changes be accounted for and recognized timely under the 
PFS for payment because services represented by these codes will be 
provided to Medicare beneficiaries by physicians during the CY in which 
they become effective. Moreover, regulations implementing HIPAA (42 CFR 
parts 160 and 162) require that the HCPCS be used to report health care 
services, including services paid under the PFS. We assign interim RVUs 
to any new codes based on a review of the AMA RUC recommendations for 
valuing these services. We also assign interim RVUs to certain codes 
for which we did not receive specific AMA RUC recommendations, but that 
are components of new combined codes. We set interim RVUs for the 
component codes in order to conform them to the value of the combined 
code. Finally, we assign interim RVUs to certain codes for which we 
received AMA RUC recommendations for only one component (work or PE) 
but not both. By reviewing these AMA RUC recommendations for the new 
codes, we are able to assign RVUs to services based on input from the 
medical community and to establish payment for them, on an interim 
basis, that corresponds to the relative resources associated with 
furnishing the services. We are also able to determine, on an interim 
final basis, whether the codes will be subject other payment policies. 
If we did not assign RVUs to new codes on an interim basis, the 
alternative would be to either not pay for these services during the 
initial CY or have each Medicare contractor establish a payment rate 
for these new codes. We believe both of these alternatives are contrary 
to the public interest, particularly since the AMA RUC process allows 
for an assessment of the valuation of these services by the medical 
community prior to our establishing payment for these codes on an 
interim basis. Therefore, we believe it would be contrary to the public 
interest to delay establishment of fee schedule payment amounts for 
these codes until notice and comment procedures could be completed.
    For the reasons previously outlined in this section, we find good 
cause to waive the notice of proposed rulemaking for the interim RVUs 
for selected procedure codes identified in Addendum C and to establish 
RVUs for these codes on an interim final basis. We are providing a 60-
day public comment period.
    Section II.E. of this final rule with comment period discusses our 
review and decisions regarding the AMA RUC recommendations. Similar to 
the AMA RUC recommendations for new and revised codes previously 
discussed, due to the timing of the AMA RUC recommendations for the 
services identified as potentially misvalued codes, it is impracticable 
for CMS to provide for notice and comment regarding specific revisions 
prior to publication of this final rule with comment period. We believe 
it is in the public interest to implement the revised RVUs for the 
codes that were identified as misvalued, and that have been reviewed 
and re-evaluated by the AMA RUC, on an interim final basis for CY 2013. 
The revisions of RVUs for these codes will establish a more appropriate 
payment that better corresponds to the relative resources associated 
with furnishing these services. A delay in implementing revised values 
for these misvalued codes would not only perpetuate the known 
misvaluation for these services, it would also perpetuate a distortion 
in the payment for other services under the PFS. Implementing the 
changes on an interim basis allows for a more equitable distribution of 
payments across all PFS services. We believe a delay in implementation 
of these revisions would be contrary to the public interest, 
particularly since the AMA RUC process allows for an assessment of the 
valuation of these services by the medical community prior to the AMA 
RUC's recommendation to CMS. For the reasons previously described, we 
find good cause to waive notice and comment procedures with respect to 
the misvalued codes and to revise RVUs for these codes on an interim 
final basis.

[[Page 74798]]

We are providing a 60-day public comment period.
    In the absence of an appropriation for CY 2014 or a Continuing 
Resolution, there was a lapse in funding, which lasted from October 1 
through October 16, 2013, when only excepted operations continued. This 
largely excluded work on this final rule with comment period. 
Accordingly, most of the work on this final rule with comment period 
was not completed in accordance with our usual schedule for final CY 
payment rules, which aims for an issuance date of November 1 followed 
by an effective date of January 1 to ensure that the policies are 
effective at the start of the calendar year to which they apply.
    We ordinarily provide a 60-day delay in the effective date of final 
rules after the date they are issued. The 60-day delay in effective 
date can be waived, however, if the agency finds for good cause that 
the delay is impracticable, unnecessary, or contrary to the public 
interest, and the agency incorporates a statement of the findings and 
its reasons in the rule issued. We believe it would be contrary to the 
public interest to delay the effective date of the MPFS portions of 
this final rule with comment period. In accordance with section 
1848(b)(1) of the statute, the MPFS is a calendar-year payment system. 
We typically issue the final rule by November 1 of each year to comply 
with section 1848(b)(1) of the statute and to ensure that the payment 
policies for the system are effective on January 1, the first day of 
the calendar year to which the policies are intended to apply. If the 
effective date of this final rule with comment period is delayed by 60 
days, the MPFS for CY 2014 adopted in this final rule with comment 
period will not be effective as of the beginning of the payment year. 
Section 1848(d) of the Act requires application of an update, 
calculated using the SGR methodology, to the CF that is used to 
calculate payments under the MPFS. The statutory update is required to 
be applied to the CF for the previous year in order to calculate the CF 
for the succeeding year. As such, it is necessary that the statutory 
update to the CF take effect as of the beginning of the calendar year 
in order to adjust MPFS payments as prescribed by statute. In addition, 
in this final rule with comment period, we review and revise values for 
specific services, and adopt or revise other policies that relate to 
the MPFS for CY 2014 or future years. Section 1848(c)(2)(B)(ii)(II) of 
the Act requires that adjustments to relative values under the MPFS be 
made in a budget neutral manner. We believe that, in order to preserve 
budget neutrality as required by statute and to promote an orderly 
transition to a new payment year, it is in the public interest for all 
of these MPFS policies to take effect in conjunction with the statutory 
update to the CF for CY 2014, and we find that it would be contrary to 
the public interest to do otherwise. We are finalizing the MPFS in this 
CY 2014 final rule with comment period and, in order to adhere to the 
statutory requirements that an adjusted CF apply to services furnished 
on or after January 1, 2014, and that budget neutrality be maintained, 
this final rule must be effective on that date.
    Additionally, we believe it would be contrary to the public 
interest to delay the effective date of the PQRS, value-based payment 
modifier, EHR incentive program, and Medicare Shared Savings provisions 
of this final rule with comment period. PQRS incentives for 2014 and 
PQRS payment adjustments for 2016, as authorized under subsections (m) 
and (a) of section 1848, will be based, in part, on the policies 
finalized in this final rule, including the requirements for reporting 
quality data beginning January 1, 2014. The CY 2016 value-based payment 
modifier, as authorized under section 1848(p), will be determined 
according to final policies adopted in this rule and using a 
performance period that begins on January 1, 2014. We are also 
finalizing policies in this rule that pertain to the reporting of 
clinical quality measures for the EHR Incentive Program during CY 2014, 
which will be used to determine incentive payments and payments 
adjustments under sections 1848(o) and (a)(7), respectively. If the 
effective date of this final rule with comment period is delayed by 60 
days, the PQRS policies adopted in this final rule will not be 
effective until after January 1, 2014. This would be contrary to the 
public's interest in ensuring that eligible professionals have the full 
benefit of reporting during CY 2014, receive appropriate incentive 
payments in a timely manner, and that their physician fee schedule 
payments in 2016 are properly adjusted to reflect their reporting on 
quality measure data in 2014. For the same reasons, we believe it would 
be contrary to the public interest to delay by 60 days the effective 
date of the policies related to the CY 2016 value-based payment 
modifier and the EHR Incentive Program. In addition, under the 
authority provided by section 1899(b)(3)(D) of the Act, certain PQRS 
requirements regarding reporting for purposes of incentive payments and 
the payment adjustment under section 1848(a)(8) were incorporated in 
the Medicare Shared Savings Program. Accordingly, for the same reasons 
described above, it would also be contrary to the public interest to 
delay the effective date of the provisions regarding PQRS reporting 
under the Medicare Shared Savings Program beyond January 1, 2014.
    Therefore, we find good cause to waive the 60-day delay in the 
effective date for this final rule with comment period as explained 
above. We note that our waiver of the delayed effective date only 
applies to the provisions noted above that are being adopted in this 
final rule with comment period. The delayed effective date is not 
waived for other provisions of this final rule with comment period, and 
those policies will be effective on January 27, 2014.

VII. Regulatory Impact Analysis

A. Statement of Need

    This final rule with comment period is necessary to make payment 
and policy changes under the Medicare PFS and to make required 
statutory changes under the Affordable Care Act (Pub. L. 111-148), the 
Middle Class Tax Relief and Job Creation Act of 2012 (Pub. L. 112-96), 
the American Taxpayer Relief Act (ATRA) of 2013 (Pub. L. 112-240), and 
other statutory changes. This final rule with comment period also is 
necessary to make changes to other Part B related policies.

B. Overall Impact

    We have examined the impact of this rule as required by Executive 
Order 12866 on Regulatory Planning and Review (September 30, 1993), 
Executive Order 13563 on Improving Regulation and Regulatory Review 
(February 2, 2013), 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 (March 22, 
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 Orders 12866 and 13563 direct 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

[[Page 74799]]

section, that the PFS provisions included in this final rule with 
comment period 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 RIA 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 entities. For purposes of the 
RFA, small entities include small businesses, nonprofit organizations, 
and small governmental jurisdictions. Most hospitals and most other 
providers and suppliers are small entities, either by nonprofit status 
or by having revenues of less than $7.0 million in any 1 year (for 
details see the SBA's Web site at http://www.sba.gov/content/small-business-size-standards# (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 are 
considered small businesses if they generate revenues of $10 million or 
less based on SBA size standards. Approximately 95 percent of providers 
and suppliers are considered to be small entities. There are over 1 
million physicians, other practitioners, and medical suppliers that 
receive Medicare payment under the PFS. Because many of the affected 
entities are small entities, the analysis and discussion provided in 
this section as well as elsewhere in this final rule with comment 
period is intended to comply with the RFA requirements.
    In addition, section 1102(b) of the Act requires us to prepare an 
RIA if a rule may have a significant impact on the operations of a 
substantial number of small rural hospitals. This analysis must conform 
to the provisions of section 604 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 for Medicare 
payment regulations and has fewer than 100 beds. We are not preparing 
an analysis for section 1102(b) of the Act because we have determined, 
and the Secretary certifies, that this final rule with comment period 
would not have a significant impact on the operations of a substantial 
number of small rural hospitals.
    Section 202 of the Unfunded Mandates Reform Act of 1995 also 
requires that agencies assess anticipated costs and benefits on state, 
local, or tribal governments or on the private sector before issuing 
any rule whose mandates require spending in any 1 year of $100 million 
in 1995 dollars, updated annually for inflation. In 2013, that 
threshold is approximately $141 million. This final rule with comment 
period will impose no mandates on state, local, or tribal governments 
or on the private sector.
    Executive Order 13132 establishes certain requirements that an 
agency must meet when it promulgates a final rule with comment period 
(and subsequent final rule) that imposes substantial direct requirement 
costs on state and local governments, preempts state law, or otherwise 
has Federalism implications. Since this regulation does not impose any 
costs on state or local governments, the requirements of Executive 
Order 13132 are not applicable.
    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 final rule with comment period; details the costs and benefits of 
the rule; analyzes alternatives; and presents the measures we would use 
to minimize the burden on small entities. As indicated elsewhere in 
this final rule with comment period, 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, and to implement statutory provisions. We 
provide information for each of the policy changes in the relevant 
sections of this final rule with comment period. We are unaware of any 
relevant federal rules that duplicate, overlap, or conflict with this 
final rule with comment period. The relevant sections of this final 
rule with comment period contain a description of significant 
alternatives if applicable.

C. Relative Value Unit (RVU) Impacts

1. Resource-Based Work, PE, and Malpractice RVUs
    Section 1848(c)(2)(B)(ii)(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 2013 with payment rates for CY 2014 using 
CY 2012 Medicare utilization as the basis for the comparison. The 
payment impacts reflect averages for each specialty based on Medicare 
utilization. The payment impact for an individual physician could vary 
from the average and would depend 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 83 
percent of their Medicare revenues from clinical laboratory services 
that are not paid under the PFS.
    We note that these impacts do not include the effect of the January 
2014 conversion factor changes under current law. The annual update to 
the PFS conversion factor is calculated based on a statutory formula 
that measures actual versus allowed or ``target'' expenditures, and 
applies a sustainable growth rate (SGR) calculation intended to control 
growth in aggregate Medicare expenditures for physicians' services. 
This update methodology is typically referred to as the ``SGR'' 
methodology, although the SGR is only one component of the formula. 
Medicare PFS payments for services are not withheld if the percentage 
increase in actual expenditures exceeds the SGR. Rather, the PFS 
update, as specified in section 1848(d)(4) of the Act, is adjusted to 
eventually bring actual expenditures back in line with targets. If 
actual expenditures exceed allowed expenditures, the update is reduced. 
If actual expenditures are less than allowed expenditures, the update 
is increased. By law, we are required to apply these updates in 
accordance with sections 1848(d) and (f) of the Act, and any negative 
updates can only be averted by an Act of the Congress.

[[Page 74800]]

Although the Congress has provided temporary relief from negative 
updates for every year since 2003, a long-term solution is critical. We 
are committed to working with the Congress to reform Medicare physician 
payments to provide predictable payments that incentivize quality and 
efficiency in a fiscally responsible way. We provide our most recent 
estimate of the SGR and physician update for CY 2014 in section II.G. 
of this final rule with comment period.
    Table 93 shows the payment impact by Medicare specialty. 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 from those shown in Table 93 (CY 2014 PFS 
Final Rule with Comment Period Estimated Impact on Total Allowed 
Charges by Specialty).
    The following is an explanation of the information represented in 
Table 93:
     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 2012 utilization and CY 
2013 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, and 
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 2014 impact on total 
allowed charges of the changes in the work and malpractice RVUs, 
including the impact of changes due to new, revised, and misvalued 
codes.
     Column D (Impact of PE RVU Changes): This column shows the 
estimated CY 2014 impact on total allowed charges of the changes in the 
PE RVUs, including the impact of changes due to new, revised, and 
misvalued codes, the statutory change to the equipment utilization rate 
from 75 percent to 90 percent for expensive diagnostic imaging 
equipment, the implementation of the ultrasound recommendation to 
replace expensive ultrasound rooms with less expense portable 
ultrasound units, and other miscellaneous and minor provisions.
     Column E (Impact of Adjusting the RVUs to Match the 
Revised MEI Weights): This column shows the estimated CY 2014 combined 
impact on total allowed charges of the changes in the RVUs and 
conversion factor adjustment resulting from adjusting the RVUs to match 
the revised MEI weights.
     Column F (Cumulative Impact): This column shows the 
estimated CY 2014 combined impact on total allowed charges of all the 
changes in the previous columns.

 Table 93--CY 2014 PFS Final Rule With Comment Period Estimated Impact Table: Impacts of Work, Practice Expense,
                                 and Malpractice RVUs, and the MEI Adjustment *
----------------------------------------------------------------------------------------------------------------
                                                       Impact of RVU changes         Impact of
                                                 --------------------------------  adjusting the
            Specialty                 Allowed     Impact of work                   RVUs to match     Combined
                                  charges  (mil)    and MP RVU     Impact of PE     the revised       impact
                                                      changes       RVU changes     MEI weights
(A)                                          (B)             (C)             (D)             (E)             (F)
----------------------------------------------------------------------------------------------------------------
Total...........................         $87,552               0               0               0               0
01--ALLERGY/IMMUNOLOGY..........             214               0               0              -3              -3
02--ANESTHESIOLOGY..............           1,871               0               0               1               1
03--CARDIAC SURGERY.............             357               0               0               2               2
04--CARDIOLOGY..................           6,461               0               2              -1               1
05--COLON AND RECTAL SURGERY....             159               0               0               0               0
06--CRITICAL CARE...............             276               0               0               2               2
07--DERMATOLOGY.................           3,123              -1               1              -2              -2
08--EMERGENCY MEDICINE..........           2,946               0               0               2               2
09--ENDOCRINOLOGY...............             449               0               0               0               0
10--FAMILY PRACTICE.............           6,402               0               0               0               0
11--GASTROENTEROLOGY............           1,909              -1              -1               0              -2
12--GENERAL PRACTICE............             536               0               0               0               0
13--GENERAL SURGERY.............           2,254               0               0               0               0
14--GERIATRICS..................             235               0               0               1               1
15--HAND SURGERY................             151               0               0              -1              -1
16--HEMATOLOGY/ONCOLOGY.........           1,896               0               0              -2              -2
17--INFECTIOUS DISEASE..........             639               0               0               2               2
18--INTERNAL MEDICINE...........          11,503               0               0               1               1
19--INTERVENTIONAL PAIN MGMT....             644              -1              -2              -1              -4
20--INTERVENTIONAL RADIOLOGY....             221              -1               0              -1              -2
21--MULTISPECIALTY CLINIC/OTHER               80               0              -1               1               0
 PHY............................
22--NEPHROLOGY..................           2,134               0               0               1               1
23--NEUROLOGY...................           1,509               0              -1               0              -1
24--NEUROSURGERY................             718               0               0               0               0
25--NUCLEAR MEDICINE............              51               0               0               0               0
27--OBSTETRICS/GYNECOLOGY.......             693               0               2              -1               1
28--OPHTHALMOLOGY...............           5,609               0               0               0               0
29--ORTHOPEDIC SURGERY..........           3,702              -1              -1               0              -2
30--OTOLARNGOLOGY...............           1,133               0              -1              -1              -2
31--PATHOLOGY...................           1,141              -4              -2               0              -6
32--PEDIATRICS..................              64               0               0               0               0
33--PHYSICAL MEDICINE...........           1,007               0              -1               0              -1
34--PLASTIC SURGERY.............             372               0               0               0               0
35--PSYCHIATRY..................           1,181               4               1               1               6

[[Page 74801]]

 
36--PULMONARY DISEASE...........           1,783               0               0               1               1
37--RADIATION ONCOLOGY..........           1,788               0               3              -2               1
38--RADIOLOGY...................           4,655               0              -2               0              -2
39--RHEUMATOLOGY................             553               0              -2              -2              -4
40--THORACIC SURGERY............             335               0               0               1               1
41--UROLOGY.....................           1,864               0              -1               0              -1
42--VASCULAR SURGERY............             931               0              -1              -1              -2
43--AUDIOLOGIST.................              57               0               1              -1               0
44--CHIROPRACTOR................             729               5               6               1              12
45--CLINICAL PSYCHOLOGIST.......             587               6              -1               3               8
46--CLINICAL SOCIAL WORKER......             414               6              -2               4               8
47--DIAGNOSTIC TESTING FACILITY.             790               0              -6              -5             -11
48--INDEPENDENT LABORATORY......             818              -2               0              -3              -5
49--NURSE ANES/ANES ASST........           1,061               0               0               3               3
50--NURSE PRACTITIONER..........           1,954               0               0               1               1
51--OPTOMETRY...................           1,116               0               0              -1              -1
52--ORAL/MAXILLOFACIAL SURGERY..              45               0               1              -2              -1
53--PHYSICAL/OCCUPATIONAL                  2,818               0               1              -1               0
 THERAPY........................
54--PHYSICIAN ASSISTANT.........           1,414               0               0               0               0
55--PODIATRY....................           1,998               0               0              -1              -1
56--PORTABLE X--RAY SUPPLIER....             113               0               2              -4              -2
57--RADIATION THERAPY CENTERS...              63               0               5              -6              -1
98--OTHER.......................              25               0               0               1               1
----------------------------------------------------------------------------------------------------------------
* Table 93 shows only the payment impact on PFS services. These impacts use a constant conversion factor and
  thus do not include the effects of the January 2014 conversion factor change required under current law.

2. CY 2014 PFS Impact Discussion
a. Changes in RVUs
    The most widespread specialty impacts of the RVU changes are 
generally related to the following major factors. The first factor is 
our rescaling of the RVUs to match the weights assigned to work, PE and 
MP in the revised MEI, as discussed in section II.B. of this final rule 
with comment period. A conversion factor (CF) adjustment is also made 
to assure budget neutrality for this adjustment in RVUs. The second 
factor involves service-level changes to RVUs for new, revised, and 
misvalued services. In addition, a number of other changes contribute 
to the impacts shown in Table 93. Other factors include a statutory 
change that requires us to use a 90 percent equipment utilization rate 
rather than the previously used 75 percent for expensive diagnostic 
imaging equipment as discussed in section II.A.2.f. of this final rule 
with comment period, updates to direct practice expense inputs for 
ultrasound services, as discussed in section II.A.5. of this final rule 
with comment period and adjustments to time for some services, as 
discussed in section II.B.3.c. of this final rule with comment period.
b. Combined Impact
    Column F of Table 93 displays the estimated CY 2014 combined impact 
on total allowed charges by specialty of all the RVU changes. These 
impacts range from an increase of 12 percent for chiropractors to a 
decrease of 10 percent for diagnostic testing facilities. Again, these 
impacts are estimated prior to the application of the negative CY 2014 
CF update applicable under the Act.
    Table 94 (Impact of Final rule with comment period on CY 2014 
Payment for Selected Procedures) shows the estimated impact on total 
payments for selected high volume procedures of all of the changes 
discussed previously. We have included CY 2014 payment rates with and 
without the effect of the CY 2014 negative PFS CF update for comparison 
purposes. We selected these procedures from among the most commonly 
furnished by a broad spectrum of physician specialties. The change in 
both facility rates and the nonfacility rates are shown. For an 
explanation of facility and nonfacility PE, we refer readers to 
Addendum A of this final rule with comment period.
BILLING CODE 4120-10-P

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[GRAPHIC] [TIFF OMITTED] TR10DE13.259

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[GRAPHIC] [TIFF OMITTED] TR10DE13.260

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BILLING CODE 4120-10-C

D. Effect of Changes to Medicare Telehealth Services Under the PFS

    As discussed in section II.E.3. of this final rule with comment 
period, we are finalizing our policy to refine our definition of rural 
as it applies to HPSAs eligible for telehealth services as well as add 
transitional care management services to the list of Medicare 
telehealth services. Although we expect these changes to increase 
access to care in rural areas, based on recent utilization of current 
Medicare telehealth services, including services similar to 
transitional care management, we estimate no significant impact on PFS 
expenditures from the additions.

E. Geographic Practice Cost Indices (GPCIs)

    Based upon statutory requirements we are updating the GPCIs for 
each Medicare payment locality. The GPCIs incorporate the use of 
updated data and cost share weights as discussed in II.E. The Act 
requires that updated GPCIs be phased in over 2 years. Addendum D shows 
the estimated effects of the revised GPCIs on area GAFs for the 
transition year (CY 2014) and the fully implemented year (CY 2015). The 
GAFs reflect the use of the updated underlying GPCI data, and the 
revised cost share weights. The GAFs are a weighted composite of each 
area's work, PE and malpractice expense GPCIs using the national GPCI 
cost share weights. Although we do not actually use the GAFs in 
computing the fee schedule payment for a specific service, they are 
useful in comparing overall areas costs and payments. The actual 
geographic adjustment to payment for any actual service will be 
different from the GAF to the extent that the proportions of work, PE 
and malpractice expense RVUs for the service differ from those of the 
GAF.
    The most significant changes occur in 22 payment localities where 
the fully implemented (CY 2015) GAF moves up by more than 1 percent (11 
payment localities) or down by more than 2 percent (11 payment 
localities). The impacts on the GPCIs are primarily attributed to the 
expiration of the 1.000 work GPCI floor. The use of updated underlying 
GPCI data and cost share weights has a minimal impact on locality GAFs. 
The total impact of the GPCI revisions is shown in the 2015 GPCI values 
of Addendum E.
    We note that the CY 2014 physician work GPCIs and summarized 
geographic adjustment factors (GAFs) published in Addenda D and E 
reflect the elimination of the 1.0 work GPCI floor provided in section 
1848(e)(1)(E) of the Act, which is set to expire prior to the 
implementation of the CY 2014 PFS.

F. Other Provisions of the Final Rule With Comment Period Regulation

1. Rebasing and Revising Medicare Economic Index
    We estimate that there is no impact of the changes to the MEI for 
CY 2014.
2. Coverage of Items and Services furnished in FDA-Approved 
Investigational Device Exemption (IDE) Clinical Trials
    We are finalizing our proposal of a transparent centralized review 
process that would be more efficient by reducing the burden for 
stakeholders. Once the IDE coverage process is centralized, there will 
be a single entity making the IDE coverage decision. This also 
eliminates duplicative reviews by Medicare local contractors and the 
numerous applications sent to contractors by stakeholders requesting 
IDE coverage. We believe that a centralized review process will not 
significantly reduce the number of IDE devices currently covered.
3. Ultrasound Screening for Abdominal Aortic Aneurysms
    As discussed in section III.B. of this final rule with comment 
period, section 1861(s)(2)(AA) of the Act, with implementing 
regulations at Sec.  410.19, authorizes Medicare coverage of ultrasound 
screening for abdominal aortic aneurysms (``AAA screening''). We are 
finalizing our proposal to modify Sec.  410.19 to allow coverage of 
one-time AAA screening without receiving a referral as part of the 
IPPE, for beneficiaries that meet certain other eligibility criteria (a 
family history of AAA or, for men aged 65-75, a history of smoking). 
Approximately 45 percent of men aged 65-75 have a history of smoking. 
It is unknown how many individuals have a family history of AAA or how 
many beneficiaries will avail themselves of this benefit. Therefore, 
the impact of this change is unknown for CY 2014.
4. Modification to Medicare Coverage of Colorectal Cancer Screening
    As discussed in section III.C. of this final rule with comment 
period, sections 1861(s)(2)(R) and 1861(pp)(1) of the Act, and 
implementing regulations at 42 CFR 410.37 authorize Medicare coverage 
of screening FOBT. We are finalizing our proposal to modify Sec.  
410.37(b) to allow attending physicians, physician assistants, nurse 
practitioners, and clinical nurse specialists to furnish orders for 
screening FOBTs. Although there may be an increase in utilization, 
particularly in rural areas, it is unknown how many individuals will 
avail themselves of this benefit. Therefore, the impact of this change 
is unknown for CY 2014.
5. Ambulance Fee Schedule
    As discussed in section III.D. of this final rule with comment 
period, section 604(a) through (c) of the ATRA 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. In addition, as discussed in section III.D. of this final rule 
with comment period, section 637 of the ATRA (which added section 
1834(l)(15) of the Act) specifies that the fee schedule amount 
otherwise applicable under the preceding provisions of section 1834(l) 
of the Act shall be reduced by 10 percent for ambulance services 
furnished on or after October 1, 2013, consisting of non-emergency 
basic life support (BLS) services involving transport of an individual 
with end-stage renal disease for renal dialysis services (as described 
in section 1881(b)(14)(B) of the Act) furnished other than on an 
emergency basis by a provider of services or a renal dialysis facility. 
The ambulance extender provisions and the mandated 10 percent rate 
decrease discussed above are enacted through legislation that is self-
implementing. We are finalizing our proposal to amend the regulation 
text at Sec.  414.610 only to conform the regulations to these self-
implementing statutory requirements. As a result, we are not making any 
policy proposals associated with these legislative provisions and there 
is no associated regulatory impact
6. Clinical Laboratory Fee Schedule
    We are finalizing our proposal to add language to the Code of 
Federal Regulations to codify authority provided by statute and to 
establish a process under which we will systematically reexamine the 
payment amounts established under the CLFS to determine if changes in 
technology for the delivery of that service warrant an adjustment to 
the payment amount. We are also finalizing our proposal of a definition 
for the term technological changes. Adjustments made under the new 
process could both increase fee schedule amounts and provide for 
reductions in existing amounts. We cannot estimate a net impact at this 
time.

[[Page 74805]]

7. Liability for Overpayments to or on Behalf of Individuals including 
Payments to Providers or Other Persons
    As discussed in section III.F. of this final rule with comment 
period, we are finalizing the regulation as proposed and changing the 
timeframe for the ``without fault'' presumptions from 3 years to 5 
years. As a result, there would be an estimated savings of $0.5 billion 
over 10 years.
8. Physician Compare Web Site
    There will be no impact for the Physician Compare Web site because 
we are not collecting any information for the Physician Compare Web 
site.
9. Physician Payment, Efficiency, and Quality Improvements--Physician 
Quality Reporting System (PQRS)
    In the CY 2013 PFS final rule with comment period, we provided 
estimates related to the impact of the requirements we finalized for 
the PQRS for 2014. Since we are making additional proposals for 2014, 
this section modifies the impact statement provided for 2014 in the CY 
2013 PFS final rule with comment period. Please note that we will base 
our estimates on information found in the 2011 Physician Quality 
Reporting System and eRx Reporting Experience and Trends (hereinafter 
``the PQRS Reporting Experience''). This report contains the latest 
data we have gathered on PQRS participation. The PQRS Reporting 
Experience is available at http://www.cms.gov/Medicare/Quality-Initiatives-Patient-Assessment-Instruments/PQRS/index.html?redirect=/PQRS/.
    According to the 2011 Reporting Experience Report, over 1 million 
professionals were eligible to participate in the PQRS. A total of 
$261,733,236 in PQRS incentives was paid by CMS for the 2011 program 
year, which encompassed 26,515 practices that included 266,521 eligible 
professionals (or approximately 27 percent of the professionals 
eligible to participate). The average incentive earned for PQRS in 2011 
per each individually-participating eligible professional was $1,059.
    As we noted in our impact statement last year, we expect that, due 
to the implementation of payment adjustments beginning in 2015, 
participation in the PQRS would rise incrementally to approximately 
300,000 eligible professionals and 400,000 eligible professionals in 
2013 and 2014, respectively. We believe our estimate of 400,000 
eligible professionals participating in PQRS in 2014 remains accurate.
    With respect to the estimate amount of incentives earned, for 2014, 
eligible professionals can earn a 0.5 percent incentive (that is, a 
bonus payment equal to 0.5 percent of the total allowed Part B charges 
for covered professional services under the PFS furnished by the 
eligible professional during the reporting period) for satisfactory 
reporting. Based on information drawn from the 2011 Reporting 
Experience and our participation estimate, we believe that, out of the 
400,000 eligible professionals we expect to participate in the PQRS in 
2014, the PQRS will distribute 2014 incentives to approximately (27 
percent of 1 million eligible professionals) 270,000 eligible 
professionals. At $1,059 per eligible professional, the PQRS would 
distribute approximately $286 million in incentive payments in 2014. We 
believe these incentive payments will help offset the cost eligible 
professionals may undertake for participating in the PQRS for the 
applicable year.
    We note that the total burden associated with participating in the 
PQRS is the time and effort associated with indicating intent to 
participate in the PQRS, if applicable, and submitting PQRS quality 
measures data. When establishing these burden estimates, we assume the 
following:
     For an eligible professional or group practice using the 
claims, registry, or EHR-based reporting mechanisms, we assume that the 
eligible professional or group practice would attempt to report PQRS 
quality measures data with the intention of earning the 2014 PQRS 
incentive, not simply to avoid the 2016 PQRS payment adjustment. 
Therefore, an eligible professionals or group practice would report on 
9 measures.
     With respect to labor costs, we believe that a billing 
clerk will handle the administrative duties associated with 
participating, while a computer analyst will handle duties related to 
reporting PQRS quality measures. According to the Bureau of Labor 
Statistics, the mean hourly wage for a billing clerk is approximately 
$16/hour whereas the mean hourly wage for a computer analyst is 
approximately $40/hour.
    For an eligible professional who wishes to participate in the PQRS 
as an individual, the eligible professional need not indicate his/her 
intent to participate. The eligible professional may simply begin 
reporting quality measures data. Therefore, these burden estimates for 
individual eligible professionals participating in the PQRS are based 
on the reporting mechanism the individual eligible professional 
chooses. However, we believe a new eligible professional or group 
practice would spend 5 hours--which includes 2 hours to review the PQRS 
measures list, review the various reporting options, and select a 
reporting option and measures on which to report and 3 hours to review 
the measure specifications and develop a mechanism for incorporating 
reporting of the selected measures into their office work flows. 
Therefore, we believe that the initial administrative costs associated 
with participating in the PQRS would be approximately $80 ($16/hour x 5 
hours).
    With respect to an eligible professional who participates in the 
PQRS via claims, the eligible professional 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 
PQRS collects QDCs as additional (optional) line items on the existing 
HIPAA transaction 837-P and/or CMS Form 1500 (OCN: 0938-0999). Based on 
our experience with Physician Voluntary Reporting Program (PVRP), we 
continue to estimate that the time needed to perform all the steps 
necessary to report each measure via claims will range from 0.25 
minutes to 12 minutes, depending on the complexity of the measure. 
Therefore, the time spent reporting 9 measures would range from 2.25 
minutes to 108 minutes. Using an average labor cost of $40/hour, we 
estimate that time cost of reporting for an eligible professional via 
claims would range from $1.50 (2.25 minutes or 0.0375 hours x $40/hour) 
to $72.00 (108 minutes or 1.8 hours x $40/hour) per reported case. With 
respect to how many cases an eligible professional would report when 
using the claims-based reporting mechanism, we proposed that an 
eligible professional would need to report on 50 percent of the 
eligible professional's applicable cases. The actual number of cases on 
which an eligible professional would report would vary depending on the 
number of the eligible professional's applicable cases. However, in 
prior years, when the reporting threshold was 80 percent, we found that 
the median number of reporting cases for each measure was 9. Since we 
are reducing the reporting threshold to 50 percent, we estimated that 
the average number of reporting cases for each measure would be reduced 
to 6. Based on these estimates, we estimated that the total cost of 
reporting for an eligible professional choosing the claims-based 
reporting mechanism would range from ($1.50/per reported case x 6 
reported

[[Page 74806]]

cases) $9.00 to ($72.00/reported case x 6 reported cases) $432.
    With respect to an eligible professional or group practice who 
participates in the PQRS via a qualified registry, direct EHR product, 
EHR data submission vendor product, or qualified clinical data 
registry, we believe there would be little to no burden associated for 
an eligible professional or group practice to report PQRS quality 
measures data to CMS, because the selected reporting mechanism submits 
the quality measures data for the eligible professional. Although we 
noted that there may be start-up costs associated with purchasing a 
qualified registry, direct EHR product, EHR data submission vendor, or 
qualified clinical data registry, we believe that an eligible 
professional or group practice would not purchase a qualified registry, 
direct EHR product, EHR data submission vendor product, or qualified 
clinical data registry solely for the purpose of reporting PQRS quality 
measures. Therefore, we have not included the cost of purchasing a 
qualified registry, direct EHR, EHR data submission vendor product, or 
qualified clinical data registry in our burden estimates.
    Unlike eligible professionals who choose to report individually, we 
noted that eligible professionals choosing to participate as part of a 
group practice under the GPRO must indicate their intent to participate 
in the PQRS as a group practice. The total burden for group practices 
who submit PQRS quality measures data via the proposed GPRO web-
interface would be the time and effort associated with submitting this 
data. To submit quality measures data for the PQRS, a group practice 
would need to (1) be selected to participate in the PQRS GPRO and (2) 
report quality measures data. With respect to the administrative duties 
for being selected to participate in the PQRS as a GPRO, we believe it 
would take approximately 6 hours--including 2 hours to decide to 
participate in the PQRS as a GPRO, 2 hours to self-nominate, and 2 
hours to undergo the vetting process with CMS officials--for a group 
practice to be selected to participate in the PQRS GPRO for the 
applicable year. Therefore, we estimated that the cost of undergoing 
the GPRO selection process would be ($16/hour x 6 hours) $96. With 
respect to reporting, the total reporting burden is the time and effort 
associated with the group practice submitting the quality measures data 
(that is, completed the data collection interface). Based on burden 
estimates for the PGP demonstration, which uses the same data 
submission methods, we estimated the burden associated with a group 
practice completing the data collection interface would be 
approximately 79 hours. Therefore, we estimated that the report cost 
for a group practice to submit PQRS quality measures data for the 
proposed reporting options in an applicable year would be ($40/hour x 
79 hours) $3,160.
    Aside from the burden of eligible professionals and group practices 
participating in the PQRS, we believe that vendors of registries, 
qualified clinical data registries, direct EHR products, and EHR data 
submission vendor products incur costs associated with participating in 
the PQRS. Please note that we finalized requirements for a new 
reporting mechanism in this CY 2014 PFS final rule with comment 
period--the qualified clinical data registry. For purposes of these 
burden estimates, we believe that, at least in its initial stage, 
vendors of a qualified clinical data registry would have burden 
estimates similar to traditional registries, as we believe many of the 
vendors seeking to become qualified as a clinical data registry in the 
PQRS will be existing qualified registries.
    With respect to qualified registries and qualified clinical data 
registries, the total burden for qualified registries who submit PQRS 
Quality Measures Data would be the time and effort associated with 
submitting this data. To submit quality measures data for the proposed 
program years for PQRS, a registry would need to (1) become qualified 
for the applicable year and (2) report quality measures data on behalf 
of its eligible professionals. With respect to administrative duties 
related to the qualification process for both traditional registries 
and clinical data registries, we estimated that it will take a total of 
10 hours--including 1 hour to complete the self-nomination statement, 2 
hours to interview with CMS, 2 hours to calculate numerators, 
denominators, and measure results for each measure the registry wishes 
to report using a CMS-provided measure flow, and 5 hours to complete an 
XML submission--to become qualified to report PQRS quality measures 
data. Therefore, we estimated that it would cost a traditional registry 
and clinical data registry ($16.00/hour x 10 hours) $160 to become 
qualified to submit PQRS quality measures data on behalf of its 
eligible professionals.
    With respect to the reporting of quality measures data, we believe 
the burden associated with reporting is the time and effort associated 
with the registry calculating quality measures results from the data 
submitted to the registry by its eligible professionals, submitting 
numerator and denominator data on quality measures, and calculating 
these measure results. We believe, however, that registries already 
perform these functions for its eligible professionals irrespective of 
participating in the PQRS. Therefore, we believe there would be little 
to no additional burden associated with reporting PQRS quality measures 
data. Whether there is any additional reporting burden will vary with 
each registry, depending on the registry's level of savvy with 
submitting quality measures data for the PQRS.
    With respect to EHR products, the total burden for direct EHR 
products and EHR data submission vendors who submit PQRS Quality 
Measures Data would be the time and effort associated with submitting 
this data. To submit quality measures data for a program year under the 
PQRS, a direct EHR product or EHR data submission vendor would need to 
report quality measures data on behalf of its eligible professionals. 
Please note that we do not require direct EHR products and EHR data 
submission vendors to become qualified to submit PQRS quality measures 
data.
    In addition to the GPRO web interface, please note that we have 
established a new reporting mechanism that would be available to group 
practices comprised of 25-99 eligible professionals: the certified 
survey vendor. With respect to using a certified survey vendor, we 
believe there would be little to no burden associated for a group 
practice to report the CG CAHPS survey data to CMS, because the 
selected reporting mechanism submitted the quality measures data for 
the group practice. Although there may be start-up costs associated 
with purchasing a certified survey vendor, we believe that a group 
practice would not purchase a certified survey vendor solely for the 
purpose of reporting the CG CAHPS survey for the PQRS. Therefore, we 
have not included the cost of purchasing a certified survey vendor in 
our burden estimates.

[[Page 74807]]

          Table 95--Estimated Costs for Reporting PQRS Quality Measures Data per Eligible Professional
----------------------------------------------------------------------------------------------------------------
                                  Estimated       Estimated       Number of
                                    hours           cases         measures       Hourly rate       Total cost
----------------------------------------------------------------------------------------------------------------
Individual Eligible                       5.0               1             N/A             $16  $80.
 Professional (EP):
 Preparation.
Individual EP: Claims........             1.8               6               9              40  3,888.
Individual EP: Registry......             N/A               1             N/A             N/A  Minimal.
Individual EP: EHR...........             N/A               1             N/A             N/A  Minimal.
Group Practice: Self-                     6.0               1             N/A              16  $96.
 Nomination.
Group Practice: Reporting....              79               1             N/A              40  $3,160.
----------------------------------------------------------------------------------------------------------------

                         Table 96--Estimated Costs per Vendor to Participate in the PQRS
----------------------------------------------------------------------------------------------------------------
                                                               Estimated hours    Hourly rate       Total cost
----------------------------------------------------------------------------------------------------------------
Registry: Self-Nomination....................................              10              $16             $160
----------------------------------------------------------------------------------------------------------------

10. Medicare EHR Incentive Program
    Please note that the requirements for meeting the clinical quality 
measures (CQM) component of achieving meaningful use for the EHR 
Incentive Program in 2014 were established in a standalone final rule 
published on September 4, 2012 (77 FR 53968). The proposals contained 
in this CY 2014 PFS final rule with comment period merely propose 
alternative methods to report CQMs to meet the CQM component of 
achieving meaningful use for the EHR Incentive Program in 2014. We 
believe any impacts these proposals would have are absorbed in the 
impacts discussion published in the EHR Incentive Program final rule 
published on September 4, 2012.
11. Medicare Shared Savings Program
    Please note that the requirements for participating in the Medicare 
Shared Saving Program and the impacts of these requirements were 
established in the final rule for the Medicare Shared Savings Program 
that appeared in the Federal Register on November 2, 2011 (76 FR 
67962). The proposals for the Medicare Shared Savings Program set forth 
in the CY 2014 final rule with comment period expand the incorporation 
of reporting requirements and incentive payments related to PQRS under 
section 1848 to include reporting requirements related to the payment 
adjustment. Since ACO participants and ACO provider/suppliers will not 
have to report PQRS separately to avoid the payment adjustment, this 
reduces the quality reporting burden for ACO participants participating 
in the Shared Savings Program. There is no impact for the additional 
proposals related to requirements for setting benchmarks or for scoring 
the CAHPS measure modules.
12. Physician Value-Based Payment Modifier and the Physician Feedback 
Reporting Program
    The changes to the Physician Feedback Program in section III.K. of 
this final rule with comment period would not impact CY 2014 physician 
payments under the Physician Fee Schedule. We anticipate that as we 
approach implementation of the value modifier, physicians will 
increasingly participate in the Physician Quality Reporting System to 
determine and understand how the value modifier could affect their 
payments.
13. Existing Standards for E-Prescribing under Medicare Part D and 
Identification
    This section of the final rule with comment period imposes no new 
requirements because use of the official Part D e-prescreening 
standards; NCPDP SCRIPT 10.6, Formulary and Benefit 3.0 are voluntary, 
and as such, it will not have a significant economic impact on a 
substantial number of small entities, small rural hospitals or state, 
local, or tribal governments or on the private sector.
14. Chiropractic Services Demonstration
    As discussed in section III.M. of this final rule with comment 
period, we are continuing the recoupment of the $50 million in 
expenditures from this demonstration in order to satisfy the BN 
requirement in section 651(f)(1)(B) of the MMA. We initiated this 
recoupment in CY 2010 and this will be the fifth and final 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 payments under the PFS for chiropractic CPT codes in CYs 2010 
through 2014. For each year of this recoupment, we have provided OACT's 
projected chiropractic expenditures based on previous year's data. 
Although OACT's projections have included the statutory reductions to 
physician payments, the statute was amended in each year to avoid these 
reductions. As a result, Medicare expenditures for chiropractic 
services during the recoupment were higher than the OACT projections. 
Chiropractic services expenditures during the recoupment period have 
been as follows: $540 million in 2010; $520 million in 2011; and $580 
million in 2012. In total, CMS recouped $32.8 million over the years of 
2010, 2011 and 2012. OACT now projects chiropractic expenditures to be 
approximately $580 million in 2013. A 2 percent recoupment percentage 
for chiropractic services would result in approximately $11.6 million 
in 2013. For the years 2010 through 2013, CMS would have recouped 
approximately $44.4 million of the $50 million required for budget 
neutrality.
    CMS plans to recoup the remaining funds, approximately $5.6 
million, and will reduce chiropractic CPT codes (CPT codes 98940, 
98941, and 98942) by the appropriate percentage.

G. Alternatives Considered

    This final rule with comment period contains a range of policies, 
including some provisions related to specific statutory 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 final policies and, where 
relevant, alternatives that were considered.

H. Impact on Beneficiaries

    There are a number of changes in this final rule with comment 
period that would have an effect on beneficiaries. In general, we 
believe that many of the changes, including the refinements of

[[Page 74808]]

the PQRS with its focus on measuring, submitting, and analyzing quality 
data; establishing the basis for the value-based payment modifier to 
adjust physician payment beginning in CY 2015; improved accuracy in 
payment through revisions to the inputs used to calculate payments 
under the PFS; and revisions to payment for Part B drugs will have a 
positive impact and improve the quality and value of care provided to 
Medicare beneficiaries.
    Most of the aforementioned policy changes could result in a change 
in beneficiary liability as relates to coinsurance (which is 20 percent 
of the fee schedule amount if applicable for the particular provision 
after the beneficiary has met the deductible). To illustrate this 
point, as shown in Table 94, the CY 2013 national payment amount in the 
nonfacility setting for CPT code 99203 (Office/outpatient visit, new) 
is $108.05, which means that in CY 2013 a beneficiary would be 
responsible for 20 percent of this amount, or $21.61. Based on this 
final rule with comment period, using the current (CY 2013) CF of 
34.0376, adjusted to 35.6446 to include budget neutrality, the CY 2014 
national payment amount in the nonfacility setting for CPT code 99203, 
as shown in Table 94, is $107.95, which means that, in CY 2014, the 
beneficiary coinsurance for this service would be $21.59.

I. Accounting Statement

    As required by OMB Circular A-4 (available at http://www.whitehouse.gov/omb/circulars/a004/a-4.pdf), in Table 97 (Accounting 
Statement), we have prepared an accounting statement showing the 
estimated expenditures associated with this final rule with comment 
period. This estimate includes the CY 2014 incurred benefit impact 
associated with the estimated CY 2014 PFS conversion factor update 
based on the FY 2014 President's Budget baseline.Expenditures

       Table 97--Accounting Statement: Classification of Estimated
------------------------------------------------------------------------
           Category                            Transfers
------------------------------------------------------------------------
CY 2014 Annualized Monetized   Estimated decrease in expenditures of
 Transfers.                     $18.8 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.
CY 2014 Annualized Monetized   Estimated increase in payment of $286
 Transfers.                     million.
From Whom To Whom?...........  Federal Government to eligible
                                professionals who satisfactorily
                                participate in the Physician Quality
                                Reporting System (PQRS).
CY 2014 Annualized Monetized   Estimated decrease in expenditures of $50
 Transfers.                     million for liability for overpayments
                                to or on behalf of individuals including
                                payments to providers or other persons.
From Whom To Whom?...........  Federal Government to physicians, other
                                practitioners and providers and
                                suppliers who receive payment under
                                Medicare.
------------------------------------------------------------------------

   Table 98--Accounting Statement: Classification of Estimated Costs,
                          Transfer, and Savings
------------------------------------------------------------------------
           Category                             Transfer
------------------------------------------------------------------------
CY 2014 Annualized Monetized   -$29 million.
 Transfers of beneficiary
 cost coinsurance.
From Whom to Whom?...........  Beneficiaries to Physicians and
                                Nonphysician Practitioners
------------------------------------------------------------------------
Category                       Cost
------------------------------------------------------------------------
CY 2014 Annualized Monetized   $66.6 million.
 Cost to eligible
 professionals of
 Participating in the PQRS
 Program.
------------------------------------------------------------------------

J. Conclusion

    The analysis in the previous sections, together with the remainder 
of this preamble, provides an initial ``Regulatory Flexibility 
Analysis.'' The previous analysis, together with the preceding portion 
of this preamble, provides a Regulatory Impact Analysis.
    In accordance with the provisions of Executive Order 12866, this 
regulation 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 410

    Health facilities, Health professions, Kidney diseases, 
Laboratories, Medicare, Reporting and recordkeeping requirements, Rural 
areas, X-rays.

42 CFR Part 411

    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 
requirements.

42 CFR Part 423

    Administrative practice and procedure, Emergency medical services, 
Health facilities, Health maintenance organizations (HMO), Health 
professionals, Incorporation by Reference, Medicare, Penalties, 
Privacy, Reporting and recordkeeping requirements.

42 CFR Part 425

    Administrative practice and procedure, Health facilities, Health 
professions, Medicare, Reporting and recordkeeping requirements.
    For the reasons set forth in the preamble, the Centers for Medicare 
& Medicaid Services amends 42 CFR chapter IV as set forth below:

[[Page 74809]]

PART 405--FEDERAL HEALTH INSURANCE FOR THE AGED AND DISABLED

0
1. The authority citation for part 405 continues to read as follows:

    Authority:  Secs. 205(a), 1102, 1861, 1862(a), 1862(m), 1869, 
1871, 1874, 1881, and 1886(k) of the Social Security Act (42 U.S.C. 
405(a), 1302, 1395x, 1395y(a), 1395y(m), 1395ff, 1395hh, 1395kk, 
1395rr and 1395ww(k)), and sec. 353 of the Public Health Service Act 
(42 U.S.C. 263a).

0
2. Section 405.201 is amended by:
0
A. Revising paragraph (a)(2).
0
B. Adding paragraph (a)(3).
0
C. Revising paragraph (b).
    The revisions and addition read as follows:

Sec.  405.201  Scope of subpart and definitions.

    (a) * * *
    (2) CMS may consider for Medicare coverage certain devices with an 
FDA-approved investigational device exemption (IDE) that have been 
categorized as Category B (Nonexperimental/investigational) device.
    (3) CMS identifies criteria for coverage of items and services 
furnished in IDE studies.
    (b) Definitions. As used in this subpart--
    Category A (Experimental) device refers to a device for which 
``absolute risk'' of the device type has not been established (that is, 
initial questions of safety and effectiveness have not been resolved) 
and the FDA is unsure whether the device type can be safe and 
effective.
    Category B (Nonexperimental/investigational) device refers to a 
device for which the incremental risk is the primary risk in question 
(that is, initial questions of safety and effectiveness of that device 
type have been resolved), or it is known that the device type can be 
safe and effective because, for example, other manufacturers have 
obtained FDA premarket approval or clearance for that device type.
    ClinicalTrials.gov refers to the National Institutes of Health's 
National Library of Medicine's online registry and results database of 
publicly and privately supported clinical studies of human participants 
conducted around the world.
    Contractors refers to Medicare Administrative Contractors and other 
entities that contract with CMS to review and adjudicate claims for 
Medicare payment of items and services.
    Investigational device exemption (IDE) refers to an FDA-approved 
IDE application that permits a device, which would otherwise be subject 
to marketing approval or clearance, to be shipped lawfully for the 
purpose of conducting a clinical study in accordance with 21 U.S.C. 
360j(g) and 21 CFR part 812.
    Routine care items and services refers to items and services that 
are otherwise generally available to Medicare beneficiaries (that is, a 
benefit category exists, it is not statutorily excluded, and there is 
no national noncoverage decision) that are furnished during a clinical 
study and that would be otherwise furnished even if the beneficiary 
were not enrolled in a clinical study.

0
3. Section 405.203 is amended by revising paragraphs (a)(1) and (2) and 
(b) to read as follows:

Sec.  405.203  FDA categorization of investigational devices.

    (a) * * *
    (1) Category A (Experimental) devices.
    (2) Category B (Nonexperimental/investigational) devices.
    (b) The FDA notifies CMS, when it notifies the sponsor, that the 
device is categorized by FDA as Category A (Experimental) or Category B 
(Nonexperimental).
* * * * *

0
4. Section 405.205 is amended by revising the section heading and 
paragraph (a)(1) to read as follows:

Sec.  405.205  Coverage of a Category B (Nonexperimental/
investigational) device.

    (a) * * *
    (1) The FDA notifies CMS, when it notifies the sponsor, that the 
device is categorized by FDA as Category B (Nonexperimental/
investigational).
* * * * *

0
5. Section 405.207 is amended by revising paragraphs (b)(2) and (3) to 
read as follows:

Sec.  405.207  Services related to a non-covered device.

* * * * *
    (b) * * *
    (2) Routine care items and services related to Category A 
(Experimental) devices as defined in Sec.  405.201(b), and furnished in 
conjunction with FDA-approved clinical studies that meet the coverage 
requirements in Sec.  405.211.
    (3) Routine care items and services related to Category B 
(Nonexperimental/investigational) devices as defined in Sec.  
405.201(b), and furnished in conjunction with FDA-approved clinical 
studies that meet the coverage requirements in Sec.  405.211.

0
6. Section 405.209 is revised to read as follows:

Sec.  405.209  Payment for a Category B (Nonexperimental/
investigational) device.

    Payment under Medicare for a Category B (Nonexperimental/
investigational) device is based on, and may not exceed, the amount 
that would have been paid for a currently used device serving the same 
medical purpose that has been approved or cleared for marketing by the 
FDA.

0
7. Section 405.211 is revised to read as follows:

Sec.  405.211  Coverage of items and services in FDA-approved IDE 
studies.

    (a) Coverage of routine care items and services for Category A 
(Experimental) devices. Medicare covers routine care items and services 
furnished in an FDA-approved Category A (Experimental) IDE study if CMS 
(or its designated entity) determines that the Medicare coverage IDE 
study criteria in Sec.  405.212 are met.
    (b) Coverage of Category B (Nonexperimental/investigational) IDE 
devices and routine care items and services. Medicare may make payment 
for a Category B (Nonexperimental/investigational) IDE device and 
routine care items and services furnished in an FDA-approved Category B 
(Nonexperimental/investigational) IDE study if CMS (or its designated 
entity) determines prior to the submission of the first related claim 
that the Medicare coverage IDE study criteria in Sec.  405.212 are met.
    (c) CMS (or its designated entity) must review the following to 
determine if the Medicare coverage IDE study criteria in Sec.  405.212 
are met for purposes of coverage of items and services described in 
paragraphs (a) and (b) of this section:
    (1) FDA approval letter of the IDE.
    (2) IDE study protocol.
    (3) IRB approval letter.
    (4) NCT number.
    (5) Supporting materials, as needed.
    (d) Notification. A listing of all CMS-approved Category A 
(Experimental) IDE studies and Category B (Nonexperimental/
investigational) IDE studies shall be posted on the CMS Web site and 
published in the Federal Register.

0
8. Section 405.212 is added to read as follows:

Sec.  405.212  Medicare Coverage IDE study criteria.

    (a) For Medicare coverage of items and services described in Sec.  
405.211, a Category A (Experimental) or Category B (Nonexperimental/
investigational) IDE study must meet all of the following criteria:
    (1) The principal purpose of the study is to test whether the 
device improves

[[Page 74810]]

health outcomes of appropriately selected patients.
    (2) The rationale for the study is well supported by available 
scientific and medical information, or it is intended to clarify or 
establish the health outcomes of interventions already in common 
clinical use.
    (3) The study results are not anticipated to unjustifiably 
duplicate existing knowledge.
    (4) The study design is methodologically appropriate and the 
anticipated number of enrolled subjects is adequate to confidently 
answer the research question(s) being asked in the study.
    (5) The study is sponsored by an organization or individual capable 
of successfully completing the study.
    (6) The study is in compliance with all applicable Federal 
regulations concerning the protection of human subjects found at 21 CFR 
parts 50, 56, and 812 and 45 CFR part 46.
    (7) Where appropriate, the study is not designed to exclusively 
test toxicity or disease pathophysiology in healthy individuals. 
Studies of all medical technologies measuring therapeutic outcomes as 
one of the objectives may be exempt from this criterion only if the 
disease or condition being studied is life threatening and the patient 
has no other viable treatment options.
    (8) The study is registered with the National Institutes of 
Health's National Library of Medicine's ClinicalTrials.gov.
    (9) The study protocol describes the method and timing of release 
of results on all pre-specified outcomes, including release of negative 
outcomes and that the release should be hastened if the study is 
terminated early.
    (10) The study protocol must describe how Medicare beneficiaries 
may be affected by the device under investigation, and how the study 
results are or are not expected to be generalizable to the Medicare 
beneficiary population. Generalizability to populations eligible for 
Medicare due to age, disability, or other eligibility status must be 
explicitly described.
    (b) [Reserved]

0
9. Section 405.213 is amended by revising paragraph (a)(1) to read as 
follows:

Sec.  405.213  Re-evaluation of a device categorization.

    (a) * * *
    (1) Any sponsor that does not agree with an FDA decision that 
categorizes its device as Category A (experimental) may request re-
evaluation of the categorization decision.
* * * * *

0
10. Section 405.350 is amended by revising paragraph (c) to read as 
follows:

Sec.  405.350  Individual's liability for payments made to providers 
and other persons for items and services furnished the individual.

* * * * *
    (c) For purposes of paragraph (a)(2) of this section, a provider of 
services or other person must, in the absence of evidence to the 
contrary, be deemed to be without fault if the determination of the 
carrier, the intermediary, or the Centers for Medicare & Medicaid 
Services that more than the correct amount was paid was made subsequent 
to the fifth year following the year in which notice was sent to such 
individual that such amount had been paid.

0
11. Section 405.355 is amended by revising paragraph (b) to read as 
follows:

Sec.  405.355  Waiver of adjustment or recovery.

* * * * *
    (b) Adjustment or recovery of an incorrect payment (or only such 
part of an incorrect payment as may be determined to be inconsistent 
with the purposes of Title XVIII of the Act) against an individual who 
is without fault will be deemed to be against equity and good 
conscience if the incorrect payment was made for items and services 
that are not payable under section 1862(a)(1) or (a)(9) of the Act and 
if the determination that such payment was incorrect was made 
subsequent to the fifth year following the year in which notice of such 
payment was sent to such individual.

0
12. Section 405.2413 is amended by--
0
A. Redesignating paragraphs (a)(4) and (5) as paragraphs (a)(5) and 
(6), respectively.
0
B. Adding new paragraph (a)(4).
0
C. Revising newly redesignated paragraph (a)(5).
    The revision and addition reads as follows:

Sec.  405.2413  Services and supplies incident to a physician's 
services.

    (a) * * *
    (4) Services and supplies must be furnished in accordance with 
applicable State law;
    (5) Furnished under the direct supervision of a physician; and
* * * * *

0
13. Section 405.2415 is amended by--
0
A. Redesignating paragraphs (a)(4) and (5) as paragraphs (a)(5) and 
(6), respectively.
0
B. Adding new paragraph (a)(4).
0
C. Revising newly redesignated paragraph (a)(5).
0
D. Revising paragraph (b).
    The revision and addition reads as follows:

Sec.  405.2415  Services and supplies incident to nurse practitioner 
and physician assistant services.

    (a) * * *
    (4) Services and supplies must be furnished in accordance with 
applicable State law;
    (5) Furnished under the direct supervision of a nurse practitioner, 
physician assistant, nurse midwife, specialized nurse practitioner or a 
physician; and
* * * * *
    (b) The direct supervision requirement is met in the case of a 
nurse practitioner, physician assistant, nurse midwife, or specialized 
nurse practitioner only if such a person is permitted to supervise such 
services under the written policies governing the rural health clinic.
* * * * *

0
14. Section 405.2452 is amended by--
0
A. Redesignating paragraphs (a)(4) and (5) as paragraphs (a)(5) and 
(6), respectively.
0
B. Adding new paragraph (a)(4).
0
C. Revising newly redesignated paragraph (a)(5).
0
D. Revising paragraph (b).
    The revision and addition reads as follows:

Sec.  405.2452  Services and supplies incident to clinical psychologist 
and clinical social worker services.

    (a) * * *
    (4) Services and supplies must be furnished in accordance with 
applicable State law;
    (5) Furnished under the direct supervision of a clinical 
psychologist, clinical social worker or physician; and
* * * * *
    (b) The direct supervision requirement in paragraph (a)(5) of this 
section is met only if the clinical psychologist or clinical social 
worker is permitted to supervise such services under the written 
policies governing the federally qualified health center.

PART 410--SUPPLEMENTARY MEDICAL INSURANCE (SMI) BENEFITS

0
15. The authority citation for part 410 continues to read as follows:

    Authority: Secs. 1102, 1834, 1871, 1881, and 1893 of the Social 
Security Act (42 U.S.C. 1302. 1395m, 1395hh, and 1395ddd).

Sec.  410.19  [Amended]

0
16. In Sec.  410.19(a) amend the definition of ``eligible beneficiary'' 
by

[[Page 74811]]

removing paragraph (1) and redesignating paragraphs (2) and (3) as 
paragraphs (1) and (2), respectively.

0
17. Section 410.26 is amended by--
0
A. Revising paragraph (a)(1).
0
B. Redesignating paragraph (b)(7) and (8) as paragraph (b)(8) and (9), 
respectively.
0
C. Adding new paragraph (b)(7).
    The revision and addition reads as follows:

Sec.  410.26  Services and supplies incident to a physician's 
professional services: Conditions.

    (a) * * *
    (1) Auxiliary personnel means any individual who is acting under 
the supervision of a physician (or other practitioner), regardless of 
whether the individual is an employee, leased employee, or independent 
contractor of the physician (or other practitioner) or of the same 
entity that employs or contracts with the physician (or other 
practitioner) and meets any applicable requirements to provide the 
services, including licensure, imposed by the State in which the 
services are being furnished.
* * * * *
    (b) * * *
    (7) Services and supplies must be furnished in accordance with 
applicable State law.
* * * * *

0
18. Section 410.37 is amended by revising paragraph (b) to read as 
follows:

Sec.  410.37  Colorectal cancer screening tests: Conditions for and 
limitations on coverage.

* * * * *
    (b) Condition for coverage of screening fecal-occult blood tests. 
Medicare Part B pays for a screening fecal-occult blood test if it is 
ordered in writing by the beneficiary's attending physician, physician 
assistant, nurse practitioner, or clinical nurse specialist.
* * * * *

0
19. Section 410.59 is amended by--
0
A. Adding paragraph (e)(1)(iv).
0
B. Revising paragraph (e)(2)(iv).
0
C. Adding paragraph (e)(2)(v).
    The revision and additions reads as follows:

Sec.  410.59  Outpatient occupational therapy services: Conditions.

* * * * *
    (e) * * *
    (1) * * *
    (iv) Outpatient occupational therapy services furnished by a CAH 
directly or under arrangements must be counted towards the annual 
limitation on incurred expenses as if such services were paid under 
section 1834(k)(1)(b) of the Act.
    (2) * * *
    (iv) Outpatient occupational therapy services furnished by a nurse 
practitioner, clinical nurse specialist, or physician assistant or 
incident to their services; and
    (v) Outpatient occupational therapy services furnished by a CAH 
directly or under arrangements.
* * * * *

0
20. Section 410.60 is amended by--
0
A. Adding paragraph (e)(1)(iv).
0
B. Revising paragraph (e)(2)(v).
0
C. Adding paragraph (e)(2)(vi).
0
D. In paragraph (e)(3), removing the phrase ``or CAH''.
    The additions and revision read as follows:

Sec.  410.60  Outpatient physical therapy services: Conditions.

* * * * *
    (e) * * *
    (1) * * *
    (iv) Outpatient physical therapy and speech-language pathology 
services furnished by a CAH directly or under arrangements must be 
counted towards the annual limitation on incurred expenses as if such 
services were paid under section 1834(k)(1)(b) of the Act.
    (2) * * *
    (v) Outpatient physical therapy and speech-language pathology 
services furnished by a nurse practitioner, clinical nurse specialist, 
or physician assistant or incident to their services; and
    (vi) Outpatient physical therapy and speech-language pathology 
services furnished by a CAH directly or under arrangements.
* * * * *

0
21. Section 410.71 is amended by revising paragraph (a)(2) to read as 
follows:

Sec.  410.71  Clinical psychologist services and services and supplies 
incident to clinical psychologist services.

    (a) * * *
    (2) Medicare Part B covers services and supplies incident to the 
services of a clinical psychologist if the requirements of Sec.  410.26 
are met.
* * * * *

0
22. Section 410.74 is amended by revising paragraph (b) to read as 
follows:

Sec.  410.74  Physician assistants' services.

* * * * *
    (b) Services and supplies furnished incident to a physician 
assistant's services. Medicare Part B covers services and supplies 
incident to the services of a physician assistant if the requirements 
of Sec.  410.26 are met.
* * * * *

0
23. Section 410.75 is amended by revising paragraph (d) to read as 
follows:

Sec.  410.75  Nurse practitioners' services.

* * * * *
    (d) Services and supplies incident to a nurse practitioners' 
services. Medicare Part B covers services and supplies incident to the 
services of a nurse practitioner if the requirements of Sec.  410.26 
are met.
* * * * *

0
24. Section 410.76 is amended by revising paragraph (d) to read as 
follows:

Sec.  410.76  Clinical nurse specialists' services.

* * * * *
    (d) Services and supplies furnished incident to clinical nurse 
specialists' services. Medicare Part B covers services and supplies 
incident to the services of a clinical nurse specialist if the 
requirements of Sec.  410.26 are met.
* * * * *

0
25. Section 410.77 is amended by revising paragraph (c) to read as 
follows:

Sec.  410.77  Certified nurse-midwives' services: Qualifications and 
conditions.

* * * * *
    (c) Incident to services: Basic rule. Medicare Part B covers 
services and supplies incident to the services of a certified nurse-
midwife if the requirements of Sec.  410.26 are met.
* * * * *

0
26. Section 410.78 is amended by revising paragraph (b) introductory 
text and paragraph (b)(4) to read as follows:

Sec.  410.78  Telehealth services.

* * * * *
    (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 three days by the patient's 
admitting physician or practitioner), subsequent nursing facility care 
services (not including the Federally-mandated periodic visits under 
Sec.  483.40(c) of this chapter and with the limitation of one 
telehealth visit every 30 days by the patient's admitting physician or 
nonphysician practitioner), 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

[[Page 74812]]

kidney disease education services, individual and group diabetes self-
management training services (except for one hour of ``hands on'' 
services to be furnished in the initial year training period to ensure 
effective injection training), individual and group health and behavior 
assessment and intervention services, smoking cessation services, 
alcohol and/or substance abuse and brief intervention services, 
screening and behavioral counseling interventions in primary care to 
reduce alcohol misuse, screening for depression in adults, screening 
for sexually transmitted infections (STIs) and high intensity 
behavioral counseling (HIBC) to prevent STIs, intensive behavioral 
therapy for cardiovascular disease, behavioral counseling for obesity, 
and transitional care management services furnished by an interactive 
telecommunications system if the following conditions are met:
* * * * *
    (4) Originating sites must be:
    (i) Located in a health professional shortage area (as defined 
under section 332(a)(1)(A) of the Public Health Service Act (42 U.S.C. 
254e(a)(1)(A)) that is either outside of a Metropolitan Statistical 
Area (MSA) as of December 31st of the preceding calendar year or within 
a rural census tract of an MSA as determined by the Office of Rural 
Health Policy of the Health Resources and Services Administration as of 
December 31st of the preceding calendar year, or
    (ii) Located in a county that is not included in a Metropolitan 
Statistical Area as defined in section 1886(d)(2)(D) of the Act as of 
December 31st of the preceding year, or
    (iii) An entity participating in a Federal telemedicine 
demonstration project that has been approved by, or receive funding 
from, the Secretary as of December 31, 2000, regardless of its 
geographic location.
* * * * *

PART 411--EXCLUSIONS FROM MEDICARE AND LIMITATIONS ON MEDICARE 
PAYMENT

0
27. 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).

0
28. Section 411.15 is amended by revising paragraphs (o)(1) and (2) to 
read as follows:

Sec.  411.15  Particular services excluded from coverage.

* * * * *
    (o) * * *
    (1) Categorized by the FDA as a Category B (Nonexperimental/
investigational) device as defined in Sec.  405.201(b) of the chapter; 
and
    (2) Furnished in accordance with the coverage requirements in Sec.  
405.211(b).
* * * * *

PART 414--PAYMENT FOR PART B MEDICAL AND OTHER HEALTH SERVICES

0
29. 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)).

0
30. Section 414.65 is amended by revising paragraph (a)(1) to read as 
follows:

Sec.  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 visit every 3 days by the patient's admitting physician or 
practitioner), subsequent nursing facility care services (with the 
limitation of one telehealth visit every 30 days by the patient's 
admitting physician or nonphysician practitioner), 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 self-management training 
services (except for one hour of ``hands on'' services to be furnished 
in the initial year training period to ensure effective injection 
training), individual and group health and behavior assessment and 
intervention, smoking cessation services, alcohol and/or substance 
abuse and brief intervention services, screening and behavioral 
counseling interventions in primary care to reduce alcohol misuse, 
screening for depression in adults, screening for sexually transmitted 
infections (STIs) and high intensity behavioral counseling (HIBC) to 
prevent STIs, intensive behavioral therapy for cardiovascular disease, 
behavioral counseling for obesity, and transitional care management 
services furnished via an interactive telecommunications system is 
equal to the current fee schedule amount applicable for the service of 
the physician or practitioner.
    (i) Emergency department or initial inpatient telehealth 
consultations. The Medicare payment amount for emergency department or 
initial inpatient telehealth consultations furnished via an interactive 
telecommunications system is equal to the current fee schedule amount 
applicable to initial hospital care provided by a physician or 
practitioner.
    (ii) Follow-up inpatient telehealth consultations. The Medicare 
payment amount for follow-up inpatient telehealth consultations 
furnished via an interactive telecommunications system is equal to the 
current fee schedule amount applicable to subsequent hospital care 
provided by a physician or practitioner.
* * * * *

0
31. Section 414.90 is revised to read as follows:

Sec.  414.90  Physician Quality Reporting System (PQRS).

    (a) Basis and scope. This section 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--
    Administrative claims means a reporting mechanism under which an 
eligible professional or group practice uses claims to report data on 
PQRS quality measures. Under this reporting mechanism, CMS analyzes 
claims data to determine which measures an eligible professional or 
group practice reports.
    Certified survey vendor means a vendor that is certified by CMS for 
a particular program year to transmit survey measures data to CMS.
    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.
    Direct electronic health record (EHR) product means an electronic 
health record vendor's product and version that submits data on PQRS 
measures directly to CMS.
    Electronic health record (EHR) data submission vendor product means 
an entity that receives and transmits data on PQRS measures from an EHR 
product to CMS.
    Eligible professional means any of the following:

[[Page 74813]]

    (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 physician group practice that is defined by 
a TIN, with 2 or more individual eligible professionals (or, as 
identified by NPIs) that has reassigned their billing rights to the 
TIN.
    Group practice reporting option (GPRO) web interface means a web 
product developed by CMS that is used by group practices that are 
selected to participate in the group practice reporting option (GPRO) 
to submit data on PQRS quality measures.
    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 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 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 physician to participate in educational 
and self-assessment 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 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.
    (iii) Requires a physician to implement a quality improvement 
intervention to address a practice weakness identified in the initial 
assessment under paragraph (h) of this section and then to remeasure to 
assess performance improvement after such intervention.
    Measures group means a subset of four or more PQRS 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.
    Physician Quality Reporting System (PQRS) 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.
    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.
    Qualified clinical data registry means a CMS-approved entity that 
has self-nominated and successfully completed a qualification process 
that collects medical and/or clinical data for the purpose of patient 
and disease tracking to foster improvement in the quality of care 
provided to patients. A qualified clinical data registry must perform 
the following functions:
    (i) Submit quality measures data or results to CMS for purposes of 
demonstrating that, for a reporting period, its eligible professionals 
have satisfactorily participated in PQRS. A qualified clinical data 
registry must have in place mechanisms for the transparency of data 
elements and specifications, risk models, and measures.
    (ii) Submit to CMS, for purposes of demonstrating satisfactory 
participation, quality measures data on multiple payers, not just 
Medicare patients.
    (iii) Provide timely feedback, at least four times a year, on the 
measures at the individual participant level for which the qualified 
clinical data registry reports on the eligible professional's behalf 
for purposes of the individual eligible professional's satisfactory 
participation in the clinical quality data registry.
    (iv) Possess benchmarking capacity that measures the quality of 
care an eligible professional provides with other eligible 
professionals performing the same or similar functions.
    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, has self-nominated and successfully completed a vetting process 
(as specified by CMS) to demonstrate its compliance with the PQRS 
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 PQRS data (as specified by CMS) on behalf of 
an eligible professional to CMS. If CMS finds that a qualified registry 
submits grossly inaccurate data for reporting periods occurring in a 
particular year, CMS reserves the right to disqualify a registry for 
reporting periods occurring in the subsequent year.
    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. For 2007 to 2014, with respect to covered 
professional services furnished during a reporting period by an 
eligible professional, an eligible professional (or in the case of a 
group practice under paragraph (i) of this section, a group practice) 
may receive an incentive if--
    (1) There are any quality measures that have been established under 
the PQRS that are applicable to any such services furnished by such 
professional (or in the case of a group practice under paragraph (i) of 
this section, such group practice) for such reporting period; and
    (2) If the eligible professional (or in the case of a group 
practice under paragraph (j) of this section, the group practice) 
satisfactorily submits (as determined under paragraph (g) of this 
section for the eligible professional and paragraph (i) of this section 
for the group practice) to the Secretary data on such quality measures 
in accordance with the PQRS for such reporting period, in addition to 
the amount otherwise paid under section 1848 of the Act, there also 
must 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 (i) 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 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 (i) of this section, the group 
practice's) total estimated allowed charges for all covered 
professional services furnished by the eligible professional (or, in 
the

[[Page 74814]]

case of a group practice under paragraph (i) of this section, by the 
group practice) during the reporting period.
    (3) The applicable quality percent is as follows:
    (i) For 2007 and 2008, 1.5 percent.
    (ii) For 2009 and 2010, 2.0 percent.
    (iii) For 2011, 1.0 percent.
    (iv) For 2012, 2013, and 2014, 0.5 percent.
    (4) For purposes of this paragraph (c)--
    (i) The eligible professional's (or, in the case of a group 
practice under paragraph (i) 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 the 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 to a group practice under this paragraph 
must be in lieu of the payments that would otherwise be made under the 
PQRS to eligible professionals in the group practice for meeting the 
criteria for satisfactory reporting for individual eligible 
professionals. For any program year in which the group practice (as 
identified by the TIN) is selected to participate in the PQRS group 
practice reporting option, the eligible professional cannot 
individually qualify for a PQRS incentive payment by meeting the 
requirements specified in paragraph (g) of this section.
    (iv) Incentive payments earned by the eligible professional (or in 
the case of a group practice under paragraph (i) of this section, by 
the group practice) for a particular program year will be paid as a 
single consolidated payment to the TIN holder of record.
    (5) The Secretary must treat an individual eligible professional, 
as identified by a unique TIN/NPI combination, as satisfactorily 
submitting data on quality measures (as determined under paragraph (g) 
of this section), if the eligible professional is satisfactorily 
participating (as determined under paragraph (h) of this section), in a 
qualified clinical data registry.
    (d) Additional incentive payment. 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)(iii) and (iv) of this section, must be increased by 
0.5 percentage points.
    (1) In order to qualify for the additional incentive payment 
described in paragraph (d) of this section, an eligible professional 
must meet all of the following requirements:
    (i) Satisfactorily submits data on quality measures, or, for 2014, 
in lieu of satisfactory reporting, satisfactorily participates in a 
qualified clinical data registry for purposes of this section for the 
applicable incentive year.
    (ii) Have such data submitted on their behalf through a Maintenance 
of Certification program that meets:
    (A) The criteria for a registry (as specified by CMS); or
    (B) An alternative form and manner determined appropriate by the 
Secretary.
    (iii) The eligible professional, more frequently than is required 
to qualify for or maintain board certification status--
    (A) Participates in a maintenance of certification program for a 
year; and
    (B) Successfully completes a qualified maintenance of certification 
program practice assessment for such year.
    (2) In order for an eligible professional to receive the additional 
incentive payment, a Maintenance of Certification Program must submit 
to the Secretary, on behalf of the eligible professional, information--
    (i) In a form and manner specified by the Secretary, that the 
eligible professional has successfully met the requirements of 
paragraph (d)(1)(iii) of this section, which may be in the form of a 
structural measure.
    (ii) If requested by the Secretary, on the survey of patient 
experience with care.
    (iii) As the Secretary may require, on the methods, measures, and 
data used under the Maintenance of Certification Program and the 
qualified Maintenance of Certification Program practice assessment.
    (e) Payment adjustments. For 2015 and subsequent years, with 
respect to covered professional services furnished by an eligible 
professional, 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 section 
1848(m)(3)(A) of the Act), the fee schedule amount for such services 
furnished by such professional during the year (including the fee 
schedule amount for purposes for 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 this paragraph 
(e).
    (1) The applicable percent is as follows:
    (i) For 2015, 98.5 percent.
    (ii) For 2016 and each subsequent year, 98 percent.
    (2) The Secretary must treat an individual eligible professional, 
as identified by a unique TIN/NPI combination, as satisfactorily 
submitting data on quality measures (as determined under paragraph (h) 
of this section), if the eligible professional is satisfactorily 
participating, in a qualified clinical data registry.
    (f) Use of appropriate and consensus-based quality measures. For 
measures selected for inclusion in the PQRS quality measure set, CMS 
will use group practice measures determined appropriate by CMS and 
consensus-based quality measures that meet one of the following 
criteria:
    (1) 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. 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.
    (2) For each quality measure adopted by the Secretary under this 
paragraph, the Secretary ensures that eligible professionals have the 
opportunity to provide input during the development, endorsement, or 
selection of quality measures applicable to services they furnish.
    (g) Use of quality measures for satisfactory participation in a 
qualified clinical data registry. For measures selected for reporting 
to meet the criteria for satisfactory participation in a qualified 
clinical data registry, CMS will use measures selected by qualified 
clinical data registries based on parameters set by CMS.
    (h) Satisfactory reporting requirements for the incentive payments. 
In order to qualify to earn a PQRS 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 under paragraph (h)(3) of (h)(5) of this 
section for such year by reporting on either individual PQRS quality 
measures or PQRS measures groups identified by CMS during a reporting 
period specified in paragraph (h)(1) of this section, using

[[Page 74815]]

one of the reporting mechanisms specified in paragraph (h)(2) or (4) of 
this section, and using one of the reporting criteria specified in 
paragraph (h)(3) or (5) of this section.
    (1) Reporting periods. For purposes of this paragraph, the 
reporting period is--
    (i) The 12-month period from January 1 through December 31 of such 
program year.
    (ii) A 6-month period from July 1 through December 31 of such 
program year.
    (A) For 2011, such 6-month reporting period is not available for 
EHR-based reporting of individual PQRS quality measures.
    (B) For 2012 and subsequent program years, such 6-month reporting 
period from July 1 through December 31 of such program year is only 
available for registry-based reporting of PQRS measures groups by 
eligible professionals.
    (2) Reporting mechanisms for individual eligible professionals. An 
individual eligible professional who wishes to participate in the PQRS 
must report information on PQRS quality measures identified by CMS in 
one of the following manners:
    (i) Claims. Reporting PQRS quality measures or PQRS 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.
    (A) If an eligible professional re-submits a Medicare Part B claim 
for reprocessing, the eligible professional may not attach a G-code at 
that time for reporting on individual PQRS measures or measures groups.
    (B) [Reserved]
    (ii) Registry. Reporting PQRS quality measures or PQRS measures 
groups to a qualified registry in the form and manner and by the 
deadline specified by the qualified registry selected by the eligible 
professional. The selected registry must 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.
    (iii) Direct EHR product. Reporting PQRS quality measures to CMS by 
extracting clinical data using a secure data submission method, as 
required by CMS, from a direct EHR product by the deadline specified by 
CMS for covered professional services furnished by the eligible 
professional during the applicable reporting period.
    (iv) EHR data submission vendor. Reporting PQRS quality measures to 
CMS by extracting clinical data using a secure data submission method, 
as required by CMS, from an EHR data submission vendor product by the 
deadline specified by CMS for covered professional services furnished 
by the eligible professional during the applicable reporting period.
    (v) Although an eligible professional may attempt to qualify for 
the PQRS incentive payment by reporting on both individual PQRS 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 PQRS 
incentive payment per TIN/NPI combination for a program year.
    (3) Satisfactory reporting criteria for individual eligible 
professionals for the 2014 PQRS incentive. An individual eligible 
professional who wishes to qualify for the 2014 PQRS incentive must 
report information on PQRS quality measures data in one of the 
following manners:
    (i) Via Claims. For the 12-month 2014 PQRS incentive reporting 
period--
    (A) Report at least 9 measures covering at least 3 National Quality 
Strategy domains, and report each measure for at least 50 percent of 
the Medicare Part B FFS patients seen during the reporting period to 
which the measure applies; or if less than 9 measures covering at least 
3 National Quality Strategy domains apply to the eligible professional, 
report 1 to 8 measures covering 1 to 3 National Quality Strategy 
domains and report each measure for at least 50 percent of the Medicare 
Part B FFS patients seen during the reporting period to which the 
measure applies. For an eligible professional who reports fewer than 9 
measures covering at least 3 NQS domains via the claims-based reporting 
mechanism, the eligible professional would be subject to the Measures 
Applicability Validation process, which would allow us to determine 
whether an eligible professional should have reported quality data 
codes for additional measures and/or covering additional National 
Quality Strategy domains. Measures with a 0 percent performance rate 
would not be counted.
    (B) [Reserved]
    (ii) Via Qualified Registry. (A) For the 12-month 2014 PQRS 
incentive reporting period--
    (1) Report at least 9 measures covering at least 3 of the National 
Quality Strategy domains report each measure for at least 50 percent of 
the eligible professional's Medicare Part B FFS patients seen during 
the reporting period to which the measure applies; or, if less than 9 
measures covering at least 3 NQS domains apply to the eligible 
professional, report 1 to 8 measures covering 1 to 3 National Quality 
Strategy domains for which there is Medicare patient data and report 
each measure for at least 50 percent of the eligible professional's 
Medicare Part B FFS patients seen during the reporting period to which 
the measure applies. For an eligible professional who reports fewer 
than 9 measures covering at least 3 NQS domains via the qualified 
registry-based reporting mechanism, the eligible professional will be 
subject to the Measures Applicability Validation process, which would 
allow us to determine whether an eligible professional should have 
reported on additional measures and/or measures covering additional 
National Quality Strategy domains. Measures with a 0 percent 
performance rate would not be counted.
    (2) Report at least 1 measures group and report each measures group 
for at least 20 patients, a majority of which much be Medicare Part B 
FFS patients. Measures with a 0 percent performance rate or measures 
groups containing a measure with a 0 percent performance rate will not 
be counted.
    (B) For the 6-month 2014 PQRS incentive reporting period, report at 
least 1 measures group and report each measures group for at least 20 
patients, a majority of which much be Medicare Part B FFS patients. 
Measures groups containing a measure with a 0 percent performance rate 
will not be counted.
    (iii) Via EHR Direct Product. For the 12-month 2014 PQRS incentive 
reporting period, report 9 measures covering at least 3 of the National 
Quality Strategy domains. If an eligible professional's CEHRT does not 
contain patient data for at least 9 measures covering at least 3 
domains, then the eligible professional must report the measures for 
which there is Medicare patient data. An eligible professional must 
report on at least 1 measure for which there is Medicare patient data.
    (iv) Via EHR Data Submission Vendor. For the 12-month 2014 PQRS 
incentive reporting period, report 9 measures covering at least 3 of 
the National Quality Strategy domains. If an eligible professional's 
CEHRT does not contain patient data for at least 9 measures covering at 
least 3 domains, then the eligible professional must report the 
measures for which there is Medicare patient data. An eligible 
professional must report on at least 1 measure for which there is 
Medicare patient data.
    (4) Reporting mechanisms for group practices. With the exception of 
a group

[[Page 74816]]

practice who wishes to participate in the PQRS using the certified 
survey vendor mechanism (as specified in paragraph (h)(4)(v) of this 
section), a group practice must report information on PQRS quality 
measures identified by CMS in one of the following reporting 
mechanisms:
    (i) Web interface. For 2013 and subsequent years, reporting PQRS 
quality measures to CMS using a CMS web interface in the form and 
manner and by the deadline specified by CMS.
    (ii) Registry. For 2013 and subsequent years, reporting on PQRS 
quality measures to a qualified registry in the form and manner and by 
the deadline specified by the qualified registry selected by the 
eligible professional. The selected registry must 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.
    (iii) Direct EHR product. For 2014 and subsequent years, reporting 
PQRS quality measures to CMS by extracting clinical data using a secure 
data submission method, as required by CMS, from a direct EHR product 
by the deadline specified by CMS for covered professional services 
furnished by the eligible professional during the applicable reporting 
period.
    (iv) EHR data submission vendor. For 2014 and subsequent years, 
reporting PQRS quality measures to CMS by extracting clinical data 
using a secure data submission method, as required by CMS, from an EHR 
data submission vendor product by the deadline specified by CMS for 
covered professional services furnished by the eligible professional 
during the applicable reporting period.
    (v) Certified survey vendors. For 2014 and subsequent years, 
reporting CAHPS survey measures to CMS using a vendor that is certified 
by CMS for a particular program year to transmit survey measures data 
to CMS. Group practices that elect this reporting mechanism must select 
an additional group practice reporting mechanism in order to meet the 
criteria for satisfactory reporting for the incentive payments.
    (vi) Although a group practice may attempt to qualify for the PQRS 
incentive payment by using more than one reporting mechanism (as 
specified in paragraph (g)(3) of this section), or reporting for more 
than one reporting period, the group practice will receive only one 
PQRS incentive payment for a program year.
    (5) Satisfactory reporting criteria for group practices for the 
2014 PQRS incentive. A group practice who wishes to qualify for the 
2014 PQRS incentive must report information on PQRS quality measures 
identified by CMS in one of the following manners:
    (i) Via the GPRO web interface. (A) For the 12-month 2014 PQRS 
incentive reporting period, for a group practice of 25 to 99 eligible 
professionals, report on all measures included in the web interface and 
populate data fields for the first 218 consecutively ranked and 
assigned beneficiaries in the order in which they appear in the group's 
sample for each module or preventive care measure. If the pool of 
eligible assigned beneficiaries is less than 218, then report on 100 
percent of assigned beneficiaries.
    (B) For the 12-month 2014 PQRS incentive reporting period, for a 
group practice of 100 or more eligible professionals, report on all 
measures included in the web interface and populate data fields for the 
first 411 consecutively ranked and assigned beneficiaries in the order 
in which they appear in the group's sample for each module or 
preventive care measure. If the pool of eligible assigned beneficiaries 
is less than 411, then report on 100 percent of assigned beneficiaries. 
In addition, for the 12-month 2014 PQRS incentive reporting period, the 
group practice must report all CG CAHPS survey measures via a CMS-
certified survey vendor, and report at least 6 measures covering at 
least 2 of the National Quality Strategy domains using a qualified 
registry, direct EHR product, or EHR data submission vendor.
    (ii) Via Qualified Registry. For the 12-month 2014 PQRS incentive 
reporting period, for a group practice of 2 or more eligible 
professionals, report at least 9 measures, covering at least 3 of the 
National Quality Strategy domains and report each measure for at least 
50 percent of the group practice's Medicare Part B FFS patients seen 
during the reporting period to which the measure applies; or, if less 
than 9 measures covering at least 3 NQS domains apply to the group 
practice, then the group practice must report 1-8 measures for which 
there is Medicare patient data and report each measure for at least 50 
percent of the group practice's Medicare Part B FFS patients seen 
during the reporting period to which the measure applies. For a group 
practice who reports fewer than 9 measures covering at least 3 NQS 
domains via the qualified registry-based reporting mechanism, the group 
practice would be subject to the Measures Applicability Validation 
process, which would allow us to determine whether a group practice 
should have reported on additional measures and/or measures covering 
additional National Quality Strategy domains. Measures with a 0 percent 
performance rate would not be counted.
    (iii) Via EHR Direct Product. For the 12-month 2014 PQRS incentive 
reporting period, for a group practice of 2 or more eligible 
professionals, report 9 measures covering at least 3 of the National 
Quality Strategy domains. If a group practice's CEHRT does not contain 
patient data for at least 9 measures covering at least 3 domains, then 
the group practice must report the measures for which there is Medicare 
patient data. A group practice must report on at least 1 measure for 
which there is Medicare patient data.
    (iv) Via EHR Data Submission Vendor. For the 12-month 2014 PQRS 
incentive reporting period, for a group practice of 2 or more eligible 
professionals, report 9 measures covering at least 3 of the National 
Quality Strategy domains. If a group practice's CEHRT does not contain 
patient data for at least 9 measures covering at least 3 domains, then 
the group practice must report the measures for which there is Medicare 
patient data. A group practice must report on at least 1 measure for 
which there is Medicare patient data.
    (v) Via a Certified survey vendor, in addition to the GPRO web 
interface, qualified registry, direct EHR product, or EHR data 
submission vendor reporting mechanisms. For the 12-month 2014 PQRS 
incentive reporting period, for a group practice of 25 or more eligible 
professionals, report all CG CAHPS survey measures via a CMS-certified 
survey vendor, and report at least 6 measures covering at least 2 of 
the National Quality Strategy domains using a qualified registry, 
direct EHR product, EHR data submission vendor, or GPRO web interface.
    (i) Satisfactory participation requirements for the incentive 
payments for individual eligible professionals. To qualify for the 2014 
PQRS incentive using a qualified clinical data registry, an individual 
eligible professional, as identified by a unique TIN/NPI combination, 
must meet the criteria for satisfactory participation as specified 
under paragraph (i)(3) of this section by reporting on quality measures 
identified by a qualified clinical data registry during a reporting 
period specified in paragraph (i)(1) of this section, and using the 
reporting mechanism specified in paragraph (i)(2) of this section.
    (1) Reporting period. For purposes of this paragraph, the reporting 
period is the 12-month period from January 1 through December 31.

[[Page 74817]]

    (2) Reporting Mechanism. An individual eligible professional who 
wishes to meet the criteria for satisfactory participation in a 
qualified clinical data registry must use a qualified clinical data 
registry to report information on quality measures identified by the 
qualified clinical data registry.
    (3) Satisfactory participation criteria for individual eligible 
professionals for the 2014 PQRS incentive. An individual eligible 
professional who wishes to qualify for the 2014 PQRS incentive through 
satisfactory participation in a qualified clinical data registry must 
report information on quality measures identified by the qualified 
clinical data registry in the following manner:
    (i) For the 12-month 2014 PQRS incentive reporting period, report 
at least 9 measures designated for reporting under a qualified clinical 
data registry covering at least 3 of the National Quality Strategy 
domains and report each measure for at least 50 percent of the eligible 
professional's patients. Of the measures reported via a qualified 
clinical data registry, the eligible professional must report on at 
least 1 outcome measure.
    (ii) [Reserved].
    (j) Satisfactory reporting requirements for the payment 
adjustments. In order to satisfy the requirements for the PQRS payment 
adjustment for a particular program year, an individual eligible 
professional, as identified by a unique TIN/NPI combination, or a group 
practice must meet the criteria for satisfactory reporting specified by 
CMS for such year by reporting on either individual PQRS measures or 
PQRS measures groups identified by CMS during a reporting period 
specified in paragraph (j)(1) of this section, using one of the 
reporting mechanisms specified in paragraph (j)(2) or (4) of this 
section, and using one of the reporting criteria specified in section 
(j)(3) or (5) of this section.
    (1) For purposes of this paragraph (j), the reporting period for 
the payment adjustment, with respect to a payment adjustment year, is 
the 12-month period from January 1 through December 31 that falls 2 
years prior to the year in which the payment adjustment is applied.
    (i) For the 2015 and 2016 PQRS payment adjustments only, an 
alternative 6-month reporting period, from July 1-December 31 that fall 
2 years prior to the year in which the payment adjustment is applied, 
is also available.
    (ii) [Reserved]
    (2) Reporting mechanisms for individual eligible professionals. An 
individual eligible professional participating in the PQRS must report 
information on PQRS quality measures identified by CMS in one of the 
following manners:
    (i) Claims. Reporting PQRS quality measures or PQRS 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.
    (A) If an eligible professional re-submits a Medicare Part B claim 
for reprocessing, the eligible professional may not attach a G-code at 
that time for reporting on individual PQRS measures or measures groups.
    (B) [Reserved]
    (ii) Registry. Reporting PQRS quality measures or PQRS measures 
groups to a qualified registry in the form and manner and by the 
deadline specified by the qualified registry selected by the eligible 
professional. The selected registry must 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.
    (iii) Direct EHR product. Reporting PQRS quality measures to CMS by 
extracting clinical data using a secure data submission method, as 
required by CMS, from a direct EHR product by the deadline specified by 
CMS for covered professional services furnished by the eligible 
professional during the applicable reporting period.
    (iv) EHR data submission vendor. Reporting PQRS quality measures to 
CMS by extracting clinical data using a secure data submission method, 
as required by CMS, from an EHR data submission vendor product by the 
deadline specified by CMS for covered professional services furnished 
by the eligible professional during the applicable reporting period.
    (v) Administrative claims. For 2015, reporting data on PQRS quality 
measures via administrative claims during the applicable reporting 
period. Eligible professionals that are administrative claims reporters 
must meet the following requirement for the payment adjustment:
    (A) Elect to participate in the PQRS using the administrative 
claims reporting option.
    (B) Reporting Medicare Part B claims data for CMS to determine 
whether the eligible professional has performed services applicable to 
certain individual PQRS quality measures.
    (3) Satisfactory reporting criteria for individual eligible 
professionals for the 2016 PQRS payment adjustment. An individual 
eligible professional who wishes to meet the criteria for satisfactory 
reporting for the 2016 PQRS payment adjustment must report information 
on PQRS quality measures identified by CMS in one of the following 
manners:
    (i) Via Claims. (A) For the 12-month 2016 PQRS payment adjustment 
reporting period--
    (1)(i) Report at least 9 measures covering at least 3 National 
Quality Strategy domains and report each measure for at least 50 
percent of the Medicare Part B FFS patients seen during the reporting 
period to which the measure applies; or if less than 9 measures 
covering at least 3 NQS domains apply to the eligible professional, 
report 1-8 measures covering 1-3 National Quality Strategy domains, and 
report each measure for at least 50 percent of the Medicare Part B FFS 
patients seen during the reporting period to which the measure applies. 
For an eligible professional who reports fewer than 9 measures covering 
at least 3 NQS domains via the claims-based reporting mechanism, the 
eligible professional would be subject to the Measures Applicability 
Validation process, which would allow us to determine whether an 
eligible professional should have reported quality data codes for 
additional measures and/or covering additional National Quality 
Strategy domains; or
    (ii) Report at least 3 measures covering at least 1 NQS domain, or, 
if less than 3 measures covering at least 1 NQS domain apply to the 
eligible professional, report 1-2 measures covering at least 1 NQS 
domain; and report each measure for at least 50 percent of the eligible 
professional's Medicare Part B FFS patients seen during the reporting 
period to which the measure applies.
    (2) Measures with a 0 percent performance rate would not be 
counted.
    (ii) Via Qualified Registry. (A) For the 12-month 2016 PQRS payment 
adjustment reporting period--
    (1)(i) Report at least 9 measures covering at least 3 of the 
National Quality Strategy domains; or if less than 9 measures covering 
at least 3 NQS domains apply to the eligible professional, report 1 to 
8 measures covering 1 to 3 National Quality Strategy domains for which 
there is Medicare patient data, and report each measure for at least 50 
percent of the eligible professional's Medicare Part B FFS patients 
seen during the reporting period to which the measure applies. For an 
eligible professional who reports fewer than 9 measures covering at 
least

[[Page 74818]]

3 NQS domains via the qualified registry-based reporting mechanism, the 
eligible professional would be subject to the Measures Applicability 
Validation process, which would allow us to determine whether an 
eligible professional should have reported on additional measures and/
or measures covering additional National Quality Strategy domains; or
    (ii) Report at least 3 measures covering at least 1 of the NQS 
domains; or if less than 3 measures covering at least 1 NQS domain 
apply to the eligible professional, report 1 to 2 measures covering 1 
National Quality Strategy domain for which there is Medicare patient 
data, and report each measure for at least 50 percent of the eligible 
professional's Medicare Part B FFS patients seen during the reporting 
period to which the measure applies. For an eligible professional who 
reports fewer than 3 measures covering 1 NQS domain via the registry-
based reporting mechanism, the eligible professional would be subject 
to the Measures Applicability Validation process, which would allow us 
to determine whether an eligible professional should have reported on 
additional measures; or
    (iii) Report at least 1 measures group and report each measures 
group for at least 20 patients, a majority of which much be Medicare 
Part B FFS patients.
    (2) Measures with a 0 percent performance rate or measures groups 
containing a measure with a 0 percent performance rate will not be 
counted.
    (B) For the 6-month 2016 PQRS payment adjustment reporting period--
    (1) Report at least 1 measures group and report each measures group 
for at least 20 patients, a majority of which much be Medicare Part B 
FFS patients. Measures groups containing a measure with a 0 percent 
performance rate will not be counted.
    (iii) Via EHR Direct Product. For the 12-month 2016 PQRS payment 
adjustment reporting period, report 9 measures covering at least 3 of 
the National Quality Strategy domains. If an eligible professional's 
CEHRT does not contain patient data for at least 9 measures covering at 
least 3 domains, then the eligible professional must report the 
measures for which there is Medicare patient data. An eligible 
professional must report on at least 1 measure for which there is 
Medicare patient data.
    (iv) Via EHR Data Submission Vendor. For the 12-month 2016 PQRS 
payment adjustment reporting period, report 9 measures covering at 
least 3 of the National Quality Strategy domains. If an eligible 
professional's CEHRT does not contain patient data for at least 9 
measures covering at least 3 domains, then the eligible professional 
must report the measures for which there is Medicare patient data. An 
eligible professional must report on at least 1 measure for which there 
is Medicare patient data.
    (4) Reporting mechanisms for group practices. With the exception of 
a group practice who wishes to participate in the PQRS using the 
certified survey vendor mechanism, a group practice participating in 
the PQRS must report information on PQRS quality measures identified by 
CMS in one of the following reporting mechanisms:
    (i) Web interface. For the 2015 payment adjustment and subsequent 
payment adjustments, reporting PQRS quality measures to CMS using a CMS 
web interface in the form and manner and by the deadline specified by 
CMS.
    (ii) Registry. For the 2015 subsequent adjustment and subsequent 
payment adjustments, reporting on PQRS quality measures to a qualified 
registry 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.
    (iii) Direct EHR product. For the 2016 subsequent adjustment and 
subsequent payment adjustments, reporting PQRS quality measures to CMS 
by extracting clinical data using a secure data submission method, as 
required by CMS, from a direct EHR product by the deadline specified by 
CMS for covered professional services furnished by the eligible 
professional during the applicable reporting period.
    (iv) EHR data submission vendor. For the 2016 subsequent adjustment 
and subsequent payment adjustments, reporting PQRS quality measures to 
CMS by extracting clinical data using a secure data submission method, 
as required by CMS, from an EHR data submission vendor product by the 
deadline specified by CMS for covered professional services furnished 
by the group practice during the applicable reporting period.
    (v) Administrative claims. For 2015, reporting data on PQRS quality 
measures via administrative claims during the applicable reporting 
period. Group practices that are administrative claims reporters must 
meet the following requirement for the payment adjustment:
    (A) Elect to participate in the PQRS using the administrative 
claims reporting option.
    (B) Reporting Medicare Part B claims data for CMS to determine 
whether the group practice has performed services applicable to certain 
individual PQRS quality measures.
    (vi) Certified Survey Vendors. For 2016 and subsequent years, 
reporting CAHPS survey measures to CMS using a vendor that is certified 
by CMS for a particular program year to transmit survey measures data 
to CMS. Group practices that elect this reporting mechanism must select 
an additional group practice reporting mechanism in order to meet the 
criteria for satisfactory reporting for the payment adjustment.
    (5) Satisfactory reporting criteria for group practices for the 
2016 PQRS payment adjustment. A group practice who wishes to meet the 
criteria for satisfactory reporting for the 2016 PQRS payment 
adjustment must report information on PQRS quality measures identified 
by CMS in one of the following manners:
    (i) Via the GPRO web interface. (A) For the 12-month 2016 PQRS 
payment adjustment reporting period, for a group practice of 25 to 99 
eligible professionals, report on all measures included in the web 
interface and populate data fields for the first 218 consecutively 
ranked and assigned beneficiaries in the order in which they appear in 
the group's sample for each module or preventive care measure. If the 
pool of eligible assigned beneficiaries is less than 218, then report 
on 100 percent of assigned beneficiaries.
    (B) For the 12-month 2016 PQRS payment adjustment reporting period, 
for a group practice of 100 or more eligible professionals, report on 
all measures included in the Web interface and populate data fields for 
the first 411 consecutively ranked and assigned beneficiaries in the 
order in which they appear in the group's sample for each module or 
preventive care measure. If the pool of eligible assigned beneficiaries 
is less than 411, then report on 100 percent of assigned beneficiaries. 
In addition, the group practice must also report all CG CAHPS survey 
measures via certified survey vendor.
    (ii) Via Qualified Registry. (A) For the 12-month 2016 PQRS payment 
adjustment reporting period, for a group practice of 2 or more eligible 
professionals--
    (1) Report at least 9 measures, covering at least 3 of the National 
Quality Strategy domains and report each measure for at least 50 
percent of the group practice's Medicare Part B FFS patients seen 
during the reporting period to which the measure applies; or

[[Page 74819]]

If less than 9 measures covering at least 3 NQS domains apply to the 
eligible professional, then the group practices must report 1-8 
measures for which there is Medicare patient data and report each 
measure for at least 50 percent of the group practice's Medicare Part B 
FFS patients seen during the reporting period to which the measure 
applies. For a group practice who reports fewer than 9 measures 
covering at least 3 NQS domains via the registry-based reporting 
mechanism, the group practice would be subject to the Measures 
Applicability Validation process, which would allow us to determine 
whether a group practice should have reported on additional measures. 
Measures with a 0 percent performance rate would not be counted; or
    (2) Report at least 3 measures, covering at least 1 of the National 
Quality Strategy domains and report each measure for at least 50 
percent of the group practice's Medicare Part B FFS patients seen 
during the reporting period to which the measure applies; or if less 
than 3 measures covering at least 1 NQS domain apply to the group 
practice, then the group practice must report 1-2 measures for which 
there is Medicare patient data and report each measure for at least 50 
percent of the group practice's Medicare Part B FFS patients seen 
during the reporting period to which the measure applies. For a group 
practice who reports fewer than 3 measures covering at least 1 NQS 
domain via the registry-based reporting mechanism, the group practice 
would be subject to the Measures Applicability Validation process, 
which would allow us to determine whether a group practice should have 
reported on additional measures. Measures with a 0 percent performance 
rate would not be counted.
    (iii) Via EHR Direct Product. For a group practice of 2 or more 
eligible professionals, for the 12-month 2016 PQRS payment adjustment 
reporting period, report 9 measures covering at least 3 of the National 
Quality Strategy domains. If a group practice's CEHRT does not contain 
patient data for at least 9 measures covering at least 3 domains, then 
the group practice must report the measures for which there is Medicare 
patient data. A group practice must report on at least 1 measure for 
which there is Medicare patient data.
    (iv) Via EHR Data Submission Vendor. For a group practice of 2 or 
more eligible professionals, for the 12-month 2016 PQRS payment 
adjustment reporting period, report 9 measures covering at least 3 of 
the National Quality Strategy domains. If a group practice's CEHRT does 
not contain patient data for at least 9 measures covering at least 3 
domains, then the group practice must report the measures for which 
there is Medicare patient data. A group practice must report on at 
least 1 measure for which there is Medicare patient data.
    (v) Via a Certified survey vendor, in addition to the GPRO Web 
interface, qualified registry, direct EHR product, or EHR data 
submission vendor reporting mechanisms. For a group practice of 25 or 
more eligible professionals, for the 12-month 2016 PQRS payment 
adjustment reporting period, report all CG CAHPS survey measures via a 
CMS-certified survey vendor and report at least 6 measures covering at 
least 2 of the National Quality Strategy domains using a qualified 
registry, direct EHR product, EHR data submission vendor, or GPRO Web 
interface.
    (k) Satisfactory participation requirements for the payment 
adjustments for individual eligible professionals. In order to satisfy 
the requirements for the PQRS payment adjustment for a particular 
program year through participation in a qualified clinical data 
registry, an individual eligible professional, as identified by a 
unique TIN/NPI combination, must meet the criteria for satisfactory 
participation as specified in paragraph (k)(3) for such year, by 
reporting on quality measures identified by a qualified clinical data 
registry during a reporting period specified in paragraph (k)(1) of 
this section, using the reporting mechanism specified in paragraph 
(k)(2) of this section.
    (1) Reporting period. For purposes of this paragraph, the reporting 
period is--
    (i) The 12-month period from January 1 through December 31 that 
falls 2 years prior to the year in which the payment adjustment is 
applied.
    (ii) [Reserved.]
    (2) Reporting Mechanism. An individual eligible professional who 
wishes to meet the criteria for satisfactory participation in a 
qualified clinical data registry must use the qualified clinical data 
registry to report information on quality measures identified by the 
qualified clinical data registry.
    (3) Satisfactory participation criteria for individual eligible 
professionals for the 2016 PQRS payment adjustment. An individual 
eligible professional who wishes to meet the criteria for satisfactory 
participation in a qualified clinical data registry for the 2016 PQRS 
payment adjustment must report information on quality measures 
identified by the qualified clinical data registry in one of the 
following manners:
    (i) For the 12-month 2016 PQRS payment adjustment reporting 
period--
    (A) Report at least 9 measures available for reporting under a 
qualified clinical data registry covering at least 3 of the National 
Quality Strategy domains and report each measure for at least 50 
percent of the eligible professional's patients; or
    (B) Report at least 3 measures available for reporting under a 
qualified clinical data registry covering at least 1 of the National 
Quality Strategy domains and report each measure for at least 50 
percent of the eligible professional's patients.
    (l) Requirements for group practices. Under the PQRS, a group 
practice must meet all of the following requirements:
    (1) Meet the participation requirements specified by CMS for the 
PQRS group practice reporting option.
    (2) Report measures in the form and manner specified by CMS.
    (3) Meet other requirements for satisfactory reporting specified by 
CMS.
    (4) Meet other requirements for satisfactory reporting specified by 
CMS.
    (5) Meet participation requirements.
    (i) If an eligible professional, as identified by an individual 
NPI, has reassigned his or her Medicare billing rights to a group 
practice (as identified by the TIN) selected to participate in the PQRS 
group practice reporting option for a program year, then for that 
program year the eligible professional must participate in the PQRS via 
the group practice reporting option.
    (ii) If, for the program year, the eligible professional 
participates in the PQRS as part of a group practice (as identified by 
the TIN) that is not selected to participate in the PQRS group practice 
reporting option for that program year, then the eligible professional 
may individually participate and qualify for a PQRS incentive by 
meeting the requirements specified in paragraph (g) of this section 
under that TIN.
    (m) Informal review. Eligible professionals or group practices may 
seek an informal review of the determination that an eligible 
professional or group practices did not satisfactorily submit data on 
quality measures under the PQRS, or, for individual eligible 
professionals, in lieu of satisfactory reporting, did not 
satisfactorily participate in a qualified clinical data registry.
    (1) To request an informal review, an eligible professional or 
group practices must submit a request to CMS within 90 days of the 
release of the feedback reports. The request must be submitted

[[Page 74820]]

in writing and 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 90 days of the 
receipt of the original request.
    (i) All decisions based on the informal review will be final.
    (ii) There will be no further review or appeal.
    (n) Limitations on review. Except as specified in paragraph (i) of 
this section, there is no administrative or judicial review under 
section 1869 or 1879 of the Act, or otherwise of--
    (1) The determination of measures applicable to services furnished 
by eligible professionals under the PQRS;
    (2) The determination of satisfactory reporting; and
    (3) The determination of any Physician Quality Reporting System 
incentive payment and the PQRS payment adjustment.
    (o) Public reporting of an eligible professional's or group 
practice's PQRS 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 (g) 
of this section, group practices) who satisfactorily submitted PQRS 
quality measures.

0
32. Section 414.511 is added to subpart G to read as follows:

Sec.  414.511  Adjustments to the Clinical Laboratory Fee Schedule 
based on Technological Changes.

    (a) CMS may make adjustments to the fee schedules as CMS determines 
are justified by technological changes.
    (b) Technological changes are changes to the tools, machines, 
supplies, labor, instruments, skills, techniques, and devices by which 
laboratory tests are produced and used.
    (c) CMS will propose and finalize any adjustments to the fee 
schedules as CMS determines are justified by technological changes in 
the Federal Register.

0
33. Section 414.610 is amended by--
0
A. Revising paragraphs (c)(1)(ii) and (c)(5)(ii).
0
B. Adding paragraph (c)(8).
0
C. Revising paragraph (h).
    The revisions and addition read as follows:

Sec.  414.610  Basis of payment.

* * * * *
    (c) * * *
    (1) * * *
    (ii) For services furnished during the period July 1, 2008 through 
December 31, 2013, ambulance services originating in:
    (A) Urban areas (both base rate and mileage) are paid based on a 
rate that is 2 percent higher than otherwise is applicable under this 
section.
    (B) Rural areas (both base rate and mileage) are paid based on a 
rate that is 3 percent higher than otherwise is applicable under this 
section.
* * * * *
    (5) * * *
    (ii) For services furnished during the period July 1, 2004 through 
December 31, 2013, 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.
* * * * *
    (8) For ambulance services furnished on or after October 1, 2013 
consisting of non-emergency basic life support (BLS) services involving 
transport of an individual with end-stage renal disease for renal 
dialysis services (as described in section 1881(b)(14)(B)) furnished 
other than on an emergency basis by a provider of services or a renal 
dialysis facility, the fee schedule amount otherwise applicable (both 
base rate and mileage) is reduced by 10 percent.
* * * * *
    (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 June 30, 2013.

0
34. Section 414.1210 is amended by revising paragraphs (a) and (c) to 
read as follows:

Sec.  414.1210  Application of the value-based payment modifier.

    (a) The value-based payment modifier is applicable:
    (1) For the CY 2015 payment adjustment period, to physicians in 
groups with 100 or more eligible professionals based on the performance 
period described at Sec.  414.1215(a).
    (2) For the CY 2016 payment adjustment period, to physicians in 
groups with 10 or more eligible professionals based on the performance 
period described at Sec.  414.1215(b).
* * * * *
    (c) Group size determination. The list of groups of physicians 
subject to the value-based payment modifier for the CY 2015 payment 
adjustment period is based on a query of PECOS on October 15, 2013. For 
each subsequent calendar year payment adjustment period, the list of 
groups of physicians subject to the value-based payment modifier is 
based on a query of PECOS that occurs within 10 days of the close of 
the Physician Quality Reporting System group registration process 
during the applicable performance period described at Sec.  414.1215. 
Groups of physicians are removed from the PECOS-generated list if, 
based on a claims analysis, the group of physicians did not have the 
required number of eligible professionals, as defined in Sec.  
414.1210(a), that submitted claims during the performance period for 
the applicable calendar year payment adjustment period.

0
35. Section 414.1215 is amended by adding paragraph (c) to read as 
follows:

Sec.  414.1215  Performance and payment adjustment periods for the 
value-based payment modifier.

* * * * *
    (c) The performance period is calendar year 2015 for value-based 
payment modifier adjustments made in the calendar year 2017 payment 
adjustment period.

0
36. Section 414.1220 is revised to read as follows:

Sec.  414.1220  Reporting mechanisms for the value-based payment 
modifier.

    Groups of physicians subject to the value-based payment modifier 
(or individual eligible professionals within such groups) may submit 
data on quality measures as specified under the Physician Quality 
Reporting System using the reporting mechanisms for which they are 
eligible.

0
37. Section 414.1225 is revised to read as follows:

Sec.  414.1225  Alignment of Physician Quality Reporting System quality 
measures and quality measures for the value-based payment modifier.

    All of the quality measures for which groups of physicians or 
individual eligible professionals are eligible to report under the 
Physician Quality Reporting System in a given calendar year are used to 
calculate the value-based payment modifier for the applicable payment 
adjustment period, as defined in Sec.  414.1215, to the extent

[[Page 74821]]

a group of physicians or individual eligible professionals within such 
group submits data on such measures.

0
38. Section 414.1235 is revised to read as follows:

Sec.  414.1235  Cost measures.

    (a) Included measures. Beginning with the CY 2016 payment 
adjustment period, costs for groups of physicians subject to the value-
based payment modifier are assessed based on a cost composite comprised 
of the following 6 cost measures (only the measures identified in 
paragraphs (a)(1) through (5) of this section are included for the 
value-based payment modifier for the CY 2015 payment adjustment 
period):
    (1) Total per capita costs for all attributed beneficiaries.
    (2) Total per capita costs for all attributed beneficiaries with 
diabetes.
    (3) Total per capita costs for all attributed beneficiaries with 
coronary artery disease.
    (4) Total per capita costs for all attributed beneficiaries with 
chronic obstructive pulmonary disease.
    (5) Total per capita costs for all attributed beneficiaries with 
heart failure.
    (6) Medicare Spending per Beneficiary associated with an acute 
inpatient hospitalization.
    (b) Included payments. Cost measures enumerated in paragraph (a) of 
this section include all fee-for-service payments made under Medicare 
Part A and Part B.
    (c) Cost measure adjustments. (1) Payments under Medicare Part A 
and Part B will be adjusted using CMS' payment standardization 
methodology to ensure fair comparisons across geographic areas.
    (2) The CMS-HCC model (and adjustments for ESRD status) is used to 
adjust standardized payments for the measures listed at paragraphs 
(a)(1) through (5) of this section.
    (3) The beneficiary's age and severity of illness are used to 
adjust the Medicare Spending per Beneficiary measure as specified in 
paragraph (a)(6) of this section.

0
39. Section 414.1240 is revised to read as follows:

Sec.  414.1240  Attribution for quality of care and cost measures.

    (a) Beneficiaries are attributed to groups of physicians subject to 
the value-based payment modifier using a method generally consistent 
with the method of assignment of beneficiaries under Sec.  425.402 of 
this chapter, for measures other than the Medicare Spending per 
Beneficiary measure.
    (b) For the Medicare Spending per Beneficiary (MSPB) measure, an 
MSPB episode is attributed to the group of physicians subject to the 
value-based payment modifier whose eligible professionals submitted the 
plurality of claims (as measured by allowable charges) under the 
group's TIN for Medicare Part B services, rendered during an inpatient 
hospitalization that is an index admission for the MSPB measure during 
the applicable performance period described at Sec.  414.1215.

0
40. Section 414.1255 is revised to read as follows:

Sec.  414.1255  Benchmarks for cost measures.

    (a) For the CY 2015 payment adjustment period, the benchmark for 
each cost measure is the national mean of the performance rates 
calculated among all groups of physicians for which beneficiaries are 
attributed to the group of physicians that are subject to the value-
based payment modifier. In calculating the national benchmark, groups 
of physicians' performance rates are weighted by the number of 
beneficiaries used to calculate the group of physician's performance 
rate.
    (b) Beginning with the CY 2016 payment adjustment period, the cost 
measures of a group of physicians subject to the value-based payment 
modifier are adjusted to account for the group's specialty mix, by 
computing the weighted average of the national specialty-specific 
expected costs. Each national specialty-specific expected cost is 
weighted by the proportion of each specialty in the group, the number 
of eligible professionals of each specialty in the group, and the 
number of beneficiaries attributed to the group.
    (c) The national specialty-specific expected costs referenced in 
paragraph (b) of this section are derived by calculating, for each 
specialty, the average cost of beneficiaries attributed to groups of 
physicians that include that specialty.

0
41. Section 414.1260 is amended by revising paragraph (b)(1)(i) to read 
as follows:

Sec.  414.1260  Composite scores.

* * * * *
    (b) * * *
    (1) * * *
    (i) Total per capita costs for all attributed beneficiaries: Total 
per capita costs measure and Medicare Spending per Beneficiary measure; 
and
* * * * *

0
42. Section 414.1270 is revised to read as follows:

Sec.  414.1270  Determination and calculation of Value-Based Payment 
Modifier adjustments.

    (a) For the CY 2015 payment adjustment period:
    (1) Downward payment adjustments. A downward payment adjustment 
will be applied to a group of physicians subject to the value-based 
payment modifier if--
    (i) Such group neither self-nominates for the PQRS GPRO and reports 
at least one measure, nor elects the PQRS administrative claims option 
for CY 2013 as defined in Sec.  414.90(h).
    (A) Such adjustment will be -1.0 percent.
    (B) [Reserved].
    (ii) Such group elects that its value-based payment modifier be 
calculated using a quality-tiering approach, and is determined to have 
poor performance (low quality and high costs; low quality and average 
costs; or average quality and high costs).
    (A) Such adjustment will not exceed -1.0 percent as specified in 
Sec.  414.1275(c)(1).
    (B) [Reserved].
    (2) No payment adjustments. There will be no value-based payment 
modifier adjustment applied to a group of physicians subject to the 
value-based payment modifier if such group either:
    (i) Self-nominates for the PQRS GPRO and reports at least one 
measure; or
    (ii) Elects the PQRS administrative claims option for CY 2013 as 
defined in Sec.  414.90(h).
    (3) Upward payment adjustments. If a group of physicians subject to 
the value-based payment modifier elects that the value-based payment 
modifier be calculated using a quality-tiering approach, upward payment 
adjustments are determined based on the projected aggregate amount of 
downward payment adjustments determined under paragraph (a)(1) of this 
section and applied as specified in Sec.  414.1275(c)(1).
    (b) For the CY 2016 payment adjustment period:
    (1) A downward payment adjustment of -2.0 percent will be applied 
to a group of physicians subject to the value-based payment modifier 
if, during the applicable performance period as defined in Sec.  
414.1215, the following apply:
    (i) Such group does not self-nominate for the PQRS GPRO and meet 
the criteria as a group to avoid the PQRS payment adjustment for CY 
2016 as specified by CMS; and
    (ii) Fifty percent of the eligible professionals in such group do 
not meet the criteria as individuals to avoid the PQRS payment 
adjustment for CY 2016 as specified by CMS.

[[Page 74822]]

    (2) For a group of physicians comprised of 100 or more eligible 
professionals that is not included in paragraph (b)(1) of this section, 
the value-based payment modifier adjustment will be equal to the amount 
determined under Sec.  414.1275(c)(2).
    (3) For a group of physicians comprised of between 10 and 99 
eligible professionals that is not included in paragraph (b)(1) of this 
section, the value-based payment modifier adjustment will be equal to 
the amount determined under Sec.  414.1275(c)(2), except that such 
adjustment will be 0.0 percent if the group of physicians is determined 
to be low quality/high cost, low quality/average cost, or average 
quality/high cost.
    (4) If all of the eligible professionals in a group of physicians 
subject to the value-based payment modifier participate as individuals 
in the PQRS using a qualified clinical data registry or any other 
reporting mechanism available to them, and CMS is unable to receive 
quality performance data for those eligible professionals under that 
reporting mechanism, the quality composite score for such group will be 
classified as ``average'' under Sec.  414.1275(b)(1).
    (5) A group of physicians subject to the value-based payment 
modifier will receive a cost composite score that is classified as 
``average'' under Sec.  414.1275(b)(2) if such group does not have at 
least one cost measure with at least 20 cases.

0
43. Section 414.1275 is amended by revising paragraphs (a) and (c) and 
(d) introductory text to read as follows:

Sec.  414.1275  Value-based payment modifier quality-tiering scoring 
methodology.

    (a) The value-based payment modifier amount for a group of 
physicians subject to the value-based payment modifier is based upon a 
comparison of the composite of quality of care measures and a composite 
of cost measures.
* * * * *
    (c)(1) The following value-based payment modifier percentages apply 
to the CY 2015 payment adjustment period:

  CY 2015 Value-Based Payment Modifier Amounts for the Quality-Tiering
                                Approach
------------------------------------------------------------------------
                                                  Average     High cost
           Quality/cost              Low cost       cost      (percent)
------------------------------------------------------------------------
High quality.....................       +2.0x*       +1.0x*         +0.0
Average quality..................       +1.0x*        +0.0%         -0.5
Low quality......................        +0.0%        -0.5%         -1.0
------------------------------------------------------------------------
* Groups of physicians eligible for an additional +1.0x if (1) reporting
  Physician Quality Reporting System quality measures through the GPRO
  web-interface or CMS-qualified registry, and (2) average beneficiary
  risk score is in the top 25 percent of all beneficiary risk scores.

    (2) The following value-based payment modifier percentages apply to 
the CY 2016 payment adjustment period:

  CY 2016 Value-Based Payment Modifier Amounts for the Quality-Tiering
                                Approach
------------------------------------------------------------------------
                                                  Average     High cost
           Quality/cost              Low cost       cost      (percent)
------------------------------------------------------------------------
High quality.....................       +2.0x*       +1.0x*         +0.0
Average quality..................       +1.0x*        +0.0%         -1.0
Low quality......................        +0.0%        -1.0%         -2.0
------------------------------------------------------------------------
* Groups of physicians eligible for an additional +1.0x if reporting
  Physician Quality Reporting System quality measures and average
  beneficiary risk score is in the top 25 percent of all beneficiary
  risk scores.

    (d) Groups of physicians subject to the value-based payment 
modifier that have an attributed beneficiary population with an average 
risk score in the top 25 percent of the risk scores of beneficiaries 
nationwide and for the CY 2015 payment adjustment period elect the 
quality-tiering approach or for the CY 2016 payment adjustment period 
are subject to the quality-tiering approach, receive a greater upward 
payment adjustment as follows:
* * * * *

PART 423--VOLUNTARY MEDICARE PRESCRIPTION DRUG BENEFIT

0
44. The authority citation for part 423 continues to read as follows:

    Authority:  Sections 1102, 1106, 1860D-1 through 1860D-42, and 
1871 of the Social Security Act (42 U.S.C. 1302, 1306, 1395w-101 
through 1395w-152, and 1395hh).

0
45. Section 423.160 is amended by--
0
A. Revising paragraphs (b)(1)(i) through (iii).
0
B. Adding paragraphs (b)(1)(iv), (b)(5)(i) through (iii), and 
(c)(1)(vi).
    The revisions and additions read as follows:

Sec.  423.160  Standards for electronic prescribing.

* * * * *
    (b) * * *
    (1) * * *
    (i) Prior to April 1, 2009, the standards specified in paragraphs 
(b)(2)(i), (b)(3) and (4), (b)(5)(i), and (b)(6).
    (ii) On or after April 1, 2009, to February 7, 2014, the standards 
specified in paragraphs (b)(2)(ii), (b)(3) and (4), (b)(5)(i) and 
(b)(6).
    (iii) From February 8, 2014, until February 28, 2015, the standards 
specified in paragraphs (b)(2)(ii), (b)(3) and (4), (b)(5)(ii), and 
(b)(6).
    (iv) From March 1, 2015, the standards specified in paragraphs 
(b)(2)(ii), (b)(3) and (b)(4), (b)(5)(iii), and (b)(6).
* * * * *
    (5) * * *
    (i) Formulary and benefits. Before The National Council for 
Prescription Drug Programs Formulary and Benefits Standard, 
Implementation Guide, Version 1, Release 0 (Version 1.0), October 2005 
(incorporated by reference in paragraph (c)(1)(ii) of this section) for 
transmitting formulary and benefits information between prescribers and 
Medicare Part D sponsors.
    (ii) Formulary and benefits. On The National Council for 
Prescription Drug Programs Formulary and Benefits Standard, 
Implementation Guide, Version 1, Release 0 (Version 1.0),

[[Page 74823]]

October 2005 (incorporated by reference in paragraph (c)(1)(ii) of this 
section), or The National Council for Prescription Drug Programs 
Formulary and Benefits Standard, Implementation Guide, Version 3, 
Release 0 (Version 3.0), April 2012 (incorporated by reference in 
paragraph (c)(1)(vi) of this section) for transmitting formulary and 
benefits information between prescribers and Medicare Part D sponsors.
    (iii) Formulary and benefits. The National Council for Prescription 
Drug Programs Formulary and Benefits Standard, Implementation Guide, 
Version 3, Release 0 (Version 3.0), April 2012 (incorporation by 
reference in paragraph (c)(1)(vi) of this section) for transmitting 
formulary and benefits information between prescribers and Medicare 
Part D sponsors.
* * * * *
    (c) * * *
    (1) * * *
    (vi) The National Council for Prescription Drug Programs Formulary 
and Benefits Standard, Implementation Guide, Version 3, Release 0 
(Version 3.0), published April 2012.
* * * * *

PART 425--MEDICARE SHARED SAVINGS PROGRAM

0
46. The authority citation for part 425 continues to read as follows:

    Authority: Secs. 1102, 1106, 1871, and 1899 of the Social 
Security Act (42 U.S.C. 1302 and 1395hh).
* * * * *

0
47. Section 425.308 is amended by revising paragraph (e) to read as 
follows:

Sec.  425.308  Public reporting and transparency.

* * * * *
    (e) Results of claims based measures. Quality measures reported 
using a CMS web interface and patient experience of care survey 
measures will be reported on Physician Compare in the same way as for 
the group practices that report under the Physician Quality Reporting 
System.

0
48. Section 425.502 is amended by revising paragraph (b)(2) to read as 
follows:

Sec.  425.502  Calculating the ACO quality performance score.

* * * * *
    (b) * * *
    (2)(i) CMS will define the quality benchmarks using fee-for-service 
Medicare data.
    (ii) CMS will set benchmarks using flat percentages when the 60th 
percentile is equal to or greater than 80.00 percent.
    (iii) CMS reserves the right to use flat percentages for other 
measures when CMS determines that fee-for-service Medicare data are 
unavailable, inadequate, or unreliable to set the quality benchmarks.
* * * * *

0
49. Section 425.504 is amended by:
0
A. Revising the section heading.
0
B. Revising paragraphs (a)(1), (b) heading, and (b)(1).
0
C. Adding paragraphs (c) and (d).
    The revisions and additions read as follows:

Sec.  425.504  Incorporating reporting requirements related to the 
Physician Quality Reporting System Incentive and Payment Adjustment.

    (a) * * *
    (1) ACOs, on behalf of their ACO provider/suppliers who are 
eligible professionals, must submit the measures determined under Sec.  
425.500 using a CMS web interface, to qualify on behalf of their 
eligible professionals for the Physician Quality Reporting System 
incentive under the Shared Savings Program.
* * * * *
    (b) Physician Quality Reporting System payment adjustment for 2015. 
(1) ACOs, on behalf of their ACO providers/suppliers who are eligible 
professionals, must submit one of the ACO GPRO measures determined 
under Sec.  425.500 using a CMS web interface, to satisfactorily report 
on behalf of their eligible professionals for purposes of the 2015 
Physician Quality Reporting System payment adjustment under the Shared 
Savings Program.
* * * * *
    (c) Physician Quality Reporting System payment adjustment for 2016 
and subsequent years. (1) ACOs, on behalf of their ACO providers/
suppliers who are eligible professionals, must submit all of the ACO 
GPRO measures determined under Sec.  425.500 using a CMS web interface, 
to satisfactorily report on behalf of their eligible professionals for 
purposes of the Physician Quality Reporting System payment adjustment 
under the Shared Savings Program for 2016 and subsequent years.
    (2) ACO providers/suppliers that are eligible professionals within 
an ACO may only participate under their ACO participant TIN as a group 
practice under the Physician Quality Reporting System Group Practice 
Reporting Option of the Shared Savings Program for purposes of the 
Physician Quality Reporting System payment adjustment under the Shared 
Savings Program for 2016 and subsequent years.
    (3) If an ACO, on behalf of its ACO providers/suppliers who are 
eligible professionals, does not satisfactorily report for purposes of 
the Physician Quality Reporting System payment adjustment for 2016 and 
subsequent years, each ACO provider/supplier who is an eligible 
professional, will receive a payment adjustment, as described in Sec.  
414.90(e) of this chapter.
    (4) For eligible professionals subject to the Physician Quality 
Reporting System payment adjustment under the Medicare Shared Savings 
Program for 2016 and subsequent years, the Medicare Part B Physician 
Fee Schedule amount for covered professional services furnished during 
the program year is equal to the applicable percent of the Medicare 
Part B Physician Fee Schedule amount that would otherwise apply to such 
services under section 1848 of the Act, as described in Sec.  414.90(e) 
of this chapter.
    (d) The reporting period for a year is the calendar year from 
January 1 through December 31 that occurs 2 years prior to the program 
year in which the payment adjustment is applied.

(Catalog of Federal Domestic Assistance Program No. 93.773, 
Medicare--Hospital Insurance; and Program No. 93.774, Medicare--
Supplementary Medical Insurance Program)

    Dated: November 14, 2013.
Marilyn Tavenner,
Administrator, Centers for Medicare & Medicaid Services.
    Approved: November 21, 2013.
Kathleen Sebelius,
Secretary, Department of Health and Human Services.
[FR Doc. 2013-28696 Filed 11-27-13; 4:15 pm]
BILLING CODE 4120-01-P
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