T h i s d o c u m e n t i s s c h e d u l e d t o b e p u b l i s h e d i n t h e F e d e r a l R e g i s t e r o n 0 7 / 1 9 / 2 0 1 3 a n d a v a i l a b l e o n l i n e a t h t t p : / / f e d e r a l r e g i s t e r . g o v / a / 2 0 1 3 - 1 6 5 4 7 , a n d o n F D s y s . g o vCMS-1600-P 2

1. Electronically . You may submit electronic comments on this regulation to http://www.regulations.gov . Follow the instructions for "submitting a comment." 2. By regular mail . You may mail written comments to the following address

ONLY:

Centers for Medicare & Medicaid Services, Department of Health and Human Services, Attention: CMS-1600-P, P.O. Box 8016, Baltimore, MD 21244-8016.

Please allow sufficient time for mailed comme nts 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-P, Mail Stop C4-26-05, 7500 Security Boulevard, Baltimore, MD 21244-1850. 4. By hand or courier . If you prefer, you may deli ver (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--CMS-1600-P 3

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 Hube rt 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 fo r persons wishing to re tain a proof of filing by stamping in and retaining an extra c opy 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 indicat ed as appropriate for hand or courier delivery may be delayed and receiv ed after the comment period.

FOR FURTHER INFORMATION CONTACT: Chava Sheffield, (410) 786-2298, for i ssues related to practice expense methodology and impacts.CMS-1600-P 4

Ryan Howe, (410) 786-3355, for issues rela ted to direct practice expense inputs

and telehealth services. Joanna Baldwin, (410) 786-7205), for issu es related to misvalued services. Ken Marsalek, (410) 786-4502, for issues related to the multiple procedure payment reduction. Heidi Oumarou, (410) 786-7942), for issues related to the revision of Medicare Economic Index (MEI). Roberta Epps, (410) 786-4503), for issues related to chiropractors billing for evaluation and management services. Craig Dobyski, (410) 786-4584), for issues related to geograp hic practice cost

indices. Simone Dennis, (410) 786-8409, for i ssues related to therapy caps. Darlene Fleischmann, (410) 786-2357, for issu es related to “incident to” services Corinne Axelrod, (410) 786-5620), for issues re lated to “incident to” services in Rural Health Center s or Federally Qualified Health Centers Anne Tayloe-Hauswald, (410) 786-4546, for issues related to ambulance fee

schedule and clinical lab fee schedule. Sandra Adams, (410) 786-2982, for issues related to Medicare shared savings

program. Rashaan Byers, (410) 786-2305, for issues related to physician compare. Christine Estella, (410) 786-0485 , for issues related to the physician quality reporting system and EHR incentive program.CMS-1600-P 5

Ronke Fabayo, (410) 786-4460 or Jay Blake, (410) 786-9371, for issues related to individual liability for payments made to providers and supplie rs and handling of incorrect payments. Rosemarie Hakim, (410) 786-3934, for issues related to coverage of items and services furnished in FDA-approved investig ational device exemption clinical trials. Jamie Hermansen, (410) 786-2064 or Jyme Schafer, (410) 786-4643, for issues related to ultrasound screening for abdominal aortic aneurysms. Pauline Lapin, (410)786-6883, for issues re lated to the chiropractic services demonstration budget neutrality issue. Andrew Morgan, (410) 786-2543, for issues related to e-prescribing under

Medicare Part D. Michael Wrobleswki, (410) 786-4465, for issu es related to value-based modifier and improvements to physician feedback. Elliot Isaac, (410) 786-4735, for malpractice RVUs and for any physician payment issue not identified above.

SUPPLEMENTARY INFORMATION: Inspection of Public Comments: All comments received before the close of the comment period are available for viewi ng by the public, including any personally

identifiable or confidential business informa tion 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 th ey 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 av ailable for public inspection as they are received, generally beginning approximately 3 weeks after publication of a document, atCMS-1600-P 6

the headquarters of the Cent ers 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 Proposed Rule for PFS A. Resource-Based Practice Expense (PE) Relative Value Units (RVUs)

B. Misvalued Codes 1. Valuing Services Under the PFS 2. Identifying, Reviewing, and Validati ng the RVUs of Pote ntially Misvalued

Services

3. CY 2014 Identification and Review of Potentially Misvalued Services 4. The Multiple Procedure Payment Reduction Policy C. Malpractice RVUs D. Medicare Economic Index (MEI) E. Geographic Practice Cost Indices (GPCIs)

F. Medicare Telehealth Services for the Physician Fee Schedule G. Therapy Caps H. Requirements for Billing “Incident To” Services I. Complex Chronic Care Management Services J. Chiropractors Billing for Evaluation & Management ServicesCMS-1600-P 7

III. Other Provisions of the Proposed Regulations A. Medicare Coverage of Items and Se rvices in FDA Investigational Device Exemption Clinical Studies--R evision of Medicare Coverage B. Ultrasound Screening for Abdominal Aortic Aneurysms C. Colorectal Cancer Screening: Modi fication to Coverage of Screening Fecal

Occult Blood Tests

D. Ambulance Fee Schedule E. Proposals Regarding the C linical Laboratory Fee Schedule F. Liability for Overpayments to or on Behalf of Individual s including Payments

to Providers or Other Persons G. Physician Compare Website H. Physician Payment, Efficiency, and Quality Improvements – Physician Quality Reporting System

I. Electronic Health Reco rd (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 IV. Collection of Information Requirements V. Response to Comments VI. Regulatory Impact Analysis Regulatory Text AcronymsCMS-1600-P 8

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

AMA RUC American Medical Association/ [Specialty Society] Relative [Value] Update Committee ATRA American Taxpayer Relief Act (Pub. L. 112-240) 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) CAH Critical access hospital

CF Conversion factor CPT [Physicians] Current Procedural Terminology ( CPT codes, descriptions and other data only are copyright 2012 American Medical Association. All rights reserved. ) CY Calendar year DRA Deficit Reduction Act of 2005 (Pub. L.109–171) eRx Electronic prescribing

FFS Fee-for-service

FR Federal Register GPCI Geographic practice cost index

HCPCS Healthcare Common Procedure Coding System

MCTRJCA Middle Class Tax Relief and J ob Creation Act of 2012 (Pub. L. 112-96) MedPAC Medicare Payment Advisory Commission

MEI Medicare Economic IndexCMS-1600-P 9

MFP Multi-Factor Productivity 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 Patient s and Providers Act (Pub. L. 110-275) MP Malpractice MPPR Multiple procedure payment reduction

MMEA Medicare and Medicaid Extenders Act (Pub. L. 111-309) MMSEA Medicare, Medicai d, and State Children’s Health Insurance Program Extension Act (Pub. L. 110-73) NPP Nonphysician practitioner OBRA ‘89 Omnibus Budget Reconciliation Act of 1989 OBRA ’90 Omnibus Budget Reconciliation Act of 1990 PC Professional component PE Practice expense PE/HR Practice expense per hour PFS Physician Fee Schedule PQRS Physician Quality Reporting System RFA Regulatory Flexibility Act RIA Regulatory impact analysis

RVU Relative value unit SGR Sustainable growth rate TAP Technical Advisory Panel TC Technical component TPTCCA Temporary Payroll Tax Cu t Continuation Act (Pub. L. 112-78)CMS-1600-P 10

VBP Value-based purchasing Addenda Available Only Through th e Internet on the CMS Web Site The PFS Addenda along with other supporti ng documents and tables referenced in this proposed rule with comment period are available through the Internet on the CMS

website at http://www.cms.gov/PhysicianFeeSched/ . Click on the link on the left side of the screen titled, ‘‘PFS Federal Regulations Notices’’ for a chr onological list of PFS Federal Register and other related documents. For the CY 2014 PFS proposed rule, refer to item CMS–1600–P. Readers who expe rience any problems accessing any of the

Addenda or other documents referenced in this proposed rule and posted on the CMS Website identified above should contact Elliot Isaac at (410) 786–4735. CPT (Current Procedural Terminology) Copyright Notice Throughout this proposed rule, we use CPT codes and descriptions to refer to a variety of services. We note that CPT codes and descriptio ns are copyright 2012 American Medical Association. All Rights Rese rved. CPT is a registered trademark of

the American Medical Associa tion (AMA). Applicable Fede ral Acquisition Regulations (FAR) and Defense Federal Acquis ition Regulations (DFAR) apply. I. Executive Summary and Background A. Executive Summary 1. Purpose This major proposed rule would revi se payment polices under the Medicare Physician Fee Schedule (PFS) and make other policy changes related to Medicare Part B payment. These changes would be applicab le to services furnished in CY 2014. 2. Summary of the Major Provisions The Social Security Act (Act) requires us to establish payments under the PFSCMS-1600-P 11

based on national uniform relative value uni ts (RVUs) that account for the relative resources used in furnishing a service. Th e Act requires that RVUs be established for three categories of resources: work, pract ice expense (PE); and malpractice (MP) expense; and that we establish by regul ation each year payment amounts for all physicians’ services, incorporati ng geographic adjustments to re flect the variations in the costs of furnishing services in different geograp hic areas. In this major proposed rule, we propose RVUs for CY 2014 for the PFS and ot her 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 chan ges in the statute. In addition, this proposed

rule includes discussions and proposals regarding:

● Misvalued PFS Codes.

● Telehealth Services.

• Applying Therapy Caps to Outpatient Therapy Services Furnished by CAHs.

• Requiring the Compliance with State law as a Condition of Payment for Services Furnished Incident to Phys ician and Other Practitioner Services.

• Revising the MEI based on MEI TAP Recommendations.

● Updating the Ambulance Fee Schedule regulations.

● Updating the- ++ Physician Compare Website. ++ Physician Quality Reporting System.

++ Electronic Health Reco rd (EHR) Incentive Program. ++ Medicare Shared Savings Program.

● Budget Neutrality for the Chir opractic Services Demonstration.CMS-1600-P 12

● Physician Value-Based Payment Modi fier and the Physician Feedback Reporting Program. 3. Summary of Costs and Benefits The Act requires that annual adjust ments to PFS RVUs not cause annual estimated expenditures to differ by more than $20 million from what they would have been had the adjustments not been made. If adjustments to RVUs would cause expenditures to change by more than $20 milli on, we must make adjustments to preserve budget neutrality. These adjustments can affect the distribution of Medicare expenditures across specialties. In addition, several pr oposed changes would affect the specialty distribution of Medicare expend itures. For most specialties the projected impacts are a small percentage change in Medicare paymen ts under the PFS. For a few specialties a larger impact is projected. Diagnostic Testing Facilities, Independent Laboratory, Pathology, Radiation Oncology, an d Radiation Therapy Centers are projected to have a change of 5 percent or more. B. Background Since January 1, 1992, Medicare has paid for physicians’ services under section 1848 of the Act, “Payment for Physicians' Se rvices.” The system relies on national

relative values that are established for wor k, 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).CMS-1600-P 13

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 proposed ru le, unless otherwis e 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 extens ive input from the physician community. A

research team at the Harvard School of Pub lic Health developed the original physician work RVUs for most codes under a cooperative agreement with the Department of Health and Human Services (HHS). In construc ting the code-specific vignettes used in determining the original physician work RVUs, Harvard worked with panels of experts, both inside and outside the federal govern ment, and obtained input from numerous physician specialty groups.

We establish work RVUs for new and revi sed codes based, in part, on our review

of recommendations received from the Americ an Medical Association/Specialty Society Relative Value Update Committee (AMA RUC). b. Practice Expense RVUs Initially, only the work RVUs were res ource-based, and the PE and MP RVUs were based on average allowable charges. Section 121 of the So cial 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 categoriesCMS-1600-P 14

of expenses (such as office rent and wa ges of personnel, but excluding malpractice expenses) comprising PEs. Originally, this new 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 implemen tation of the resource-based PE RVU system until January 1, 1999. In addition, se ction 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 base d 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 sour ces are described in greater detail in the

CY 2012 final rule with comme nt 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 non facility RVUs reflect all of

the direct and indirect PEs involved in furnishing a serv ice described by a particular HCPCS code. The difference, if any, in th ese PE RVUs generall y results in a higher payment in the nonfacility setting because in th e facility settings some costs are borne by the facility. Medicare’s paym ent to the facility (such as the OPPS payment to the HOPD) would reflect costs typically in curred by the facility. Thus, payment associated with those facility resources is not made under the PFS.CMS-1600-P 15

Section 212 of the Balanced Budge t Refinement Act of 1999 (BBRA) (Pub. L. 106-113, enacted on November 29, 1999) di rected the Secretar y 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 thes e 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 co mment 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 expens e per hour (PE/HR) data that are used in the calculation of PE RVUs for most spec ialties (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 se rvices furnished on or after CY 2000. The resource-based MP RVUs were implemented in the PFS final rule with comment periodCMS-1600-P 16

published November 2, 1999 (64 FR 59380). Th e MP RVUs are based on malpractice insurance premium data collect ed from commercial and phys ician-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 re view all RVUs no less often than every 5 years. Prior to CY 2013, we c onducted 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 Committ ee (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 comme nt period (76 FR 73057), we finalized a proposal to consolidate reviews of work and PE RVUs under se ction 1848(c )(2)(B) of the Act and reviews of potentially misval ued codes 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 nu mber of potentially misvalued codes on an

annual basis based on various iden tification 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 misvaluedCMS-1600-P 17

codes with an emphasis on seven specific ca tegories (see section II. B.2. of this proposed rule). e. Application of Budget Neutra lity to Adjustments of RVUs

As described in section VI.C.1. of this proposed rule, in accordance with section 1848(c)(2)(B)(ii)(II) of the Act, if revisions to the R VUs 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 physicia ns’ service, the components of the fee schedule (work, PE, and MP RVUs) are adju sted by geographic practice cost indices (GPCIs) to reflect the variations in the costs of furnishing the servic es. The GPCIs reflect the relative costs of physician work, PE, a nd MP in an area compared to the national average costs for each component. (See secti on II.E.2 of this proposed rule for more information about GPCIs.)

RVUs are converted to dollar amounts th rough the application of a CF, which is calculated based on a statutory formula by CM S'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 Up date Adjustment Factor (UAF), which is calculated by taking into account the Medica re Sustainable Growth Rate (SGR), an annual growth rate intended to control grow th in aggregate Medi care expenditures for physicians’ services, and the allowed and actual expenditure s for physicians’ services. A

more detailed discussion of the calculation of the CF, the SGR, and the MEI appears in the PFS final rule with comment period for each calendar year (the most recent begins on 77 FR 69131).CMS-1600-P 18

The formula for calculating the Medicare fee schedule payment amount for a given service and fee schedul e 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 Methodo logy for Anesthesia Services Section 1848(b)(2)(B) of the Act specif ies that the fee sc hedule amounts for

anesthesia services are to be based on a uniform relative value guide, with appropriate adjustment of an anesthesia conversion fact or, 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 f ee schedule methodology for anesthesia services. Specifically, we establish a separate conversi on 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 servic es. Since anesthesiaservices 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 Me dicare Part B payment policie s. It also finalized many

of the CY 2012 interim RVUs and establishe d interim RVUs for ne w and revised codes for CY 2013 to ensure that our payment syst em is updated to reflect changes in medical practice, coding changes, and the relative values of services. It also implemented certain statutory provisions including provi sions of the Affordable Care Act (Pub. L. 111–148) and the Middle Class Tax Relief a nd Jobs Creation Act (MCTRJCA) (Pub. L. 112-96), including claims-based data reporti ng requirements for therapy services.CMS-1600-P 19

In the CY 2013 PFS final rule with comme nt period, we announced the following for CY 2013: the total PFS update of - 26.5 percent; the initial estimate for the sustainable growth rate (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 additi on, the ATRA extended and added several provisions affecting Medi care 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 hos pital outpatient depart ment (OPD) through CY 2013, and requiring the counting of a proxy amo unt for therapy services furnished in a Critical Access Hospital (CAH) toward the cap and threshold during CY 2013. In addition to the changes effective fo r CY 2013, section 635 of ATRA revised the equipment utilization rate assumption for adva nced imaging services furnished on or after January 1, 2014. On March 5, 2013, we submitted to the Medicare Payment Advisory Committee (MedPAC) an estimate of the SGR and CF applicable to Medicare payments for physicians’ services for CY 2014, as required by section 1848(d)(1)(E) of the Act. The actual values used to compute physician payments for CY 2014 will be based on laterCMS-1600-P 20

data and are scheduled to be published by November 1, 2013 as part of the CY 2014 PFS final rule with comment period.CMS-1600-P 21

II. Provisions of the Proposed Rule for PFS A. Resource-Based Practice Expense (PE) Relative Value Units (RVUs)

1. Overview Practice expense (PE) is the portion of th e resources used in furnishing a service that reflects the general cate gories of physician and practiti oner expenses, such as office rent and personnel wages, but excluding malp ractice 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 me thodology for a resource-based system for determining PE RVUs for each physician’s serv ice. We develop PE RVUs by looking at the direct and indirect physician practice re sources involved in furnishing each service. Direct expense categories include clinical labor, medical supplies, and medical equipment. Indirect expenses include admi nistrative labor, office e xpense, and all other expenses. The sections that follow provi de more detailed information about the methodology for translating the resources involved in furnishing each service into service-specific PE RVUs. In addition, we note that sec tion 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 th ey 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 m illion. 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.CMS-1600-P 22

2. Practice Expense Methodology a. Direct Practice Expense We determine the direct PE for a specifi c service by adding the costs of the direct resources (that is, the clinical st aff, equipment, and supplies) t ypically involved with furnishing

that service. The costs of the resources are cal culated using the refined direct PE inputs assigned to each CPT code in our PE database, whic h are based on our review of recommendations

received from the AMA RUC. For a detailed explanation of the direct PE methodology, including examples, we refer readers to the Fi ve-Year Review of Work Relative Value Units Under the PFS and Proposed Changes to the Practice Expense Met hodology proposed notice (71 FR 37242) and the CY 2007 PFS final rule with comment period (71 FR 69629).

b. Indirect Practice Ex pense per Hour Data We use survey data on indirect PEs incurre d 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 prac titioners (NPPs) paid under the PFS using a survey instrument and methods highly consis tent 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 av ailable. 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.CMS-1600-P 23

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 surv ey. 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 fina l rule with comment period (74 FR 61751), the transition to the PPIS data was complete in CY 2013. Therefore, the 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 re quires us to use the medical oncology supplemental survey data submitted in 2003 fo r oncology drug administration services. Therefore, the PE/HR for medical oncology, he matology, and hematology/oncology reflects the continued use of these survey data. Supplemental survey data on independent labs from the College of American Pathologists were implemented for payments in CY 2005. Supplemental survey data from the National Coalition of Quality Di agnostic Imaging Services (NC QDIS), representing independent diagnostic testing facilities (ID TFs), were blended with supplem entary survey data from the American College of Radiology (ACR) and impl emented for payments in CY 2007. Neither IDTFs, nor independent labs, partic ipated in the PPIS. Therefore, we continue to use the PE/HR that was developed from their supplemental survey data. Consistent with our past pr actice, the previous indire ct PE/HR values from theCMS-1600-P 24

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 repr oductive 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 Medica re-recognized speci alty data. We do not use the PPIS data for sleep medicine since there is not a fu ll 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 particip ate in the PPIS. However, be ginning 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 simila r to each other with respect to physician time. For registered dietician services, the resour ce-based PE RVUs have been calculated in accordance with the final policy th at 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 th e 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.CMS-1600-P 25

(1) Direct Costs The relative relationship between the direct cost portions of the PE RVUs for any two services is determined by the relative rela tionship between the sum of the direct cost resources (that is, the clinical staff, equipment, and supplie s) typically involved with furnishing each of the services . The costs of these resour ces 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 anothe r service has a direct cost sum of $200, the direct portion of the PE RVUs of the first se rvice would be twice as much as the direct portion of the PE RVUs fo r the second service. (2) Indirect Costs Section II.A.2.b. of this proposed rule describes the current data sources for specialty-specific indirect costs used in our PE calculations. We allocated the indirect

costs to the code level on the basis of the dire ct costs specifically a ssociated with a code and the greater of either the clinical labor costs or the phys ician work RVUs. We also incorporated the survey data described ear lier in the PE/HR discussion. The general approach to developing the indi rect portion of the PE RVUs is described as follows:

• For a given service, we use the dir ect 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 R VUs for a given service is 2.00 and direct costs, on average, represented 25 pe rcent of total costs for the specialties thatCMS-1600-P 26

furnished the service, the initial indirect allo cator would be calculated so that it equals 75 percent of the total PE RVUs. Thus, in this example the initial i ndirect 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 RV Us are greater than the 1.50 clinical labor portion) to the initial indi rect allocator of 6 .00 to get an indirect allocator of 10.00. In the absence of any further use of the surv ey 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 thes e indirect cost allocators. For example, if one service

had an indirect cost allocator of 10.00 and another service ha d 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 R VUs for the second service.

• Next, we incorporate the specialty-s pecific indirect PE/HR data into the calculation. In our example, if based on the su rvey 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 w ith 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 aCMS-1600-P 27

hospital or facility setting, we establish two PE RVUs: facility and nonfacility. The methodology for calculating PE RVUs is the sa me for both the facility and nonfacility RVUs, but is applied independently to yi eld two separate PE RVUs. Because in calculating the PE RVUs for services furnishe d 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 genera lly lower than the nonfacility PE RVUs. Medicare makes a separate payment to the faci lity for its costs of furnishing a service. e. Services with Technical Components (TCs) and Professional Components (PCs) Diagnostic services are generally compri sed of two components: a professional component (PC); and a technical component (TC). The PC and TC may be furnished independently or by different pr oviders, or they may be furnis hed together as a “global”

service. When services have PC and TC co mponents that can be billed separately, the payment for the global service e quals the sum of the payment for the TC and PC. This is a result of using a weighted average of the ra tio of indirect to dire ct 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 e xpenses to the global service, PCs, and TCs for a service. (The di rect 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 th e 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 setu p file contains theCMS-1600-P 28

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 current aggregate pool of direct PE costs. This is the product of the current aggregat e PE (aggregate direct and indirect) RVUs, the CF, and the average direct PE percentage from the survey data. Step 3 : Calculate the aggregate pool of dir ect costs. This is the sum of the product of the direct costs for each service from Step 1 and the utilization data for that service. For CY 2014, we adjusted the direct cost pool to match the new PE share of the MEI, as discussed in section II.D. of this rule. Step 4: Using the results of Step 2 and St ep 3 calculate a direct PE scaling adjustment so that the aggregate direct co st pool does not exceed the current aggregate direct cost pool and apply it to the dir ect costs from Step 1 for each service. Step 5 : Convert the results of Step 4 to an RVU scale for each service. To do this, divide the results of Step 4 by the CF. No te that the actual value of the CF used in

this calculation does not influence the final di rect 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 di rect cost PE RVUs since changes in the CFs and changes in the associated direct s caling factors offset one another.CMS-1600-P 29

(3) Create the Indirect Cost PE RVUs

Create indirect allocators. Step 6 : Based on the survey data, calculate di rect and indirect PE percentages for each physician specialty. Step 7 : Calculate direct and indirect PE pe rcentages at the service level by taking a weighted average of the results of Step 6 fo r the specialties that furnish the service. Note that for services with TCs and PCs, th e direct and indirect percentages for a given service do not vary by the PC, TC, and global service. Step 8 : Calculate the service level alloca tors 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 c linical PE RVUs; and the work RVUs.

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

There are two situations wher e this formula is modified:

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

• If the clinical labor PE RVUs exceed the work RVUs (and the service is not a global service), then the i ndirect allocator is: indi rect percentage (direct PE RVUs/direct percentage) + clinical PE RVUs. (Note : For global services, the indirect allocator is based on both the work RVUs and the

clinical labor PE RVUs . We do this to recognize that, fo r the PC service, indirect PEs will be allocated using the work RVUs, and for the TC service, indirect PEs will beCMS-1600-P 30

allocated using the direct PE RVUs and the clin ical 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 5, th e formulas were divided into two parts for each service.

• The first part does not vary by service a nd is the indirect pe rcentage (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 describe d 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 indire ct PE percentage from the survey data. Step 10 : Calculate an aggregate pool of indi rect PE RVUs for all PFS services by adding the product of the indirect PE allo cators for a service from Step 8 and the utilization data for that service. For CY 2014, we adjusted the indirect cost pool to match the new PE share of the MEI, as disc ussed in section II.D. of this rule. Step 11 : Using the results of Step 9 and Step 10, calculate an indirect PE adjustment so that the aggregate indir ect 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 aggr egate pools of specialty-specific adjust ed indirect PE allocators for a ll PFS services for a specialty byCMS-1600-P 31

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 fo r 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 St ep 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 fact or for the entire PFS. Step 16 : Calculate the indirect practice cost index at the service level to ensure the capture of all indirect cost s. Calculate a weighted aver age 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 serv ice, PCs, and TCs. Under this method, the indirect practice cost index for a given service (for example, echocardiogram) does not vary by th e PC, TC, and global service.) Step 17 : Apply the service level indirect prac tice cost index calc ulated 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 fromCMS-1600-P 32

Step 17 and apply the final PE budget neutrali ty (BN) adjustment and the MEI revision adjustment. The final PE BN adjustment is calculate d by comparing the results of Step 18 to the current pool of PE RVUs (prior to th e MEI revision adjustment and the OPPS/ASC cap redistribution). This final BN adjustment is required to redistribute RVUs from step 18 to all PE RVUs in the PFS, and because ce rtain specialties are excluded from the PE RVU calculation for ratesetting purposes, but al l specialties are included for purposes of calculating the final BN adjustment. (See “Specialties excluded from ratesetting

calculation” later in this secti on.) As discussed in section II. D. of this proposed rule, we are revising the Medicare Economic Index (MEI) for CY 2014. Step 19 : Consistent with the proposed policy addressed in section II.A.4. of this proposed rule, apply the OPPS/ASC cap to code s subject to the cap and redistribute the

RVU reduction to the PE RVUs for all other services. (5) Setup File Information

• Specialties excluded from ratesetting calculation : For the purposes of calculating the PE RVUs, we exclude certain specialties, such as certain nonphysician practitioners paid at a pe rcentage of the PFS and low- volume specialties, from the calculation. These specialties are include d for the purposes of calculating the BN adjustment. They are displayed in Table 1.CMS-1600-P 33

TABLE 1: Specialties Excluded From Ratesetting Calculation Specialty Code Specialty Description 49 Ambulatory surgical center 50 Nurse practitioner 51 Medical supply company with certified orthotist 52 Medical supply company with certified prosthetist 53 Medical supply company with certified prosthetist-orthotist 54 Medical supply company not included in 51, 52, or 53. 55 Individual certified orthotist 56 Individual certified prosthestist 57 Individual certified prosthetist-orthotist 58 Individuals not included in 55, 56, or 57 59 Ambulance service supplier, e.g., privat e 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 w ith 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 utilizat ion associated with allCMS-1600-P 34

physical therapy services to the sp ecialty of physical therapy.

• Identify professional and technical serv ices not identified under the usual TC

and 26 modifiers : Flag the services that are PC a nd TC services, but do not use TC and 26 modifiers (for example, elec trocardiograms). This flag associates the PC and TC with the associated global code for use in creati ng the indirect PE RVUs . For example, the professional service, CPT code 93010 (Electro cardiogram, routine EC G 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 assist ant at surgery modifier are paid 16 percent of the PFS amount for that service; therefore, the uti lization file is modified to only account for 16 percent of any service that contains the assistant at surgery m odifier. Similarly, for t hose services to which volume adjustments are made to account for the pa yment modifiers, time adjustments are applied as well. For time adjustments to surgical serv ices, 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 Paymen t Modifiers to Utilization Files Modifier Description Volume Adjustment Time Adjustment 80,81,82 Assistant at Surgery 16% Intraoperative portionCMS-1600-P 35

Modifier Description Volume Adjustment Time Adjustment AS Assistant at Surgery – Physician Assistant 14% (85% * 16%) Intraoperative portion 50 or LT and RT Bilateral Surgery 150% 150% of physician time 51 Multiple Procedure 50% Intraoperative portion 52 Reduced Services 50% 50% 53 Discontinued Procedure 50% 50% 54 Intraoperative Care only Preoperative + Intraoperative Percentages on the payment files used by Medicare contractors to process Medicare claims Preoperative + Intraoperative portion

55 Postoperative Care only Postoperative Percentage on the payment files used by Medicare contractors to process Medicare claims Postoperative portion

62 Co-surgeons 62.5% 50% 66 Team Surgeons 33% 33%

We also make adjustments to volume and time that correspond to other payment rules, including special multiple procedure endoscopy ru les and multiple procedure payment reductions (MPPR). We note that section 1848(c)(2)(B)(v) of the Act exem pts certain reduced payments for multiple imaging procedures and multiple th erapy 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.CMS-1600-P 36

● Work RVUs : The setup file contains the work RVUs from this pr oposed rule with comment period. (6) Equipment Cost Per Minute The equipment cost per minute is calculated as: (1/(minutes per year * usage)) * price * ((interest rate/(1-(1/((1 + interest rate)^ life of equipment)))) + maintenance)

Where: minutes per year = maximum minutes per ye ar 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 th e particular piece of equipment. maintenance = factor for maintenance; 0.05. interest rate = variable, see discussion below. Usage : We currently use an equi pment utilization rate assump tion of 50 percent for most equipment, with the exception of expensive diagnostic imaging equipment. For expensive diagnostic imaging equipment, which is equipm ent priced at over $1 million (for example, computed tomography (CT) and magnetic resona nce imaging (MRI) scanners), we use an equipment utilization rate assumption of 75 per cent. Section 1848(b)(4)(C) of the Act, as modified by section 635 of the America Taxpa yer Relief Act of 2012 (Pub. L. 112-240, enacted on January 2, 2013) (ATRA), requires that fo r fee schedules established for CY 2014 and subsequent years, in the methodology for dete rmining PE RVUs for expensive diagnostic imaging equipment, the Secretary shall use a 90 percent assumption. The provision also requiresCMS-1600-P 37

that the reduced expenditures attr ibutable to this change in th e utilization rate for CY 2014 and subsequent years shall not be taken into acc ount 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 applie d in CY 2013. These services ar e listed in a file called “CY 2014 CPT Codes Subject to 90 Percent Usage Ra te,” available on the CMS website under downloads for the CY 2014 PFS proposed rule at http://www.cms.gov/physicianfeesched/downloads/ . These codes are also displayed in Table 3. 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 CPT Code Short Descriptor 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 dyeCMS-1600-P 38

CPT Code Short Descriptor 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 spone 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 lw r extre w/o dye 73722 Mri joint of lwr extr w/dye CPT Code Short Descriptor 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

Interest Rate : In the CY 2013 final rule with comment period (77 FR 68902), weCMS-1600-P 39

updated the interest rates used in developing an equipment cost per minute calculation.

The interest rate was based on the Sma ll Business Administration (SBA) maximum interest rates for different categories of lo an size (equipment cost) and maturity (useful life). The interest rates are listed in Ta ble 4. See 77 FR 68902 for a thorough discussion

of this issue.

TABLE 4: SBA Maximum Interest Rates

Price Useful Life Interest Rate <$25K <7 Years 7.50% $25K to $50K <7 Years 6.50% >$50K <7 Years 5.50% <$25K 7+ Years 8.00% $25K to $50K 7+ Years 7.00% >$50K 7+ Years 6.00%

See 77 FR 68902 for a thorough discussion of this issue.CMS-1600-P 40TABLE 5: Calculation of PE RVUsunder Methodology for Selected CodesStep Source Formula 99213Office visit,est Nonfacility33533CABG,arterial,singleFacility71020Chest xray Nonfacility71020-TCChest xray Nonfacility71020-26Chest xray Nonfacility93000ECG,completeNon-facility93005ECG,tracinNon-faci(1) Laborcost (Lab)Step 1 AMA 13.32 77.52 5.74 5.74 0.00 6.12(2) Supplycost (Sup)Step 1 AMA 2.98 0.00 3.39 3.39 0.00 1.19(3)Equipmentcost (Eqp)Step 1 AMA 0.17 0.58 7.24 7.24 0.00 0.11(4) Directcost (Dir)Step 1 =(1)+(2)+(3) 16.48 78.10 16.38 16.38 0.00 7.42(5) Directadjustment(Dir. Adj.)Steps 2-4 Seefootnote*0.5427 0.5427 0.5427 0.5427 0.5427 0.5427 0.5(6)AdjustedLaborSteps 2-4 =Labor *Dir Adj=(1)*(5) 7.23 42.07 3.11 3.11 0.00 3.32(7)AdjustedSuppliesSteps 2-4 =Eqp * DirAdj=(2)*(5) 1.62 0.00 1.84 1.84 0.00 0.65(8)AdjustedEquipmentSteps 2-4 =Sup * DirAdj=(3)*(5) 0.09 0.32 3.93 3.93 0.00 0.06(9)AdjustedDirectSteps 2-4 =(6)+(7)+(8) 8.94 42.39 8.89 8.89 0.00 4.03(10)ConversionFactor(CF)Step 5 PFS 34.023034.0230 34.0230 34.0230 34.0230 34.0230 34.0(11) Adj.labor costconvertedStep 5 =(Lab *DirAdj)/CF=(6)/(10) 0.21 1.24 0.09 0.09 0.00 0.10CMS-1600-P 41(12) Adj.supply costconvertedStep 5 =(Sup *DirAdj)/CF=(7)/(10) 0.05 0.00 0.05 0.05 0.00 0.02(13) Adj.equipmentcostconvertedStep 5 =(Eqp *DirAdj)/CF=(8)/(10) 0.00 0.01 0.12 0.12 0.00 0.00(14) Adj.direct costconvertedStep 5 =(11)+(12)+(13) 0.26 1.25 0.26 0.26 0.00 0.12(15) WorkRVUSetupFilePFS 0.97 33.75 0.22 0.00 0.22 0.17(16)Dir_pctSteps 6,7 Surveys 0.31 0.18 0.31 0.31 0.31 0.31(17)Ind_pctSteps 6,7 Surveys 0.69 0.82 0.69 0.69 0.69 0.69(18) Ind.Alloc.Formula(1st part)Step 8 See Step 8 ((14)/(16)*(17) ((14)/(16)*(17) ((14)/(16)*(17) ((14)/(16)*(17) ((14)/(16)*(17) ((14)/(16)*(17) ((14)/(16)*(19) Ind.Alloc.(1stpart)Step 8 See 18 0.79 5.87 0.64 0.64 0.00 0.29(20) Ind.Alloc.Formula(2nd part)Step 8 See Step 8 (15) (15) (15+11) (11) (15) (15+11)(21) Ind.Alloc.(2ndpart)Step 8 See 20 0.97 33.75 0.31 0.09 0.22 0.27(22)IndirectAllocator(1st + 2nd)Step 8 =(19)+(21) 1.76 39.62 0.95 0.73 0.22 0.56(23)IndirectAdjustment(Ind. Adj.)Steps 9-11SeeFootnote**0.3826 0.3826 0.3826 0.3826 0.3826 0.3826 0.3CMS-1600-P 42(24)AdjustedIndirectAllocatorSteps 9-11=Ind Alloc* Ind Adj0.67 15.16 0.36 0.28 0.08 0.21(25) Ind.PracticeCost Index(IPCI)Steps 12-161.08 0.77 0.93 0.93 0.93 0.91(26)AdjustedIndirectStep 17 = Adj.IndAlloc *PCI=(24)*(25) 0.73 11.60 0.34 0.26 0.08 0.19(27) PreCap PERVUStep 18 =(Adj Dir+ Adj Ind)* OtherAdj=((14)+(26)) *Other Adj)***0.98 12.78 0.61 0.53 0.08 0.32(28)OPPS/ASCCap AdjStep 19 PFS 1.016 1.0161.016 1.016 1.016 1.016 1(29) FinalPE RVUStep 19 PE RVU *OPPS/ASCCap Adj(27)*(28) 1.00 12.99 0.62 0.54 0.08 0.32Note: PE RVUs in Table 5, row 28, may not match Addendum B due to rounding.*The direct adj = [current PE RVUs * CF * avg dir pct]/[sum direct inputs] = [Step 2]/[Step 3]**The indirect adj = [current PE RVUs * avg ind pct]/[sum of ind allocators] = [Step 9]/[Step 10]***The other adjustment includes adjustments for the changes inthe equipment utilization rate for certain services and the MEIrevisions..Note: The use of any particular conversion factor (CF) in Table 5 to illustrate the PE calculation has no effect on the resulting RVUs.CMS-1600-P 43

3. Changes to Direct PE Inputs for Specific Services In this section, we discuss other CY 2014 proposals and revisi ons related to direct PE inputs for specific services. The proposed revi sions are included in the proposed rule CY 2014 direct PE database, which is available on the CM S website under the supporting data files for the CY 2014 PFS proposed rule with comment period at www.cms.gov/PhysicianFeeSched/ a. Anomalous Supply Inputs In the CY 2013 PFS final rule with comment pe riod, we established interim final direct PE inputs based on acceptance, with refinement, of recommendations submitted by the AMA RUC. Although we generally address public comme nts on the prior year’s interim final direct PE inputs in the following year’s final rule w ith comment period, several commenters raised an issue regarding anomalous supply items that we believe is best addressed through proposed revisions to the direct PE inputs. 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). The recommended new items were called “specimen, so lvent, 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 th ese services through the indirect PE allocation. We also noted that the current direct PE input s for these and similar se rvices across the PFS do not include these kinds of costs as disposable supplies.CMS-1600-P 44

Several commenters noted that, contrary to ou r assertion in the final rule with comment period, there are a few items incor porated 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 seve n supply inputs in particul ar 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 associat ed HCPCS codes are listed in Table 6. TABLE 6: Items Identified by Commenters CMS Supply Code Item Description Associated CPT Codes SK106 device shipping cost 93271, 93229, 93268 SK112 Federal Express cost (average across all zones) 64650, 88363, 64653 SK113 communication, wire less per service 93229 SK107 fee, usage, cycletron/accelerator, gammaknife, Lincac SRS System 77423, 77422 SK110 fee, image analysis 96102, 96101, 99174 SK111 fee, licensing, computer, psychology 96102, 96101, 96103, 96120 SD140 bag system, 1000ml (for angiographywaste fluids) 93451,93452,93453,93454,9 3455,93456,93457,93458,93 459,93460,93461

We reviewed each of these items for consistency with the general principles of the PE methodology regarding the consistent categorizati on of all costs. Within the PE methodology,

all costs other than clinical la bor, disposable supplies, and medical equipment are considered

indirect costs. For six of the items contained in Table 6, we agr ee with the commenters that the items should not be considered disposable supp lies. We believe that these items are more appropriately categorized as indirect PE costs, wh ich are reflected in the a llocation of indirect PE RVUs rather than direct PE. Therefore, we ar e proposing to remove the following six items fromCMS-1600-P 45

the direct PE input database for CY 2014: “d evice shipping cost” (SK106); “Federal Express cost (average across all zones)” (SK112); “comm unication, wireless per service” (SK113); “fee, usage, cycletron/accelerator, gammaknife, Lincac SRS System” (SK107); “fee, image analysis” (SK110); and “fee, licensing, computer, psycho logy” (SK111). The CY 2014 proposed direct PE input database and Addendum B of this propo sed rule reflect these proposed revisions. In the case of the supply item called “bag sy stem, 1000ml (for angiography waste fluids)” (SD140), we do not agree with the commenters th at this item is anal ogous to the specimen disposal costs recommended for th e surgical pathology codes. This supply input represents only the costs of the disposable material items asso ciated 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 amor tized portion of a speci men disposal contract

that includes costs for resources such as labor and transportation. Furthermore, we do not believe that the specimen disposal contract is attributable to individual procedures within the established PE methodology. We believe that a dis posable supply is one that is attributable, in its entirety, to an individual patient for a partic ular service. An amor tized 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 re lated to waste management or other service contra cts, but none of these costs are currently incorporated into the PE methodology as disposable supplies. Instead, these costs are appropriately categorized as

indirect costs and are reflected in the PE RVUs through the allocation of indirect PE. We are clarifying that we believe that supply costs related to specimen disposal attributab le to individualCMS-1600-P 46

services may be appropriately ca tegorized as disposable supplies , but that specimen disposal costs related to an allocated portion of service co ntracts that cannot be at tributed to individual services should not be incorporated into the dire ct PE input database as disposable supplies. Moreover, because do not agree with comment ers that the “bag system, 1000ml (for angiography waste fluids)” (SD140) is analogous to a specimen dis posal contract for the reasons state above, we continue to beli eve that SD140 is a direct expe nse. Accordingly, we are not removing SD140 from the direct PE input databa se. Additionally, we anticipate responding to these and other aspects of the co mments regarding the direct PE inputs for the surgical pathology services in the CY 2014 PFS final rule with comment period. b. Direct PE Input Refinements based on Routine Data Review In reviewing the direct PE input database, we have identified seve ral discrepancies that

we believe should be addressed for CY 2014. In the following para graphs, we identify the nature of these discrepancies, the a ffected codes, and the refine ments displayed in the CY 2014 proposed 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). U pon reviewing these items we believe that the

codes should include the items at th e quantities listed in Table 7. TABLE 7: Supply Items and Qu antities for CPT code 51710

Supply Code Description of Supply Item NF Quantity SA069 tray, suturing 1.0 SB007 drape, sterile barrier 16in x 29in 1.0 SC029 needle, 18-27g 1.0 SC051 syringe 10-12ml 1.0 SD024 catheter, Foley 1.0 SD088 Guidewire 1.0CMS-1600-P 47

Supply Code Description of Supply Item NF Quantity SF036 suture, nylon, 3-0 to 6-0, c 1.0 SG055 gauze, sterile 4in x 4in 1.0 SG079 tape, surgical paper 1in (Micropore) 6.0 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 fo r 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 tim e is the result of a rounding erro r in our data and should be removed from the 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) (K imwipe)” (SM027) should

be included in the code instead of the inva lid code. The CY 2014 proposed direct PE input database reflects these proposed revisions. Additionally, we conducted a rout ine review of the codes valu ed in the nonfacility setting

for which moderate sedation is inhe rent in the procedure. Consiste nt with the sta ndard moderate sedation package finalized in the CY 2012 PFS fi nal rule with comment period (76 FR 73043), we have made minor adjustments to the nurse ti me and equipment time of 18 of these codes. These codes appear in Table 8, and the CY 2014 pr oposed direct PE input database reflects the proposed refined inputs for moderation sedation. TABLE 8: Codes with Minor Adjustme nts to Moderate Sedation InputsCMS-1600-P 48

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 We recently received a recommendation fromthe AMA RUC regarding appropriate preservice clinical labor minutes in the facility setting for codes with 000 day global periods. In general, the AMA RUC has 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 reco mmended 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 propose to amend the pre-serviceCMS-1600-P 49

clinical labor minutes for the codes listed in Table 9, consiste nt with the AMA RUC recommendation. The proposed CY 2014 direct PE input database reflects this proposal. TABLE 9: 000-Day Global Codes with Prop osed Changes to Pre-service CL Time

CPT Code Short Descriptor Existing CL PreService Facility Minutes Proposed CL PreService Facility Minutes (AMA RUC Recommendation)

20900 Removal of bone for graft 60 30 20902 Removal of bone for graft 60 30 33224 Insert pacing lead & connect 35 30 33226 Reposition l ventric lead 35 30 36800 Insertion of cannula 60 0 36861 Cannula declotting 37 0 37202 Transcatheter therapy infuse 45 0 50953 Endoscopy of ureter 60 30 50955 Ureter endoscopy & biopsy 60 30 51726 Complex cystometrogram 41 30 51785 Anal/urinary muscle study 34 30 52250 Cystoscopy and radiotracer 37 30 52276 Cystoscopy and treatment 32 30 52277 Cystoscopy and treatment 37 30 52282 Cystoscopy implant stent 31 30 52290 Cystoscopy and treatment 31 30 52300 Cystoscopy and treatment 36 30 52301 Cystoscopy and treatment 36 30 52334 Create passage to kidney 31 30 52341 Cysto w/ureter stricture tx 42 30 52342 Cysto w/up stricture tx 42 30 52343 Cysto w/renal stricture tx 42 30 52344 Cysto/uretero stricture tx 55 30 52345 Cysto/uretero w/up stricture 55 30 52346 Cystouretero w/renal strict 55 30 52351 Cystouretero & or pyeloscope 45 30CMS-1600-P 50

CPT Code Short Descriptor Existing CL PreService Facility Minutes Proposed CL PreService Facility Minutes (AMA RUC Recommendation)

52352 Cystouretero w/stone remove 50 30 52353 Cystouretero w/lithotripsy 50 30 52354 Cystouretero w/biopsy 50 30 52355 Cystouretero w/excise tumor 50 30 54100 Biopsy of penis 33 30 61000 Remove cranial cavity fluid 60 15 61001 Remove cranial cavity fluid 60 15 61020 Remove brain cavity fluid 60 15 61026 Injection into brain canal 60 15 61050 Remove brain canal fluid 60 15 61055 Injection into brain canal 60 15 61070 Brain canal shunt procedure 60 15 62268 Drain spinal cord cyst 36 30 67346 Biopsy eye muscle 42 30 68100 Biopsy of eyelid lining 32 30 93530 Rt heart cath congenital 35 30 93531 R & l heart cath congenital 35 30 93532 R & l heart cath congenital 35 30 93533 R & l heart cath congenital 35 30 93580 Transcath closure of asd 35 30 93581 Transcath closure of vsd 35 30 d. Price Adjustment for Laser Diode It has come to our attention that the pri ce 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 fi nal rule with comment period (77 FR 68922). The CY 2014 proposed direct PE input database reflects the updated price for the equipment

item. e. Direct PE Inputs for Stereotactic Radios urgery (SRS) Services (CPT Codes 77372 and 77373)CMS-1600-P 51

Since 2001, Medicare has used HCPCS G-code s, in addition to the CPT codes, for stereotactic radiosurgery (SRS ) to distinguish robotic and no n-robotic methods of delivery..

Based on our review of the current SRS technolo gy, it is our understanding that most services currently furnished with linac-based SRS technol ogy, including services cu rrently billed using the non-robotic codes, incorporate some type of robot ic feature. Therefore, we believe that it is no longer necessary to continue to distinguish robotic vers us non-robotic linac-based SRS through the HCPCS G-codes. For purposes of the hospital outpatient prospective payment system (OPPS), CMS is proposing to repla ce the existing four SRS HCPCS G-codes G0173 (Linear accelerator ba sed stereotactic radiosurgery, complete course of therapy in one session), G0251(Linear accelerator based st ereotactic radiosurgery, delive ry including collimator changes and custom plugging, fractionated treatment, all lesions, per session, maximum five sessions per course of treatment), G0339 (Image-guided robo tic 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 stereo tactic radiosurgery, delivery including collimator changes and cust om plugging, fractionated treatment, all lesions, per session, second through fifth se ssions, maximum five sessions per course of treatment), with the SRS CPT codes 77372 (Radiation treatment de livery, stereotactic radiosurgery (SRS), complete course of treatment of cranial lesion(s ) consisting of 1 session; linear accelerator based) and 77373 (Stereotactic body radiati on 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 deliver y. 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 theCMS-1600-P 52

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 nonfaci lity setting through the PFS. These two codes, G0339 and G0340, describe robotic SRS treatment delivery and are contractorpriced. CPT codes 77372 and 77373, which describe SRS treatment delivery without regard to the method of delivery, are curren tly paid in the nonfacility se tting based on resource-based RVUs developed through the standard PE methodology. If the CY 2014 OPPS proposal is implemented, it would appear that there would no longer be a need for G-codes to describe robotic SRS treatment and delivery. Prior to elim inating the contractor-priced G-codes and using the existing CPT code for PFS payment of servic es previously reported using G-codes, we believe that it would be appropriate to ensure that the direct PE inputs used to develop PE RVUs for CPT codes 77372 and 77373 accurately reflect the typical resources used in furnishing the

services that would be re ported in the non-facility setting in the absence of the robotic G-codes. Therefore, for CY 2014, we are not proposing to replace the contractor-p riced G-codes for PFS payment. We are seeking comment from the p ublic and stakeholders, including the AMA RUC, regarding whether or not the direct PE input s for CPT codes 77372 and 77373 would continue to accurately estimate the resources used in furnis hing typical SRS delivery were there no coding

distinction between robotic and non-robotic methods of delivery. 3. Using OPPS and ASC Rate s in Developing PE RVUs As we explain in section II.A.2.d of this pr oposed rule, we typically establish two PE RVUs for procedures that can be furnished in either a nonfacility se tting, like a physician’s office, or facility setting, like a hospital. Th e nonfacility RVUs reflect all of the direct and indirect practice expenses of provi ding a particular service when the entire service is furnished inCMS-1600-P 53

a nonfacility setting. The facility RVUs are designed to reflect the direct and indirect practice expenses typically 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. Thus, the difference between the facility and nonfacility RVUs is because Medicare makes a separate payment to the facility for its costs of furnishing a service when a se rvice is furnished in a facility. When services are furnished in the facility setting, such as a hospital outpatient department (OPD) or an ambulatory surgical cen ter (ASC), the total Medicare payment (made to the facility and the pr ofessional combined) typically exceeds the Medicare payment made for the same service when furnished in the physicia n office or other nonfacilit y setting. We believe that this payment difference generally reflects the greater costs that facilities incur than those incurred by practitioners furnis hing services in offices and ot her non-facility settings. For example, hospitals incur higher overhead costs be cause they maintain the capability to furnish services 24 hours a day and 7 days per week, furnis h services to higher acu ity patients than those who receive services in physician offices, a nd have additional legal obligations such as complying with the Emergency Medical Tr eatment and Active Labor Act (EMTALA). Additionally, hospitals and ASCs must meet Medicare conditions of participation and conditions for coverage, respectively. However, we have found that for some serv ices, the total Medicare payment when the service is furnished in the physician office se tting exceeds the total Medicare payment when the

service is furnished in an OPD 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.CMS-1600-P 54

The PFS PE RVUs rely heavily on the voluntary submission of information by individuals furnishing the service and who are paid at least in pa rt based on the data provided. Currently, we have little means to validate whethe r the information is accurate or reflects typical resource costs. Furthermore, in the case of cer tain direct costs, like the price of high-cost disposable supplies and expensive capital equipm ent, 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 ex tensively in previous rulemaking (75 FR 73252) and again in section II.A.3.e of this proposed rule. Such incomplete, small sample, potentially biased or inaccurate resource input cost s 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 outda ted. 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 cost s for all HCPCS codes paid under the PFS on an annual or even regular basis. Thus, the informa tion used to estimate PE resource costs for PFS services is not routinely updated. Instead, we strive to maintain relativity by reviewing the work RVUs, physician time, and direct PE inputs for a c ode at the same time and reviewing all codes within families where appropriate. Nonetheless, outdated resource input costs may distort RVUs used to develop nonfacility PFS payment rates fo r individual services. In the case of new medical devices for which high growth in volume of a service as it diffuses into clinical practice may lead to a decrease in the cost of expe nsive items, outdated pr ice inputs can result in significant overestimation of resource costs. Such inaccurate resource input costs may distort the nonfacility PE RVUs used toCMS-1600-P 55

calculate PFS payment rates for individual serv ices. As we have previously noted, OPPS payment rates are based on auditable hospital data and are updated annually. Given the 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 in a facility result from inadequate or inaccurate direct PE inputs, especially in price or time assumptions, as compared to the mo re accurate OPPS data. On these bases, we are proposing a change in the PE methodology begi nning in CY 2014 and subsequent years. To improve the accuracy of PFS nonfacility payment ra tes for each calendar year, we are proposing to use the current year OPPS or ASC rates as a point of compar ison in establishing PE RVUs for

services under the PFS. In se tting PFS rates, we would comp are the PFS payment rate for a service furnished in an office setting to the total Medicare payment to prac titioners and facilities for the same service when furnished in a hospi tal outpatient setting. Fo r services on the ASC list, we would make the same comparison except we would use the ASC rate as the point of comparison instead of the OPPS rate. We are proposing to limit the nonfacility PE R VUs for individual codes so that the total nonfacility PFS payment amount would not exceed the total combined amount Medicare would pay for the same code in the facility setting. That is, if the nonfacili ty PE RVUs for a code would result in a higher payment than the co rresponding OPPS or ASC payment rate and PFS facility PE RVUs (when applic able) for the same code, we w ould 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 co nsistency and transparency possible, we are proposing to use the current year PFS c onversion factor, as reflected in Figure B1. Similarly, we are proposing to use current year OPPS or ASC rate s in the comparison.CMS-1600-P 56

For services with no work RVUs, we are pr oposing to compare the total nonfacility PFS payment to the OPPS payment rates directly si nce no PFS payment is made for these services when furnished in the facility setting. We are proposing to exempt the fo llowing services from this policy: Services Without Separate OPPS Payment rates : We are proposing to exclude services without separately payable OPPS rates from this methodi cal 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 are proposing to excl ude services capped at the OPPS payment rate by the Deficit Reduction Act of 2005 (DRA) (Pub. L. 109–171) from this policy. 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,CMS-1600-P 57

including X-ray, ultrasound, nucle ar medicine, MRI, CT, and fl uoroscopy services. Screening and diagnostic mammograms are exempt. Since payment for these procedures is capped by statute we are excluding them from this policy.

Codes with Low Volume in the OPPS or ASC : We are proposing 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 tota l number of PFS/OPPS allowed services. Codes with ASC Rates Based on PFS Payment Rates : To avoid issues of circularity, we are proposing to exclude ASC services subject to the “offi ce-based” procedure payment policies for which payment rates are based on the PFS nonfacility PE RVUs. We direct interested readers to the CY 2013 OPPS final rule (77 FR 68444) for a dditional information regarding this payment policy. Codes Paid in the Facility at Nonfacility PFS Rates : To avoid issues of ci rcularity, we are also proposing to exclude services that are paid in the facility setti ng at nonfacility payment rates. This would include certain profe ssional-only services where the resource costs for practitioners are assumed to be similar in both settings. Codes with PE RVUs Develope d Outside the PE Methodology: We are also proposing to

exclude services with PE RVUs establishe d outside the PE Methodology through notice and comment rulemaking. Addendum B of this proposed rule with comment period displays the PE RVUs that would result from implementation of this proposed change in the PE methodology. In discussing resource input issues, some stak eholders have previous ly suggested that the direct costs (for example, clini cal labor, disposable supplies a nd medical equipment) involved in furnishing a service are similar in both the nonf acility and facility settings. Others haveCMS-1600-P 58

suggested that facilities, like hos pitals, 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. This proposed policy does not assume

that the direct costs to furnish a service in th e nonfacility setting are al ways lower than in the facility setting. Medicare payment met hodologies, including both OPPS and the PFS PE methodology, incorporate both direct and indirect costs (administrative labor, office expenses, and all other expenses). This proposed policy is 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 offi ce and facility settings are comparable. We believe this proposal provi des a reliable means for Medi care to set upper payment limits for office-based procedures based on relativel y more reliable cost information available for the same procedures when furnished in a facili ty setting where the cost structure would be expected to be somewhat, if not significantly, high er 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 cu rrent inability to obtain accura te information regarding supply and equipment prices, as well as procedure time assumptions. We believe that this policy will mitigate the negative impact of these difficu lties on both the appropria te 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 fo r services. Given the significantly higher cost structur e of facilities (as discussed above) we believe that this presumption is accurate. In its March 2012 re port 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 2012CMS-1600-P 59

Report to Congress, page 46) We believe th at the proposed change to our PFS PE methodology will more appropriately reflect resour ce costs in the nonfacility setting. b. 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 describe d in the direct PE input database and whether the ultrasound equipment listed for specific pr ocedure codes is clinically necessary. In response, the AMA RUC recommended cr eating several new equipment inputs in addition to the revision of current equipment i nputs for ultrasound services. The AMA RUC also forwarded pricing information for new and ex isting equipment items from certain medical specialty societies that represen t the practitioners who furnish th ese services. In the following paragraphs, we summarize the AMA RUC recommendations, addre ss our review of the provided information, and describe proposed changes to the direct PE inputs used in developing PE RVUs

for these services. (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 equipmen t 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 c onsidering these recommendations , we identified a series of new concerns regarding the makeup of these equi pment packages and becau se there are several different ways to handle these concerns, we are seeking public comment from additionalCMS-1600-P 60

stakeholders prior to proposi ng to implement any of these re commended changes through future rulemaking. We note 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 fu rnishing every service in that room. When equipment items beyond those included in a “room” are typically us ed 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” ra ther than being included in the room. When handled in this way, the room includes only t hose inputs that are comm on to all services furnished in that room type, and thus the direct PE inputs are appr opriate for the typical case of each particular service. When additional equipment items are invol ved in furnishing a particular service, they are included as an individual PE input only for that particular service. In contrast, the equipment items currently in cluded in the “room, ultrasound, general” are: the ultrasound system, five diffe rent transducers, two probe star ter kits, two printers, a table,

and various other items. We do not believe that it is likely that all of these items would be typically used in furnishing each service. Fo r example, we do not believe that the typical ultrasound study would require the us e 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, regard less 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 wh ether or not each of the indivi dual items is typically used inCMS-1600-P 61

furnishing a particular procedure. Instead of incorporating the AMA RUC’s r ecommendation to add more equipment items to these ultrasound equipment “room” packages, we believe that we should continue to consider the appropriateness of the full number of items in the ultrasou nd “rooms” in the context of maintaining appropriate relativity with other services across th e PFS. We seek comment from stakeholders, including the AMA RUC, on the items included in the ultras ound rooms, especially as compared to the items included in other equi pment “rooms.” We believe that it would be appropriate to consider these comments in futu re rulemaking. Specifically we seek comment on whether equipment packages called “rooms” shou ld 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 typi cal services furnished in the room . We believe that it would be most appropriate to propose changes to the “room, ultrasound, general” (EL015) and “room, ultrasound, vascular” (EL016) in the context of c onsidering comments on this broader issue.

We also believe that consideration of the broade r issue will help determ ine whether it would be appropriate to create a “room, ultrasound, cardiovascu lar,” and if so, what items would be included in this equipment package. In addition to the concerns regarding the contents of the ultras ound “room” packages, we are also concerned about the pricing informa tion submitted through the AMA RUC to support its recommendation to add equipment to the ultras ound 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 a current AMA RUC recommendation, a medical specialty society recommended increasing the price of that item to $314,500. However, that recommendation did not include documentation to support the pricingCMS-1600-P 62

level, such as a copy of a paid invoice for the equipment. Furthermore, the recommended price conflicts with certain publicly available information. For ex ample, the Milwaukee SentinelJournal 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-seesstrong-future-with-its-ultra sound-business-uj8mn79-190533061.html At this time, are unsure how to best r econcile the information disclosed by the manufacturer to the press and the prices subm itted 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 part icular items based sole ly 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 di rect PE input described in th e database as “ultrasound unit, portable” (EQ250) is currently priced at $29,999 ba sed on a submitted invoice, while the article cites that GE sells a portabl e unit for as low as $7,900. We are seeking comment on the appropriate price to use as the typi cal cost for portab le ultrasound units. Additionally, we are not proposi ng to revise the equipment items, or to change the prices of items, included in these rooms. Instead, pending our receipt and consideration of additional information, the proposed direct PE input database continues to include the current prices for the “room, ultrasound, general” (EL015), “room, u ltrasound, vascular” (EL016), and “ultrasound unit, portable” (EQ250).CMS-1600-P 63

(2) New Equipment Inputs and Price Updates Ultrasound Unit, portable, breast procedures. The AMA RUC reco mmended 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 wh ere ultrasound imaging is included in the code descriptor. These services are described by CPT codes 19105 (Ablat ion, 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), a nd 19298 (Placement of radiotherapy afterloading brachytherapy catheters (multiple tube and bu tton type) into the breast for interstitial radioelement application following (at the time of or subsequent to) par tial mastectomy, includes imaging guidance). 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 actu al resource costs associated with equipment and supply items than quotes or other information. Therefore, we are proposing a price of $33,930, which reflects the price displaye d on the submitted copy of the paid invoice. We are not using the quotes as we do not believe th at quotes provide reliable inform ation about the prices that are actually paid for medical equipment. Endoscopic Ultrasound Processor. The AMA RUC recommende d creating a new direct PE input called “endoscopic ultras ound processor,” for use in furnishing the service described by CPT code 31620 (Endobronchial ultrasound (EBU S) during bronchoscopi c diagnostic or therapeutic intervention(s) (List separately in ad dition to code for primary procedure[s])). We are creating this equipment item to use as an inpu t in the proposed direct PE input database. TheCMS-1600-P 64

price associated with the “endoscopic ultrasoun d processor” will be $59,925, which reflects the price documented on the copy of the paid i nvoice submitted with the recommendation. Bronchofibervideoscope. The AMA RUC recommended crea ting a new direct PE input called “Bronchofibervideoscope,” for use in fu rnishing the service described by CPT code 31620 (Endobronchial ultrasound (EBU S) during bronchoscopic diagnostic or therapeutic intervention(s) (List separately in addition to co de for primary procedure[s])). We are creating this new equipment item to use as an input in th e proposed direct PE input database. However, this item has no price associated with it in the proposed direct PE input data base because we did not receive any information that would allow us to price the item accurately. Consequently, we seek copies of paid invoices for this equipment item so that we can price the item accurately in

the future. Endoscope, ultrasound probe, drive (ES015) . The AMA RUC forwarded pricing information to us regarding the existing input called “endoscope, ultrasound probe, drive” (ES015). This information included a copy of a pa id invoice. Based on this information, we are proposing to change the price associated with ES015 to $13,256.25, which reflects the price documented on the submitted copy of the paid invoice. (3) Ultrasound Equipment Input Recomm endations for Particular Services The AMA RUC made recommendations regardin g the typical ultrasound items used in furnishing particular services. In genera l, the AMA RUC recommended that the existing equipment items accurately described the typical equipment used in furnishing particular services. However, for some CPT codes th e AMA RUC recommended changing the associated equipment inputs that appear in the direct PE input database. Based on our review of these recommendations, we have generally agreed w ith the AMA RUC regarding these recommendedCMS-1600-P 65

changes, and these changes are reflected in the proposed direct PE input database. Table 10 displays the codes with proposed changes to ul trasound equipment. However, for certain codes we do not agree with the recommendations of the AMA RUC. The following paragraphs address the changes we are proposing that differ fr om the recommendations of the AMA RUC.

For a series of cardiovascul ar services that include ul trasound technology, the AMA RUC recommended removing certain equipment items and replacing those items with a new item called “room, ultrasound, cardiovascu lar.” As we described in th e preceding paragraphs, we are not proposing to create the “room, ultrasound, cardi ovascular” and therefor e will not propose to add this “room” an input for these services . However, we note that the newly recommended equipment package incorporates many of the sa me kinds of items as the currently existing “room, ultrasound, vascular” (EL016). We agr ee with the AMA RUC’s suggestion that the existing equipment inputs for the relevant serv ices listed in Table 10 do not reflect typical resource costs of furnishing the services. We be lieve that, pending our further consideration of the ultrasound “room” equipment packages, it woul d be appropriate to use the existing “room, ultrasound, vascular” (EL016) as a proxy for resour ce costs for these services Therefore, the proposed direct PE input database reflects this proposed change. In the case of CPT code 76942 (Ultrasonic gu idance for needle placement (eg, biopsy, aspiration, injection, localization device), imaging supervision and interpretation), we agree with the AMA RUC’s recommendation to replace th e current equipment input of the “room, ultrasound, general” (EL015) with “ultrasound unit, portable” (E Q250). We note that this service is typically reported with other codes th at describe the needle placement procedures and that the recommended change in equipment from a room to a portable device reflects a change in the typical kinds of procedures reported with this image guidance service. Given this change, weCMS-1600-P 66

believe that it is appropriate to reconsider th e procedure time assumption currently used in establishing the direct PE inputs for this code is 45 minutes, which we belie ve is inaccurate. We reviewed the services reporte d with CPT code 76942 to identif y the most common procedures furnished with this image guidance. The code most frequently reported with CPT code 76942 is CPT 20610 (Arthrocentesis, aspiratio n and/or injection; major joint or bursa (eg, shoulder, hip, knee joint, subacromial bursa). The assumed pro cedure time for this service is five minutes. The vast majority of other procedures fre quently reported with CPT code 76942 range in procedure time assumptions from 5 to 20 minutes . Therefore, in addition to proposing the recommended change in equipment inputs associat ed with the code, we are also proposing to change the procedure time assumption used in esta blishing direct PE inputs for the service from 45 to 10 minutes, based on our analysis of thirty needle placement procedures most frequently reported with CPT code 76942. We note that this will reduce the clinical labor and equipment

minutes associated with the code from 58 to 23 mi nutes. This change is reflected in the proposed direct PE input database. We also note that this code has been proposed as a potentially

misvalued code in section II.B.3.b.1. TABLE 10: Codes with Proposed Chan ges to Ultrasound Equipment for CY 2014

CPT Code Descriptor CY 2013 CMS Equipment Code CY 2013 Equipment Description Proposed CY 2014 Equipment CMS Code Proposed CY 2014 Equipment Description

19105 Cryosurg ablate fa each EQ250 ultrasound unit, portable NEW ultrasound unit, portable, breast procedures

19296 Place po breast cath for rad EL015 room, ultrasound, general NEW ultrasound unit, portable, breast procedures

19298 Place breast rad tube/caths EL015 room, ultrasound, general NEW ultrasound unit, portable, breast procedures n/a NEW Bronchofibervideoscope 31620 Endobronchial us add-on n/a NEW Endoscopic ultrasound processorCMS-1600-P 67

CPT Code Descriptor CY 2013 CMS Equipment Code CY 2013 Equipment Description Proposed CY 2014 Equipment CMS Code Proposed CY 2014 Equipment Description

52649 Prostate laser enucleation EQ255 ultrasound, noninvasive bladder scanner w-cart EQ250 ultrasound unit, portable

76376 3d render w/o postprocess EL015 room, ultrasound, general Remove input

76775 Us exam abdo back wall lim EL015 room, ultrasound, general EQ250 ultrasound unit, portable

76820 Umbilical artery echo EQ249 ultrasound color doppler, transducers

and vaginal probe EL015 room, ultrasound, general

76857 Us exam pelvic limited EL015 room, ultrasound, general EQ250 ultrasound unit, portable

76870 Us exam scrotum EL015 room, ultrasound, general EQ250 ultrasound unit, portable

76872 Us transrectal EL015 room, ultrasound, general EQ250 ultrasound unit, portable

76942 Echo guide for biopsy EL015 room, ultrasound, general EQ250 ultrasound unit, portable

EQ253 ultrasound, echocardiography digital acquisition (Novo Microsonics, TomTec)

EQ254 ultrasound, echocardiography w-4 transducers (Sequoia C256) 93303 Echo guide for biopsy

EQ252 ultrasound, echocardiography analyzer software (ProSolv) EL016 room, ultrasound, vascular

EQ252 ultrasound, echocardiography analyzer software (ProSolv)

EQ253 ultrasound, echocardiography digital acquisition (Novo Microsonics, TomTec) 93304 Echo transthoracic

EQ254 ultrasound, echocardiography w-4 transducers (Sequoia C256) EL016 room, ultrasound, vascular

93306 Tte w/doppler complete EQ253 ultrasound, echocardiography digital acquisition (Novo Microsonics, TomTec) EL016 room, ultrasound, vascularCMS-1600-P 68

CPT Code Descriptor CY 2013 CMS Equipment Code CY 2013 Equipment Description Proposed CY 2014 Equipment CMS Code Proposed CY 2014 Equipment Description

EQ254 ultrasound, echocardiography w-4 transducers (Sequoia C256)

EQ252 ultrasound, echocardiography analyzer software (ProSolv)

EQ252 ultrasound, echocardiography analyzer software (ProSolv)

EQ253 ultrasound, echocardiography digital acquisition (Novo Microsonics, TomTec) 93307 Tte w/o doppler complete

EQ254 ultrasound, echocardiography w-4 transducers (Sequoia C256) EL016 room, ultrasound, vascular

EQ252 ultrasound, echocardiography analyzer software (ProSolv)

EQ253 ultrasound, echocardiography digital acquisition (Novo Microsonics, TomTec) 93308 Tte f-up or lmtd

EQ254 ultrasound, echocardiography w-4 transducers (Sequoia C256) EL016 room, ultrasound, vascular

EQ253 ultrasound, echocardiography digital acquisition (Novo Microsonics, TomTec)

EQ252 ultrasound, echocardiography analyzer software (ProSolv) EQ256 ultrasound, transducer (TEE Omniplane II) 93312 Echo transesophageal

EQ254 ultrasound, echocardiography w-4 transducers (Sequoia C256) EL016 room, ultrasound, vascularCMS-1600-P 69

CPT Code Descriptor CY 2013 CMS Equipment Code CY 2013 Equipment Description Proposed CY 2014 Equipment CMS Code Proposed CY 2014 Equipment Description

EQ254 ultrasound, echocardiography w-4 transducers (Sequoia C256) EQ256 ultrasound, transducer (TEE Omniplane II)

EQ252 ultrasound, echocardiography analyzer software (ProSolv) 93314 Echo transesophageal

EQ253 ultrasound, echocardiography digital acquisition (Novo Microsonics, TomTec) EL016 room, ultrasound, vascular

EQ252 ultrasound, echocardiography analyzer software (ProSolv)

EQ253 ultrasound, echocardiography digital acquisition (Novo Microsonics, TomTec) 93320 Doppler echo exam heart

EQ254 ultrasound, echocardiography w-4 transducers (Sequoia C256) EL016 room, ultrasound, vascular

EQ252 ultrasound, echocardiography analyzer software (ProSolv) 93321 Doppler echo exam heart EQ254 ultrasound, echocardiography w-4 transducers (Sequoia C256) EL016 room, ultrasound, vascular

EQ252 ultrasound, echocardiography analyzer software (ProSolv)

EQ253 ultrasound, echocardiography digital acquisition (Novo Microsonics, TomTec) 93325 Doppler color flow add-on

EQ254 ultrasound, echocardiography w-4 transducers (Sequoia C256) EL016 room, ultrasound, vascularCMS-1600-P 70

CPT Code Descriptor CY 2013 CMS Equipment Code CY 2013 Equipment Description Proposed CY 2014 Equipment CMS Code Proposed CY 2014 Equipment Description

EQ252 ultrasound, echocardiography analyzer software (ProSolv)

EQ253 ultrasound, echocardiography digital acquisition (Novo Microsonics, TomTec) 93350 Stress tte only

EQ254 ultrasound, echocardiography w-4 transducers (Sequoia C256) EL016 room, ultrasound, vascular

93351 Stress tte complete EQ254 ultrasound, echocardiography w-4 transducers (Sequoia C256) EL016 room, ultrasound, vascular

93980 Penile vascular study EL015 room, ultrasound, general EQ249 ultrasound color doppler, transducers and vaginal probe

93981 Penile vascular study EL015 room, ultrasound, general EQ249 ultrasound color doppler, transducers and vaginal probe

4. Collecting Data on Services Furnished in Off-Campus Hospital Provider-Based Departments In recent years, the research literature and popular press have documented the increased trend toward hospital acquisition of physician practices, integra tion of those practices as a department of the hospital, and the resultant incr ease in the furnishing of physicians’ services in a hospital outpatient setting (for example, s ee 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 physici ans: better quality, higher costs? Issue Brief No. 136, Center for Studying Hea lth System Change. August 2011). When a Medicare beneficiary receives outp atient services in a hospital, Me dicare generally pays more inCMS-1600-P 71

total than when the beneficiary receives those sa me services in a freestanding clinic or physician office. As more physician practices become hos pital-based, news articles have highlighted beneficiary liability for the additional coinsurance for the “facility fee,” which is the payment in addition to the physician payment when services are furnished in a hospital. MedPAC has questioned the appropriateness of increased Me dicare payment and beneficiary cost-sharing when physician offices become hospital outpat ient departments, and has recommended that Medicare pay selected hospital outpatient serv ices at physician fee sc hedule rates (MedPAC March 2012 Report to Congress ). The total l payment (including both Medicare program payment and beneficiary costsharing) generally is higher wh en outpatient services are furn ished in the hospital outpatient setting rather than a physician office. Both the PFS and the hospital outpatient prospective payment system (OPPS) establish payment based on the relative resources involved in furnishing

a service. As described in section II.B.1.b. of this proposed rule, the relative values for services furnished in the physician office setting unde r the PFS reflect not only payment for the practitioner’s work, but also the direct expenses (clinical labor, medical equipment, and medical supplies) and the indirect expenses (administra tive labor, office expense, and all other expenses) typically involved in furnishing the service. U nder section 1833(t) of th e Act, Medicare provides separate payment through the OPPS to hospitals for certain items and services furnished to registered hospital outpatients that are based on the relativity of the re source costs (labor and capital) involved in furnishing thos e hospital services. In general, we expect hospitals to have higher overall resource requirements than physicia n offices because hospitals are required to meet conditions of participation, to maintain standby capacity fo r emergency situations, and to

be available to address a wide variety of complex medical needs in a community. When servicesCMS-1600-P 72

are furnished in the hospital setting, such as in off-campus provider based departments, Medicare pays the physician under the PFS at a typically lower facility paymen t rate but then also pays the hospital under the OPPS for the facility resour ces required to furnish the service. The beneficiary pays coinsurance for both th e physician PFS payment and the hospital OPPS payment. The term “facility fee” refers to this additional hospital outpatient payment. Upon acquisition of a physician practice, hospita ls 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 (f or further information on the provider-based regulations at §413.65, see http://www.gpo.gov/fdsys/pkg/CF R-2010-title42-vol2/pdf/CFR2010-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 gatheri ng information on the frequency, type, and payment for services furnished in off-campus provi der-based departments of the hospital. To better understand the growi ng trend toward hospital acqui sition of physician offices and subsequent treatment of those locatio ns as off-campus provider-based outpatient departments, we are considering collecting info rmation that would allow us to analyze the frequency, type, and payment for services fu rnished in off-campus provider-based hospital departments. We have considered several pote ntial methods. Claims-based approaches could include (1) creating a new place of service code for off-campus departments of a provider under 42 CFR 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 Outpatie nt” and “23 Emergency Room-Hospital” when physician services are furnished in an off-camp us provider-based depart ment, or (2) creating a HCPCS modifier that could be repo rted with every code for services furnished in an off-campusCMS-1600-P 73

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 also have considered asking hospitals to break out the costs and ch arges for their provider-based departments as outpatient service cost centers on the Medicare hospita l cost report, form 2552-10. We note that some hospitals already break out these cost s voluntarily or beca use of cost reporting requirements for the 340B Drug Discount program but this practice is not consistent or standardized. We welcome public comment on th e best means for collecting information on the frequency, type, and payment for services furn ished in off-campus provider-based departments of hospitals.CMS-1600-P 74

B. Misvalued Codes 1. Valuing Services Under the PFS Section 1848(c) of the Act requires the S ecretary 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 compone nt to include “the portion of the resources used in furnishing the service that reflects physicia n time and intensity in fu rnishing 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) fo r the service based on the relative resources incorporating physician time and intensity re quired in furnishing th e service.” Section 1848(c)(1)(B) of the Act defines the PE componen t as “the portion of the resources used in furnishing the service that reflec ts the general categor ies of expenses (such as office rent and wages of personnel, but excluding malpractice ex penses) comprising practice expenses.” (See section I.A.2. for more detail on the PE compon ent.) Section 1848(c)(1)(C) of the Act defines the malpractice component as “the portion of th e resources used in furnishing the service that reflects malpractice expenses in furnishing the se rvice.” Sections 1848 (c)(2 )(C)(ii) and (iii) of the Act specify that PE and malpractice expense RVUs shall be determined based on the relative PE/malpractice expense resources invol ved in furnishing the service. Section 1848(c)(2)(B) of the Ac t directs the Secretary to co nduct 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 cert ain criteria and to review and make appropriate adjustments to the relative valu es for those services. Section 3134(a) of the

Affordable Care Act also added a new secti on 1848(c)(2)(L) to the Ac t which, requires the Secretary to develop a process to validate the RVUs of certain potentially misvalued codes underCMS-1600-P 75

the PFS, identified using the same criteria used to identify potentially misvalued codes, and to make appropriate adjustments. As discussed in section II.A.1. of this propos ed rule, each year we develop and propose appropriate adjustments to the RVUs, taking in to account the recommendations provided by the American Medical Association/Specialty Soci ety 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 reco mmendations on the appropriate relative values for new, revised, and potentially misvalued PFS se rvices. We review these recommendations on a code-by-code basis and consider these recomme ndations in conjunction with analyses of other data, such as claims data, to inform the decisi on-making process as author ized by the law. We may also consider analyses of physician time, wo rk RVUs, or direct PE inputs using other data sources, such as Department of Veteran Affair s (VA), National Surgical Quality Improvement Program (NSQIP), the Society for Thoracic Surgeons (STS) National Database, and the Physician Quality Reporting Initiative (PQRI) data bases. 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 contemporar y medical practice. We note that section 1848(c)(2)(A)(ii) of the Act author izes the use of extrapolation a nd other techniques to determine the RVUs for physicians' services for which specifi c data are not available in addition to taking

into account the results of c onsultations with organizations representing physicians. In accordance with section 1848(c) of the Act, we de termine appropriate adjustments to the RVUs, explain the basis of these adjustments, and re spond to public comments in the PFS proposed and

final rules. 2. Identifying, Reviewing, and Validating the RVUs of Potentially Misvalued ServicesCMS-1600-P 76

a. Background In its March 2006 Report to the Congress, MedP AC 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 mi svalued over time. MedPAC stated, “when a new service is added to the physician fee schedul e, it may be assigned a relatively high value because of the time, technical sk ill, 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 servic e 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 sin ce 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 si gnificant steps to identify and address potentially misvalued code s. As MedPAC noted in its March 2009 Report to Congress, in the in tervening years since MedPAC made the initial recommendations, “CMS and the AMA RUC have taken several steps to imp rove the review process.'' Most recently, section 1848(c)(2)(K)(ii) of the Ac t (as added by section 3134(a) of the Affordable Care Act) directed the Secretary to specifi cally 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;CMS-1600-P 77

● Codes that are recently establishe d for new technologies or services;

● Multiple codes that are frequently b illed 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 re view 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 recommendati ons on the review and appropriate adjustment of potentially

misvalued services. In add ition, the Secretary may conduct su rveys, other data collection activities, studies, or other analys es, as the Secretary determines to be appropriate, to facilitate the review and appropriate adjustment of potenti ally misvalued services . This section also authorizes the use of analytic contractors to identif y and analyze potentially misvalued codes, conduct surveys or collect data, and make r ecommendations on the review and appropriate adjustment of potentially misvalued services. Additionally, this section provides that the Secretary may coordinate the review and adjust ment 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 appropr iate coding revisions (i ncluding using existing processes for consideration of coding changes) that may include consolidation of individual services into bundled codes for paym ent under the physician fee schedule. b. Progress in Identifying and Revi ewing Potentially Misvalued Codes To fulfill our statutory mandate, we have identified and reviewed numerous potentially misvalued codes in all seven of the categories sp ecified in section 1848(c)(2 )(K)(ii) of the Act,CMS-1600-P 78

and we plan to continue our work examining pot entially 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 an d other public commenters on revised work RVUs and direct PE inputs for those codes. The AMA RUC, through it s own processes, also identifies potentially misvalued codes for re view. Through our public nomination process for potentially misvalued codes established in th e CY 2012 PFS final rule with comment period, other individuals and stakeholder groups submit no minations for review of potentially misvalued

codes as well. Since CY 2009, as a part of the annual potentia lly 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 incl uded 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,'' re ferring to a list of the highest PFS expenditure services, by specialty, that had not b een recently reviewed (7 6 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 sa me 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 c odes is services that have not been subject to review since the implementation of the PFS (the so-called “Harvardvalued codes”). In the CY 2009 PFS proposed ru le, we requested that the AMA RUC engage in an ongoing effort to review the remaining Harv ard-valued codes, focusing first on the high-CMS-1600-P 79

volume, low intensity codes (73 FR 38589). Fo r the Fourth Five-Year Review (76 FR 32410), we requested that the AMA RUC review services th at have not been reviewed since the original implementation of the PFS with annual utili zation greater than 30,000 (Harvard-valued— Utilization > 30,000). In the CY 2013 final rule with comment period, we identify for review the potentially misvalued codes for Harvard-valued serv ices 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-al one PE (codes with physician work and no listed physician time and codes with no physician work and have listed physician time). c. Validating RVUs of Po tentially Misvalued Codes In addition to identifying and reviewing pot entially 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 form al process to validate RVUs under the PFS. The validation process may include validation of work elements (such as time, mental effort and professional judgment, technical skill and physical effort, a nd stress due to risk) i nvolved with furnishing a service and may include validation of the pre-, po st-, and intra-service co mponents of work. The Secretary is directed, as part of the validation, to validate a samp ling 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 pot entially misvalued codes, including conducting surveys, other data collection activ ities, 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 possi ble approaches, methodologies, and dataCMS-1600-P 80

sources that we should consider for a validati on 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).

We have entered into two contracts with out side entities to devel op validation models for RVUs. During a 2-year project, the RAND Co rporation will use availa ble data to build a validation model to predict work RVUs and th e individual components of work RVUs, time and intensity. The model design will be informed by th e statistical methodologies and approach used to develop the initial work RVUs and to identif y potentially misvalued procedures under current CMS and AMA RUC processes. RAND will use a re presentative set of CMS-provided codes to

test the model. RAND will consul t with a technical expert pane l 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 coll ecting data from several practices for services selected by the

contractor. The data will be used to develop time estima tes. 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 re view the new time data and their potential implications for work and the ratio of work to time.

3. CY 2014 Identification and Review of Potentially Misvalued Services a. Public Nomination of Potentially Misvalued Codes In the CY 2012 PFS final rule with comment pe riod, we finalized a process for the public to nominate potentially misvalued codes (76 FR 73058). The public and stakeholders mayCMS-1600-P 81

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. Supporting do cumentation for codes nominated for the annual review of potentially misvalued codes may include the following:

● Documentation in the peer reviewed medical literature or other reli able 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 hos pital stay; and physician time.

● An anomalous relationship between the code being proposed for review and other

codes.

● Evidence that technology ha s 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 othe r 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 Affair s (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 in tensity from professional and management societies and organizations, su ch as hospital associations.CMS-1600-P 82

After we receive the nominated codes duri ng the 60-day comment period following the

release of the annual PFS fina l rule with comment period, we evaluate the supporting

documentation and assess whether the nominated c odes appear to be potentially misvalued codes appropriate for review under the annual process. In the follo wing year’s PFS proposed rule, we publish the list of nominated c odes and indicate whether we ar e proposing each nominated code as a potentially misvalued code. We did not receive publicly nominated potentia lly misvalued codes for inclusion in this proposed rule. We look forward to receiving ne w code nominations for inclusion in the CY 2015 proposed rule to continue with our efforts to identify potentially misvalued codes. b. Potentially Misvalued Codes (1) Contractor Medical Director Id entified Potentially Misvalued Codes After publishing the CY final rule with co mment period, we began considering additional ways to broaden participation in the process of iden tifying potentially misv alued codes. We solicited the input of Me dicare contractor medical director s (CMDs) in developing a list of potentially misvalued codes. CMDs offer a unique perspective on the Medicare program.

Medicare Administrative Contractors administ er the Medicare program in their assigned geographic area and each has at l east one CMD that serves as its director. As a group, CMDs represent a variety of medical specialties, wh ich makes them a diverse group of physicians capable of providing opinions across the vast sc ope of services covered under the PFS. In addition to being physicians, they are on the front line of administering the Medicare program; and their offices often serve as the first point of contact for any provider with questions regarding coverage, coding and claims processing. CM Ds spend a significant amount of time communicating directly with provide rs and the health care industry discussing more than just the broad aspects of the Medicare program but also e ngaging in and facilitating specific discussionsCMS-1600-P 83

around individual services. Through their develo pment of evidence-based local coverage determinations (LCDs), CMDs also have expe rience developing policy based on research. In consultation with our CMDs, we have identified the following list of codes that we are proposing as potentially misvalued. We include a brief discussion of the reasons for proposing these codes as potentially misv alued.

TABLE 11: Codes Identified in Consultati on with CMDs as Potentially Misvalued CPT Code Short Descriptor 17311 Mohs 1 stage h/n/hf/g 17313 Mohs 1 stage t/a/l 21800 Treatment of rib fracture 22035 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, mappi ng, color coding of specimens, microscopic examination of specimens by the surgeon, and hi stopathologic preparation, head, neck, hands, feet genitalia, or any location with surgery di rectly 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 exci sion of tissue specimens, mapping, color coding of specimens, microscopic examination of specimens by the surgeon, and histpathologic prepar ation including routine stai ns(s) of the trunk, arms, or legs; first stage, up to 5 tissue blocks) are proposed as potentially misvalued codes because based on CMD comments,

we believe that the code may be overvalued.CMS-1600-P 84

CPT codes 21800 (Closed treatment of rib fr acture, uncomplicated, each), 22305 (Closed treatment of vertebral pr ocess fracture(s)) and 27193 (Closed treatment of pelvic ring fracture, dislocation, diastasis or subluxa tion, without manipulation) is pr oposed for review. We are considering the appropriateness of having a 90-da y global surgical packag e for a procedure that is performed in settings other than the inpatient setting 33 percent of the time. We believe it is unlikely that it is appropriate for a procedure pe rformed outside of the inpatient hospital setting at this frequency to have such a long global period. CPT codes 33960 (Prolonged extracorporeal circulation for cardiopulmonary insufficiency; in itial day) and 33961 (Each subsequent day) are being proposed for review because CMDs were concerned about their current valuation of physician work. The CMD comment states that th e service was originally valued when it was used primarily in premature neonates; but the se rvice is now being furnished to adults with severe influenza, pneumonia and respiratory distress syndrome. We are concerned that, while the code currently includes 523 minutes of tota l physician time with 133 minutes of intraservice time, physicians are not typically furnishing the se rvice over that entire time interval; rather, hospital-employed pump technicians are furnishing much of the work. CPT codes 47560 (Laparoscopy, surgical; with guided transhepatic cholangiography, without biopsy), 47562 (Cholecystectomy) and 47563 (Cholecystectomy with cholangiography) we are proposing these codes as potentially misvalued because the more extensive code has

lower work RVUs than the less extensive codes. CPT codes 55845 (Prostatectomy, retropubic radica l with or without nerve sparing with bilateral pelvic lymphadenectomy, including extern al iliac, hypogastric, and obturator nodes) and 55866 (Laparoscopy, surgical prostatectomy, retr opubic radial, including nerve sparing, includes robotic assistance when performe d) we are proposing as potentially misvalued because the RVUsCMS-1600-P 85

for the laparoscopic procedure are higher than for the open procedure and, in general, a laparascopic procedure would not require great er resources than the open procedure. We are proposing CPT 64566 (Posterior tibial neurostimulation, percutaneous needle electrode, single treatment, includes programming) as a potentially misvalued code because we think that the procedure typically is furnished by support sta ff with supervision as opposed to being furnished by the physician. We are concer ned that the current va luation is based on the procedure being furnished by a physician. We are proposing CPT code 76942 (Ultrasonic guidance for needle placement (for example, biopsy, aspiration, injection, localiz ation device), imaging supervision and interpretation) as a potentially misvalued code because of the high frequency with which it is billed with CPT code 20610 (Arthro centesis aspiration and/or injecti on; major joint or bursa (for example, shoulder, hip, knee joint, subacromia l bursa) in the CMD’s geographic region. The CMD noted that some providers within the contractor’s geographi c area bill CPT code 76942 with every injection or aspiration of the knee. One CMD suggests that the payment for CPT

code 76942 and CPT code 20610 should be combined to reduce the incentive for providers to always provide and bill separately for ultras ound guidance. We note that we are making a proposal regarding the direct PE inputs for CPT code 76942. Our claims data show that the procedure time assumption for CPT code 76942 is longer than the typical procedure with which the code is billed (f or example, CPT code 20610). The pr oposed changes relating to CPT code

76942 are addressed in detail in s ection II.A.4.b.3. of this proposed rule. We believe that the discrepancy in procedure times and the resul ting potentially inaccura te payment raises a fundamental concern regarding the incentive to furnish ultras ound guidance. However, we believe this concern spans more than just an individual code for ultrasound guidance. Accordingly, we have proposed additional ultras ound guidance codes as potentially misvalued inCMS-1600-P 86

Table 12. We are seeking public comment on including these code s as potentially misvalued codes. We are also seeking public comment on a ny similar codes that should be included on this

list.

TABLE 12: CPT Codes for Ultrasound Guidance 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

(2) Improving the Valuation of the Global Surgic al Package, Measuri ng Post-Operative Work In the CY 2013 proposed rule, we sought comments on methods of obtaining accurate and current data on E/M services furnished as pa rt of a global surgical package. Commenters provided a variety of suggestions including setting the all surgi cal 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-Re lated Group length of stay data, and setting documentation standards for post-operative E/M services that co uld be audited. In addition to receiving the broader comments on measuring post-operative wo rk, we also received a comment from the AMA RUC noting that the hospita l and discharge day managementservices included in the global period for many surgical procedures may have been inadvertently removed from the time file in 2007. With its comment letter, the AM A RUC sent us a time file with updated postoperative visits for the services that arguably we incorrectly displayed with zero visits in the CMS time file. We said in the CY 2013 final rule with comment period that we would review this file and, if appropriate, propose modifications to the physic ian time file in the CY 2014 PFS proposed rule. We noted in the CY 2013 final ru le with comment period that if time had beenCMS-1600-P 87

removed from the physician time file inadverten tly, it would not have a ffected the physician work RVUs or direct PE inputs for these services. It would ha ve 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 da ta were deleted from the time file due to an inadvertent error as noted by the AMA RUC. Thus, we are proposing 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 13. We believe this proposal would populate the physician time file with data that , absent the inadverten t error, would have been present in the

time file.

TABLE 13: Proposed Physician Time Chan ges for CY 2014 Potentially Misvalued Codes

AMA RUC-Recommended Visits CPT Code Short Descriptor 99231 99232 99238 99291 CY 2013 Physician

Time AMA RUCRecommended Physician

Time 19368 Breast reconstruction 4 1 712 770 19369 Breast reconstruction 3 1 657 690 20100 Explore wound neck 2 1 218 266 20816 Replantation digit complete 5 1 671 697 20822 Replantation digit complete 3 1 587 590 20824 Replantation thumb complete 5 1 646 690 20827 Replantation thumb complete 4 1 610 625 20838 Replantation foot complete 8 1 887 986 20955 Fibula bone graft microvasc 6 1 1 867 957 20969 Bone/skin graft microvasc 8 1 1018 1048 20970 Bone/skin graft iliac crest 8 1 958 988 20973 Bone/skin graft great toe 5 1 1018 988 21139 Reduction of forehead 1 1 400 466 21151 Reconstruct midface lefort 2 1 1 567 686 21154 Reconstruct midface lefort 3 1 2 664 853 21155 Reconstruct midface lefort 2 1 2 754 939 21175 Reconstruct orbit/forehead 1 1 2 549 767 21182 Reconstruct cranial bone 1 1 2 619 856 21188 Reconstruction of midface 1 1 512 572 22100 Remove part of neck vertebra 2 1 397 372CMS-1600-P 88

AMA RUC-Recommended Visits CPT Code Short Descriptor 99231 99232 99238 99291 CY 2013 Physician

Time AMA RUCRecommended Physician

Time 22101 Remove part thorax vertebra 3 1 392 387 22110 Remove part of neck vertebra 6 1 437 479 22112 Remove part thorax vertebra 7 1 507 530 22114 Remove part lumbar vertebra 7 1 517 530 22210 Revision of neck spine 7 1 585 609 22212 Revision of thorax spine 7 1 610 640 22214 Revision of lumbar spine 7 1 585 624 22220 Revision of neck spine 7 1 565 585 22222 Revision of thorax spine 8 1 630 651 22224 Revision of lumbar spine 8 1 620 666 22315 Treat spine fracture 1 1 257 252 22325 Treat spine fracture 6 1 504 528 22326 Treat neck spine fracture 6 1 452 480 22327 Treat thorax spine fracture 9 1 505 604 22548 Neck spine fusion 8 1 1 532 673 22556 Thorax spine fusion 3 1 1 525 557 22558 Lumbar spine fusion 2 1 1 502 525 22590 Spine & skull spinal fusion 3 1 532 501 22595 Neck spinal fusion 6 1 492 521 22600 Neck spine fusion 6 1 437 490 22610 Thorax spine fusion 8 1 468 549 22630 Lumbar spine fusion 3 1 501 487 22800 Fusion of spine 7 1 517 571 22802 Fusion of spine 4 1 552 538 22804 Fusion of spine 5 1 630 595 22808 Fusion of spine 5 1 553 530 22810 Fusion of spine 5 1 613 595 22812 Fusion of spine 8 1 666 700 31582 Revision of larynx 8 1 489 654 32650 Thoracoscopy w/pleurodesis 2 1 322 290 32656 Thoracoscopy w/pleurectomy 3 1 419 377 32658 Thoracoscopy w/sac fb remove 1 1 362 330 32659 Thoracoscopy w/sac drainage 2 1 414 357 32661 Thoracoscopy w/pericard exc 1 1 342 300 32664 Thoracoscopy w/ th nrv exc 1 1 362 330 32820 Reconstruct injured chest 4 1 5 631 854 33236 Remove electrode/thoracotomy 4 1 258 346

33237 Remove electrode/thoracotomy 5 1 378 456CMS-1600-P 89

AMA RUC-Recommended Visits CPT Code Short Descriptor 99231 99232 99238 99291 CY 2013 Physician

Time AMA RUCRecommended Physician

Time 33238 Remove electrode/thoracotomy 5 1 379 472 33243 Remove eltrd/thoracotomy 5 1 504 537 33321 Repair major vessel 8 1 751 754 33332 Insert major vessel graft 8 1 601 604 33401 Valvuloplasty open 8 1 830 661 33403 Valvuloplasty w/cp bypass 8 1 890 638 33417 Repair of aortic valve 3 1 3 740 750 33472 Revision of pulmonary valve 1 1 5 665 780 33502 Coronary artery correction 3 1 3 710 688 33503 Coronary artery graft 6 1 3 890 838 33504 Coronary artery graft 5 1 3 740 789 33600 Closure of valve 6 1 800 628 33602 Closure of valve 6 1 770 628 33606 Anastomosis/artery-aorta 8 1 860 728 33608 Repair anomaly w/conduit 5 1 800 668 33690 Reinforce pulmonary artery 3 1 3 620 636 33702 Repair of heart defects 1 1 4 663 751 33722 Repair of heart defect 5 1 770 608 33732 Repair heart-vein defect 5 1 710 578 33735 Revision of heart chamber 3 1 4 740 770 33736 Revision of heart chamber 5 1 710 548 33750 Major vessel shunt 2 1 3 680 722 33764 Major vessel shunt & graft 2 1 4 710 750 33767 Major vessel shunt 5 1 800 608 33774 Repair great vessels defect 1 1 7 845 998 33788 Revision of pulmonary artery 3 1 3 770 736 33802 Repair vessel defect 3 1 2 558 556 33803 Repair vessel defect 3 1 2 618 586 33820 Revise major vessel 1 1 1 430 414 33824 Revise major vessel 1 1 3 588 615 33840 Remove aorta constriction 2 1 3 588 639 33845 Remove aorta constriction 1 1 3 710 726 33851 Remove aorta constriction 2 1 3 603 700 33852 Repair septal defect 2 1 3 663 719 33853 Repair septal defect 8 1 800 668 33917 Repair pulmonary artery 5 1 740 608 33920 Repair pulmonary atresia 6 1 800 658 33922 Transect pulmonary artery 5 1 618 546 33974 Remove intra-aortic balloon 1 1 406 314 34502 Reconstruct vena cava 6 1 793 741CMS-1600-P 90

AMA RUC-Recommended Visits CPT Code Short Descriptor 99231 99232 99238 99291 CY 2013 Physician

Time AMA RUCRecommended Physician

Time 35091 Repair defect of artery 11 1 2 597 790 35694 Arterial transposition 2 1 468 456 35901 Excision graft neck 4 1 484 482 35903 Excision graft extremity 3 1 408 416 47135 Transplantation of liver 23 1 1501 1345 47136 Transplantation of liver 28 1 1301 1329 49422 Remove tunneled ip cath 1 1 154 182 49429 Removal of shunt 6 1 249 317 50320 Remove kidney living donor 4 1 480 524 50845 Appendico-vesicostomy 5 1 685 613 56632 Extensive vulva surgery 7 1 835 683 60520 Removal of thymus gland 2 1 2 406 474 60521 Removal of thymus gland 5 1 457 445 60522 Removal of thymus gland 7 1 525 533 61557 Incise skull/sutures 3 1 529 510 63700 Repair of spinal herniation 3 1 399 401 63702 Repair of spinal herniation 3 1 469 463 63704 Repair of spinal herniation 8 1 534 609 63706 Repair of spinal herniation 8 1 602 679

(3) Codes With Higher Total Medicare Payments in Office than in Hospital or ASC We are proposing to address nearly 200 code s that we believe 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 Medica re payment (the combined payment to the facility and the professional) when the service is furnished in a fac ility, either a hospital outpatient department or an ASC. For services furnished in a facility set ting we would generally expect the combined payment to the facility and the practitioner to exceed the PFS pa yment made to the professional when the service is furnished in the nonfacility setting. This payment di fferential is expected because it reflects the greater cost s we would expect to be incu rred by facilities relative to physicians furnishing services in offices and other non-facility sett ings. These greater costs areCMS-1600-P 91

due to higher overhead resulting from differences in regulatory requireme nts and for facilities, such as hospitals, maintaining th e capacity to furnish services 24 hours per day and 7 days per week. However, when we analyzed such paymen ts, we identified nearly 300 codes that would result in greater Medicare payment in the nonfacili ty setting than in the fa cility setting. We believe these anomalous site-of-service paymen t differentials are the result of inaccurate resource input data used to establish rates under the PFS. In this proposed rule, we are proposing to a ddress these misvalued codes. Specifically, we are proposing to refine th e PE methodology to limit the nonfac ility PE RVUs for individual

codes so that the total nonfac ility PFS payment amount would not exceed the total combined payment under the PFS and the OPPS (or the AS C payment system) when the service is furnished in the facility setting. We believe this is an efficient way to address these significant anomalies within the PE methodology and more appr opriately value these services.. We discuss this proposal in more de tail in section II.A.4.b.3.CMS-1600-P 92

4. The Multiple Procedure Payment Reduction Policy Medicare has long employed multiple proced ure payment reduction (MPPR) policies to adjust payment to more appropriately reflect re duced 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 furnishe d 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 furn ished together. With the exception of a few codes that are always reported with another code, the PFS values serv ices independently to recognize relative resources invo lved when the servi ce is the only one furnished in a session. Although some of our MPPR policies precede the A ffordable Care Act, MPPRs can address the fourth category of potentially misv alued codes identified in section 1848(c)(2)(K) of the Act, as added by the Affordable Care Act, which is “m ultiple codes that are frequently billed in conjunction with furnishing a single service” (s ee 75 FR 73216). We are not proposing any new MPPRs in this proposed rule, but the following se ctions describe the history of MPPRs and the services currently covered by MPPRs. a. Background Medicare has a longstanding policy to redu ce 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 sa me 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 reductio n, 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 woul d consider applying the policy to other diagnostic tests in the future.CMS-1600-P 93

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 furnishe d on contiguous areas of the body in a single session (70 FR 70261). This MPPR policy recognizes that fo r the second and subsequent imaging procedures furnished in the same session, th ere are some efficiencies in clinical labor, supplies, and equipment time. In particular, certa in clinical labor activit ies 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, we also reduced those accordingly. The imaging MPPR policy originally app lied to computed tomography (CT) and computed tomographic angiogra phy (CTA), magnetic resonan ce imaging (MRI) and magnetic resonance angiography (MRA), and ultrasound serv ices 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 th e TC of global services, but not to professional component (PC) services. There have been several revisions to this pol icy since it was originally adopted. Under the current imaging MPPR policy, full payment is ma de 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 reduc tion in CY 2007 (70 FR 70263). However, section 5102(b) of the Defic it Reduction Act of 2005 (DRA) (Pub. L. 109–171, enacted on December 20, 2006) amended the statut e to place a cap on the PFS payment amount for most imaging procedures at the amount paid under the hospital outpatient prospective payment system (OPPS). In view of this new OPPS payment cap, we decided in the CY 2006CMS-1600-P 94

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 attribut able to the imaging MPPR policy from the PFS budget neutrality provision. Effective July 1, 201 0, 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 per cent. Section 1848(c)(2)(B)(v)(IV) of the Act exempted the reduced expenditure s attributable to this further change from the PFS budget neutrality provision. In the July 2009 U.S. Government Accountab ility Office (GAO) report entitled, Medicare Physician Payments: Fees Could Better Reflect Efficiencies Achieved when Services are Provided Together , the GAO recommended that we take furt her 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 th e same day. The GAO report recommended the following: (1) expanding the existing imaging M PPR policy for certain services to the PC to reflect efficiencies in physician work for cert ain imaging services; and (2) expanding the MPPR

to reflect PE efficiencies that occur when cer tain nonsurgical, nonimaging services are furnished together. The GAO report also encouraged us to fo cus on service pairs that have the most impact on Medicare spending. In its March 2010 report, MedPAC noted its c oncerns about mispricing of services under

the PFS. MedPAC indicated that it would e xplore 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 pl anned to analyze nonsurgical services commonly furnished together (for example, 60 to 75 percent of the time) to assess whether an expansion ofCMS-1600-P 95

the MPPR policy could be warranted. MedPAC en couraged us to consid er 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 a ppropriate 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 a pplies regardless of code family; that is, the policy applies to multiple imaging services fu rnished within the same family of codes or across families. This policy is consistent wi th 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 ru le with comment period (75 FR 73228), although section 1848(c)(2)(B)(v)(VI) of the Act specifies that reduc ed 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 fu rnished on or after July 1, 2010) are excluded from the PFS budget neutrality adjustment, it does not apply to reduced e xpenditures attributable to our policy change regarding additional code combinations across code families (noncontiguous body areas) that are subject to budget neutralit y under the PFS. The complete list of codes subject to the CY 2011 MPPR policy for diagnostic imaging services is included in

Addendum F.CMS-1600-P 96

As a further step in applying the provisi ons 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 thera py” 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 fi rst proposed in the CY 2011 proposed rule (75 FR 44075) as a 50 percent payment reducti on to the PE component of the second and subsequent therapy services for multiple “alway s therapy” services furnished to a single beneficiary in a single day. It applies to servi ces 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 subse quent therapy services for multiple “always therapy” services furnished to a sing le beneficiary in a single day. Subsequent to publication of the CY 2011 PFS final rule w ith 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 s ection 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 furnis hed in institutional settings. Section 4 of the PPTRA exempted the reduced expenditures attrib utable to the therapy MPPR policy from the PFS budget neutrality provision. Sec tion 633 of the ATRA revised th e reduction to 50 percent of the PE component for all settings, effective Ap ril 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 andCMS-1600-P 97

subsequent procedures or additi onal 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 serv ices are billed on the same date of service for one beneficiary by the same practitioner or faci lity under the same National Provider Identifier (NPI), regardless of whether the services are furnished in one therapy discipline or multiple disciplines, including physical therapy, occupa tional therapy, or speech-language pathology. The MPPR policy applies in all settings where outpatient therapy serv ices are paid under

Part B. This includes both serv ices that are furnished in the office setting and paid under the PFS, as well as institutional serv ices that are furnished by out patient hospitals, home health agencies, comprehensive outpatient rehabilitation facilities (CORFs), and other entities that are paid for outpatient therapy servic es 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. Th e in-office ancillary exception to the general prohibition under sec tion 1877 of the Act as amended by the Ethics in Patient Referrals Act, also known as the Stark law, allo ws physicians to refer Medicare beneficiaries for designated health services, incl uding imaging, radiation therap y, home health care, durable medical equipment, clinical laboratory tests, a nd physical therapy, to entities with which they have a financial relationship under specific cond itions. MedPAC recommended that we apply a MPPR to the PC of diagnostic imaging services furnished by the same practitioner in the same

session as one means to curb excess self-referral for these services. 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 regardingCMS-1600-P 98

potentially misvalued codes that result from “m ultiple 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 Imag ing 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 an d the TC of certain diagnostic imaging codes. Specifically, we expanded the payment reduction curren tly applied to the TC to apply also to the PC of the second and subsequent advanced imagi ng services furnished by the same physician (or by two or more physicians in the same group pract ice) 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 perc ent payment reduction to the PC component of the second and subsequent imaging services. Under this policy, full payment is made for th e PC of the highest paid advanced imaging service, and payment is reduced by 25 percent fo r 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 serv ices in the same sessi on due to duplication of physician work, primarily in the pr e- and post-service periods, but w ith some efficiencies in the intraservice period. This policy is consistent with the statutor y requirement for the Secretary to identify, review, and adjust the relative values of potentiall y 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 me dicine diagnostic procedures, under which we apply a 50 percent payment reduc tion to second and subsequent pr ocedures. Furthermore, it was responsive to continued concerns about significant gr owth in imaging spending, and to MedPAC (March 2010 and June 2011) and GAO (July 2009) recommendations regarding the expansion ofCMS-1600-P 99

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 te sts. Although we proposed a 25 percent reduction for both diagnostic cardiovascular and ophthalmology services, we adopted a 20 percent reduction for ophthalmol ogy services in the final rule with comment period (77 FR 68941) in response to public comments. For dia gnostic cardiovascular services, full payment is made for the procedure with the highest TC pa yment, 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. Although we are not proposing any new MPPR policies for CY 2014, we continue to look at expanding the MPPR based on efficienci es when multiple procedures are furnished together. Any specific proposals would be presente d in future rulemaking and subject to further public comment.”

The complete list of servi ces subject to the MPPRs on diagnostic imaging services, therapy services, diagnostic car diovascular services and diagno stic ophthalmology services is shown in Addenda F through J.CMS-1600-P 100

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, usi ng weighted specialty-specific malpractice expense percentages and 1991 av erage allowed charges. Malpractice RVUs for new codes after 1991 were extrapolated from simila r 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 res ource-based malpractice RVUs for services furnished beginning in 2000. Therefore, in itial implementation of resource-based malpractice RVUs occurred in 2000. The statute also requires that we revi ew and, if necessary, adjust RVUs no less often than every 5 years. The first review and update of resour ce-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 a nd 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 ru le 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 and revised codes e ffective before the ne xt five-year review of malpractice RVUs (for example, eff ective CY 2011 through CY 2014, assuming that the next review of malpract ice RVUs occurs for CY 2015) are determined either by a

direct crosswalk from a similar source code or by a modified cr osswalk to account for

differences in work RVUs between the new/re vised code and the source code. For theCMS-1600-P 101

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 fully implemented 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 fact or for the new/revised code and source code

but uses the work RVU for the new/revised co de to adjust for the difference in risk

attributable to the variation in work between the two services. For CY 2014, we will continue our current approach for determining malpractice RVUs for new/revised codes. We will pub lish a list of new/revised codes and the malpractice crosswalks used for determining their malpractice RVUs in the final rule with comment period. The CY 2014 malprac tice RVUs for new/revised codes will be implemented in the CY 2014 PFS final rule with comment period. These RVUs will be subject to public comment. They will then be finalized in the CY 2015 PFS final rule with comment period.CMS-1600-P 102

D. Medicare Economic Index (MEI) 1. Revising of the Medicare Economic Index (MEI) a. Background The Medicare Economic Index (MEI) is authorized under s ection 1842(b)(3) of the Act, which states that prevailing charge levels begi nning 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, th at such higher level is justified by yearto-year economic changes. Beginning July 1, 1975, and continui ng through today, the MEI has met this requirement by reflecting th e weighted-average annual price change for various inputs involved in fu rnishing 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 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 instan ces. First, the ME I was rebased in 1998 (63 FR 58845), which moved the cost structur e 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-wid e 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 structur e of the index from 2000 data to 2006 data.CMS-1600-P 103

The terms ‘‘rebasing’’ and ‘‘revising’’, while often used interchangeably, actually denote different activities. Rebasing refers to moving the base year for the structure of costs of an input price index, while revising relates to other types of changes such as changing data sources, cost categories, or pri ce proxies used in the input price index. For CY 2014, we are proposing to revise the ME I based on the recommendations of the MEI Technical Advisory Panel (TAP). We are not rebasing the MEI and will continue to use

the data from 2006 to estimate the cost we ights, since these are the most recently available, relevant, and complete data we have available to de velop these weights. In the following sections of this proposed rule, we detail our proposals re garding reorganization of cost categories, our rationale for selecting the price proxies in the MEI, and the results of the proposed revisions to the MEI based on the MEI TAP recommendations. b. MEI Technical Advisory Panel (TAP) Recommendations In the CY 2011 PFS final rule (77 FR 68892), we proposed to convene a MEI TAP that would review all asp ects of the MEI, including the inputs, input weights, pricemeasurement proxies, and productivity adju stment. The MEI TAP was to assess the relevance and accuracy of these inputs to current physician practices. The MEI TAP’s analysis and recommendations would be consid ered in future rulemaking to ensure that the MEI accurately and appropriately meets its intended statutory purpose. The MEI TAP was established by the Secretary under 42 U.S.C. §217a and was governed by the provisions of the Federal Advisory Committee Act (FACA) (Pub. L. 92- 463, enacted on October 6, 1972), as amended, 5 U. S.C. App. The Panel’s deliberations were made in accordance with the FACA, wh ich means that the meetings were conducted in public and stakeholders were given the opportunity to share their evidence and views with panel members.CMS-1600-P 104

The MEI TAP consisted of five members a nd held three meetings in 2012: May 21; June 25; and July 11. It produced 8 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 fi nal report, including all findings and

recommendations are available at http://www.cms.gov/Regulations-andGuidance/Guidance/FACA/MEITAP.html. It is possible to implement some of the recommendations immediately, while more in-d epth research is required to implement

several of the recommendations. For CY 2014, we are proposing to imple ment 10 of the 13 recommendations made by the MEI TAP. These proposed changes only involve revising the MEI categories, cost shares, and price proxies. Again, we are not propos ing to rebase the MEI

at this time since the MEI TAP concluded that there is not a reliabl e, ongoing source of

data to maintain the MEI. After acknowle dging that there are no additional data to support further rebasing of the MEI at this time, the MEI TAP recommended that CMS’ Office of the Actuary (OACT) identify and evaluate additional data sources that may allow for more frequent updates to the MEI’s co st categories and their respective weights. Some of the possible data sources the MEI TAP suggested we consider are: • The Medical Group Management Asso ciation’s (MGMA) Cost Survey • The Bureau of the Census Services Annual Survey (SAS) • Pending feasibility, a CMS survey, po ssibly conducted jointly with the American Medical Association, that focuses exclusively on physician expenses as they

relate to the MEI. The Pane l notes that the lead time to conceive, develop, fund, and administer such a survey would likely be considerable. • Alternatively, and again pending f easibility, CMS could obtain moreCMS-1600-P 105

robust data by means of detailed formal co st reports based on a methodologically sound sample of physician practices. Whether th e degree of improvement in the MEI would

warrant the cost associated with the process would be an important consideration. As such, we will continue to investigate possible data sources, including an assessment of whether using self-employed physician data for the MEI cost weights,

continues to be the most appropriate approach. c. Overview of Proposed Revisions

The MEI was last rebased and revise d in the CY 2011 PFS final rule with comment period (75 FR 73262 – 73275). The cu rrent base year for the MEI is 2006,

which means that the cost we ights in the index reflect phys icians’ 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, respectiv ely). We are proposing 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 comp ensation to physician compensation.

● Revise the physician wage and benefit split so that the cost weights are more in line with the definitions of the pri ce proxies used for each category.

● Add an additional subcategory under non-physician compensation for healthrelated workers.

● Create a new cost ca tegory called “All Other Prof essional Services” that includes expenses covered in the current MEI categories: “All Other Services” and “Other Professional Expenses.” The pr oposed “All Other Professional Services”CMS-1600-P 106

category would be further disa ggregated into appr opriate occupational subcategories.

● Create an aggregate co st category called “Miscellane ous Office Expenses” that would include the expenses for “Rubber and Plastics,” “Che micals,” “All Other Products,” and “Paper.” (2) Revise price proxies:

● Revise the price proxy for physicia n wages and salaries from the Average Hourly Earnings (AHE) for the Total Pr ivate Nonfarm Economy for Production and Nonsupervisory Workers to the ECI for Wage s and Salaries, Professional and Related Occupations, Private Industry.

● Revise the price proxy for physician bene fits from the ECI for Benefits for the Total Private Industry to the ECI for Bene fits, Professional and Related Occupations, Private Industry.

● Use the ECI for Wages and Salaries and the ECI for Benefits of Hospital, Civilian workers (private i ndustry) as the price proxies for the new category of nonphysician health-related workers.

● Use ECIs to proxy the Professional Se rvices occupational subcategories that reflect the type of professional serv ices purchased by physicians’ offices.

● Revise the price proxy for the fixed capital category from the CPI for Owners’ Equivalent Rent of Residen ces to the PPI for Lessors of Nonresidential Buildings (NAICS 53112). d. Revising Expense Categories in the MEI The MEI is used as part of the Sust ainable Growth Rate (SGR) methodology to update the PFS and represents the price compone nt of that update. The proposed expense categories in the MEI, along w ith their respective weights, are primarily derived fromCMS-1600-P 107

data collected in the 2006 AMA Physician Pr actice Information Survey (PPIS) for selfemployed physicians representing 42 medical specialties and selected self-employed nonMedical Doctor (non-MD) speci alties. Data for non-MD spec ialties were co llected in a supplemental survey of the PPIS survey questionnaire. We included the data from the following non-medical specialties in the MEI cost weight calculations (optometrists, oral surgeons, podiatrists, and chiropractors) spec ialties in the MEI cost weight calculations

consistent with the definition of the term ‘‘ physician’’ in section 1861(r) of the Act. In summary, the term ‘‘physician’’ when used in connection with the performance of

functions or actions an indivi dual is legally authorized to perform means the following: (1) A doctor of medicine or osteopathy; (2) a doctor of dental surgery or of dental medicine; (3) a doctor of podiatric medicine ; (4) a doctor of optometry; or (5) a chiropractor. For a complete definition, pleas e see section 1861(r) of the Act. We are not proposing to change the data source we used to establish the major MEI cost weights, and therefore, we propose to continue to use of the 2006 AMA PPIS physician expense

data at this time. Data for the dental medi cine specialty are not included in the weights since the PPIS supplemental collection effort did not survey this specialty. We are not proposing any changes in the methodology for estimating the cost

shares as finalized in the CY 2011 PFS fi nal rule with comment period (75 FR 73263 - 73267). For CY 2014, we are proposing to revise the classification of certain expenses

within the 2006-based MEI. The following sections describe the details of the proposed revisions for each of the categories and the ra tionale for the proposed changes. We also provide the Panel recommendation that is the impetus for each of the proposed revisions. (1) Overall MEI Cost Weights. Table 14 lists the set of mutually exclus ive and exhaustive cost categories andCMS-1600-P 108

weights that make up the proposed revised ME I as compared to the current MEI cost categories. The physician compensation cost weight under the proposed revised MEI is 2.600 percentage points higher than the physician compensation we ight in the current MEI. This occurs because of the proposed recl assification of expenses for non-physician

clinical staff that can bill independently from non-physic ian compensation to physician compensation. This change lowers the PE co st weight by 2.600 perc ent 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 propos ed 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 proposed new sub-aggreg ate 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 categ ories we propose to

remove are:

● Office expenses.

● Drugs & supplies. TABLE 14: Proposed Revised 2006 MEI Cost Categories and, Weights Compared to the Current 2006 MEI Cost Categories and WeightsCMS-1600-P 109

Current MEI (2006=100), finalized in the CY2011 PFS final rule Proposed Revised MEI (2006=100), CY2014 PFS proposed rule

Cost Category Current Weights Revised Weights Revised Cost Category Physician Compensation 48.266% 50.866% Physician Compensation Wages and Salaries 43.881% 43.641% Wages and Salaries Benefits 4.386% 7.225% Benefits Practice Expense 51.734% 49.134% Practice Expense Non-physician compensation 19.153% 16.553% Non-physician compensation Non-physician wages 13.752% 11.885% Non-physician wages 7.249% Non-health, non-physician wages P&T 6.006% 0.800% Professional and Related Management 1.446% 1.529% Management Clerical 4.466% 4.720% Clerical Services 1.834% 0.200% Services

4.636% Health related, non-physician wages Non-physician benefits 5.401% 4.668% Non-physician benefits Other Practice Expense 26.308% 32.581% Other Practice Expense Office expenses 20.035% Utilities 1.266% 1.266% Utilities 2.478% Miscellaneous Office Expenses Chemicals 0.723% 0.723% Chemicals Paper 0.656% 0.656% Paper Rubber & Plastics 0.598% 0.598% Rubber & Plastics 0.500% All other products Telephone 1.501% 1.501% Telephone Postage 0.898% 0.898% Postage All other services 3.581% 8.095% All Other professional services

2.592% Professional, scientific, & technical services

3.052% Administrative support & waste management 2.451% All other services All other products 0.500% Capital 10.310% 10.310% Capital Fixed Capital 8.957% 8.957% Fixed Capital Moveable Capital 1.353% 1.353% Moveable Capital Professional Liability Insurance 4.295% 4.295% Professional Liability Insurance Medical Equipment 1.978% 1.978% Medical EquipmentCMS-1600-P 110

Current MEI (2006=100), finalized in the CY2011 PFS final rule Proposed Revised MEI (2006=100), CY2014 PFS proposed rule

Cost Category Current Weights Revised Weights Revised Cost Category Drugs and Supplies 1.760% Prescription Drugs 0.000% Medical supplies 1.760% 1.760% Medical supplies Other Professional Expenses 4.513% All other 4.513% Total MEI 100.000% 100.000% Total MEI * 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 fo r mean physician net income (physician compensation) for self-employed physicians and for the selected self-employed specialties referenced previously in th is rule. Expenses for employed physician compensation are combined with expenses for self-employed physician compensation to obtain an aggregate Physician Compensati on cost weight. Based on this methodology, the Physician Compensation cost weight in the current MEI is 48.266 percent. As discussed in the CY 2011 PFS final rule with comment period (75 FR 73265), when determining this weight, we classified the expenses for non-phys ician clinical staff

that can bill Medicare in dependently under non-physician compensation, which is where these expenses have historically been apportioned in the MEI. The AMA PPIS survey question that collected the data for the clinical personnel who can independently bill, such as nurse practitioners, physician assist ants, and other clini cal personnel, captured these expenses under non-physician compensation. Additionally, prior AMA surveysCMS-1600-P 111

captured these expenses as non- physician compensation costs. The Panel reviewed this methodology and Recommendation 3.2 was that: “OACT evaluate the appropriate classificat ion of the expenses associated with non-physician clinical staff who can bill Medi care independently. Among the factors

OACT should consider are:

● Any definition of ‘physicians’ that ex ists under current law in relation to the

Medicare PFS and whether these definiti ons might limit OACT’s ability to make changes;

● Whether time for non-physician staff who can bill independently is included among the inputs to the PE RVU methodology u nder the Medicare PFS (that is, is the

treatment of this i nput under the PE RVU methodology consistent with that under the MEI);

● Whether there is any evidence these st aff do not spend the majority of their time providing ‘physicians’ services ’ as defined by Medicare; and

● The extent to which those who can bill independently actually do so.” We are proposing to reclassify these expenses to physician compensation for

several reasons:

● These types of practitioners furnish serv ices 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 i ndependently. Therefore, it would improve consistency with the RVU payments to incl ude these expenses as physician compensationCMS-1600-P 112

in the MEI. The effect of moving the expenses rela ted to clinical staff that can bill independently is to increase the physician compensation cost shar e by 2.600 percentage points and reduces non-physician compensa tion costs by the same amount. The physician compensation cost share for th e proposed revised ME I 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 calcula ted using data from the PPIS. Self-employed physician wages a nd salaries accounted for 92.3 percent of physician earnings while physician benefits ac counted for the remaining 7.8 percent. For employed physician payroll, the distributions for wages and salaries, and benefits for 2006 were 85.8 percent and 14.2 percent, respec tively. This ratio was determined by calculating a weighted average of available IRS Statistics of Income (SOI) data for partnerships, corporations, and S-corporations specific to physicians and outpatient care centers. Combining the information on self-employed and employed physicians produced a physician wages & salaries cost weight of 43.880 per cent and a physician benefits cost weight of 4.386 pe rcent, in the current MEI.

Recommendation 3.1 stated:

“The Panel recommends that OACT revise the Physician Wages and Salaries and Physician Benefit cost weights in the 2006-ba sed MEI. OACT should determine the cost weights for wages and benefits to ensure they are consistent with the definitions in the Employment Cost Index. Specifically, OAC T should consider estimating the proportion of the Physician Wages and Salaries cost we ight associated with physicians’ retirementCMS-1600-P 113

benefits, and reclassifying that percentage into the Physician Benefits cost weight to be

consistent with the costs included in the ECI for Wages and Salaries and the ECI for Benefits price proxies. Evaluation of the PPIS data determined that retirement benefits were included in the Physician Wages and Salaries cost weight while the associated price change is currently reflected in the ECI for Benefits.” We are proposing to revise the wage and benefit split used for physician compensation. Specifically, we are proposing to apply the distribution from the 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 ot her benefits such as physician retirement, paid leave, and payroll taxes were likely included in physician wages and salaries. By definition, the price proxy used fo r physician benefits, which is an Employment Cost Index (ECI) concept, incl udes retirement savings. Thus, using the AMA PPIS data produces a definitional incons istency between the cost weight and the price proxy. Therefore, we propose to use th e data on wages and salaries, and employee benefits from the SOI for Offices of Phys icians and Dentists for partnerships and corporations for both self-employed and em ployed physicians. From the SOI data, benefit expenses were estimated by summing the partnership data for retirement plans and employee benefit programs with corpora tion 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 to tal 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 canCMS-1600-P 114

bill independently as physician compensation with the use of the SOI data, the physician wages and salary cost share in the proposed 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 proposed revised MEI of 2.839 percentage points. As a result, the physician wages and salary cost share for the proposed revised MEI is 43.641 percent and the physician benefit cost sh are for the proposed 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 categ ories 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 The cost weight for Non-physician Empl oyee Compensation was developed using the 2006 AMA PPIS mean expenses for these co sts. As discussed previously, for CY 2014 we are proposing to exclude the expenses related to non- physician clinical staff that can bill independently from this cost categ ory. Moving the expenses related to the

clinical staff that can bi ll independently out of non- physician compensation costs decreases the share by 2.600 percentage poi nts. The non-physician compensation cost share for the proposed revised MEI is 16.553 pe rcent compared to the current physician compensation cost share of 19.153 percent. We are proposing to use the same met hod as finalized in the CY 2011 PFS final rule to split the non-physician compensation be tween wages and benefits. For reference, we use 2006 BLS Employer Costs for Employee Compensation (ECEC) data for theCMS-1600-P 115

Health Care and Social Assi stance (private industry). Data for 2006 in the ECEC for

Health Care and Social Assist ance 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 proposed revised MEI are 11.885 percent and 4.668 per cent, respectively; for the current MEI, the non-physician wage and benefit cost shares are 13.752 percent and 5.401 percent, respectively. The current 2006-based MEI further disaggr egated the non-physician wages into four occupational subcategories, the detail s of this method can be found in 75 FR 73264-

73265. The MEI TAP Recommendation 4.4 stated: “The Panel recommends the disaggrega tion 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-hea lth, non-physician wages should be further disaggregated based on the Current Populat ion Survey and Occupational Employment

Statistics data.” We propose to implement this recommendation using expenses reported on the AMA PPIS for non-physician, non-health-related wo rkers. The survey question asks for the expenses for: “non-clinical personnel involved primarily in administrative, secretarial or clerical activities (Includi ng transcriptionists, medical re cords personnel, receptionists, schedulers and billing staff, coding staff, information technology staff, and custodial personnel).” The non-physician, non-health-rel ated wage cost share for the proposed revised MEI is 7.249 percent. For wage costs of non-physic ian, health-related workers, the survey question asksCMS-1600-P 116

for the expenses for: “other clinical staff, including RNs, LPNs, physicists, lab technicians, x-ray technicians, medical as sistants, and other clinical personnel who

cannot independently bill.” The non-physician, health-related wage cost share for the proposed revised MEI is 4.636 percent. Toge ther the non-health a nd health-related, nonphysician wage costs sum to be equal to the total non-physician wage share in the proposed revised MEI of 11.885 percent. We are proposing to disaggregate the non-physician, non-health-related wage cost weight of 7.249 percent into four occupational subcategor ies. The methodology is

similar to that finalized in the CY 2011 PFS final rule with comment period (75 FR 73264), in that we are proposing to use 2006 Cu rrent Population Surv ey (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 usi ng 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) work ers, 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 occupationa l distribution in the proposed revised MEI as well as the

distribution for the 2006-based MEI is presented in Table 15.

TABLE 15: Percent Distribution of Nonphysi cian Payroll Expense by Occupational Group: Proposed Revised 2006-Based MEI and Current 2006-Based MEI. Current MEI (2006=100), finalized in the CY11 PFS final rule Proposed MEI (2006=100), CY14 PFS proposed rule Cost Category Current MEI06 Revised MEI06 Revised Cost Category Non-physician compensation 19.153% 16.553% Non-physician compensationCMS-1600-P 117

Current MEI (2006=100), finalized in the CY11 PFS final rule Proposed MEI (2006=100), CY14 PFS proposed rule Cost Category Current MEI06 Revised MEI06 Revised Cost Category Non-physician wages 13.752% 11.885% Non-physician wages 7.249% Non-health, non-phys. wages P&T 6.006% 0.800% Professional and Related Management 1.446% 1.529% Management Clerical 4.466% 4.720% Clerical Services 1.834% 0.200% Services

4.636% Health related, non-phys. Wages Non-physician benefits 5.401% 4.668% Non-physician benefits The health-related workers were previous ly included mainly in the Professional and Technical and Service Categories. Thes e proposed changes 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 ca tegorized as Other Practice Expenses.

In the current 2006-based MEI we had classi fied other PEs in one of the following subcategories: Office Expenses; Drugs and Supplies; and All Other Professional Expenses. For CY 2014, we are proposing to disaggregate these expenses in a way

consistent with the MEI TAP’s reco mmendations, 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 In surance (PLI), and a ll other professional

expenses. For the proposed revised 2006-based MEI, we propose to disaggregate Other Practice Expenses into 15 detailed su bcategories as shown in Table 16.CMS-1600-P 118

TABLE 16: Revised Cost Categor ies for Other Practice Expense Revised Cost Category Revised MEI06 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. Svcs. 2.592% Administrative and support & waste 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% For most of these categories, we use th e 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 Me dical 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–B enchmark 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 below.CMS-1600-P 119

● Utilities : The Utilities cost weight includes expe nses classified in the fuel, oil and gas, water and sewage, and electricity industries. The proposed cost weight for utilities is 1.266 percent, the same cost share as in the current MEI.

● Miscellaneous Office Expenses : We are proposing to include an aggregate category of detailed office expe nses that were stand-alone categories in the current 2006- based MEI. During the CY 2011 PFS pr oposed rule comment period, several commenters expressed confusion as to the rele vance of these categor ies to their practice

costs. The MEI TAP discusse d the degree of granularity ne eded in both the calculation and reporting of the MEI. Th e MEI TAP concluded that it mi ght be prudent to collapse some of the non-labor PE categories with othe r categories for presentation purposes. In particular, Recommendation 3.4 was that: “OACT report more aggregated costs under the Office Expenses cost category. In particular, reported costs associated with Rubber and Plastics, Chemicals, All Other Products, and Paper should be combined. However, the Panel believes that OACT should maintain separately the underlying deta ils and calculations a ssociated with these aggregated costs when applying price proxies and calculating the overall MEI and its subcomponents.” Based on this recommendation, we are proposing to add an aggregate category to the MEI that includes the expenses for paper, chemicals, rubber and plastics, and all other products. The cost shares for pa per, chemicals, rubber and plastics, and all other products remain the same for the propos ed revised MEI as in the current MEI.”

● Telephone : The telephone cost weight includ es expenses classified in the telecommunications (accounting for the major ity of the telephone expenses) and cable industries. The cost weight for Telephone services is 1.501 percent in the proposed revised MEI, the same cost share as in the current MEI.CMS-1600-P 120

● Postage : The Postage cost weight includes pos tal service expenses. The cost weight for Postage is 0.898 percent in the pr oposed revised MEI, the same cost share as

in the current MEI.

● All Other Services : We propose 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 percen t, which is the sum of the current MEI weight for All Other Services (3.581 percent) and A ll Other Professional Expenses (4.513 percent), is more in line with the GPCI Purchased Services index as

finalized in the CY2012 PFS final rule with comment period (76 FR 73085). The TAP

Recommendation 3.3 was that “OACT create a new cost category entitle d Professional Services that should

consist of the All Other Services cost cate gory (and its respective weight) and the Other Professional Expenses cost category (and it s respective weight). The Panel further recommends that this categor y be disaggregated into appropriate occupational categories consistent with the relevant price proxies.” We propose to combine the "Other Professional Expenses" and “All Other Services” cost weights of the 2006-based ME I and further disaggregate the 8.095 percent of expenses into more detail based on th e BEA I-O data, allowing for specific cost weights for services such as contract billi ng services, accounting, and legal services. We considered various levels of aggregati on; however, in consid ering the level of aggregation, the available co rresponding price proxies must be considered. Given the price proxies that are available from the EC I, we propose to disaggregate these expenses into three categories:

● NAICS 54 (Professional, Scien tific, and Technical Services) : TheCMS-1600-P 121

Professional, Scientific, and Technical Servi ces sector comprises establishments that specialize in performing professional, scientific, and techni cal activities for others. These activities require a high degree of expertise and training. Th e establishments in this sector specialize according to expertise and provi de these services to clients in a variety of industries, including but not limited to: legal advice and represen tation; accounting, and payroll services; com puter services; management consulting services; and advertising services and ha ve a 2.592 percent weight.

● NAICS 56 (Administrative and Support and Waste Management and Remediation Services) : The Administrative and Suppor t and Waste Management and Remediation Services sector comprises establishments performing routine support activities for the day-to-day ope rations of other organizations. The establishments in this sector specialize in one or more of these s upport activities and provide these services to clients in a variety of industries includi ng 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 resi dual category of these expenses : The residual All Other Services cost category is mostly comp rised of expenses associated with service occupations, including but not limited to: la b and blood specimen transport; catering and food services; collection company services; a nd dry cleaning services and have a 2.451 percent weight.

++ Fixed Capital : The Fixed Capital cost weight includes expenses for building leases and depreciation. Th e cost weight for Fixed Ca pital is 8.957 percent in the proposed revised MEI, the same cost share as in the current MEI.

++ Moveable Capital : The Moveable Capital cost we ight includes expenses forCMS-1600-P 122

non-medical equipment including but not limite d to, computer equipment and software,

as well as the rental and leas ing of automotive and industria l machinery equipment. The cost weight for Moveable Capital is 1.353 perc ent in the proposed revised MEI, the same

cost share as in the current MEI.

++ Professional Liability Insurance (PLI) : The weight for PLI expense was derived from the 2006 AMA survey and wa s calculated as the mean PLI expense expressed as a percentage of total expenses. The cost weig ht for PLI is 4.295 percent in the proposed revised MEI, the same cost share as in the current MEI.

++ Medical Equipment Expenses : The proposed weight for Medical Equipment was calculated using the 2006 AMA PPIS mean expense data . The cost weight for Medical Equipment Expenses is 1.978 percen t in the proposed revised MEI, the same

cost share as in the current MEI. ++ Medical Supplies Expenses : The proposed weight for Medical Supplies was calculated using the 2006 AMA PPIS mean expe nse data. The cost weight for Medical Supplies Expenses is 1.760 percent in the propos ed revised MEI, the same cost share as

in the current MEI.

2. Selection of Price Proxies for Use in the MEI After developing the cost category wei ghts for the proposed 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 ar e measures of priceCMS-1600-P 123

change at the intermediate or final stage of production. They are the prefe rred proxies for physician purchases as these pr ices 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 pe r hour worked. These fixed-weight indexes are not affected by employment shifts among in dustries 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 em ployee benefits, such as the employer’s share of Social Security taxes, pension and other retirement plans, insu rance benefits (life, health, disability, and accident ), and paid leave. Like EC Is for wages & salaries, the ECIs for employee benefits ar e 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 va riable using the following four criteria.

● Relevance : The price proxy should appropriately represent price changes for specific goods or services within the e xpense category. Relevance may encompass judgments about relative efficiency of the market generating the price and wage

increases.CMS-1600-P 124

● 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 va riability can conflict with relevance—since the more specifically a price variable is de fined (in terms of service, commodity, or geographic area), the higher the possibil ity of high sampling variability. A wellestablished time series is also preferred.

● Timeliness of actual published data : For greater granularity and the need to be as timely as possible, we prefer mont hly and quarterly da ta to annual data.

● Public availability : For transparency, we prefer to use data sources that are publicly available. Below we discuss the price and wage pr oxies for each cost category of the proposed revised 2006-based MEI (as shown in Table 17). We will continue to use the same price proxies as those used in the 2006-based MEI except as noted below. a. Physician Compensation (Physician’s Own Time) (1) Physician Wages and Salaries

Based on recommendations from the MEI TA P, we are proposing to use the ECI for Wages and Salaries for Professional and Related Occupations (Private Industry) (BLS series code CIU2020000120000I) to measure pri ce growth of this category in the proposed revised 2006-based MEI. The curre nt 2006-based MEI used Average Hourly Earnings (AHE) for Production and Non-Superv isory Employees for the Private Nonfarm Economy.

The MEI TAP had two recommendati ons concerning the price proxy for physician Wages and Salaries. The firs t recommendation from the MEI TAP was Recommendation 4.1, which was that: “...OACT re vise the price proxy associated withCMS-1600-P 125

Physician Wages and Salaries from an Av erage Hourly Earnings concept to an Employment Cost Index concept.” AHEs ar e 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 ec onomy, including shifts in employment mix. The recommended alternative, the ECI co ncept, measures the rate of change in employee wage rates per hour worked. ECIs m easure the pure rate of change in wages by industry and/or occupation a nd are not affected by shifts in employment mix across industries and occupations. The MEI TAP t hought 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 was that: “CMS revise the price proxy associated with changes in Physician Wages and Salaries to use the Employment Cost Inde x 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 recommends 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 SecurityAmendments of 1972,” which stated that the index should reflect changes in practice expenses and “general earnings.” 1

1 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.CMS-1600-P 126

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 ot her professionals that receive advanced training. Additionally, we believe th e ECI is a more appr opriate 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 pr oxy that is consistent with the Physician Wages and Salaries price proxy.” We are pr oposing to use the ECI for Benefits for Professional and Related Occupations (Private Industry) to measure pr ice growth of this category in the proposed 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 seri es ID CIU2010000120000I) and the relative importance of wages and salaries within tota l compensation. We belie ve this series is technically appropriate because it better reflects the benefit trends for professionals requiring advanced training. The current 2006-ba sed 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 will continue using the ECI for Wages andCMS-1600-P 127

Salaries for Professional and Related Occupation (Private In dustry) (BLS series code CIU2020000120000I) to measure the pric e growth of this cost ca tegory. This is the same proxy used in the current 2006-based MEI.

● Management : We will continue using the ECI for Wages and Salaries for Management, Business, and Financial (P rivate Industry) (BLS series code CIU2020000110000I) to measure the pric e growth of this cost ca tegory. This is the same proxy used in the current 2006-based MEI.

● Clerical : We will continue using the ECI for Wages and Salaries for Office and Administrative Support (Private Indus try) (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 will continue using the ECI for Wages and Salaries for Service Occupations (Private Indu stry) (BLS series code CIU2020000300000I) to measure the price growth of this cost category. This is the same proxy used in the current 2006-based

MEI. (ii) Non-physician, Health-R elated Wages and Salaries In Recommendation 4.4, the MEI TAP “... recommend[ed] the disaggregation of the Non-Physician Compensation costs to in clude an additional category for healthrelated workers. This disaggregation woul d allow for health-related workers to be separated from non-health-related workers. CM S should rely directly on PPIS data to estimate the health-related non-physician comp ensation cost weight s. The non-health, non-physician wages should be further disagg regated based on the Current Population Survey and Occupational Employment Statis tics data. The new health-related cost category should be proxied by the ECI, Wages and Salaries, Hospital (NAICS 622),CMS-1600-P 128

which has an occupational mix that is reasona bly close to that in physicians’ offices. The Non-Physician Benefit category should be proxied by a composite benefit index reflecting the same relative occupation we ights as the non-physician wages.” We are proposing to use the ECI for Wages and Salari es for Hospital Workers (Private Industry) (BLS series code CIU2026220000000I) to measure th e price growth of this cost category in the proposed revised 2006-based MEI. The ECI for Hospital workers has 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 will continue using a composite ECI for non-physician employee benefits in the proposed revised 2006-based MEI. Howeve r, we are proposing to expand the number of occupations from four to five by a dding detail on Non-Physic ian Health-Related Benefits. The weights and price proxies for the composite benefits index will be revised to reflect the addition of the new categor y. Table 17 lists the five ECI series and corresponding weights used to construct the pr oposed revised composite benefit index for non-physician employees in the proposed revised 2006-based MEI.

TABLE 17: CMS Composite Price Index for Non-physician Employee Benefits in the Proposed Revised 2006-Based MEI

ECI Series 2006 Weight (%) Benefits for Professiona l and Related Occupation (Private Industry) 7 Benefits for Management, Business, and Financial (Private Industry) 12

Benefits for Office and Administrative Support (Private Industry) 40 Benefits for Service Occupations (Private Industry) 2 Benefits for Hospital Workers (Private Industry) 39CMS-1600-P 129

(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 entitle d Professional Services that should

consist of the All Other Services cost cate gory (and its respective weight) and the Other Professional Expenses cost category (and it s respective weight). The Panel further recommends that this categor y be disaggregated into appropriate occupational categories consistent with the relevant price proxie s.” We are proposing to implement this recommendation in the proposed revised 2006- based MEI using a cost category titled

“All Other Professional Services.” Likewi se, the MEI TAP stated in Recommendation 4.7 that “...price changes associ ated with the Professional Se rvices category be proxied by an appropriate blend of Employment Cost Indexes th at reflect the types of professional services purchased by physic ian offices.” We agree with this recommendation and are proposing to the use the following price proxies for each of the new occupational categories:

● Professional, Scientif ic, and Technical Services : We are proposing to use the ECI for Total Compensation for Professional, Sc ientific, and Technical Services (Private Industry) (BLS series code CIU2015400000000I) to measure the price growth of this cost category. This cost category was not broke n out separately in the current 2006-based

MEI.

● Administrative and Support Services : We are proposing to use the ECI for Total Compensation for Administrative, S upport, Waste Management, and Remediation Services (Private Industry) (BLS seri es code CIU2015600000000I) to measure the price growth of this cost category. This cost category was not br oken out separately in theCMS-1600-P 130

current 2006-based MEI.

● All Other Services : We are proposing to use the ECI for Compensation for Service Occupations (Private Industr y) (BLS series code CIU2010000300000I) to measure the price growth of this cost category. (b) Miscellaneous Office Expenses

● Chemicals : We will continue using the PPI for Other Basic Organic Chemical Manufacturing (BLS series code #PCU32519–32519) to measure the price growth of this cost category. This is the same proxy used in the current 2006-based MEI.

● Paper : We will continue using the PPI for Converted Paper and Paperboard (BLS series code #WPU0915) to measure the price growth of th is cost category. This is the same proxy used in the current 2006-based MEI.

● Rubber & Plastics : We will continue using the PPI for Rubber and Plastic Products (BLS series code #WPU07) to measur e the price growth of this cost category. This is the same proxy used in the current 2006 -based MEI.

● All Other Products : We will continue using th e CPI-U for All Products less Food and Energy (BLS series code CUUR0000SA0 L1E) to measure the price growth of this cost category. This is the same proxy used in the current 2006-based MEI.

● Utilities : We will continue using the CPI fo r Fuel and Utilities (BLS series code CUUR0000SAH2) to measure the price growth of this cost category. This is the same proxy used in the current 2006-based MEI.

● Telephone : We will continue using the CPI for Telephone Services (BLS series code CUUR0000SEED) to m easure the price growth of th is cost category. This is the same proxy used in the current 2006-based MEI.

● Postage : We will continue using the CPI for Postage (BLS series codeCMS-1600-P 131

CUUR0000SEEC01) to measure the price growth of this cost category. This is the same proxy used in the current 2006-based MEI.

● Fixed Capital : In Recommendation 4.5, “The Panel recommends using the

Producer Price Index for Lessors of Nonres idential Buildings (NAICS 53112) for the MEI Fixed Capital cost category as it represen ts the types of fixed capital expenses most likely faced by physicians. The Panel noted the volatility in the index, which is greater than the Consumer Price Index for Owners’ Equi valent Rent of Residences. This relative volatility merits ongoing monito ring and evaluation of alterna tives.” We are proposing to

use the PPI for Lessors of Nonresid ential Buildings (BLS series code PCU531120531120) to measure the price growth of this cost category in the proposed

revised 2006-based MEI. The current 2006-based MEI used the CPI for Owner’s Equivalent Rent. We believe the PPI for Le ssors of Nonresidential Buildings is more appropriate as fixed capital ex penses in physician offices s hould 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 Panel believe s it is important that a proxy reflect price changes in the types of non-medical e quipment purchased in the production of physicians’ services, as well as the price changes associated with Information and Communication Technology expenses (includi ng both hardware and software).” We intend to continue to investigate possible da ta sources that could be used to proxy the physician expenses related to moveable cap ital in more detail. However, we will continue to use the PPI for Machinery and Equipment (series code WPU11) to measure the price growth of this cost category in the proposed revised 2006-based MEI. This isCMS-1600-P 132

the same proxy used in the current 2006-based MEI.

● Professional Liability Insurance : Unlike the other price proxies based on data from BLS and other public sources, the proxy fo r PLI is based on data collected directly by CMS from a sample of commercial insura nce carriers. The MEI TAP discussed the methodology of the CMS PLI index, as well as c onsidered alternative data sources for the PLI price proxy, including information availa ble from BLS and through state insurance commissioners. MEI TAP Finding 4.3 states: “The Panel finds the CMS-constructed prof essional liability insurance price index used to proxy changes in prof essional liability insurance prem iums in the MEI represents the best currently available method for its inte nded 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 pric e changes in premiums throughoutthe industry.” Given this finding, we will continue using the CMS Physician PLI index to measure the price growth of this cost category in the proposed revised 2006-based MEI. This is the same proxy used in the current 2006-based MEI.

● Medical Equipment : We will continue using the PPI for Medical Instruments and Equipment (BLS series code WPU1562) as the price proxy for this category. This is the same proxy used in the current 2006-based MEI.

● Medical Materials and Supplies : We will continue using a blended index comprised of 50/50 blend of the PPI for Su rgical Appliances (BLS series code WPU156301) and the CPI–U for Medical Equi pment and Supplies (BLS series code CUUR0000SEMG). This is the same pr oxy used in the current 2006-based MEI.CMS-1600-P 133

TABLE 18: Proposed Revised 2006-Base d MEI Cost Categories, Weights, and Price Proxies

Cost Category 2006 Weight Price Proxy Total MEI 100.000% Physician Compensation 50.866% Wages and Salaries 43.641% ECI - Wa ges and salaries - Professional and Related (Private) Benefits 7.225% ECI - Benefits - Professional and Related (Private) Practice Expense 49.134% Non-physician Compensation 16.553% Non-physician Wages 11.885%Non-health, nonphysician wages 7.249%

Professional and Related 0.800% ECI - Wages And Salaries - Professional and Related (Private) Management 1.529% ECI - Wages And Salaries - Mgmt., Business, and Finc. (Private) Clerical 4.720% ECI - Wages And Salaries - Office and Admin. Support (Private) Services 0.200% EC I - Wages And Salaries - Service Occupations (Private)Health related, nonphys. Wages 4.636% ECI - Wages and Salaries - Hospital (Private) Non-physician Benefits 4.668% Composite Benefit Index Other Practice Expense 32.581% Miscellaneous Office Expenses 2.478%

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 Professional Services 8.095% Prof., Scientific, and Tech. Svcs. 2.592% ECI - Compensation - Prof., Scientific, and Technical (Private) Admin. and Support Services 3.052% ECI - Compensation - Admin., Support, Waste Mgmt. (Private) All Other Services 2.451% ECI - Compensation - Service Occupations (Private)CMS-1600-P 134

Cost Category 2006 Weight Price Proxy Capital Fixed Capital 8.957% PPI - Lessors of Nonresidential Buildings Moveable Capital 1.353% PPI - Machinery and Equipment Professional Liability Insurance 4.295% CMS - Professional Liability Phys. Prem. Survey Medical Equipment 1.978% PPI - Medical Instruments and Equipment Medical Supplies 1.760% Compos ite - PPI Surgical Appliances & CPIU 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 peri od (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 incor porated 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 incorporat ed 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 Mu ltifactor Productiv ity) in the MEI and finds such an adjustment continues to be a ppropriate. This adjustment pr events ‘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 servic es performed per unit of input resources, which results from advances in produc tivity by individual ph ysician practices.” Based on the MEI TAP’s finding, we will continue to use the current method for adjusting the full MEI for multifactor produc tivity in the proposed revised 2006-basedCMS-1600-P 135

MEI. As described in the CY 2003 PFS final rule with comment period, we believe this adjustment is appropriate because it explicit ly reflects the productivity gains associated with all inputs (bot h labor and non-labor). We believe that using the 10-year moving average percent change in economy-wide mu ltifactor 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 Proposed Revisions on the MEI Update Table 19 shows the average calendar year percent change from CY 2005 to CY 2014 for both the proposed revised 2006-based MEI and the current 2006-based MEI. The average annual percent change in th e proposed revised 2006-based MEI is 0.1 percent lower than the current 2006-based ME I over the 2005-2013 period. On an annual basis over this period, the differences vary by up to plus or minus 0.7 percentage points. In the two most recent years (CY 2012 and CY 2013), the annual percent change in the proposed revised 2006-based MEI wa s within 0.1 percentage poi nt 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 pr ice proxy for physician wa ges and salaries and benefits and the revised pri ce proxy for fixed capital. TABLE 19: Annual Percent Change in the Proposed Revised 2006-Based MEI, not including productivity adjustme nt and the Current 2006-Based MEI, not including productivity adjustment * Update Year Proposed Revised 2006-based MEI excl. MFP Current 2006- based MEI, excl. MFP CY 2005 3.8 3.1 CY 2006 4.0 3.3 CY 2007 3.2 3.2 CY 2008 3.2 3.4CMS-1600-P 136

Update Year Proposed Revised 2006-based MEI excl. MFP Current 2006- based MEI, excl. MFP 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 2013 update is based on historical data through the second quarter 2012, prior to MFP adjustment As shown in Table 20, the projection of the proposed revised 2006-based MEI for the CY 2014 PFS proposed rule is an increase of 0.7 percent, 0.1 pe rcentage point lower than the projected increase using the current 2006-based MEI. In the CY 2014 PFS final rule with comment period, we will incorporat e historical data through the second quarter of 2013, and therefore, the cu rrent estimated increase of 0.7 percent for 2014 may differ

in the final rule.

TABLE 20: Projected Annual Percent Change in the CY 2014 Proposed Revised 2006-Based MEI and the Current 2006-Based MEI * Update Year Proposed Revised 2006- based MEI Current 2006-based MEI CY 2014 0.7 0.8 *Based on the 2nd quarter 2013 forecast from IHS Global Insight, with historical data through the 1st quarter 2013. For the productivity adjust ment, the 10-year moving average percent change adjustment for CY 2014 is 0.9 percent, whic h is based on the most historical data available from BLS at the time of the proposed rule. If more recent historical data of

MFP is available at the time of the final ru le, we will incorporate it into the final MEI update.CMS-1600-P 137

TABLE 21: Forecasted Annual Percent Change in the Proposed Revised MEI for CY 2014 (All Categories)

Revised Cost Category Revised Price Proxy Revised Cost Weight CY14 Update (percent) MEI 100.000% 0.7

MFP 10-yr moving average of Private Nonfarm Business Multifactor Productivity N/A 0.9 MEI without productivity adjustment 100.000% 1.6 Physician Compensation 50.866% 2.0 Wages and Salaries ECI - Wages and salaries - Professional and Related (private) 43.641% 1.9

Benefits ECI - Benefits - Professional and Related (private) 7.225% 2.2 Practice Expense 49.134% 1.3 Non-physician compensation 16.553% 1.7 Non-physician wages 11.885% 1.7Non-health, nonphysician wages 7.249% 1.8 Professional & Related ECI - Wages And Salaries - Professional and Related (Private) 0.800% 1.9

Management ECI - Wages And Salaries - Managers & Administrators (Private) 1.529% 1.7

Clerical ECI - Wages And Salaries - Admin Support incl Clerical (Private) 4.720% 1.8

Services ECI - Wages And Salaries - Service Occupations (Private) 0.200% 1.5 Health related, non-physician wages ECI - Wages and Salaries -Hospital (civilian) 4.636% 1.5 Non-physician benefits Composite Benefit Index 4.668% 1.7 Other Practice Expense 32.581% 1.1 Utilities CPI Fuels and Utilities 1.266% 0.7 Miscellaneous Office Expenses 2.478% 0.3

Chemicals Other Basic Organic Chemical Manufacturing PPI325190 0.723% -1.2CMS-1600-P 138

Revised Cost Category Revised Price Proxy Revised Cost Weight CY14 Update (percent) Paper PPI for converted paper 0.656% 1.1 Rubber & Plastics PPI for rubber and plastics 0.598% 0.3 All other products CPI - All Items Less Food And Energy 0.500% 1.9 Telephone CPI for Telephone 1.501% 0.1 Postage CPI for Postage 0.898% 4.9 All Other Professional Services 8.095% 1.7 Professional, Scientific, and Tech. Svcs ECI - Compensation: Prof. scientific, tech. 2.592% 1.7 Administrative and support & waste ECI - Compen sation Administrative 3.052% 1.8 All Other Services ECI Compensation: Services Occupations 2.451% 1.6 Capital 10.310% 0.5

Fixed PPI for Lessors of nonresidential buildings 8.957% 0.5 Moveable PPI for Machinery and Equipment 1.353% 0.8 Professional Liability Insurance CMS - Prof. Liability. Phys. Prem. Survey 4.295% 0.9 Medical Equipment PPI - Med. Inst. & Equip. 1.978% 1.4 Medical supplies Composite - PPI Surg. Appl. & CPIU Med. Supplies. (CY2006) 1.760% 1.0 *Based on the 2nd quarter 2013 forecast from IHS Global Insight, with historical data through the 1st quarter 2013.CMS-1600-P 139

E. 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 re source cost differences among localities compared to the national average for each of the three fee schedule components (that is, work, PE, and malpractice (MP)). The 89 to tal PFS localities are discussed in section II.E.3. of this proposed rule. While requiring that the PE and MP GPCIs reflect the full relative cost differences, sect ion 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, secti on 1848(e)(1)(G) of the Act sets a permanent 1.5 work GPCI

floor for services furnished in Alas ka 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) be ginning 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 e nd of 2012. Section 602 of the ATRA amended

the statute to exte nd 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 re quires 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 are proposing to phase in 1/2 of the latest GPCI adjustment in CY 2014.CMS-1600-P 140

We have completed a review of the GP CIs and are proposing new GPCIs, as well as a revision to the cost share weights that correspond to al l three GPCIs in this proposed rule. We also calculate a geographic adjust ment factor (GAF) for each PFS locality. The GAFs are a weighted composite of each area's work, PE and malpractice expense GPCIs using the national GPCI cost share weight s. While we do not actually use GAFs in computing the fee schedule payment for a speci fic service, they are useful in comparing overall areas costs and payments. The actua l 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 fl oor. 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 pe rmanent, and therefore, applicable in CY 2014. See Addenda D and E to this pr oposed rule for the proposed CY 2014 GPCIs and summarized GAFs available on the CMS website under the supporting documents section of the CY 2014 PFS proposed rule located at http://www.cms.gov/PhysicianFeeSched/

. 2. GPCI Update 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 t ype. Additionally, each of the three GPCIs relies on its own data source(s) and met hodology for calculating its value as described

below. Additional information on the CY 2014 GPCI update may be found in ourCMS-1600-P 141

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 website. It is located under the suppor ting documents section of the CY 2014 PFS proposed rule located at http://www.cms.gov/PhysicianFeeSched/

. a. Work GPCIs The physician work GPCIs are designed to re flect the relative costs of physician labor by Medicare PFS locality. As required by statute, the phys ician 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 th e national average, as a proxy for physicians’ wages. Physicians’ wages are not include d in the occupation categories used in calculating the work GPCI because Medica re payments are a key determinant of physicians’ earnings. Including physician wage data in calculating the work GPCIs would potentially in troduce some circularity to the ad justment since Medicare payments typically contribute to or influence physicia n wages. That is, including physicians' wages in the physician work GPCIs would, in e ffect, 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 outdate d 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 ear nings from the 2006 through 2008 Bureau ofCMS-1600-P 142

Labor Statistics (BLS) Occupa tional 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 fo r selecting a data source fo r purposes of calculating the GPCIs. For example, the BLS OES wage and employment data are derived from a large sample size of approximately 200,000 establis hments 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 regularl y, and includes a co mprehensive set of occupations and industries (for exampl e, 800 occupations in 450 industries). Because of its reliability, public availabi lity, 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.E.2.b the employee wage component and pur chased 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 fo r the 2006 through 2008 data to compute the

work GPCIs. We note that the Medicare Payment Advisory Commission (MedPAC) was required by section 3004 of th e MCTRJCA to submit a report to the Congress by June 15, 2013 that assesses whether any adjustment unde r 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 adju stment under the Act, including the extent to which the floor on such adjustment impacts access to care. We did not have sufficient time to review this report, which was issued on June 14, 2013 for this proposed rule. We look forward to reviewing the MedPAC report and its recommendations with respect toCMS-1600-P 143

the work GPCI. b. Practice Expense GPCIs The PE GPCIs are designed to measure the relative cost differe nce in the mix of goods and services comprising practice expens es (not including malpractice expenses) among the PFS localities as compared to the na tional average of these costs. Whereas the physician work GPCIs (and as discussed late r 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; offi ce 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. Alt hough 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 co st of services that typically would be purchased from other entities, such as law firms, accounting firms, information technology consultants, building service managers, or any ot her 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 typica lly buy. (For more information on the development of the purchased service index, we refer read ers to the CY 2012 PFS final rule with comment period (76 FR 73084 thro ugh 73085).) The office rent index component of the PE GPCI measures relative ge ographic 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. Theref ore, the “equipment, supplies and otherCMS-1600-P 144

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 calcu late the employee wage and purchased

services indices for the PE GPCI. As di scussed in section II.E.2.a., because of its reliability, public availability, level of deta il, 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 pr oposed CY 2014 GPCI update, we used updated BLS OES data (2009 through 2011) as a repl acement for the 2006 through 2008 data for purposes of calculating the employee wage co mponent and purchased service index of

the PE GPCI.

Office Rent Index Discussion Since the inception of the PFS, we have used residential rent da ta (primarily the two-bedroom residential apartment rent data produced by the Department of Housing and Urban Development (HUD) at the 50 th 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 concer ns with the conti nued use of the HUD rental data because the data were not upda ted 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 suitab ility of using 3-year (2006-2008) 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 St ates conducted annually by the U.S. CensusCMS-1600-P 145

Bureau, sampling approximately 3 million addre sses with a recent re sponse rate above 97 percent, and that it reports rental informati on for residences at th e county level. Given that the ACS rental data pr ovided a sufficient degree of re liability, is updated annually, and was expected to be available for fu ture 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 propose to use the most recent 3-year ACS residential rent data ( 2008 through 2010) to calculate the office rent component of the PE GPCI. We note that when responding to the ACS survey, individuals also report whethe r utilities are included in th eir rent. Thus, the cost of utilities cannot be separated from “gross rents” since some individuals monthly rent also

covers the cost of utilities. As discus sed in section II.E.2.d. we combined the cost weights for fixed capital and uti lities when assigning a proposed weight to the office rent component of the PE GPCI. For many years, we have received requests from physicians and their representatives to use commercial rent data in stead of residential rent data as a proxy to measure the relative cost differences in physic ian office rent. Additionally, in a report entitled “Geographic Adjustment in Medica re Payment, Phase I: Improving Accuracy, '' prepared for CMS under contract and releas ed 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 comm ercial 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-CMS-1600-P 146

metropolitan areas, we continued to use resi dential rent data for the CY 2012 GPCI update. For the CY 2014 GPCI update, we continue d our efforts to identify a reliable

source of commercial rent data that could be used in calcula ting the rent index. We could not identify a nationally representative commerci al rent data source that is available in the public sector. However, we identified a pr oprietary commercial rent data source that has potential for use in calculati ng the office rent indices in futu re 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 propriet ary data source is our ability to make information available to the public. When us ing government data, 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 us e and our ability to disc lose data. In such a situation, those wishing to re plicate our calculations based on detailed data would also need to purchase the underlying proprietary data. We also believe that, generally speaking, a proprietary “for prof it” data source is more suscep tible to periodic changes in

the criteria used for data co llection, including possible change s 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 ca nnot 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 repres entative commercial re nt 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. Th at is, in the absence of using a proprietaryCMS-1600-P 147

data source, it is unlikely that we would be able to use comme rcial rent data to calculate the office rent index component of the PE GP CI. Therefore, we request comments on the potential future use of a proprietary commercia l 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 liabili ty 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 upda te) we used 2006 and 2007 malpractice premium data (75 FR 73256). The propos ed CY 2014 MP GPCI update reflects 2011 and 2012 premium data. Additionally, for the past se veral 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 dir ectly with the Puer to Rico Insurance

Commissioner and Institute of St atistics to obtain data on MP insurance premiums that were used to calculate an updated MP GP CI for Puerto Rico. Using updated MP premium data would result in a 17 percent in crease in MP GPCI for the Puerto Rico payment locality under the proposed fully pha sed-in seventh GPCI update, which would

be effective CY 2015. d. GPCI Cost Share Weights To determine the cost share weights fo r the proposed CY 2014 GPCIs, we used the weights we propose to use for the CY 2014 value for the revised 2006-based Medicare Economic Index (MEI) as discussed in section II.D. of this proposed rule. AsCMS-1600-P 148

discussed in detail in that section, the ME I 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 th e GPCI cost share weights to make them consistent with the most recent update to the MEI, and propose to do so again for CY

2014. We would note that consis tent 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 rela ted 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 attri buted 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 th e inclusion of the cost share weight assigned to utilities within the office rent compone nt 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 th e utility measurement present in the ACS two bedroom gross rent da ta, 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” categoriesCMS-1600-P 149

of the 2006-based MEI market basket. Upon co mpleting our analysis of the GPCI cost share weights (as required by the Act) and addressing commenters’ concerns regarding

the office rent and labor relate d industries previous ly contained in the medical equipment, supplies and other miscellaneou s components of the PE GCPI, we updated the GPCI cost share weights consistent with the weights es tablished 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 shar e weights also provides consistency across the PFS in the use of this da ta. Given that we have addressed previous

commenters concerns about the allocation of labor related co sts (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 believe it is appropriate to propose to adopt the weights we are proposing to use for the revised 2006-based ME I as the GPCI cost share weights for CY

2014. As a result, the cost share weight for the work GPCI (as a percen tage of the total) in this proposal is changed from 48.266 pe rcent to 50.866 percent, and the cost share weight for the PE GPCI is revised from 47.439 percent to 44.839 per cent with a change in the employee compensation component fr om 19.153 to 16.553 percentage points. The cost share weights for the office rent co mponent (10.223 percent), purchased services component (8.095 percent), and the medi cal equipment, supplies, and other miscellaneous expenses component (9.968 percen t) of the PE GPCI and the cost share weight for the MP GPCI (4.295 percent) rema ins unchanged. A discussion of the specificCMS-1600-P 150

MEI cost centers and the respective weights used to calculate each GPCI component (and subcomponent) is provided below. (1) Work GPCIs We propose to adopt the proposed revi sed 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 di fferences in malpractice expenses are measured by its own GPCI). Therefore, the pr oposed cost share weight for the PE GPCIs is 44.839 percent. (a) Employee Compensation For the employee compensation portion of the PE GPCIs, we used the proposed non-physician employee compensation category we ight of 16.553 percent reflected in the

revised 2006-based MEI. (b) Office Rent We set the PE GPCI office rent porti on 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 a nd mortgage interest) and utilities. As discussed previously in this section, we propose 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 re nt for all ACS survey respondents, we combined these two components to calculate office rent values th at were used to calculate the office rentCMS-1600-P 151

index component of the proposed PE GPCI. For purposes of consistency, we combined those two cost categories when assigning a pr oposed weight to the office rent component. (c) Purchased Services

As discussed in section II.D. of this proposed rule, to be consistent with the purchased services index, we are proposing to combine the current MEI cost share weights for “All Other Services” and “Other Professional Expenses” into a component

called “All Other Professiona l 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 local ity 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 labo r-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 shar e weight). Therefore, only 62 percent (5.011/8.095) of the purchased service index is adjusted for geographic cost differences while the remaining 38 percen t (3.084/8.095) of the purchas ed service index is not adjusted for geographic variation. (d) Equipment, Supplies, and Other Miscellaneous Expenses To calculate the medical equipment, supp lies, and other miscellaneous expenses component, we removed PLI (4.295 percen tage points), non-physician employee compensation (16.553 percentage points), fi xed capital/utilitie s (10.223 percentage points), and purchased services (8.095 percen tage points) from the total proposed PE category weight (44.839 percent). Therefore, the proposed cost share weight for the medical equipment, supplies, and other miscellaneous expenses component is 9.968 percent (44.839 – (4.295+16.553 + 10.223 + 8.095) = 9.968). As explained above,CMS-1600-P 152

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 propose to use the PLI weight of 4.295 percent for the MP GPCI cost share weight. The proposed GPCI cost share wei ghts for CY 2014 are displayed in Table 22. TABLE 22: Proposed Cost Share Weights for CY 2014 GPCI Update

Expense Category Current Cost Share

Weight Proposed CY 2014 Cost Share

Weight Work 48.266% 50.866% Practice Expense 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 Ca re Act added a new subparagraph (I) under section 1848(e)(1) of th e Act to establish a 1.0 PE GPCI floor for physicians' services

furnished in frontier States effective Ja nuary 1, 2011. In accordance with section 1848(e)(1)(I) of the Act, be ginning in CY 2011, we applied a 1.0 PE GPCI floor for physicians' services furnished in States determ ined to be frontier States. In general, a frontier state is one in which at least 50 pe rcent of the counties ar e “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 fr ontier state, we refer readers to the FY 2011 Inpatient Prospective Payment System fi nal rule (75 FR 50160 through 50161). There are no changes in the States identified as "F rontier States" for the CY 2014 proposed rule.CMS-1600-P 153

The qualifying States are reflected in Table 23. In accordance with statute, we will apply

a 1.0 PE GPCI floor for these States in CY 2014.

TABLE 23: Frontier States under S ection 1848(E)(1)(I) of the Act (As added by section 10324(c) of the Affordable Care Act)

State Total Counties Frontier Counties Percent Frontier Counties (relative to counties in the State) Montana 56 45 80% Wyoming 23 17 74% North Dakota 53 36 68% Nevada 17 11 65% South Dakota 66 34 52%

f. Proposed GPCI Update As explained above in the background sect ion, 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 a nd second year of the 2-year transition, along with the GAFs, are displayed in Addenda D and E to this proposed rule available on the CMS website under the supporting documents section of the CY 2014 PFS proposed rule web page at http://www.cms.gov/PhysicianFeeSched/

. 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 localit ies are statewide ar eas (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 3CMS-1600-P 154

states having 5 or more localities. The District of Columbia, Maryland, and Virginia suburbs, Puerto Rico, and the Virgin Islands are additional locali ties 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 phys icians’ services were made under the reasonable charge system. Payments were ba sed on the charging patterns of physicians. This resulted in large differe nces in payment for physicians’ services among types of services, geographic payment areas, and phys ician specialties. Recognizing this, the Congress replaced the reasonabl e 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 ba sed 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 establis hed under the reasonable charge system by local Medicare carriers based on their know ledge of local physic ian charging patterns

and economic conditions. These localities changed little between the inception of Medicare in 1967 and the beginning of th e PFS in 1992. Shortly after the PFS took effect, CMS undertook a study in 1994 that cu lminated in a comprehensive locality revision that was implemented in 1997 (61 FR 59494). The revised locality structure reduced th e number of localities from 210 to the current 89, and the number of statewide loca lities 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 commentCMS-1600-P 155

period (61 FR 59494). The current 89 fee sc hedule areas are defined alternatively by state boundaries (for example, Wisconsin), metropolitan area s (for example, Metropolitan St. Louis, MO), portions of a metropolitan area (for example, Manhattan), or rest-of-state areas that exclude metropolitan areas (for ex ample, Rest of Missouri). This locality configuration is used to calculate the GPCIs th at 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 st ructure 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 pa yments would be affected. In recent years, we have also considered more compre hensive changes to local ity configuration. In 2008, we issued a draft comprehensive re port detailing four different locality configuration options ( www.cms.gov/physicianfeesched/downloads/ReviewOfAltGPCIs.pdf ). The alternative locality configurations in the re port are described below.

● Option 1: CMS Core-Based Stat istical Area (CBSA) Payment Locality Configuration : CBSAs are a combination of Office of Management and Budget (OMB’s) Metropolitan Statistical Areas (MSAs) and Micr opolitan Statistical Areas. Under this option, MSAs would be considered as urban CBSAs. Micropolitan Statistical Areas (as defined by OMB) and rural areas would be c onsidered as non-urba n (rest of state) CBSAs. This approach would be consistent with the areas used in the Inpatient Prospective Payment System (IPPS) pre-r eclassification wage index, which is the hospital wage index for a geographic ar ea (CBSA or non-CBSA) calculated from submitted hospital cost report data before statutory adjustments reconfigure, orCMS-1600-P 156

“reclassify” a hospital to an area other than its geographic location, to adjust payments

for differences in local resource costs in ot her Medicare payment systems. Based on data used in the 2008 locality report, this option would increase the numb er of PFS localities

from 89 to 439.

● Option 2: Separate High-Cost Coun ties from Existing Localities (Separate Counties) : Under this approach, higher cost counties are removed from their existing locality structure, and they w ould each be placed into th eir own locality. This option

would increase the number of PFS localitie s 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 countie s 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 differentia l to separate high-cost MSAs.

● Option 4: Group Counties Within a St ate Into Locality Ti ers Based on Costs (Statewide Tiers) : This option creates tiers of coun ties (within each state) that may or may not be contiguous but share similar pract ice costs. This option would increase the number of PFS localities from 89 to 140, us ing a 5 percent GAF differential to group

similar counties into statewide tiers. For a detailed discussion of the public comments on the cont ractor’s 2008 draft report detailing four different locality conf igurations, 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 (sep arate MSAs from statewide localities)CMS-1600-P 157

because the commenters believed this altern ative would improve payment accuracy and could mitigate potential reductions to rural ar eas compared to Option 1 (CMS CBSAs). In response to some public comments re garding 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 website at www.cms.gov/PhysicianFeeSched/downloads /Alt_GPCI_Payment_Locality_Structures_ Review.pdf

. Moreover, at our request, the Institut e of Medicine conducted a comprehensive empirical study of the Medicare GAFs es tablished 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 re flect 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 de finition should be used for both the hospital wage index and the physician geographic adjust ment factor. Further, the Institute of

Medicine recommended that MSAs and statewide non-metr opolitan statistical areas

should serve as the basis for de fining these labor markets. Under the Institute of Medicine’s recommendations, MSAs would be considered as urban CBSAs. Micropolitan Areas (as defi ned 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-reclassificat ion wage index to make geographic payment adjustments in other Medicare pa yment systems. For more information on the Institute ofCMS-1600-P 158

Medicine’s recommendations on the PFS local ity 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 website at www.cms.gov/PhysicianFeeSched

. Additionally, the Phase I report can be acces sed on the Institute of Medicine's

website at http://www.iom.edu/Reports/2011/Ge ographic-Adjustment-in-MedicarePayment-Phase-I-Improving-Accuracy.aspx

. b. Institute of Medicine Phase II Report Discussion

The Institute of Medicine’s second report, entitled “G eographic Adjustment in Medicare Payment - Phase II: Implicati ons for Access, Quality, and Efficiency ” was released July 17, 2012 and can be accessed on the Institute of Medi cine’s website at http://www.iom.edu/Reports/2011/Geographic- Adjustment-in-Medicare-Payment-PhaseI-Improving-Accuracy.aspx

. The Phase II report evaluated the effects of geographic adjustment factors (hospital wage index and GPCIs) on the di stribution of the health care workforce, quality of care, population health, and the ability to provide efficient, hi gh value care. The Institute of Medicine’s Phase II report also included an analysis of the impacts of implementing its recommendations for accuracy in geographi c adjustments which include a CBSA-based locality structure under the PFS. The Institute of Medicine an alysis found that adopting a CBSA-based locality structure under the PFS crea tes large changes in county GAF values; for example, approximately half of all US counties would experien ce 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 ar eas (relative to the national average) becauseCMS-1600-P 159

the GPCI values for rural areas would no l onger 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 in cluded in the Institute of Medicine’s Phase II report are summarized as follows:

● Recommendation 1 : The Medicare program shoul d develop and apply policies that promote access to primary care servic es in geographic areas where Medicare beneficiaries experience pe rsistent access problems.

● Recommendation 2 : The Medicare program s hould pay for services that improve access to primary and specialty care for beneficiaries in medically underserved urban and rural areas, particul arly telehealth technologies.

● Recommendation 3 : To promote access to appropriate and efficient primary care services, the Medicare program shoul d support policies that would allow all qualified practitioners to practice to the fu ll extent of their ed ucational preparation.

● Recommendation 4 : The Medicare program shoul d reexamine its policies that provide location-based adjustments for speci fic 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 Workfo rce Commission, to support data collection, research, evaluations, and strategy developm ent, and make actionable recommendations about workforce distribution, s upply, and scope of practice.CMS-1600-P 160

● Recommendation 6 : Federal support should faci litate independent external evaluations of ongoing workforce programs intende d to provide access to adequate health services for underserved populations and Me dicare beneficiaries. These programs include the National Health Services Corps, Title VII and VIII prog rams under the Public Health Service Act, and related progr ams intended to achieve these goals. (2) Institute of Medicine Phase II Report Conclusions

The Institute of Medicine committee concl uded 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 th e healthcare workforce, quality of care, population health, and the ability to provide efficient, hi gh value care. Specifically, the

Institute of Medicine committee stated “that there are wide di screpancies in access to and quality of care across geographic areas partic ularly for racial and ethnic minorities. However, the variations do not appear to be st rongly related to diffe rences 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 underser ved rural and inner-ci ty areas. However, geographic adjustment of Medicare payment is not an appropriate approach for addressing problems in the supply and distribution of th e health care workforce. The geographic

variations in the distributi on of physicians, nurses and phys ician assistants, and local shortages that create access problems for beneficiaries s hould be addressed through other means” (Page. 7). Moreover, the committ ee concluded that “geographic [payment] adjustment is not an appropriate tool for achie ving policy goals such as improving quality of expanding the pool of providers available to see Medicare beneficiaries” (Page. 9). (3) CMS Summary Response to Instit ute of Medicine Phase II ReportCMS-1600-P 161

The Institute of Medicine’s Phase II re port 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 pa yment shifts would o ccur as a result of implementing a CBSA-based locality configuration under the PFS. Based on our contractor’s analysis, there would be significant redistribu tive impacts if we were to implement a policy that would reconfigure th e PFS localities based on the Institute of Medicine’s CBSA-based locality recomme ndation. Many rural areas would see

substantial decreases in th eir 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 cu rrently designated as “rest of state” but are located within higher cost MSAs, would experience increas es in their applicable GPCIs and GAFs. That is, given that urban and ru ral areas would no longer be grouped together (for example, as in the current 34 statew ide localities), many rural areas would see a reduction in payment under a CBSA- based locality configuration. As noted earlier in this section, we are a ssessing 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 asse ss the implications of proposing a nationwide locality reconfiguration under th e PFS, we must also asse ss and analyze the operational changes necessary to implement a revised localit y structure. Given th at all options under consideration (includi ng the Institute of Medicine’s CBSA-based approach) would expand

the number of current lo calities and result in payment reduc tions to primarily rural areas, presumably any nationwide locality reconfigur ation could potentially be transitioned over aCMS-1600-P 162

number of years (to phase-in the impact of payment reductions gradually, from year to year, instead of all at once). As such, transitio ning from the current locality structure to a nationwide reconfigured locality structure would present op erational and administrative challenges that need to be iden tified and addressed. Therefor e, we have begun to assess the broad operational changes that would be invol ved in implementing a nationwide locality reconfiguration under the PFS. A ccordingly, we believe that it would be premature to make any statements about potential changes we w ould consider making to the PFS localities at this time. Any changes to PFS fee schedule ar eas would be made through future notice and comment rulemaking. In the event that we develop a spec ific proposal for changing the locality configuration during future rulemaking, we woul d provide detailed analysis on the impact of the changes for physicians in each count y. We would also provide opportunities for public input.CMS-1600-P 163

F. Medicare Telehealth Services for the Physician Fee Schedule 1. Billing and Payment for Telehealth Services a. History Prior to January 1, 1999, Me dicare coverage for services delivered via a telecommunications system was limited to se rvices that did not require a face-to-face

encounter under the traditional model of medi cal care. Examples of these services included interpretation of an x-ray, electroencephalogram tracing, and cardiac pacemaker analysis. Section 4206 of the BBA provided for cove rage of, and payment for, consultation services delivered via a telecommunications sy stem to Medicare beneficiaries residing in rural health professional shorta ge areas (HPSAs) as defined by the Public Health Service Act. Additionally, the BBA required that a Me dicare practitioner (tel epresenter) 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 schedu le 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 e xpanded 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 telecommunicat ions system. We first implemented thisCMS-1600-P 164

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 Secretar y to establish a process that provides for annual updates to the list of Me dicare telehealth services. We established this process in the CY 2003 PFS final rule with comment period (67 FR 79988). As specified in regulations at §410.78(b), we generally require that a telehealth

service be furnished via an interactive te lecommunications system. Under §410.78(a)(3), an interactive telecommunications system is defined as, “multimedia communications equipment that includes, at a minimum, audio and video equipment permitting two-way,

real-time interactive communi cation between the patient an d distant site physician or practitioner. Telephones, f acsimile machines, and electr onic mail systems do not meet the definition of an interactive telecommunications system.” An interactive telecommunications system is generally re quired 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 fede ral telemedicine demonstration program in Alaska or Hawaii. As specified in regulat ions at §410.78(a)(1), store-and-forward means the asynchronous transmission of medical info rmation from an originating site to be reviewed at a later time by the pr actitioner at the distant site. Medicare telehealth services may be furnis hed 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 eligib le 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 lim ited under section 1834(m)(3)(C) of the Act to specified medical facilities located in speci fic geographic areas. The initial list of telehealth originating sites included the office of a practitioner, a cr itical access hospitalCMS-1600-P 165

(CAH), a rural health clinic (RHC), a fede rally qualified health center (FQHC) and a hospital (as defined in secti on 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 te lehealth originating sites to include a hospital-based renal dialysis center, a skilled nur sing facility (SNF), and a co mmunity mental health center (CMHC). To serve as a telehealth originating si te, a site must also be located in an area designated as a rural HPSA, in a county that is not in a metropo litan statistical area (MSA), or must be an entity that participat es in a federal telemedicine demonstration project that has been approved by (or rece ives 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 tele presenter at the originating site.

b. Current Telehealth Bi lling and Payment Policies As noted previously, Medicare telehealth services can only be furnished to an eligible telehealth beneficiary in a qualifying origina ting site. An originat ing site is defined as one of the specified sites wher e an eligible telehealth individu al is located at the time the service is being furnished via a telecommun ications system. Th e originating sites authorized by the st atute are as follows:

● Offices of a phys ician or practitioner;

● Hospitals;

● CAHs;

● RHCs;

● FQHCs;

● Hospital-Based or Cri tical Access Hospital-Based Renal Dialysis Centers (including Satellites);CMS-1600-P 166

● SNFs;

● CMHCs. Currently approved Medicare telehealth services include the following:

● Initial inpatient consultations;

● Follow-up inpatient consultations;

● Office or other outpatient visits;

● Individual psychotherapy;

● Pharmacologic management;

● Psychiatric diagnostic interview examination;

● End-stage renal disease (ESRD) related services;

● Individual and group medi cal nutrition therapy (MNT);

● Neurobehavioral status exam;

● Individual and group hea lth and behavior assessmen t and intervention (HBAI);

● Subsequent hospital care;

● Subsequent nursing facility care;

● Individual and group kidney di sease education (KDE);

● Individual and group diabetes se lf-management training (DSMT);

● Smoking cessation services;

● Alcohol and/or substance abuse an d brief intervention services;

● Screening and behavioral counseling in terventions in primary care to reduce alcohol misuse;

● Screening for depression in adults;

● Screening for sexually transmitted infections (STIs) and high intensity behavioral counseling (H IBC) to prevent STIs;CMS-1600-P 167

● Intensive behavioral therapy fo r cardiovascular disease; and

● Behavioral counseling for obesity. In general, the practitioner at the di stant 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 cont ractors that process claims fo r the service area where their

distant site is located. Sec tion 1834(m)(2)(A) of the Act requ ires 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 telecomm unications system. Distant site practitioners must submit the appropriate HCPCS procedur e code for a covered profes sional telehealth service, appended with the –GT (via interactive audi o and video telecommunications system) or – GQ (via asynchronous telecommunications system ) modifier. By reporting the –GT or – GQ modifier with a covered telehealth pro cedure code, the distant site practitioner certifies that the beneficiary was present at a telehealth originating site when the

telehealth service was furnis hed. The usual Medicare deducti ble and coinsurance policies apply to the telehealth services repo rted by distant site practitioners.CMS-1600-P 168

Section 1834(m)(2)(B) of the Act provides for payment of a facility fee to the originating site. To be paid the originating s ite facility fee, the pr ovider or supplier where the eligible telehealth individual is located must subm it 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 fa cility or location. The usual Medicare deductible and coinsurance policies appl y to HCPCS code Q3014. By submitting HCPCS code Q3014, the originating site certifies that it is loca ted in either a rural HPSA or non-MSA county or is an entity that participates in a federal telemedicine demonstration project that ha s been approved by (or receive s 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 prof essional services that are commonly furnished remotely using telecommunicati ons technology, but that do not require the patient to be present in-pers on with the practitioner when they are furnished, are covered and paid in the same way as services deliv ered without the use of telecommunications technology when the practitioner is in-person at the medical fac ility furnishing care to the patient. Such services typically involve ci rcumstances where a practitioner is able to visualize some aspect of the patient’s c ondition without the patie nt being present and without the interpositi on of a third person’s judgment. Visualization by the practitioner can be possible by means of x-rays, electrocar diogram 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, elec tronically, rather than by means of a verbal description) is a covered physician’s service. These remote se rvices are not Medicare telehealth services as defined under section 1834(m) of the Act. Rather, these remote services that utilizeCMS-1600-P 169

telecommunications technology are considered physicians’ serv ices 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 geogr aphic 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 Hea lth Service Act (PHSA) (42 U.S.C. 254e(a)(1)(A)). Section 332(a)(1)(A) of the PHSA provides fo r 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 si tes limits eligible sites to those that are not

in an MSA. To determine rural designations wi th more precision, 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. RU CAs 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 theCMS-1600-P 170

nation's census tracts regarding their rural and urban status and relationships. They were developed under a collaborative project be tween ORHP, the U.S. Department of Agriculture's Economic Research Servi ce (ERS), and the WWAMI Rural Health Research Center (RHRC). A more comprehe nsive description is available at the USDA

ERS website at: www.ers.usda.gov/data-products/rural-urban-commuting-areacodes/documentation.aspx#.UcsKfZwzZKE . The RUCA classification scheme contains 10 primary and 30 secondary codes. The prim ary code numbers (1 through 10) refer to the primary, or single largest, commuting shar e. Census tracts with RUCA codes of 4 through 10 refer to areas with a primary comm uting share outside of a metropolitan area.

In addition to counties that ar e not in an MSA, ORHP considers some census tracts in MSA counties to be rural. Specifically, cen sus tracts with RUCA codes 4 through 10 are considered to be rural, as well as census trac ts with RUCA codes 2 and 3 that are also at least 400 square miles and have a population density of le ss than 35 people per square

mile. We are proposing to modify our regulations regarding originating sites to define

rural HPSAs as those located in rural census tracts as determined by ORHP. We believe that defining “rural” to incl ude geographic areas located in rural census tracts within MSAs would allow for the appropriate incl usion of additional HPSAs as areas for telehealth originating sites. We also believe that adopting the more precise definition of “rural” for this purpose would expand access to health care services for Medicare

beneficiaries located in rural areas. We are also proposing to change our polic y 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 aCMS-1600-P 171

geographic area’s eligibility for telehealth or iginating 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 likeli hood that mid-year changes to geographic designations would result in sudden disrupti ons to beneficiaries’ access to services, unexpected changes in eligibility for establishe d telehealth originati ng sites and avoid the operational difficulties associated with admini stering with mid-year Medicare telehealth payment changes. We are proposing to esta blish geographic eligib ility for Medicare telehealth originating sites for each calendar year based upon the status of the area as of December 31st of the prior cal endar year. Accordingly, we are proposing to revise our regulations at §410.78(b)(4) to conform w ith both of these proposed policies. 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 pr ocess provides the pub lic with an ongoing opportunity to submit requests for adding serv ices. We assign any request to make

additions to the list of teleh ealth services to one of two cat egories. In the November 28,

2011 Federal Register (76 FR 73102), we finalized revisi ons to criteria that we use to review requests in the second cat egory. 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 si milarities between the requested and existing

telehealth services fo r the roles of, and in teractions among, the beneficiary, the physician (or other practitioner) at the dist ant site and, if necessary, the telepresenter. We also look for similarities in the telecommunications system used to deliver the proposed service, forCMS-1600-P 172

example, the use of interactiv e audio and video equipment.

● Category 2 : Services that are not similar to the current list of telehealth services. Our review of these requests incl udes an assessment of whether the service is accurately described by the corresponding c ode when delivered via telehealth and

whether the use of a teleco mmunications system to deli ver the service produces demonstrated clinical benefit to the patient . In reviewing these requests, we look for evidence indicating that the use of a tel ecommunications 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 benefi ciary improves the diagnosis or treatment of an illness or injury or improves the functio ning of a malformed body part, including dates and findings, and a list and copies of publishe d peer reviewed articl es relevant to the

service when furnished via telehealth. Our ev identiary standard of clinical benefit does

not include minor or in cidental benefits. Some examples of clinical be nefit include the following:

● Ability to diagnose a medical conditi on in a patient population without access to clinically appropriate in -person diagnostic services.

● Treatment option for a patient po pulation without access to clinically appropriate in-person treatment options.

● Reduced rate of complications.

● Decreased rate of subsequent diagnos tic or therapeutic interventions (for example, due to reduced rate of recurrence of the disease process).

● Decreased number of future hos pitalizations or physician visits.

● More rapid beneficial resolution of the disease process treatment.CMS-1600-P 173

● Decreased pain, bleeding, or other quantifiable symptom.

● Reduced recovery time. Since establishing the process to add or re move services from the list of approved telehealth services, we have added the follo wing to the list of Medicare telehealth services: individual and group HBAI serv ices; 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 mont h to be furnished in-person by a physician, CNS, NP, or PA to examine the vascular access site); individu al and group MNT; neurobehavioral status exam; initial and follow-up inpatient telehealth consultations for beneficiaries in hospitals and skilled nursing facilities (SNF s); subsequent hospital care (with the limitation of one telehealth visit ev ery 3 days); subsequent nursing facility care (with the limitation of one telehealth vis it every 30 days); indi vidual and group KDE; and individual and group DSMT (with a minimum of 1 hour of in-person instruction to ensure effective injection training), smoking cessati on services; alcohol a nd/or substance abuse and brief intervention services; screening a nd behavioral counseling interventions in primary care to reduce alcohol misuse; screen ing for depression in adults; screening for sexually transmitted infections (STIs) and high intensity behavioral counseling (HIBC) to prevent STIs; intensive behavioral therapy for cardiovascular dise ase; and behavioral counseling for obesity. 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 exampl e, 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 Medi care telehealth services must include any supportingCMS-1600-P 174

documentation the requester wishes us to consid er 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 servi ces, requestors should be a dvised 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 website 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 a dditions to the CY 2014 telehealth list. a. Submitted Requests

The American Telemedicine Associati on (ATA) submitted a request to add CPT codes 98969 (Online assessment and manage ment service provided by a qualified nonphysician health care professional to an esta blished patient, guardian, or health care provider not originating from a related assessment and management service provided within the previous 7 days, using the Intern et or similar electronic communications network) and 99444 (Online eval uation and management serv ice provided by a physician to an established patient, guardian, or health care provider not origin ating from a related E/M service provided within the previous 7 da ys, 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 indi cator of ‘‘N’’ (Non-covered se rvice) to these servicesCMS-1600-P 175

because: (1) these services are non-face-to-face; and (2) th e code descriptor includes language that recognizes the pr ovision of services to parties other than the beneficiary and for whom Medicare does not provide cove rage (for example, a guardian). Under section 1834(m)(2)(A) of the Ac t, Medicare pays the physicia n 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 whic h no payment may be made under Medicare, we are not proposing to add on line 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 simila r 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 telepresente r. 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 fo r publically requested services that fall into this category, the criteria also expedite our ability to identi fy codes for the telehealth list that resemble those services already on this list. For CY 2013, CMS finalized a paym ent policy for new CPT code 99495 (Transitional care management services with the following required elements: Communication (direct contact, te lephone, electronic) with th e patient and/or caregiver within 2 business days of discharge medi cal decision making of at least moderateCMS-1600-P 176

complexity during the service period face-to -face visit, within 14 calendar days of discharge) and CPT code 99496 (Transitiona l care management services with the following required elements: Communication (dir ect contact, telephone, electronic) with the patient and/or caregiver within 2 business days of di scharge 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 set ting (including acute hospital, rehabilita tion hospital, longterm acute care hospital), pa rtial hospitalization, observation status in a hospital, or skilled nursing facility/nursi ng facility, to the patient’s community setting (home, domiciliary, rest home, or assi sted 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-f ace services that may be pe rformed by the physician or other qualified health care prof essional and/or licensed cl inical staff under his or her

direction.

We believe that that the interactions between the furnishing practitioner and the beneficiary described by the required face-to -face visit component of the 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, a nd do not require the patient to be present in-personCMS-1600-P 177

with the practitioner when they are furnished. As such, we do not need to consider whether the non-face-to-face aspect s of the TCM service are si milar to other telehealth services. Were these compone nts of the TCM services sepa rately 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 telecommuni cations technology. Therefore, we are proposing 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 are also proposing to revise our regulations at §410.78(b) and §414.65(a)(1) to include TCM services as Medicare

telehealth services. 4. Telehealth Frequency Limitations

The ATA asked that we remove the telehe alth 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 §410.78(e )(2), the federally mandated periodic SNF visits required under § 483.40(c) could not be furnished through

telehealth. The ATA requested that the frequenc y limitation be removed due to “recent federal telecommunications polic y 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 creati on of a nationwide broadband network dedicated to health care, connec ting public and private non-profit health care providers in rural and urban locations, and a se ries of studies that demonstrated the valueCMS-1600-P 178

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 serv ices. We discussed our complementary commitments to ensuring that SNF residents, gi ven their potential clinical acu ity, continue to receive inperson visits as appropriate to manage their co mplex 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 prov ision of subsequent nursing facility care services furnished through teleh ealth 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 demons tration project and th e studies referenced in the request, we found no information regardin g the relative clini cal benefits of SNF subsequent care when furnished via telehealth more frequently than once every 30 days.

We did note that the FCC information reflect ed 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 furnishe d 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 teleheal th visits would appr opriately serve this particular population given th e potential medical acuity and co mplexity of patient needs.CMS-1600-P 179

We did not find any such evidence in the stud ies. Three of the studies identified by the ATA were not directly relevant to SNF subs equent care services. One of these focused on using telehealth technology to treat patien ts with pressure ulcer s after spinal cord injuries. The second focused on the useful ness of telehealth technology for patients receiving home health care services. A th ird study addressed th e use of interactive communication technology to f acilitate the coordination of care between hospital andSNF personnel on the day of hospital discharge. The ATA also mentioned a peerreviewed presentation delivered at its a nnual 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 pr esentation 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 addre sses the concerns we have expressed about the possibility that nursing facility subsequent care visits furnished too frequently through telehealth rather than in-person could co mpromise care for this potentially acute and complex patient population. We remain committed to ensuring that SN F inpatients receive appropriate inperson visits and that Medicar e pays only for medically reas onable and necessary care. We are not persuaded by the information submitted by the ATA that it would be

beneficial or advisable to remove the fr equency limitation we established for SNF subsequent care when furnished via telehealt h. Because we want to ensure that nursing facility patients with complex medical conditions have appropriately frequent, medically reasonable and necessary encounters with thei r admitting practitioner, we continue toCMS-1600-P 180

believe that it is appropriate for some subse quent nursing facility ca re 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 are not proposing any changes to the limitations regarding SNF subsequent

care services furnished vi a telehealth for CY 2014.CMS-1600-P 181

G. Therapy Caps 1. Outpatient Therapy Caps for CY 2014 Section 1833(g) of the Act applies a nnual, per beneficiary, limitations on expenses considered incurred for outpatient therapy services under Medicare Part B, commonly referred to as “therapy caps.” There is one therapy cap for outpatient occupational therapy (OT) services and anothe r separate therapy cap for physical therapy (PT) and speech-language pathol ogy (SLP) services combined. Until October 1, 2012, the therapy caps applied to all outpatient therapy services except those furnished by a hospital or another entity under an arrangement with a hospital described under section 1833(a)(8)(B) of the Act. For convenience, we will refer to the exemption from the caps for services described under secti on 1833(a)(8)(B) of the Act as the “outpatient hospita l services exemption.” S ection 3005(b) of the MCTRJCA added section 1833(g)(6) of the Act to te mporarily suspend the outpatient hospital services exemption, thereby requiring that th e therapy caps apply to services described under section 1833(a)(8)(B) of the Act fr om October 1, 2012 to December 31, 2012 for services furnished during 2012. This broade ned application of the therapy caps was extended through December 31, 2013, by secti on 603(a) of the ATRA. In addition, section 603(b) of the ATRA amended section 18 33(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 critical acce ss hospital (CAH)), we must c ount towards the therapy caps the amount that would be payable for the serv ices 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 servic es furnished by hospitals and certain other entities, instead of as CAH outpatient therapy services under section 1834(g) of the Act.CMS-1600-P 182

Payment for outpatient therapy services under se ction 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 pa yment amount determined under a fee schedule

established under sectio n 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 required as 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 also sp ecified that nothing in the amendments to section 1833(g)(6) of the Act “shall be cons trued as changing the method of payment for outpatient therapy services under 1834(g) of the Act.” Since CY 2011, a therapy multiple proce dure payment reduction (MPPR) policy has applied to the second and subsequent “a lways 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 reducedthe practice expense portion of officebased services by 20 percent and reduced th e practice expense portion of institutionalbased 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.B.4 of this proposed rule.) Sections 1833(g)(1) and (3) of the Act sp ecify that in counting services towards the cap, “no more than the amount specified in paragraph (2) for the year shall be considered incurred expenses.” As noted above, section 603(b) of the ATRA amended section 1833(g)(6) of the Act to require that outpatient therapy services furnished byCMS-1600-P 183

CAHs during CY 2013 are counted towards the therapy caps using the amount that would be paid for those services under secti on 1834(k)(1)(B) of the Act, which is how outpatient therapy services fu rnished by hospitals and certain other entitie s are paid. Since payment for outpatient therapy services under section 1834(k )(1)(B) of the Act is made at the PFS rate and includes any a pplicable therapy MPPR, the amounts for incurred expenses counted toward the caps for therapy services furnished by a CAH also reflect any applicable therapy MPPR.

We believe that this is consistent w ith the statutory amendments made by the ATRA. Including the therapy MPPR in cal culating incurred expenses for therapy services furnished by CAHs treats CAH services consistently with services furnished in other applicable sett ings. Therefore, therapy servi ces 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 th erapy MPPR policy, see Addendum H of this proposed rule. The therapy cap amounts under section 1833(g) of the Act are updated each year based on the Medicare Economic Index (M EI). 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 near est $10 as specified in secti on 1833(g)(2)(B) of the Act. The therapy cap amounts for CY 2014 will be announced in the CY 2014 PFS final rule with comment period. An exceptions process for the therapy caps has been in effect since January 1, 2006. Originally required by sect ion 5107 of the Deficit Reduction Act of 2005 (DRA), which amended section 1833(g)(5) of the Act, the exceptions process forCMS-1600-P 184

the therapy caps has been continuously ex tended several times through subsequent legislation (MIEA-TRHCA, MMSEA, MIPPA , the Affordable Care Act, MMEA, TPTCCA, and MCTRJCA). Last amended by s ection 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 be neficiary’s services for the year have exceeded the therapy cap, thera py suppliers and providers use the KX modifier on claims for services to request an exception to the th erapy caps. By use of the KX modifier, the therapist is attesting that the services above the therapy cap are r easonable and necessary

and that there is documentation of medical neces sity for the services in the beneficiary’s

medical record. Under section 1833(g)(5)(C) of the Ac t, added by the MCTRJCA and extended through 2013 by the ATRA, we are required to a pply a manual medical review process to therapy claims when a beneficiary’s incurr ed 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 toward the th resholds 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/MedicalReview/TherapyCap.html

. 2. Proposed Application of Therapy Ca ps to Services furnished by CAHs

Section 4541 of the BBA amended secti on 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 secti on 1833(a)(8)(B) of the Act. S ection 1833(a)(8)(B) of the ActCMS-1600-P 185

refers to therapy services furnished by a hospita l 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 en tity under arrangements with a hospital. Payment for the services described under se ction 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 C AH 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 i npatient who is not in a covered Part A stay (63 FR 30818, 30858). We included a similar stat ement in the preamble to the final rule; however, we did not include the same referenc e 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 ther apy caps apply only to items and services furnished by nonhospital pr oviders and therapists (63 FR 58865). In the CY 1999 proposed rule, we proposed to include provisions at §410.59(e)(3) and §410.60(e)(3) to describe, respectively, the outpa tient therapy services that are exempt from the statutory therapy caps for outpatient OT services, and for outpatient PT and SLP services combined. Specifica lly, in the CY 1999 PFS proposed rule, we proposed to add the following regulatory language for OT and for PT at §§410.59(e)(3) and 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 underCMS-1600-P 186

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 §410.59(e)(3), but was included in the final re gulation text for PT in §410.60(e)(3). We note that for purposes of the therapy cap, out patient PT services under our regulation at §410.60 include outpatient SLP services descri bed under §410.62. As such, SLP services

are included in the references to PT u nder §410.60. Although the rulemaking history and regulations appear inconclusive as to whet her outpatient therapy services furnished by

CAHs were intended to be subject to the therapy cap s 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 occupati onal therapy cap. Moreover, we have consistently excluded all outpatient therapy se rvices 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 ther apy 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 medi cally necessary therapy services above the therapy caps; and therapy services furnishe d 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 th e amount that must be counted towards the therapy caps and thresholds for outpatient th erapy services furnished by CAHs, we did not apply towards the thera py caps or thresholds any am ounts for therapy services furnished by CAHs. Therefore, we have inte rpreted the statutory exclusion for outpatient therapy services furnished by hospital outpatient departments also to apply to CAHs and implemented the therapy caps accordingly.CMS-1600-P 187

As noted above, section 3005(b) of th e MCTRJCA temporarily suspended the outpatient hospital services exemption from October 1, 2012 through December 31, 2012 (which has subsequently been extended by the ATRA through December 31, 2013). 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 applie d 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 th e outpatient hospital services described under section 1833(a)(8)(B) of the Act fo r 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 toward 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 cap s applicable to services furnished by CAHs, but directed us to count CAH services towards the caps. However, after reflecti ng on the language of section 1833(g) of the Act, we have concluded that the therapy caps should be applied to outpatient therapy services furnished by CAHs. To explain further, under sections 1833(g )(1) and (3) of the Ac t, the therapy caps are made applicable to all services descri bed under section 1861( p) of the Act except those described under the outpati ent hospital services exemption. Section 1861(p) of the Act establishes the benefit category for outpa tient PT, SLP and OT services, (expressly for PT services and, through s ection 1861(ll)(2) of the Act, for outpatient SLP servicesCMS-1600-P 188

and, through section 1861(g) of the Act, for outpatient OT se rvices). Sec tion 1861(p) of the Act defines outpatient therapy services in the three disciplines as those furnished by a provider of services, a clinic, rehabilitati on agency, or a public health agency, or by others under an arrangement with, and under th e 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 prov ider of services, clinic, rehabilitation agency, or a public health ag ency. As such, section 1861(p) of the Act defines outpatient therapy services very broa dly to include those furnished by providers and other institutional settings, as well as t hose furnished in office settings. Under section 1861(u) of the Act, a CAH is a “pr ovider of services.” As such, unless the outpatient therapy services fu rnished by a CAH fit within th e 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 C AH. As noted above, s ection 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 C AH services is made under section 1834(g) of the Act. Thus, the outpatient hospital serv ices exemption to the therapy caps under section 1833(a)(8)(B) of the Act does not apply, and the th erapy 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 ther apy caps, and our cons istent practice since 1999 has been to exclude PT, SLP and OT se rvices furnished by CAHs from the therapy caps. As such, in order to apply the th erapy caps and related policies to services furnished by CAHs for CY 2014 and subsequent years, we believe we would need to revise our regulations.CMS-1600-P 189

We propose to apply the therapy cap limitati ons and related polic ies to outpatient therapy services furnished by a CAH be ginning on January 1, 2014. Not only do we believe this is the proper statutory interpreta tion, but we also believe it is the appropriate policy. Under the existing re gulations, with the suspensi on of the outpatient hospital services exemption through 2013, the therapy ca ps apply to outpatien t 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 propose to revise the ther apy cap regulation at §410.60(e)(3) to remove the exemption for services furnished by a CAH. CAH outpatient therapy services are di stinct from other outpatient therapy services in that outpatient ther apy 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 descri bed 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 th e 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 th e 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 unde r section 1834(k)(1)(B) of the Act instead ofCMS-1600-P 190

as CAH services under section 1834(g) of the Act. Thus, the distinction in payment methodology no longer provides a te chnical barrier to includi ng an amount for therapy services furnished by CAHs in the caps. We propose 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 hospita l 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 woul d be treated differently than services furnished in other outpatient hospital sett ings. We note that the exceptions process described above, including use of the KX modifi er to attest to the medical necessity of therapy services above the caps and other requirements, would apply for services furnished by a CAH in the same way that it applies to outpatient therapy services furnished by certain other f acilities. Similarly, the manua l medical review process for claims that exceed the $3,700 thresholds would apply to therapy services furnished by a CAH in the same way that they apply for out patient therapy services furnished by certain

other facilities. We rec ognize that the manual medical review process expires on December 31, 2013 and we would apply the manual medical review process to CAH services only as required by statute. We are proposing 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 speci fying that the therapy caps apply to such

services. Specifically, we propose to amend the re gulations, which pertain to the OT therapy cap and the combined PT and SL P therapy cap, respec tively, by includingCMS-1600-P 191

paragraph (e)(1)(iv) under §410.59 and (e )(1)(iv) under §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 Ac t. We also propose to add new paragraph (e)(2)(v) to §410.59 and (e)(2)(vi) to §410.60. These new paragraphs would expressly include outpa tient (occupational/ physical) th erapy services furnished by a CAH directly or under arrangements under the description of services to which the annual limitation applies. Further, we pr opose to amend the regulation at §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.”CMS-1600-P 192

H. Requirements for Billing “Incident To” Services Section 1861(s)(2)(A) of the Act establishe s the benefit category for services and supplies furnished as “incident to” the profe ssional services of a physician. The statute specifies that “incident to” services a nd supplies are “of kinds which are commonly furnished in physicians' offices and are comm only either rendered without charge or included in physicians’ bills.” In addition to the requirements of the statute, our regulati on at §410.26 sets forth specific requirements that must be met in or der for physicians and other practitioners to bill Medicare for incident to physicians’ services. Section 410.26(a)(7) limits “incident

to” services to those include d under section 1861(s)(2)(A) of the Act and that are not covered under another benefit category. Secti on 410.26(b) specifies (in part) that in order for services and supplies to be paid as “incident to” servi ces under Medicare Part B, the services or supplies must be:

• Furnished in a noninstitutional set ting to noninstitutio nal patients.

• An integral, though incident al, part of the service of a physician (or other practitioner) in the course of diagnosis or treatment of an in jury or illness.

• Furnished under direct supervision (as specifi ed under §410.26(a)(2) and defined in §410.32(b)(3)(ii)) of a physician or other practitioner eligible to bill and directly receive Medicare payment.

• Furnished by the physician, practitioner with an “incident to” benefit, or auxiliary personnel.

In addition to §410.26, there are regulations sp ecific to each t ype of practitioner

who is allowed to bill for “incident to” services. These ar e found at §410.71(a)(2) (clinical psychologist services), §410.74(b) (physician assistants ’ services), §410.75(d)CMS-1600-P 193

(nurse practitioners’ se rvices), §410.76(d) (clin ical nurse specialist s’ services), and §410.77(c) (certified nurse-midwiv es’ services). When refe rring to practitioners who

can bill for services furnished “incident to” th eir 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 fu rnishing the service, we mean the practitioner who is billing for the service. Wh en we refer to the “auxiliary personnel” or the person who “provides” the service we are referri ng to an individual who is personally performing the service or so me aspect of it. 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 “i ncident to” services ar e billed by a physician, they are paid at 100 percent of the fee sche dule amount, and when th e services are billed by a nurse practitioner or clinical nurse special ist, they are paid at 85 percent of the fee schedule amount. Payments are subject to the usual deductible and coinsurance. As the services commonly furnished in physicians’ offices and other nonfacility settings have expanded to include more compli cated services, the types of services that can be furnished “incident to” physicians’ se rvices 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 theirCMS-1600-P 194

citizens. These state standards often include qualifications for th e individuals who are permitted to furnish specific services or requirements about the circumstances under which services may be actually furnished. For example, since 2009, New York has required that offices in which surgery is furn ished must be accredited by a state-approved accredited agency or organization. Similarly, Florida requires certain standards be met when surgery is furnished in offices, includi ng that the surgeon must “examine the patient immediately before the surgery to evaluate th e risk of anesthesia and of the surgical procedure to be performed” and “qualified anesthesia personnel shal l be present in the room throughout the conduct of all general anesthetics, regional anesthetics and

monitored anesthesia care.” Over the past years, several situations ha ve 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 bi lling for the services would have been permitted under state law to personally furnish the services, but the services were actually provided by auxiliary personnel who were not in compliance with state law in providing the particular service (or as pect of the service).

Practitioners authorized to bill Medicare for services that they furnish to Medicare beneficiaries are required under Medicare to comply with state law. For example, section 1861(r) of the Act specifies that an indivi dual can be considered a physician in the performance of any function or action only wh en legally authorized to practice in the particular field by the State in which he pe rforms such function or action. Section 410.20(b) of our regulations provides that paymen t is made for services only if furnished by a doctor who is “...legally au thorized to practice by the state in which he or sheCMS-1600-P 195

performs the functions or actions, and who is acting within the scope of his or her license.” Similarly, section 1861(s)(2)(K)(ii) of the Act provides a benefit category for services of a nurse practitione r (NP) or clinical nurse spec ialist (CNS) that the NP or CNS is “legally authorized to perform by th e State in which the services are performed, and §410.75(b) of our regulations provides that nurse practitioners’ services are covered only if the NP is “authorized by the State in which the services are furnished to practice as a nurse practitioner in acco rdance with State law.” There are similar provisions for clinical psychologist servi ces (§410.71(a)(2)), clinical social worker services (§410.73(b)(1)), physician assistants’ servic es (§410.74(a)(2)(ii)), clinical nurse specialists’ services (§41 0.76(b)(1)), and certified nur se-midwives’ services (§410.77(b)(1)). However, the Medicare requirements for services and supplies incident to a physician’s professional services (§410.26 disc ussed 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 a ny of the regulations regarding services furnished “i ncident to” the services of ot her practitioners contain this requirement. Thus, Medicare has had limited r ecourse 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 i ssued a report entitle d “Prevalence and Qualifications of Nonphysicians Who Perfor med Medicare Physician Services” (OEI-09- 06-00430) that considered in part the qualific ations of auxiliary personnel providing incident to physician services. This report found that services were being billed to Medicare that were provided by auxiliary personnel. Afte r finding that services were being provided and billed to Medicare by a uxiliary personnel “. . .who did not possess theCMS-1600-P 196

required licenses or certifica tions according to State laws, regulations, and/or Medicare rules,” the OIG recommended that we revise the “incident to” rules to, among other things, “require that physicians who do not pe rsonally perform the services they bill to Medicare ensure that no persons except...nonph ysicians who have the necessary training, certification, and/or licensure , pursuant to State laws, Stat e regulations, and Medicare regulations personally perform the services under the direct supervision of a licensed physician.” We are also pr oposing amendments to our re gulations to address this

recommendation. To ensure that auxiliary personnel provi ding services to Medicare beneficiaries

incident to the services of other practitioners do so in accordance with the requirements

of the state in which the servic es are furnished and to ensure that Medicare dollars can be

recovered when such services are not furnishe d in compliance with the state law, we are proposing to add a requirement to the “incid ent to” regulations at §410.26, Services and supplies incident to a physician’s professiona l services: Conditions. Specifically, we are proposing to amend §410.26(b) by redesigna ting paragraphs (b)(7) and (b)(8) as paragraphs (b)(8) and (b)(9), respectively, a nd by adding a new paragraph (b)(7) to state that “Services and supplies must be furnishe d in accordance with applicable State law.” We are also proposing to amend the definiti on of auxiliary personnel at §410.26(a)(1) to require that the individual performing “inc ident to” services “meets any applicable requirements to provide the se rvices, including licensure, im posed by the State in which the services are being furnished.” In addition, we are proposing to elimin ate redundant and potentially incongruent regulatory language by replaci ng the specific “incident to” requirements currentlyCMS-1600-P 197

contained in the regulations relating to each of the various types of practitioners with a reference to the requirements of §410.26. Specifically, we are proposing to:

• Revise §410.71(a)(2) regard ing clinical ps ychologist services to read “Medicare Part B covers services and supplie s incident to the services of a clinical psychologist if the requiremen ts of §410.26 are met.”

• Revise §410.74(b) regarding physician assistants’ services to read “Medicare Part B covers services and supplie s incident to the services of a physician assistant if the requirements of §410.26 are met.”

• Revise §410.75(d) regarding nurse practit ioners to read “Medicare Part B covers services and supplies incident to the services of a nurse practitioner if the requirements of §410.26 are met.”

• Revise §410.76(d) regarding clinical nur se specialists’ se rvices to read

with “Medicare Part B covers se rvices and supplies incident to the services of a clinical nurse specialist if the requ irements of §410.26 are met.”

• Revise the language in §410.77(c) re garding certified nurse-midwives’

services to read “Medicare Part B covers services and supplies incident to the services of

a certified nurse-midwife if the re quirements of §410.26 are met.” As discussed above, these practitioners are, and would continue to be under this proposal, required to comply with §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 th e requirements for “inc ident to” services of §410.26 using slightly different terminology. Our goal in proposing the revisions to refer to §410.26 in the regulation for each practitioner’s “incident to” servi ces is to reduce the regulatory burden and make it less difficult for practitioners to determine what isCMS-1600-P 198

required. Reconciling these regulatory re quirements for physicians and all other practitioners who have the aut hority to bill Medicare for “incident to” services is also consistent with our general policy to tr eat nonphysician practiti oners similarly to physicians unless there is a compelling reason for disparate treatment. We believe that this proposal would make the requirements cl earer for practitioners furnishing “incident

to” services without eliminat ing existing regulatory require ments or imposing new ones. We welcome comments on any requirements th at we may have ina dvertently overlooked in our proposed revisions, or any benefit th at accrues from continuing to carry these separate regulatory requirements. The regulations applicable to Rural Health Clinics (RHCs) and Federally Qualified Health Centers (FQHCs) have simila r “incident to” rules, and we are proposing to make conforming changes to these regulatio ns. Specifically, we are also proposing to revise §405.2413(a), which addresses services and supplies incide nt to physicians’ services for RHCs and FQHCs, by redesi gnating paragraphs (a)(4) and (a)(5) as paragraphs (a)(5) and (a)(6), re spectively and by adding a new paragraph (a)(4) that states services and supplies must be furnished in accordance with applicable state law. Additionally, we are proposing to amend §405. 2415(a), which addresses services incident to nurse practitioner and physician assistant services by redesignati ng paragraphs (a)(4) and (a)(5) as paragraphs (a )(5) and (a)(6), respectively and by adding a new paragraph (a)(4) that specifies services and supplies must be furnished in accordance with applicable state law. We are proposing to amend §405.2452(a), which addresses services and supplies incident to clin ical 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 furnishedCMS-1600-P 199

in accordance with applicable state law. Finally, we are also proposing the removal of the word “personal” in §§ 405.2413, 405.2415, and 405.2452 to be consistent with the “incident to” provisions in §410.26 Services and supplies incident to a physician’s professional services: Conditions. The proposed amendments to our regulati ons 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. Thr oughout the Medicare program, as evidenced by several examples above, the qua lifications required for the delivery of health care services are genera lly determined with reference to state law. As discussed above, our current regulations governing practitioners who can bill Medicare directly include a basic requirement to comply with state law when furn ishing Medicare covered services. However, the Medicare regulations for “incident to” services and supplies do not specifically make compliance with state law a condition of paym ent for services and supplies furnished and billed as an incident to a practitioner’s se rvices. The proposed amendments to our regulations would rectif y this situation and make compliance with state law a requirement for all “incident to” se rvices. In addition to health and safety

benefits we believe would accrue to the Medi care patient population, this approach would

assure that federal dollars are not expended for services that do not meet the standards of the states in which they are being furnis hed, and provides the ability for the federal government to recover funds paid where se rvices and supplies are not furnished in

accordance with state law. We note that this proposal would not impose any new requirements on those practitioners billing the Medi care program since auxiliary personnel furnishing services in a state would already be required to comply wi th the laws of that state. This regulatoryCMS-1600-P 200

change would simply adopt the existing requ irements as a condition of payment under Medicare. Codifying this requirement w ould provide the federal government a clear basis to deny a claim for Medicare paym ent when services are not furnished in accordance with applicable state law and the ab ility to recover funds, as well as assure that Medicare makes payment for services furnished to beneficiaries only when the services meet the requirements imposed by the st ates to regulate health care delivery in

order to ensure the health a nd safety of their citizens.CMS-1600-P 201

I. Complex Chronic Care Management Services

As we discussed in the CY 2013 PFS fi nal rule with comment period, we are committed to 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 designe d 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 Progra m (described in “Medicare Program; Medicare Shared Savings Program: Accountab le Care Organizations; Final Rule'' which appeared in the November 2, 2011 Federal Register (76 FR 67802)).

● The testing of the Pion eer ACO model, designed fo r experienced health care organizations (described on the Center for Medicare and Medicaid Innovation's (Innovation Center's) Web site at innovations.cms.gov/initiati ves/ACO/Pioneer/index.html ).

● The testing of the Advance Paym ent 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/AdvancePayment/index.html ).

● The Primary Care Incentive Payment (PCIP) Program (described on the CMS

Web site at www.cms.gov/Medicare/Medicare-Fee-for-ServicePayment/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 andCMS-1600-P 202

coordination of health care services ar e improved by making advanced primary care practices more broadly available (described on the CMS Web site atwww.cms.gov/Medicare/DemonstrationProjects/DemoProjectsEvalRpts/downloads/mapcpdemo_Factsheet.pdf ).

● The Federally Qualified Health Ce nter (FQHC) Advanced Primary Care

Practice demonstrati on (described on the CMS Web site atwww.cms.gov/Medicare/DemonstrationProjects/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-PrimaryCare-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 coordination with these initiatives, we also continue to explore potential refinements to the PFS that would appropr iately value care management within Medicare's statutory structure for fee- for-service physician payment and quality reporting. For example, in the CY 2013 PFS fi nal rule with comment period, we adopted a policy to pay separately for care manageme nt involving the transi tion of a beneficiary from care furnished by a treating physician durin g 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 desc ribed above, research and demonstrations from other public and priv ate stakeholders, the work of all partiesCMS-1600-P 203

involved in the potentially misvalued code initiative, and from the public at large. 1. Patient Eligibility for Separately Paya ble Non-Face-to-Face Complex 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 nonface-to-face care management work is includ ed in calculating the total work for the typical E/M services, and the total work for th e typical service is us ed to develop RVUs for the E/M services. In the CY 2012 PFS pr oposed rule, we highlighted some of the

E/M services that include substantial care ma nagement work. Specifically, we noted that the vignettes that describe a typical service for mid-level office/outpa tient services (CPT codes 99203 and 99213) include furnishing ca re management, communication, and other necessary care management related to the o ffice visit in the post-s ervice 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. Because the current E/M offi ce/outpatient visit CPT codes were designed to support all office visits and reflect an overa ll 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 separate ly for the non face-toface care plan oversight services furnished to beneficiaries under the care of home health agencies or hospices and we currently pay separately for care management servicesCMS-1600-P 204

furnished to beneficiaries tran sitioning from care furnished by a treating physician during a hospital stay to care furnished by the bene ficiary's primary physic ian in the community. Similar to these situations, we believe that the resources required to furnish complex 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. Furnishing care management to beneficiaries with multiple chronic conditions requires complex and 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 adjustme nt of medical therapy. Therefore, for CY 2015, we are proposing to establish a sepa rate payment under the PFS for complex chronic care management services furnished to patients with multiple complex 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 have performed an analysis of Medi care claims for patie nts with selected multiple chronic conditions (see http://www.cms.gov/Research -Statistics-Data-andSystems/Statistics-Tre nds-and-Reports/ChronicConditions/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 depa rtment visits. We believe these findings would hold in general for patients with mu ltiple complex chronic conditions that are expected to last at least 12 months or un til the death of the patient, and that place theCMS-1600-P 205

patient at significant risk of death, acute exacerbation/ decompensation, or functional decline. We believe that successful efforts to improve chronic care management for these patients could improve the quality of care wh ile simultaneously decreasing costs (for example, through reductions in hospitalizatio ns, use of post-acute care services, and emergency department visits.)

As described below in more detail in sect ion II.I.3, we intend to develop standards for furnishing complex chronic care manageme nt services to ensure that the physicians who bill for these services have the capabi lity to provide them. One of the primary reasons for our proposed 2015 implementation da te is to provide sufficient time to develop and obtain public input on the standard s necessary to demonstrate the capability to provide these services. 2. Scope of Complex Chronic Care Management Services We consider the scope of complex chronc care management services to include:

● The provision of 24-hour- a-day, 7-day- a-week access to address a patient’s acute complex 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 co mplex chronic care needs regardless of the time of day or day of the week. Members of the complex 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 o ffice 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 conditi ons including systematic assessment ofCMS-1600-P 206

patient’s medical, functional, and psychosocial needs; system-based approaches to ensure timely receipt of all recommended preventiv e care services; medi cation reconciliation

with review of adherence a nd potential interac tions; and oversight of patient selfmanagement of medications. In consultation w ith the patient and ot her key practitioners treating the patient, the practitioner furn ishing complex chronic care management services should create a patient-centered plan of care document to assure that care is provided in a way that is congr uent with patient choices and values. A plan of care is based on a physical, mental, cognitive, ps ychosocial, functional and environmental (re)assessment and an inventory of resources an d supports. It is a comprehensive plan of care for all health issues. It typically in cludes, but is not limited to, the following elements: problem list, exp ected outcome and prognosis, measurable treatment goals, symptom management, planned inte rventions, medication management, community/social services or dered, 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 el ectronic 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 vis it to an emergency department, and visits following discharges from hospitals and skille d nursing facilities. The practice must be

able to facilitate communicat ion of relevant patient information through electronic exchange of a summary care record with ot her health care prov iders regarding these transitions. The practice must also have qualified personnel who are available to deliverCMS-1600-P 207

transitional care services to a patient in a time ly way so as to reduce the need for repeat visits to emergency departments and re-a dmissions to hospitals and skilled nursing

facilities.

● Coordination with home and commun ity based clinical service providers required to support a patient’s psychoso cial 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 w ith the provider regarding their care through not only the telephone but also through the use of secure messaging, internet or other asynchr onous non face-to-face consultation methods. 3. Standards for Furnishing Complex Chronic Care Coordination Services Not all physicians and qualified nonphysicia n practitioners who wish to furnish complex chronic care management services cu rrently have the capability to fully provide the scope of services described in section II.I.2. without making addi tional investments in technology, staff training, and the devel opment and maintenance of systems and processes to furnish the services. We in tend to establish standards that would be necessary to provide high quality, safe comp lex chronic care management services. For example, potential standards c ould include the following:

● The practice must be using a certif ied Electronic Health Record (EHR) for beneficiary care that meets the most recent HHS regulatory standard for meaningful use. The EHR must be integrated in to the practice to support acces s to care, care coordination, care management and communication.

● The practice must employ one or more advanced practice regi stered nurses or physicians assistants whose written job descript ions indicate that their job roles includeCMS-1600-P 208

and are appropriately scaled to meet the need s for beneficiaries receiving services in the practice who require complex chronic care management services provided by the practice.

● The practice must be able to demonstr ate the use of writt en protocols by staff participating in the furnishing of services th at describe: (1) the methods and expected “norms” for furnishing each component of co mplex chronic care management services provided by the practice; (2) the strategies for systematically furnishing health risk assessments to identify all beneficiaries eligib le and who may be willing to participate in the complex chronic care management services; (3) the procedures for informing eligible beneficiaries about complex chronic care management services and obtaining their consent; (4) the steps for monitoring the me dical, functional and social needs of all beneficiaries receiving complex chronic care management services; (5) system based approaches to ensure timely delivery of all recommended preventive care services to beneficiaries; (6) guidelines for communi cating common and anticipated clinical and

non-clinical issues to benefici aries; (7) care plans for bene ficiaries 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 sy stematic approach to communicate and electronically exchange clinical information with and coordinate care among all service providers involved in the ongoi ng care of a beneficiary re ceiving complex chronic care management services; (9) a systematic appro ach for linking the prac tice and a beneficiary receiving complex chronic care management services with long-term services and supports including home and community-based se rvices; (10) a systematic approach to the care management of vulnerable benefici ary populations such as racial and ethnicCMS-1600-P 209

minorities and people with disabilities; and (11) patient education to assist the beneficiary to self-manage a chronic condition that is c onsidered at least one of his/her complex chronic conditions. These prot ocols must be reviewed a nd updated as is appropriate

based on the best available clinical information at least annually.

● All practitioners including advanced practice registered nurses or physicians assistants, involved in the de livery of complex chronic care management services must

have access at the time of serv ice to the beneficiary's EH R 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 pr oviding after hours care to ensure that the complex chronic care management services are available with this level of EHR support in the practice or remo tely through a Virtual Privat e Network (VPN), a secure website, or a health information exchange (HIE) 24 hours per day and 7 days a week. Some have suggested that, to furnish thes e services, practices could be recognized as a medical home by one of the national organizations includ ing: the National Committee for Quality Assurance (NCQA) , the Accreditation Association for Ambulatory Health Care, The Joint Comm ission, URAC, etc.; which are formally recognizing primary care practices as a pati ent-centered medical home. We understand there are differences among the approaches ta ken by national organizations that formally recognize medical homes and therefore, we seek comment on these and other potential care coordination standards, and the potenti al for CMS recognizing a formal patientcentered medical home designation as one means for a practice to demonstrate it has met any final care coordination standards for furnishing complex chronic care management services. Any regulatory changes would be addressed through separate notice-andcomment rulemaking.CMS-1600-P 210

4. Billing for Separately Payable Complex Chronic Care Management Services and Obtaining Informed Consent from the Beneficiary To recognize the additional resources required to provide complex chronic care management services to patients with multip le chronic conditions, we are proposing 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 e xpected to last at least 12 months, or until the death of the patient, that place the patient at significant risk of death, acute exacerbation/decompensati on, 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 heal th care professional. Initial services include obtaining the initial informed consent from the beneficiary as described below and the initial implementation of the complex chronic care management services

described in section II.I.2. of this proposed rule. Not all patients who are eligible for se parately payable complex chronic care management services may necessarily want these services to be provided

. Therefore, before the practitioner can furnish or bill for these services, the eligible beneficiary must

be informed about the availabil ity of the services from the practitioner and provide his or her consent to have the services provided, including the electronic communication of the patient’s information with other treating provi ders as part of care coordination. This would include a discussion with the pa tient about what complex chronic care management services are, how these servic es are accessed, how their information will be shared among other providers in the care team , and that cost-sharing applies to theseCMS-1600-P 211

services even when they are not delivered face-to-face in the practic e. To bill for the initial services (GXXX1), the practitioner would be required to document in the patient’s medical record that all of the complex chroni c care management serv ices 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 w ould be provided to the beneficiary and this would also be recorded in the beneficiary’s electronic medical record. A practitioner would need to reaffirm with the beneficiary at least every 12

months whether he or she wishes to c ontinue to receive complex chronic care management services during the following 12-month period. The informed consent for complex chronic care management services could be revoked by the beneficiary at any time. Ho wever, if the revocation occurs during a current 90-day complex chronic care manage ment period, the revocation would not be

effective until the end of that period. The beneficiary coul d notify the practitioner either verbally or in writing. At the time the info rmed consent is obta ined, the practitioner would be required to inform the beneficiary of the right to stop the complex chronic care management services at any time and the e ffect of a revocation of consent on complex chronic care management serv ices. Revocation by the beneficiary of the informed consent must also be noted by recording the date of the revocation in the beneficiary’s medical record and by providing the benefici ary with written confirmation that the practitioner would not be pr oviding complex chronic care management services beyond the current 90 day period. A beneficiary who has revoked informed consent for complex chronic care management services from one practitioner ma y choose instead to re ceive these services from a different practitioner, which can begi n at the conclusion of the current 90-dayCMS-1600-P 212

period. The new practitioner would need to fulfill all the requir ements for billing

GXXX1 and then GXXX2. Prior to submitting a claim for complex 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 benefici ary has been receiving these services over the previous 90-day period (noting the beginning and end dates for the 90- day period), the reason(s) w hy the services were provide d and a description of the services provided. The notice may be deliv ered 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 offi ce visit.) The notice must be received by the beneficiary before the practiti oner submits the claim for the services. A separate notice must be received by the beneficiary for each 90-day period for which the services will be billed. A copy of the notice should be included in the medical record. In addition to the requirement that at least an hour of complex chronic care management services be furnished to the pa tient, we propose that billing for subsequent complex chronic care management services (GXXX2) would be limited to those 90-day periods in which the medical needs of the patie nt require substantial revision of the care plan discussed in section II.I.2. Substantial re vision to a care plan typically is required when the patient’s clinical condition changes sufficiently to require: significantly more intensive monitoring by clini cal staff, significant changes in the treatment regimen, and significant time to educate the patient/caregiver about the patient’s condition/change in treatment plan and prognosis. Because the payment for non-face-to-face car e management services is generally bundled into the payment for face-to-face E/M visits, the resources required to provideCMS-1600-P 213

care management services for patients without multiple chronic conditions or for less

than the one or more hours of clinical staff time continues to be re flected in the payment

for face-to-face E/M visits. For similar reas ons, the resources required to provide care management services to patients residing in facility settings where care management activity by facility staff would be included in the associated f acility payment also continues to be reflected in the pa yment for face-to-face E/M visits. We propose that complex chronic care ma nagement services include transitional care management services (CPT 99495, 99496), ho me health care supervision (HCPCS G0181), and hospice care supervision (HCPCS G0182). If furnished, in order to avoid duplicate payment, we propose that these servic es may not be billed separately during the 90 days for which either GXXX1 or GXXX2 ar e billed. For similar reasons, we propose

that GXXX1 or GXXX2 cannot be billed se parately if ESRD services (CPT 90951- 90970) are billed during the same 90 days. Practitioners billing a complex chronic care management code accept responsibility for managing and coordinating the beneficiary's care over this period. Therefore, we propose to pay only one clai m for the complex chronic care management services (either GXXX1 or GXXX2) billed per beneficiary at the conclusion of each 90- day period. All of the complex chronic care management services delineated in section II.H.2 above that are relevant to the patient must be furnished in order to bill GXXX1 or GXXX2 for a 90-day period. If a face-to-face visit is provided during the 90-day period by the practitioner who is furnishing complex chronic care manageme nt services, the pract itioner should report the appropriate evaluation and management code in addition to GXXX1 or GXXX2.

We note that to bill for these services , we propose that at least 60 minutes ofCMS-1600-P 214

complex chronic care management services must be provided. Time of less than 60 minutes over the 90 day period could not be roun ded up to 60 minutes in order to bill for these services. We also propose that for pur poses of meeting the 60-minute requirement, the practitioner could count th e time of only one clinical st aff member for a particular segment of time, and could not count overlappi ng intervals such as when two or more

clinical staff members are meeting about the patient. In future rulemaking, we intend to propose RVUs for complex chronic care management services. To inform our propos al, we seek input on the physician work and practice expenses associated with these services. 5. Complex Chronic Care Management Serv ices and the Annual Wellness Visit (AWV) (HCPCS codes G0438, G0439) We are proposing that a be neficiary must have received an AWV in the past twelve months in order for a practitioner to be able to bill separately for complex chronic care management services. We believe that the linking of these services to the AWV makes sense for several reasons. First, the AW V 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 practiti oners 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 c ontribute 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 indicat or to assist us in knowingCMS-1600-P 215

which single practitioner a beneficiary has chosen to furnish complex chronic care management services. While a beneficiary wo uld retain the right to choose and change the practitioner to furnish complex chronic ca re 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 complex chronic care management services. We would expect that the practitioner the beneficiary chooses for the AWV would be the practitioner furnishing the complex chronic care mana gement services. For the less frequent situations when a beneficiary c hooses a different practitioner to furnish the complex chronic care management services from the practitioner who in the previous year furnished the AWV, the practitioner furnishing the complex chronic are management services would need to obtain a copy of the assessment and care plan developed between the beneficiary and the pr actitioner who furnishe d the AWV prior to billing for complex 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 Me dicare Part B coverage period, for that time period we propose the Initial Preventive Phys ical Examination (G0402) can substitute for the AWV to allow a beneficiary to receive complex chronic care management services. 6. Complex Chronic Care Management Servi ces Furnished Incident to a Physician’s Service under General Physician Supervision We outline the requirements for billing for se rvices furnished in the office, but not personally and directly performed by the physician or qualified nonphysician practitionerCMS-1600-P 216

(referred to as a “practitione r” in the following discussion ), under our “incident to” requirements in regulations and in section 60, Chapter 12, of Medicare Benefit Policy Manual (100-02). One key requirement of “incid ent to” services is that a practitioner (as thet term is used in section II.H of this pr oposed rule directly s upervise the provision of services by auxiliary personnel by being in the office suite an d able to furnish assistance and direction throughout the provision of the service. Section 60.4 of the Manual specifically discusses the one exception that al lows for general supe rvision of “incident to” services furnished to homebound patients in medically underserved areas. Under that provision, we identify more specific requi rements for the personnel that can furnish

“incident to” services under general supervision. For ex ample, we require that the personnel must be employed by, employed by the same entity, or an independent contractor of, the practitioner billing the “incident to” services. One of the required capabilities for a phys ician to furnish complex chronic care management services is 24-hour-a-day, 7-day- a-week beneficiary access to the practice to address the patient’s complex chronic care n eeds. 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 those needs regardless of th e time of day or day of the week. If the patient has a complex chronic care need outsi de of the practice’s normal business hours, the patient’s initial contact w ith the practice for that need could be with clinical staff employed by the practice, (for example, a nurse or other appropriate auxiliary personnel) and not necessarily with a physic ian or practitioner. Those services would be furnished

incident to the services of the billing practitioner. We have also proposed to require that at least one hour of complex chronic care services be furnished to a pa tient during the 90-day period in order for the practitioner toCMS-1600-P 217

be able to bill separately for the chronic care services. The ti me, if not personally performed by the physician, must be directed by the physician. We are proposing that the time spent by a clinical staff person furnishing aspects of complex chronic care services outside of the practice’s normal business hour s during which there is no direct physician supervision would count towards the one hour requirement even though the services do not meet the direct supervision require ment for “incident to” services. We believe that the additional require ments we impose for personnel under the exception for general supervision for homeboun d patients in medically underserved areas should apply in these circumstances where we are allowing a practiti oner to bill Medicare for complex chronic care management services furnished under thei r general supervision and incident to their professional services . In both of thes e unusual cases, these requirements help to ensure that appropriate services are being fu rnished by appropriate personnel in the absence of the direct superv ision. Specifically, we propose that if a practice meets all the conditions required to bill separately for complex chronic care management services, the time spent by a clin ical staff employee furnishing aspects of these services to address a patient’s complex chronic care need outsi de of the practice’s

normal business hours is counted towards the one hour requirement when at a minimum the following conditions are met:

● The clinical staff person is dir ectly employed by the physician and the employed clinical staff person meets any relevant state requirements.

● The services of the clinical staff pers on are an integral part of the physician’s complex chronic care management services to the patient (the patie nt must be one the physician is treating and for which informed consent is in effect), and are performed under the general supervision of the physicia n. General supervision means that theCMS-1600-P 218

physician need not be physica lly present when the services are performed; however, the services must be performed under the physic ian’s overall supervis ion and control.

Contact is maintained between the clinical staff person and the physician (for example, the employed clinical staff person contacts th e physician directly if warranted and the physician retains professional res ponsibility for the service.)

● The services of the employed clinical staff person meet all other “incident to” requirements with the excepti on of direct supervision. 7. Complex Chronic Care Management Se rvices and the Primary Care Incentive Payment Program (PCIP) Under section 1833(x) of the Act, th e 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 practitioner. 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 disqualif ying community primary care physicians who follow their patients into the hospital sett ing, 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 pe rcentage calculation. In the CY 2013 final rule (77 FR 68993), we adopted a policy that the TCM code s hould 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 sett ing to the hospital-based discharge day management services already excluded from th e PCIP denominator. Similar to the codesCMS-1600-P 219

already excluded from the PCIP denominator, we expressed concern that inclusion of the TCM code in the denominator of the primar y care percentage calcu lation could produce unwarranted bias against ‘‘true primary care practitioners’’ who are involved in furnishing post-discharge care to their patients. Complex chronic care management services are also similar to the services that we have already excluded from the from th e PCIP denominator. For example, complex chronic care management includes management of care transitions within health care settings including referrals to other clinicia ns, visits following a patient visit to an emergency department, and visits following di scharges from hospita ls and skilled nursing facilities. Therefore, wh ile physicians and qualified nonphysician practitioners who furnish complex chronic care management services would not receive an additional incentive payment under the PCIP for the serv ice itself (because it is not considered a ‘‘primary care service’’ for purposes of the PCIP), we propose that the allowed charges for complex chronic care management services would not be include d in the denominator when calculating a physician’s or practitione r’s percent of allowed charges that were primary care services for purposes of the PCIP. 8. Summary In summary, we are proposing for CY 2015 to establish a separate payment under the PFS for complex chronic care management services furnished to patients with multiple complex chronic conditions that are ex pected 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, as discussed in section II.I.1. We are proposing the scope of these complex chro nic care management services discussed in section II.I.2; the billing require ments for these services as di scussed in section II.I.4; theCMS-1600-P 220

AWV requirement as discussed in section II.I. 5; the general supervision requirements as discussed in section II.I.6, and the PCIP de nominator exclusion as discussed in section

II.I.7. We are seeking input from the public on, th e standards required to provide these

services as discussed in secti on II.I.3, and the work and PE th at would be associated with

these services. We are making this proposal to establis h codes and separate payment for complex chronic care management services in the c ontext of the broader multi-year strategy to appropriately recognize and value primary car e and care management services. Should this proposal become final policy, it may be a short-term payment strategy that would be

modified and/or revised to be consistent with broader prim ary care, and care management and coordination services if the agency decides to pursue payment for a broader set of management and coordination services in futu re rulemaking. We also note that as we consider a final policy, we would assess the po tential impact of the policy on our current programs and demonstrations designed to im prove payment for, and encourage long-term investment in, care management services. Like wise, to assure that there are not duplicate payments for delivery of care management services, we would consider whether such payments are appropriate for providers participating in other programs and

demonstrations. J. Chiropractors Billing for Evaluation & Management Services Section 1861(r)(5) of the Act includes chiropractor s in its definition of “physician” with language limiting chiroprac tors to “treatment by means of manual manipulation of the spine (t o correct a subluxa tion).” Specifically, the Act says: The term “physician,” when used in c onnection with the pe rformance of anyCMS-1600-P 221

function or actions means . . .a chiropract or who is licensed as such by the State (or in a State which does not license chiropr actors as such, is legally authorized to perform the services of a chiropractor in the jurisdiction in which he performs such services) and who meets uniform minimum standards promulgated by the Secretary, but only for the purpose of s ections 1861(s)(1) and 1861(s)(2)(A) and only with respect to treatment by means of manual manipulation of the spine (to correct a subluxation) which he is legally authoriz ed to perform the State or jurisdiction in which such treatment is provided.” The statute, thus, limits chiropractic cove rage to treatment of subluxation of the spine. Our interpretation of this language allows payment to chiropractors for chiropractic manual manipulation to correct a subluxation of th e spine. Specifically, we provide for payment of the following codes list ed in the chiropractic section of the CPT

Manual. 98940 – Chiropractic manipulation treat ment (CMT), spinal, 1-2 regions 98941 – CMT spinal, 3-4 regions 98942 – CMT spinal, 5 regions (CPT includes an additional CPT c ode 98943 – CMT extraspinal 1 or more regions for which Medicare doe s not cover as it is not a spinal manipulation.)

Section 240.1.2 of the IOM 100-02 includes requirements that must be met to

demonstrate that these services are necessary, using either x -ray or physical examination. In addition, it includes documentation require ments for initial and subsequent visits. These include a history and physical exam. According to the CPT manual, the codes for CMT describe services including a “pre-manipulative patient assessment,” which is consistent with the history and physicalCMS-1600-P 222

exam requirement discussed above. In dete rmining the relative value assigned to the CMT services we include this pre- manipulative patient assessment. These chiropractic codes have a global su rgery indicator of 0, meaning that we do not pay separately for services provided on the same day and related to the same service. The CPT manual notes that separa te E/M services can be report ed with a -25 modifier “if the patient’s condition requires a significant, separately iden tified E/M service above and beyond the usual preservice and postservice work associated with the procedures.” It goes on to note that a separate diagnosis is not required. We currently do not allow payment for E/M services to chiropractors as we have

not identified an E/M service th at would be related to treatment of subluxation of the spine, which is the statutory requirement , beyond the preservice and postservice work

associated with the CMT. We have believe d that the assessments included in the CMT codes accurately capture the E/M that would typically be furnished by chiropractors in furnishing CMT services. Questions have arisen as to whether it w ould be appropriate to allow chiropractors

to furnish and bill Medicare for E/M services , especially in light of the CPT language regarding the reporting of a sepa rate E/M service on the same day using a -25 modifier.

We would note that CPT codes are the HIPPA compliant code set. Their use is not limited to Medicare, and other insurers ma y not limit chiropractic coverage to manual manipulation to correct subluxation of the sp ine. We are seeking comment to assess

whether there are situations in which E/M services that are not included in the CMT codes, but would meet the statutory require ments for chiropractor services, would be appropriate. We are not propos ing to pay chiropractors for E/M services in CY 2014. If after receiving and analyzing public comment we determine that it would be appropriateCMS-1600-P 223

to modify our policy with respect to chiropr actors and E/M services, we would do so in future rulemaking. Specifically, we are seeking comments on the following questions:

• Are there situations where a chiropracto r would furnish E/M services that are with respect to treatment by means of manua l manipulation of the spine (to correct a subluxation) that are not included within the definition of the CMT c odes? Specifically, we are seeking information on the situations, the services that woul d be provided, and the

E/M codes that would be billed.

• Would such a policy expand access to chiropractic services for Medicare

beneficiaries? Are there othe r benefits that would accrue?

• If payment were to be allowed for E/M services, which codes would be appropriate to report chiropractic E/M services ? For services provided in an office, would it be appropriate to allow billing of all five office E/M codes for new or existing patient as appropriate? Should one or a set of codes be created spec ifically for chiropractic E/M services similar to those for therapy evalua tions or ophthalmic evaluations? With what frequency should chiropractors be allowed to bill E/M services?

• What would justify E/M services be yond those included in CMT codes? Should they be allowed on every treatment day or only at the onset of treatment?

• Are these E/M services ones that ar e already being furnished by another physician or other practitioner? If these are not services currently covered by Medicare, what volume could be expected?CMS-1600-P 224

III. Other Provisions of the Proposed Regulations A. Medicare Coverage of Items and Services in FDA Investigati onal Device Exemption Clinical Studies--Revision of Medicare Coverage 1. Statutory Aut hority and Background This proposed rule would revise certain Me dicare regulations currently codified in §405.201 through 405.214, and §411.15(o) relating to c overage of the costs of routine items and services in Category A Investig ational device exemption (IDE) studies and trials, and coverage of the co sts of Category B, investigatio nal devices and the costs of routine items and services in Category B i nvestigational device exemption (IDE) studies

and trials. It is based on section 1862(m) of the Act, which, among other things, authorizes the Secretary to esta blish criteria to ensure that studies and trials of Category A devices conform to appropriate scientific and ethical standards. We are proposing to

establish those criteria that ensure that st udies and trials of Category A devices conform to appropriate scientific a nd ethical standards. We are also proposing, based on our rulemaking authority in section 1871 of the Ac t, to extend the same criteria proposed for Category A IDE studies and tria ls to Category B IDE studies and trials. Our proposed rules are necessary to carry out the admini stration of the insura nce program under Title XVIII of the Act). Finally, to ensure that co verage of items and services in IDE studies

and trials is uniform across Medicare admini strative regions, we are proposing that IDE coverage decisions will be made by CMS centrally. On September 8, 1995, the FDA and CMS (then known as HCFA) entered into an interagency agreement in which the FDA ag reed to categorize investigational device exemptions (IDEs) for purposes of Medicare coverage. The process identified in this interagency agreement is re flected in a September 19, 1995 final rule (60 FR 48417).CMS-1600-P 225

The September 19, 1995 rule described two FDA device categories: (1) Category A devices were described as experimental/i nvestigational devices ; and (2) Category B devices were described as nonexpe rimental/investigational devices. a. Coverage of IDE--Costs of R outine Items, Services, and Devices. The September 19, 1995 rule created a pa th to Medicare coverage under certain circumstances for Category B investigational devices and the costs of routine items and

services in IDE studies and tr ials. The IDE coverage policy gave Medicare beneficiaries the opportunity to have earlier access to new medical devices, but these determinations were made by local Medicare contractor s sometimes on a claim-by-claim basis. Although the current IDE policy was a path to earlier access to certain devices and the costs of routine items and services, we were also hearing that the IDE coverage approval process was burdensome and created national va riability that made it difficult for study sponsors to conduct national IDE studies.

As we evaluated the IDE review and approval process we heard and sought out feedback from stakeholders (for example, ma nufacturers, study spons ors, and hospitals).

Most of the stakeholders told us that obtaining coverage of the device and the costs of routine items and services was inefficient; th at each Medicare cont ractor has different processes to review IDE devices and studies. It also became apparent that the lack of

centralization led to inconsistent IDE covera ge across the Medicare contractors. These

factors contributed to some reluctance to en roll Medicare beneficiar ies in IDE studies. We also requested feedback from the Medi care local contractors. We found that the Medicare contractors reviewed pertinen t available evidence and the FDA-approved IDE study protocol as factors in their decision-making process. Reviewing all of the

information related to the IDE device and the FDA-approved study was a way to ensureCMS-1600-P 226

that the device, as used, is reasonable and necessary for the Medicare beneficiary and furnished in a setting appropriate to the patien t’s medical needs. Wh ile each contractor’s process was appropriate, they were in practi ce slightly different from contractor to contractor; and in most cases duplicative. Furthermore, we found that local Medicare contractors were applying vary ing levels of scrutiny in re viewing IDE devices and the

costs of routine items and services within IDE studies. Most cont ractors reviewed IDE study protocols extensively, while other c ontractors may have reviewed them less extensively. 2. Proposals We are proposing a transparent, centraliz ed review process that would be more efficient by reducing the burde n for stakeholders interest ed in conducting nationwide trials. Once the IDE coverage process is cen tralized, there would be a single entity making the IDE coverage decision. This enhances administrative efficiency by eliminating the need for duplicative review s by Medicare local contractors and the submission of duplicated covera ge requests to different cont ractors by stakeholders. We believe that a centralized review process would not significantly reduce the number of IDE devices currently covered; but we are specifically re questing public to comment on this issue. Changing the review and decisi on of IDE coverage to a centralized review process in no way changes a ny beneficiary appeal rights. a. Category A IDE Devices In 2003, section 731(b) of the Pr escription Drug, Improvement, and Modernization Act (MMA) provided that the Secretary could not ex clude coverage for

certain routine care costs in IDE studies a nd trials of Category A devices, provided to beneficiaries under section 1862(a)(1)(A) of th e Act. A Category A IDE device is aCMS-1600-P 227

device for which the initial questions of safety and effectiveness have not been resolved

and the FDA is unsure whether th e device type can be safe and effective. In addition, the Secretary was given the authority to en sure that any Category A IDE device study conform to appropriate scientific and ethica l standards (section 1862( m)(1) of the Act). While the Congress gave the Secretary the au thority to determine the scope of routine care costs, the Congress did not authorize or establish cove rage for the Category A device itself. Therefore, we are not proposing any changes to coverage of the Category A IDE device. Category A devices would c ontinue to be noncovered under section 1862(a)(1)(A) of the Act. The Congress has expressly authorized the Se cretary to establish criteria to ensure that any Category A IDE device study confor m to appropriate scie ntific and ethical standards. (For more information, see s ection 1862(m)(2)(B) of the Act.) In the November 15, 2004 conforming final rule ( 69 FR 66420), we fina lized a regulatory provision at §405.207(b)(2) requiring Categor y A IDE devices be furnished in conjunction with an FDA-approve d clinical study and that the study standards would be defined through the national c overage determina tion (NCD) process. Rather than establish standards through th e NCD process, we would sp ecify the study standards in this proposed rule. We believe the Congress gave the Secretary th e authority to create appropriate scientific and ethi cal standards because of thei r importance in protecting for

Medicare beneficiaries.

The use of standards is essential to protecting Medicare st udy participants in category A trials. Studies that have high scientific and ethical standards lead to generalizable and reliable knowledge for Medicare provi ders, practitioners and

beneficiaries.CMS-1600-P 228

We believe that minimum standards are needed for IDE studi es and trials for which Medicare coverage of devices or routine items and services is provided to ensure

that Medicare beneficiaries w ho volunteer to participate in st udies are protected and that the study design is appropriate to answer que stions of importance to Medicare and its beneficiaries. Although an item or serv ice may be considered “reasonable and necessary” when used by a clinician for the benefit of an indivi dual patient, it may not necessarily be reasonable and necessary when us ed in the context of an IDE study or trial.

The use of such an item or service in an ID E study or trial may expose the study participants to increased risks that must be balanced by other factors, including the likelihood that the study woul d add important information to the body of medical knowledge. There are numerous studies that ma y be considered “scientifically valid,” but are of little benefit to patients or to the Medicare program. It is essential that CMS-approved IDE studies or trials serve the best interests of Medicare beneficiaries. We believe, in concert with other federal agencies, that appropriate study design is crit ical to ensure that not only are participants in research studies exposed to the least risk possible, but also to ensure that the results from the study would be useful in improving healthcare deliv ery. Scientifically and ethically flawed studies will not produce valid results, exposi ng Medicare beneficiaries to unnecessary risk; and wasting time and resources for all involved. We are proposing 13 standards that Cate gory A IDE studies must meet in order

for the costs of routine care items and services to be coverable. The first four and the seventh proposed standards embody ethica l values. The fifth and sixth proposed standards were developed in response to repo rts of egregious misc onduct in the past in

endeavors to conduct clinical re search by placing individuals at the risk of harm for theCMS-1600-P 229

good of others. Both the independent review of protocols and informed consent by study participants are warranted to provide accountability to the public that the conduct of the study is not compromised by potentia l conflicts of interest on the part of investigators, and the study subject’s autonomy is respected. The IDE study and trial st andards that we are proposing are as follows:

● The principal purpose of the study is to test whether the item or service meaningfully improves health outcomes of patients who are repres ented by the Medicareenrolled subjects.

● The rationale for the study is well suppor ted by available scientific and medical information, or it is intended to clarify or establish the health out comes of interventions already in common clinical use.

● The study results are not anticipa ted to unjustifiably duplicate existing knowledge.

● The study design is methodologically appropriate and the anticipated number of enrolled subjects is appropria te to answer the research que stion(s) being asked in the study.

● The study is sponsored by an organizat ion or individual ca pable of completing it successfully.

● The study is in compliance with all applicable federal regulations concerning the protection of human subjec ts found at 45 CFR part 46.

● All aspects of the study are conducte d according to appropriate standards of scientific integrity set by the International Committee of Medical Journal Editors.

● The study has a written protocol that clearly demonstrates adherence to the

standards listed here as Medicare requirements.CMS-1600-P 230

● Where appropriate, the c linical research study is not designed to exclusively test toxicity or disease pat hophysiology in healthy individual s. 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 patien t has no other viable treatment options.

● The study is registered on the ClinicalTrials.gov website and/or the Registry of Patient Registries (RoPR) by th e principal sponsor/investigator prior to the enrollment of the first study subject.

● The study protocol speci fies 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 Co mmittee of Medical Journal Editors (http://www.icmje.org). However, a full repor t of the outcomes must be made public no later than 3 years after the end of data collection.

● The study protocol explicitly discusse s subpopulations affected by the item or service under investigation, particularly trad itionally underrepresente d groups in clinical studies, how the inclusion and exclusion crite ria effect enrollment of these populations, and a plan for the retention and reporting of sa id populations in the study. If the inclusion and exclusion criteria are expected to have a negative effect on the recruitment or retention of underrepresented popul ations, the protocol must discuss why these criteria

are necessary.CMS-1600-P 231

● The study protocol explicitly discusses how the results are or are not expected to be generalizable to subsections of the Medicare populat ion to infer whether Medicare patients may benefit from the intervention. Se parate discussions in the protocol may be necessary for populations eligible for Medica re due to age, disability or Medicaid eligibility. In proposed §405.212(a)(1) through (7), we w ould set forth scientific standards for IDE studies or trials in which providers, practitioners, suppliers or beneficiaries are requesting payment for items or services prov ided to Medicare beneficiaries participating in the IDE study or trial. 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 qual ity and validity of the study. The exercise of committing to paper all the aspects of the st udy is crucial to ensuring that all potential concerns have been addressed. It is impossi ble to evaluate the adequacy of trial design without a written protocol. We do not propose to define the content of that protocol. Numerous federal agencies and other scientif ic entities have done that. However, in proposed §405.212(a)(8) we would specify that all IDE studies or tr ials must have a written protocol addressing the Medicare standards. In proposed §405.212(a)(9), we would sp ecify the “therapeutic intent” requirement. We are proposing a standard th at limits IDE studies to those that do not exclusively test toxicity or disease pathophysiology in healthy individuals but also have a therapeutic outcome. However, the study ma y exclusively test toxicity or disease pathophysiology, if the disease or condition being studied must be life-threatening asCMS-1600-P 232

defined in 21 CFR 312.81(a) and the patient ha s no other viable treat ment options or is severely debilitating as defined in 21 CFR 312.81(b). In proposed §405.212(a)(10), we would specify the standard that requires that IDE studies and trials that Medicare supports be registered on ClinicalTria ls.gov site. The Natio nal Institutes of Health/National Library of Medicine (NIH/NLM) established a clinical trials registry (ClinicalTrials.gov) to meet the requirem ent of the 1997 Food and Drug Administration Modernization Act. After a thorough re view of the NIH/NLM ClinicalTrials.gov website, we believe that all st udies covered under this policy should be registered in this registry prior to enrollment of the first subject. Registration into ClinicalTrials.gov assu res that beneficiaries would have pertinent information about and IDE study or trial Medicare supports — an essential component of transparency to facilitate pa tient-provider informed decision-making. The World Health Organization and Internati onal Committee of Medical Journal Editors (WHO/ICMJE) data elements are the required data elements in this registry. Information about this registry may be obtained at http://www.clinicaltrials.gov/ . We believe that registration serves the public’s desire to obtain information about the studies that their Medicare premiums and tax dollars support. In proposed §405.212(a)(11), we would addres s the issue of dissemination of the IDE study or trial findings. We believe that it is imperative th at the results of IDE studies and trials for which Medicare has made paymen t of any clinical costs be made available to the public regardless of the outcomes. If trial results ar e not published, they do not add

to the clinical eviden ce base and cannot be used for me dical decision-making. For this standard, we are suggesting that the st udy protocol provides a discussion of the publication/dissemination plan of the study findings.CMS-1600-P 233

In proposed §405.212(a)(12), we would focu s on the issue of under-representation of specific demographic groups in U.S. clini cal research studies. We want to support

studies that allow Medica re beneficiaries to voluntarily participate in; and that add to the knowledge base about the use of the IDE devi ce in the Medicare population, to ultimately improve the quality of care that Medicare be neficiaries receive. Well-designed studies have protocols that define the populations with the highest risk of having the disease or condition being studied. If data are not available that clearl y demonstrate differences of clinical importance in subgroups defined by ge nder, race/ethnicity, age, or other relevant subpopulations, then the protocol must discu ss the necessary steps to enroll appropriate numbers of these populations to ensure a valid an alysis of the interven tion effects. It is not our intention to require a specific enrollment of all s ubpopulations. However, it is,

our intention that all cove red study protocols address populations affected by the technology under investigation w ith special emphasis on minor ity and other groups that have experienced disparities in health care due to a lack of qualit y research data. If convincing evidence indicates that no differe nces exist between identified subgroups, that information should be noted in the protocol. In proposed §405.212(a)(13), we would specify the standard that requires that an IDE study or trial protocol explic itly discuss how the results ar e or are not expected to be generalizable to subsections of the Medicare population a nd to infer whether Medicare patients may benefit from the intervention. More often than not the published evidence does not include the Medicare population. We believe that unless th ere are clear data documenting that no important differences exis t between the Medicare beneficiaries and the population studied, the study must discuss the enrollment of appropriate numbersCMS-1600-P 234

representative of the Medicare population to ensu re that the analysis of the results of the intervention may be applicable to Medicare beneficiaries. In §405.211, we are proposing that if the fo llowing two characteristics are also

included met in addition to the criteria lis ted in §405.212(a)(1) through (a)(13), we would automatically cover the costs of routine item s and services in the a Category A study or trial, and the costs of the i nvestigation device and the rou tine items and services in a Category B study or trial as follows:

● The study is a pivotal study.

● The study has is a superiority study design. In §405.212, we propose a process by whic h Category A IDE studies will qualify for Medicare coverage of routine items and se rvices provided in the studies. We propose that any interested party who seeks coverage in an IDE study may send us a request letter that describes the scope and na ture of the IDE study, discussing each of the 15 standards in this policy. b. Category B IDE Devices Under our regulations, a nonexperimental /investigational (Category B) device

was described as a device for which the underl ying questions of safety and effectiveness

has been resolved. In the absence of a NC D, Medicare coverage for Category B devices has been decided by Medicare contractors, su bject to review unde r the claims review process at § 405.211(b). If the Category B de vice was covered, Medicare also covered the costs of items and services specific to the use of the device and furnished in conjunction with an FDA-a pproved clinical study. Beyond Category A IDE studies, we believe th at all investigati onal device studies wherein Medicare coverage is sought should co nform to rigorous scientific and ethicalCMS-1600-P 235

standards. We believe that regardless of wh ether the device is categorized as an A or B the IDE study should meet the same scientific and ethical standards. Thus, we are proposing to require that Categor y B IDE trials must meet the same scientific and ethical

standards. c. Review and Approval (§405.212) We are proposing a centraliz ed IDE coverage review process for Category A and Category B IDEs. We believe the criteria §405.212(a)(1) through (a)(13) are integral to coverage in any study that is Medicare-approve d because it ensures that the IDE device is being furnished in a study with high levels of scientific and ethical integrity. In addition, we propose to cover Category B IDE devices and the costs of routine

care items and services furnished in an IDE study that meets the criteria proposed §405.212(a) and the following a dditional criteria:

● The study is a pivotal study.

● The study has is a superiority study design. As we review the IDE studies, we woul d look for reasonable assurance that enrolled Medicare beneficiary subjects w ill receive the best possible care and are protected when they are subjects in these ID E studies. The pivotal study and superiority study design criteria furnish assurances th at the study results will be informative for beneficiary choices and medical decision-making in the non-t rial settings where most care is actually furnished. We believe that their decisions are facilitated by trial designs that allow them to compare their options a nd determine which one is superior for the beneficiary. Non-inferiority tr ial designs (in contrast to su periority designs) only support more limited and thus less useful conclusions, th at is, that the invest igated device is no worse than the comparator treatment by some pre-specified margin.CMS-1600-P 236

Supporting materials may be submitted. The request would include the following

information:

● The FDA approval letter.

● IDE study protocol.

● IRB approval letter(s).

● The ClinicalTrials.gov identifier We propose that requests should be submitted via email to clinicalstudynotific ation@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: S1-02-01 7500 Security Blvd Baltimore, MD 21244

d. Notification We propose that we would notify beneficiar ies, providers, and practitioners of the

IDE studies of all IDE devices eligible for coverage by posting the IDE study title and ClinicalTrials.gov registry number on our website and publishing a list in the Federal Register

. e. Additional/Conforming Changes In addition to the proposed changes in §405.211 and §405.212, we note the following changes:

● In §405.201(b), Definitions, we woul d be revised the section by removing,CMS-1600-P 237

revising and adding definitions. Some of the de finitions that we are proposing to remove comprise factors that will allo w stakeholders to understand th e clinical study criteria for

items and services furnished in an IDE study including the Category A and B device itself. Therefore, we proposing the following changes ++ Removal of the following definitions: ++ Class I, II, and III devices which refe rs to the different designations of FDA devices. These designations are not relevant to CMS cove rage of an IDE device and

routine items and servic es in an IDE study. ++ Post-market approval refers to a mark eting application for a Class III device.

Like class this is not releva nt to whether CMS may cover an IDE device or routine items or services in an IDE study. ++ Adding the following definitions: -- Clinicaltrials.gov which 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 conducte d around the world. After a thorough review of the NIH/NLM ClinicalTrials .gov website, we believe that all studies covered under this policy should be registered in this regist ry. This is common practice in the research community. Studies and tr ials are now transparent – the study sites, investigator names, source of support, descri ption of the study me thods, and study results are open to the public, including Medicare benefi ciaries. We believe that registration serves the public’s desire to obtain inform ation about the studies they may want to participate. This is a benefit to benefici aries and their provider s participating in IDE

studies. -- Pivotal studies or trials, which refer to clinical investig ations designed toCMS-1600-P 238

collect definitive evidence of the safety and effectiveness of a device for a specified intended use, typically in a statistically justif ied number of subjects. It may or may not be preceded by an early and/or a trad itional feasibility study or trial. -- Routine care items and services, which refer to items and services that are otherwise generally available to Medicare beneficiaries (tha t is, there exists a benefit category, 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 benefici ary were not enrolled in a clinical trial. We note that noncoverage of a routine care item or services under an IDE trial in no way restricts a beneficiary’s access to guaranteed Me dicare benefits outside of an IDE trial. -- Superiority studies refer to studies or tr ials that are intended to demonstrate at some pre-specified level of confidence that th e effect of an investigational treatment is superior to that of an active control by more than a pre-specified margin. We are proposing the additions of the previously discussed definitions because we

would use these factors in our decision to cover an investigational device and the costs of routine items and services in an IDE study.

● We are proposing to modify the following definitions:

++ The term Category A which was devel oped in cooperation with the FDA for the purposes of distinguishing those FDA cl asses under which investigational and noninvestigational devices fall. A Category A IDE device is considered an experimental device; and therefore, deemed nonc overed by Medicare standards. ++ Category A device would be defined as a device for which “absolute risk” of the device type has not been es tablished (that is, the question of safety and effectiveness have not been resolved) and the FDA is unsur e whether the device t ype can be safe andCMS-1600-P 239

effective. ++ The term Category B which was de veloped in cooperation with the FDA for the purposes of distinguishing those FDA classes under which investigational and non-investigational devices fall. FDA assigns each device with an FDA-approved IDE to one of two categories. We propose to revise the definition of Category B (Nonexperimental/investigational) device to mean 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 manufact urers have obtained FDA approval for that device type.

++ Contractors mean Medicare Administra tive Contractors and other entities that contract with CMS to review and adjudicate claims for Medicare items and services. Currently, this is the definition refers to CM S's local Medicare Contractors. We propose to update the current definition in order for the definition to be accurate and consistent Agency-wide. ++ IDE stands for investig ational device exemption . An FDA-approved IDE application permits a device, which would othe rwise 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 and 813. In §405.203, FDA categorization of inves tigational devices, we are not proposing any changes. We have found that the inte ragency agreement between the FDA and CMS that supports the FDA cate gorization of devices to one of two categories for investigational purpose is wi dely accepted among device manuf acturers. Therefore, to avoid future confusion by changing the categor ization, we believe th at maintaining thisCMS-1600-P 240

process continues to support the development of new health technol ogies and tools that practitioners and beneficiarie s have access. It should be noted that neither the determination nor any re-evaluation made by FDA, nor the review determination made by CMS under § 405.211, would be considered co verage determinations that implicate the Part 426 NCD/LCD appeals process. In §405.207—

● In paragraph (a), we ar e not proposing any changes to our current noncoverage of Category A IDE devices. As stated previous ly, we continue to find that because initial questions of safety and effectiveness have not been resolved and the FDA is unsure of whether the device type can be safe and effective, experime ntal/investigati onal (Category A) devices are not reasonable and necessary under section 1862(a)(1)(A ) of the Act; and

● Paragraph (b) currently states that a ll Category A IDE studies and trials must meet the criteria established through the NCD process. Because we are proposing scientific and ethical standards, we no l onger need to establish the IDE study criteria through the NCD process; and therefore, we are proposing to delete the NCD process requirement. We are also proposing to remove the following statement from §405.207(b)(2) that states “If the trial is init iated before January 1, 2010, the device must

be determined as intended for use in the diagnosis, m onitoring or treatment of an immediately life-threatening disease or conditio n” because it is no l onger applicable. We are not proposing changes to §405.207(b)(1) or (b)(3). In §§405.205, 405.207, 405.209, and 405.211, we propose to retain the current explanation of coverage and payment for non-experimental/investigational devices. For §405.213, Re-evaluation of a device ca tegorization, we are not proposing any changes to this section because we believe that maintaining this process continues toCMS-1600-P 241

support the development of new health tec hnologies and tools that practitioners and

beneficiaries have access. We are proposing to retain the prot ections in §405.215, Confidential Commercial and Trade Secret Information, without modifi cation. We note that section 502(c) of the Act broadly prohibits the disc losure of trade secret and confidential commercial or financial information -- information exempt from public disclosure by the Freedom of Information Act (FOIA) 5 U.S.C. 552(b)(4) out side the Department. This prohibition is found in the devices and regulatory inspections provisions of the Act, and is not limited

to device-related information. This disclosu re prohibition also applies to information reported or otherwise obtained by the Depart ment during inspection activities and other activities. This prohibition is interpreted to allow information sharing within the U.S. Department of Health and Human Services only. In §411.15(o)(2), Experimental or inves tigational device exclusions, we propose to revise the requirement to specify that the exclusions under this section include experimental or investigational devices, except for certain devices furnished in accordance with the CMS IDE study and trial st andards established in §405.21l. We are proposing this change to be consiste nt with the IDE study characteristics.CMS-1600-P 242

B. Ultrasound Screening for Abdominal Aortic Aneurysms 1. Background and Statutory Authority Section 1861(s)(2)(AA) of the Act authori zes Medicare coverage under Part B of ultrasound screening for abdominal aortic aneu rysms (“AAA screening” ), as defined in section 1861(bbb) of the Act. Our implem enting regulations for AAA screening are at §410.19. AAA screening is covered for a benefici ary that meets certai n criteria including

that he or she must receive a referral dur ing the initial preventive physical examination (IPPE) and has not previously had an AAA screening covered under the Medicare program. The IPPE, as described in secti on 1861(ww) of the Act (and regulations at §410.16), includes a time restriction and must be furnished not more than one 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 limita tion for the IPPE effectively reduces a Medicare beneficiary’s ability to ob tain a referral for AAA screening. Section 1834(n) of the Act, added by s ection 4105 of the Affordable Care Act, grants the Secretary the discre tion and authority to modify co verage of certain preventive

services identified in secti on 1861(ddd)(3) of the Act, whic h in turn cross-references section 1861(ww)(2) of the Act (including AAA screening at sect ion 1861(ww)(2)(L). The Secretary may modify coverage to the ex tent that such modifi cation is consistent

with the recommendations of the United St ates 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 ultrasonograp hy in men ages 65 through 75 who have ever smoked. (Grade: B Recommendatio n)” (Screening for Abdominal Aortic Aneurysm: Recommendation Statement. http://www.uspreventiveservicestask force.org/uspstf05/aaascr/aaars.htm ). The USPSTFCMS-1600-P 243

recommendation does not include a time limit with respect to the referral for this test. 2. Provisions of the Proposed Regulations We are proposing to exercise our disc retion and authority un der section 1834(n) of the Act to modify coverage of AAA screen ing consistent with the recommendations of

the USPSTF to eliminate the one -year time limit with respect to the referral for this service. This proposed modification would a llow coverage of AAA screening for eligible beneficiaries without requ iring them to receive a referral as part of the IPPE. Specifically for purposes of coverage of AAA screeni ng, we propose to modify the definition of “eligible beneficiary” in §410.19(a) by removing paragraph (a)(1), of this definition, and redesignating paragraphs (a)( 2) and (a)(3) of this defin ition as paragraphs (a)(1) and (a)(2), respectively.

The IPPE is a one-time benefit available to beneficiaries under Part B that receive the IPPE not more than one year after the effective date of the beneficiary’s first Medicare Part B coverage period. Many benefici aries 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, limiting access to AAA screening. We believe that our proposed modification is consistent with current USPSTF recommendations for one-time screening and allows for expanded access to this important preventive service. We i nvite public comment on this proposal. C. Colorectal Cancer Screening: Modificat ion to Coverage of Screening Fecal Occult

Blood Tests 1. Background and Statutory Authority Sections 1861(s)(2)(R) a nd 1861(pp)(1) of the Act auth orize Medicare coverage of colorectal cancer screening. The statute authorizes covera ge of screening fecal occultCMS-1600-P 244

blood tests (FOBT), screening flexible sigm oidoscopies, screening colonoscopies, and other tests determined to be appropriate, subj ect to certain frequency and payment limits. Section 410.37(b) (condition for coverage of screening FOBT) speci fies that Medicare Part B pays for screening FOBT if orde red in writing by the be neficiary’s attending physician. For purposes of §410.37, “attending phys ician” is defined as “a doctor of medicine or osteopathy (as defined in sect ion 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 perf ormed in the overall management of the beneficiary’s specific medical problem.” The coverage provisions for FOBT sc reening were established in 1997 and effective on January 1, 1998 (62 FR 59048, Octobe r 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 beneficiar ies receive appropriate preventive counseling about the implications and po ssible results of having these examinations performed (62 FR 59081). Since then, Medicare covera ge of preventive services has expanded to include, among other things, coverage of an annual wellness visit (as defined in §410.15). The annual wellness visit includes provisions for furnishing personalized health advice and appropriate referrals. In addi tion to physicians, the annual wellness visit can be furnished by certain nonphysician practitione rs, including physician assi stants, nurse practitioners, and clinical nurse specialists. Additionally, §410.32 provides coverage a nd payment rules for diagnostic x-ray tests, diagnostic laboratory test s, and other diagnostic tests. Section 410.32(a)(2) states: “Nonphysician practitioners (that is, clinical nurse specialis ts, clinical psychologists,CMS-1600-P 245

clinical social workers, nurse-midwives, nurse practitioners, and physician assistants) who furnish services that would be physicia n 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 statut ory benefit, may be treated th e same as physicians treating beneficiaries for the purpose of this paragraph.” 2. Proposed Revisions We are proposing to revise §410.37(b), “Condition for coverage of screening fecal-occult blood tests,” to allow an attend ing physician, physician assistant, nurse practitioner, or clinical nurs e specialist to furnish written orders for screening FOBT. These proposed modifications would allo w for expanded coverage and access to screening FOBT, particularly in rural areas. We invite public comment on this proposal. In addition, we are seeking public comment re garding whether a practitioner permitted to order a screening FOBT must be the benefi ciary’s attending practitioner as described

earlier.CMS-1600-P 246

D. Ambulance Fee Schedule

1. Amendment to Sectio n 1834(l)(13) of the Act Section 146(a) of the Medicare Improvement s 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 befo re January 1, 2010, the ambulance fee schedule amounts for ground ambulance services shall be increased as follows:

● For covered ground ambulance transports th at originate in a rural area or in a

rural census tract of a metr opolitan statistical ar ea, the fee schedule amounts shall be increased by 3 percent.

● For covered ground ambulance transports th at do not originate in a rural area or in a rural census tract of a metropolitan sta tistical area, the fee sc hedule 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 th e payment add-ons described above for an additional year, such that these add-on s 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 §414.610(c)(1)(ii) to conform the regulati ons to this stat utory requirement. Section 106(a) of the Me dicare and Medicaid Extenders Act of 2010 (Pub. L.111- 309, enacted December 15, 2010) (MMEA) agai n 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 c overed ground ambulance transpor ts furnished on or after January 1, 2011, and before January 1, 2012. In the CY 2012 End-Stage Renal DiseaseCMS-1600-P 247

Prospective Payment System (ESRD PPS) final rule (76 FR 70228, 70284 through 70285, and 70315), we revised §414.610(c)(1)(ii) to conform the regulations to this statutory requirement. Section 306(a) of the Temporary Payr oll 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 th e 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 §414.610(c)(1)(ii) to conform the regulations to this statutory requirement. Subsequently, section 604(a) of the AT RA 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 cove red ground ambulance transports furnished on or after January 1, 2013 and before January 1, 2014. Thus, we propose to revise §414.610(c)(1)(ii) to conform the regulations to this statutory requirement. This statutory requirement is self-imple menting. A plain reading of the statute requires only a ministerial application of the mandated rate increase, and does not require any substantive exercise of discreti on on the part of the Secretary.

2. Amendment to Sec tion 146(b)(1) of MIPPA Section 146(b)(1) of the MIPPA amended the designation of certain rural areas for payment of air ambulance services. This section originally specified that any areaCMS-1600-P 248

that was designated as a rural area for pur poses of making payments under the ambulance

fee schedule for air ambulance services fu rnished on December 31, 2006, must continue to be treated as a rural area for purpose s of making payments under the ambulance fee

schedule for air ambulance services furnis hed 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 provi sion 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 §414.610(h) to confor m the regulations to this statutory requirement. Section 106(b) of the MMEA amended s ection 146(b)(1) of MI PPA 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 §414.610( h) to conform the regulations to this statutory requirement. Subsequently, section 306(b) of th e TPTCCA amended se ction 146(b)(1) of MIPPA to extend this provi sion 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 §414.610(h) to conform the regul ations to this stat utory 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 propose to revise §414.610(h) to conform the regulations to th is statutory requirement. This statutory requirement is self-imple menting. A plain reading of the statute requires only a ministerial application of a rural indicator, and does not require anyCMS-1600-P 249

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 have re-established the “rural” i ndicator 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 Prescripti on Drug, Improvement and Modernization Act of 2003 (Pub. L. 108-173, enacted on D ecember 8, 2003) (MMA) added section 1834(l)(12) to the Act, which specified that in the case of gro und ambulance services furnished on or after July 1, 2004, and before January 1, 2010, for which transportation originates in a qualified rural area (as describe d in the statute), the Secretary shall provide for a percent increase in the base rate of th e 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 ac count mileage) in the lo west quartile of all rural county populations as compared to the aver age cost per trip for such services (not taking into account mileage) in the highest quartile of rural c ounty 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 gr ound ambulance transports that originated in a “qualified rural area”; that is, to transpor ts that originated in a rural area included in those areas comprising the lowest 25th per centile of all rural p opulations arrayed by population density. For this purpose, rural ar eas included Goldsmith areas (a type of rural census tract). 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 throughCMS-1600-P 250

December 31, 2010. In the CY 2011 PFS final rule with comment period (75 FR 73385, 73386 and 73625), we revised §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 §414.610(c)(5)(ii) to conform the regulations to this statutory requirement. Section 306(c) of the TPTCCA amende d 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 th e 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 §414.610(c)(5)(ii) to confor m the regulations to these statutory requirements. Subsequently, section 604(c) of the AT RA amended section 1834(l)(12)(A) of the Act to extend this rural bonus through D ecember 31, 2013. Therefore, we are continuing to apply the 22.6 percent rural bonus described above (in the sa me manner as in previous years), to ground ambulance services with date s of service on or after January 1, 2013 and before January 1, 2014 where transportati on originates in a qualified rural area. Accordingly, we propose to revise §414.610(c)(5 )(ii) to conform the regulations to this statutory requirement.

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 CodeCMS-1600-P 251

File. This statutory requirement is self-imp lementing. This provision requires a oneyear extension of the rural bonus (which wa s 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 s ection 1834(l)(15) of the Act, specifies that the fee schedule amount otherwise appl icable under the preceding provisions of section 1834(l) of the Act sh all be reduced by 10 percent for ambulance services furnished on or after October 1, 2013, c onsisting of non-emergency basic life support (BLS) services involving transp ort of an individual with end-stage renal disease for renal dialysis services (as describe d in section 1881(b)(14)(B) of th e Act) furnished other than on an emergency basis by a provider of services or a renal dialysis facility. We are proposing to revise §414.610 by adding paragrap h (c)(8) to conform the regulations to this statutory requirement. This statutory requirement is self-imple menting. A plain reading of the statute requires only a ministerial application of the mandated rate decrease, and does not require any substantive exercise of di scretion on the part of the S ecretary. Accordingly, for the

ambulance services described in section 637 of the ATRA furnished on or after October 1, 2013, the fee schedule amount othe rwise applicable ( both base rate and mileage) will be 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 theCMS-1600-P 252

following studies: (A) A study that analyzes data on existi ng cost reports for ambulance services furnished by hospitals and critical access hos pitals, including varia tion by characteristics of such providers of services, with a Repor t to Congress on such study due no later than October 1, 2013; and (B) A study of the feas ibility of obtaining cost data on a periodic basis from all ambulance providers of services and supplie rs for potential use in examining the appropriateness of the Medicare add-on payments for ground ambulance services

furnished under the fee schedule under secti on 1834(l) of the Act and in preparing for future reform of such payment system, w ith a Report to Congress due on such study no later than July 1, 2014. Further, in conducting the study under paragraph (B) a bove, 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 a ppropriate cost data and the periodicity of such cost data collection;

● Examine the feasibility of developi ng a standard cost reporting tool for providers of services and suppliers of ground ambulance services; and

● Examine the ability to furnish such co st data by various types of ambulance providers of services and suppliers, especi ally by rural and super-rural providers of services and suppliers. As noted above, in conducting the st udy under section 604(d)(1) of the ATRA described in paragraph (B) above, the Secretar y is required to consult with industry on the design of such cost collection efforts (see section 604(d)(2)(A) of the ATRA). WeCMS-1600-P 253

are using this 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 a ll 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 fo r future reform of such payment system. We therefore invite public comment on thes e issues as part of the study we are conducting under section 604(d )(1)(B) of the ATRA. E. Proposals Regarding the C linical 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 nonpatient s currently are paid on the basis of the Clinical Laboratory Fee Schedule (CLFS), with limited exceptions. For each Healthcare 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 St ate or a local geographic area; or

● A national limitation amount (NLA) (s ection 1833(a)(1)(D)(i), (a)(2)(D)(i), (h)(1), and (h)(4)(B) of the Act). The NL A for a clinical diag nostic 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 diagnos tic laboratory test performed on or after January 1, 2001, that the Secretary determin es is a new test for which no limitation amount has previously been established (section 1833(h)(4)(B)(v iii) of the Act).CMS-1600-P 254

Currently, we update the CLFS amounts annually to reflect changes in the

Consumer Price Index for all Urban Consumer s (U.S. city average) (CPI-U) and apply a multi-factor productivity adjustment (see secti on 1833(h)(2)(A) of the Act). In the past, we also implemented other adjustments or di d not apply the change in the CPI-U to the CLFS in accordance with statutory mandates. For example, under section 1833(h)(2)(A)(i) of the Act, we were required to subtract 0.5 percentage points from the CPI-U adjustment for 2009 and 2010. We do not otherwise update or change the CLFS. For any clinical diagnostic laboratory test s 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 dia gnostic laboratory tests (see section 1833(h)(8) of the Act and 42 CFR §§414.500 through 414.509). Once established, however, in most cases, we only have the opportuni ty to reconsider the basis and/or amount of payment for new tests for one additional year after the ba sis 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 mechanis m to adjust payment amounts is unique among the Medicare payment schedules and systems. Generally, fee schedules and prospective payment systems are evaluated each year to reflect the changing mix of services provided under that system or sc hedule 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 ar e essentially locked in place and do not change when the cost of the test changes. As discussed below, in this proposed rule, weCMS-1600-P 255

are proposing to implement a pr ocess to adjust payment amounts based on changes in technology. 2. Proposals Regarding Technological Change s Under Section 1833(h)(2)(A)(i) of the

Act a. Background on Technological Changes There has been a significan t amount of technological change in the clinical laboratory area since the implementation of th e CLFS, which has resulted in the increased use of point-of-care testing, brand new tests being developed, and the proliferation of laboratory-developed test s. 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 mo re efficient and automated. Technology has enabled a significant site -of-service shift for many laboratory tests from the laboratory environment to the po int of health care de livery. This point-ofcare testing has increased since the 1980s, when this type of testing first became available, mainly due to changes in technol ogy 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 rece iving care, such as at aCMS-1600-P 256

physician’s office or at a hospital bedside, to facilitate decisions about appropriate

treatment. There are also brand new technologies th at did not exist when the CLFS was established, most notably genetic and genomic te sts. This area of medicine evolved from the work of the Human Genome Project a nd subsequent research and development by both the federal government and private firm s. 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 in the pediatric populat ion. As this area has expanded over the past several decades, Medicare has taken on a more prominent role in payment for these services (see 77 FR 68994 through 69002 for a thorough discu ssion of how Medicare pays for these tests). We expect the number of codes and test s in this area to con tinue to grow as the technology evolves and more tests become av ailable in the areas of pharmacogenomics, personalized and predictive medici ne, and companion diagnostics. We also note the growth in laboratory-developed test s (LDTs) over the years. These proprietary tests are developed by labor atories, which then offer the service of providing the test. Some of the most advan ced laboratory tests curre ntly being performed are LDTs which use sophisticated proprieta ry technology. Many LDTs do not have their own codes; instead, they are billed using unlis ted codes for which c ontractors establish a payment amount. Other LDTs were billed to Medicare using “stack ing codes,” where a laboratory submits a code for each step of the testing process; however, these “stacking

codes” were eliminated at the end of 2012 for molecular pathology tests and replacedCMS-1600-P 257

with 114 new test-specific codes. These payment processes provide us with limited information about the technology used to perf orm these tests. However, we know that the number of LDTs has been growing over the years and multiple laboratories have developed ways to perform the same test. Fu rther, our recent expe rience with using a gap filling methodology to price molecular pathology tests, which are often LDTs, has shown that the costs of performing these tests ha ve decreased since c ontractors initially established payment amounts for the tests, or compared to the c ode stack previously billed. Our experience with gap filling molecular pathology tests has also shown that

there is wide variation in the cost of performing the same test by different la boratories. 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 (CMS has added approximately 800 new test codes to the CLFS since its inception), it would be appropria te to establish a process to reconsider payment amounts

on the CLFS to take into account increased e fficiency, changes in laboratory personnel and supplies necessary to conduct a test, change s in sites of service, and other changes driven by technological advances. Section 1833(h)(2)(A)(i) of the Act requires the Secretar y 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], [the change in the CPI-U] and subject to such other adjustments as the Secretary determines are justified by techno logical changes ” (emphasis added). Under this authority, we are proposing a pr ocess under which we will systematically reexamine the payment amounts established und er the CLFS to determine if changes in technology for the delivery of that service warrant an adjustment to the payment amount.CMS-1600-P 258

b. Proposed Definition of Technological Changes We are proposing to define technologi cal changes as changes to the tools, machines, supplies, labor, instruments, skills, techniques, and devices by which laboratory tests are produced and used. 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 laborat ory to a physician’s offi ce). We believe this broad definition would capture all of the technological cha nges that could impact the resource inputs for various tests on the CL FS. As discussed below, the technological changes for a specific test w ould be discussed in the propos ed rule in which we are proposing to adjust the payment amount for th at test, and we woul d seek public comment on our determination of the technological changes and the payment adjustment. c. Proposed Process We are proposing that, each year, we w ould 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 technologi cal changes. For those codes where we determine that payment adjustments should be made, beginning with the CY 2015 PFS proposed rule, we would identify the test code, discuss how it has been impacted by technological changes, and propose an associ ated adjustment to the payment amount for the test code as appropriate to reflect th e 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 technologi es are employed), and to provide for reductions in existing amounts (for example in situations where technologyCMS-1600-P 259

reduces costs through increased efficiencies). We expect that most payment amounts will decrease due to the changes in technology that have occurred over the years since the payment amounts were established and th e general downward trend of costs once technology has had an opportunity to diffuse. A key goal in establishing this review process is to ensure payment accuracy afte r technological changes; thus payment rates

could increase or decrease as a result of these reviews. Under our proposed process, we would also list codes that we reviewed but for

which there was insufficient information to su pport or establish an adjustment to the payment amount due to technological cha nges. We would solicit comment on the technology used to perform any tests we reviewed for possible payment changes, and any relevant cost information. We expect that we would finalize any payment adjustments in the PFS final rule, beginning with the CY 2015 PFS final rule. We are proposing that the CPI-U and multi-factor productivity adjustment s would be applied after we establish the new payment amount through our usual instruction process. We believe that this proposed process w ould best allow for the greatest amount of transparency in review and the most struct ured and consistent opportunity for the public to provide input into the process. We are soliciting comment on these proposals. d. Proposed Identification and Prioriti zation of Codes to be Reviewed We are proposing to review all codes curre ntly on the CLFS. We are proposing to start our review by examining the codes that have been on the CLFS the longest and then work our way forward, over multiple years, unt il we have reviewed all of the codes on the CLFS. We believe that the payment am ounts for codes that have been on the CLFS the longest amount of time would be most af fected by changes in technology because, in general, technology is most expens ive earliest in its life cycle but decreases in cost as theCMS-1600-P 260

technology matures and diffuses. If during th e course of reviewi ng these individual codes we find that there are additional, newer codes that are clinically and/or technologically similar, we are proposing to consider them fo r review at the same time as we review the older codes because we exp ect we would have the same or similar justifications for making payment adjustments to those codes. We in tend to review these codes as quickly as possible but we believe there would be a si gnificant administrative burden associated with such a comprehensiv e review of the 1,250 codes on the CLFS. We are estimating that it would take at least 5 years to review all of the existing codes on

the CLFS. Once we have completed our review of the codes currently on the CLFS and made any adjustments necessary due to tec hnological changes, we are proposing to

review codes added to the CLFS after 2015 th at have been on the CLFS for at least 5 years. We would also review codes again that have not been review ed 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 have changed dramatically in less than 5 years. We are soliciting 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 are also proposing to allow the public to nominate additional co des for review, including those that had been previously reviewed for technological cha nge. We are proposing 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. Fu rther, we are proposing that the nominationCMS-1600-P 261

must include an explanation from the nomin ator 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 expl ain why we think such a change is not

warranted at that time. We are proposing to codify th e proposed process at 42 CFR §414.511. We are seeking public comment on thes e proposals. We also are seeking comment on alternative approaches to achie ving our goal of paying appropriately for laboratory tests by accounting for changes in technology. Finally, we are soliciting comment on general trends in technology change in the laboratory industry and the health care sector in general. 3. Proposed Changes in the CY 2014 OPPS/ASC Proposed Rule In the CY 2014 OPPS/ASC proposed rule, CMS is proposing to package payment for certain clinical diagnostic la boratory tests into the base payment for the Ambulatory Payment Classification (APC). For detail s on this proposal, pleas e see the “Proposed Changes to Packaged Items and Services” section of the CY 2014 OPPS/ASC proposed rule. Comments on the OPPS proposal s hould be made to the CY 2014 OPPS/ASC proposed rule. Comments on the proposals in this rule should be made to the CY 2014 PFS proposed rule.CMS-1600-P 262

F. Liability for Overpayments to or on Be half of Individuals in cluding Payments to

Providers or Other Persons 1. Background and Statutory Authority CMS waives recovery of overpayments in certain situations for claims based feefor-service provider, supplier or beneficiar y 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 benefi ciary overpayments under certain presumptions within a specified timeframe. Section 1870(b) and (c) of the Act allow the S ecretary to reduce the specified time period to not less than one year if the Secretary finds that such a reduction is consistent with the objec tives 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 se ction 1870(b) and (c) of the Act. Section 1870(b) of the Act pr ovides for the waiver of recovery of an overpayment to a provider of services (hereinafter, “pr ovider”) or other person whenever that provider or other person is “without fault” in incurri ng the overpayment. Fo r purposes of section 1870 of the Act and this proposed rule, the te rm “other person” in cludes practitioners, physicians, and other suppliers. Section 1870(b) of the Act also establishes circumst ances under which a provider or other person is presumed for administrati ve 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 pr ovides for the waiver of recovery of an overpaymentCMS-1600-P 263

to an individual whenever the individual is “without fault” in incurring the overpayment, and recovery would either defeat the purpose of the Soci al Security or Medicare programs or would be “against equity and good conscience.” Section 1870(c) of the Act also establishes circumst ances under which recovery of an overpayment for an individual is presumed to be “against equity and good conscience.” After a specified period of tim e, recovery of certain overpayments from

individuals who are “without fa ult” 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 pa yment for, among other things, items and services that are not reason able and necessary or that are for custodial

care. Section 638 of the ATRA amended the timef rame specified in section 1870(b) of the Act “without fault” presumption from 3 to 5 years so that the pr esumption of “without fault” only applies if the Medicare cl aims 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, sect ion 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 determ ination 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 ch ange CMS’ claims reopening regulationCMS-1600-P 264

at §405.980. Specifically, we retain our author ity to reopen claims for any reason within one year, for good cause within 4 years, and at any time for fraud or similar fault. 2. Provisions of the Proposed Regulations We propose to revise §405.350(c) and §405.355(b). These proposed revisions would change the timing of the triggering ev ent for the “without fault” and “against equity and good conscience” presumptions. Th ese revisions are being proposed to reflect

the revisions to section 1870 of the Act as specified in by section 638 of ATRA. Specifically, we propose to change th e timeframe at §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 overpay ment 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 propose to amend the timef rame at §405.355(b) for the presumption “against equity and good conscien ce” for certain types of deni als for an individual who is “without fault” so that the pr esumption would apply if the overpayment determination is made subsequent to the fifth year (instead of the third year) follo wing the year in which the notice of payment was se nt to the individual. Additionally, in our review of the cu rrent regulation implementing section 1870(c) of the Act, we noted that §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 se ction 1862(a)(1) or (a)( 9) of the Act. Accordingly, we propose to update and clar ify §405.355(b) so that it clearly reflects the statutory language by adding th at the “against equity and good conscience” presumption would be applicable for an individual who is “without fault” only if the overpayment isCMS-1600-P 265

related to items and services that are not pa yable under section 1862(a)(1 ) or (a)(9) of the Act. In addition, we propose to delete th e parenthetical at the end of §405.355(b) because the regulations referenced no longer exists; those sections of the regulations were reassigned. (See the October 11, 1989 Federal Register (54 FR 41733).) The modifications we propose to §405.355(b) makes the references in the parenthetical no longer necessary.CMS-1600-P 266

G. Physician Compare Website 1. Background and Statutory Authority Section 10331 (a)(1) of the Affordable Ca re Act, requires that, by no later than January 1, 2011, we develop a Physician Compare Internet website with information on physicians enrolled in the Medicare program un der 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. 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 th at begin no earlier than January 1, 2012, we implement a plan for making publicly availa ble through Physician Compare information on physician performance that provides compar able information on quality and patient experience measures. We met this requi rement 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 outc omes and functional status of patients.

● An assessment of the c ontinuity and coordination of care and care transitions,CMS-1600-P 267

including episodes of care and risk-adjusted resource use.

● An assessment of efficiency.

● An assessment of patient experien ce and patient, caregiver, and family engagement.

● An assessment of the safety, e ffectiveness, and timeliness of care.

● Other information as determined appropriate by the Secretary. As required under section 10331(b) of the Af fordable 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 opport unity, as determined by the Secretary, to review their results before posting to Physicia n Compare. This would consist of a 30-day preview period for all measurement performan ce data that will allo w physicians and other eligible professionals to view their data as it will appear on the we bsite in advance of publication. Details of the preview pro cess will be communicated on the Physician Compare Initiative page on CMS.gov in advance of the preview period.

● Processes to ensure th e 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 ap plicable, other payers, to the extent such information would provide a more accurate portrayal of physician performance.

● Processes to ensure appropriate attr ibution of care when multiple physicians and other providers are involved in the care of the patient.CMS-1600-P 268

● Processes to ensure timely statisti cal 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 accu rate 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 note 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 th rough Physician Compare, section 10331(e) of the Affordable Care Act requires the Secr etary, as the Secretary deems appropriate, to consider the plan to transition to value- based purchasing for physicians and other practitioners that was devel oped 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 publis h data on physician quality and efficiency and on patient expe rience of care in support of value-based purchasing and consumer choice. Initial wo rk 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 Afford able Care Act supports our overarching goals of providing consumers with quality of care information to make informed decisions about their healthcare, while encour aging clinicians to improve on the qualityCMS-1600-P 269

of care they provide to their patients. In accordance with section 10331 of the Affordable Care Act, we intend to utilize Physic ian Compare to publicly report physician performance results. 2. Public Reporting of Physician Performance Data Since the initial launch of the website, we have continued to build on and improve Physician Compare. In 2013, we launched a fu ll redesign of Physician Compare offering significant improvements including a complete overhaul of the underlying database and a new Intelligent Search feature, addressing tw o of our stakeholders’ primary critiques of the site and considerably im proving functionality and usabi lity. The primary source of administrative information on Physician Compar e is the Provider Enrollment, Chain, and Ownership System (PECOS); as the sole source of verified Me dicare professional information, PECOS remains the primary information source. However, with the redesign, we incorporated Medicare claims information to verify the information in PECOS to ensure only the most current and accu rate information is included on the site. With the redesign, users can now sear ch for Medicare physicians and other healthcare professionals by defi ning a location – a ZIP code, a city/State combination, an exact address, or landmark – and by entering a medical specialty, hea lth care professional or group practice name, a medical condition, body part, or organ system. The site produces a list of suggested specialties, as defined by the 855i Medicare Enrollment Form, users can choose related to their search term or a list of names, as appropriate. Currently, users can view information about approved Medicare professionals such as name, primary and secondary special ties, 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 ofCMS-1600-P 270

Medical Specialties (ABMS) board certifi cation information. In addition, for group practices, users can also vi ew group practice names, speci alties, practice locations, Medicare Assignment status, and affiliated professionals. As required by 1848(m)(5)(G) of the Act, we are required to post on a CMS website the names of eligible professionals who satisfactorily repor t under the PQRS, as well as those eligible profe ssionals who are successful el ectronic prescribers under the Medicare Electronic Prescribing (eRx) Incentive Program, and Physician Compare

contains a link to the list of names. In additi on to the list of names, there is a section on each individual’s profile page listing th e quality programs under which the specific individual satisfactorily repor ted or was a successful electr onic prescriber. The program name is listed and a green check mark clearl y indicates participation. 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 whic h group practices are satisfactorily reporting in Group Practice Re porting Option (GPRO) under the PQRS or the eRx Incentive program. We have also included a notation and check mark for individuals that 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.

As we indicated in the 2013 PFS final rule with comment period (77 FR 69166), we will include a check mark in the quality prog rams section of the profile page to note those individuals who report the PQRS Card iovascular Prevention measures group in support of the Million Hearts Initiative. Finally, a check ma rk will be added to indicate

those individuals who have earned a Maintena nce of Certification Additional IncentiveCMS-1600-P 271

starting with data reported for CY 2013. We will update this information annually moving forward. We are now instituting our plan for a phased approach to public reporting of performance information on Physician Compar e. 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 coll ected through the GPRO web interface during 2012 would be publicly reported on Physician Compare. These measures will be publicly reported on Physician Compare in 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 Arte ry Disease (CAD) PQRS GPRO measures, and that we would develop and report compos ite measures for these measure groups in future years, if technically feasible. For data reported in 2013 under the GPRO, DM and CAD PQRS GPRO measures a nd composites collected via th e GPRO web interface that meet the minimum sample size of 20 patients, a nd that prove to be st atistically valid and reliable, will be publicly reported on Physic ian 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 othe rwise deemed not to be suitable for public reporting, the group’s performance rate on that measure will not be publicly reported. In the Shared Savings Program final ru le (76 FR 67948), we noted that because Accountable Care Organization (ACO) providers /suppliers that are el igible professionals are considered to be group practices for purposes of qua lifying for a PQRS incentive under the Shared Savings Program, we woul d publicly report performance on quality measures as we report performance on quality measures for PQRS GPRO groupCMS-1600-P 272

practices. Public reporting of performance on these measures will be presented at the ACO level only.

In the CY 2013 PFS final rule with co mment period (77 FR 69167), we also finalized our decision to publicly report Clinician and Group Consumer Assessment of Healthcare Providers and Syst ems (CG-CAHPS) data for group practices of 100 or more eligible professionals reporti ng data in 2013 under the GPRO, and for ACOs participating in the Shared Savings Program. We anticip ate 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 fina lized a decision to publicly re port on Physician Compare the performance rates on a limited set of web inte rface 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 propose to expand the quali ty measures posted on Physician Compare by publicly reporting performance on all measures collected through the GPRO web interface for groups of all sizes partic ipating in 2014 under the PQRS GPRO and for ACOs participating in the Medicare Shared Savings Program. 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 will provide a 30-day preview period prior to public ation 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. CMS will detail the proc ess for the 30-day preview and provide aCMS-1600-P 273

detailed timeline and instructions for previe w in advance of the start of the preview period. For 2013 and 2014, we expanded the group reporting option for PQRS GPRO to include a registry reporting op tion, which we propose to further modify for data reported in 2014 under the PQRS GPRO registry option. 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 phys icians and other eligible professionals under PQRS, we propose to publicly repor t on Physician Compare performance on certain measures that groups report via regi stries and EHRs in 2014 for the PQRS GPRO. Specifically, we propose to report, no ear lier than 2015, performance on the GPRO registry and EHR measures id entified 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 continue to pr ovide beneficiaries with a consistent set of measures over time. For registry reporti ng, publicly reported meas ures would include:

● Diabetes: Hemoglobin A1c Poor Control.

● Heart Failure (HF): Beta-Blocker Th erapy for Left Ventricular Systolic Dysfunction (LVSD).

● Medication Reconciliation.

● Preventive Care and Scr eening: Influenza Immunization.

● Pneumococcal Vaccination Status for Older Adults.

● Preventive Care and Screen ing: Breast Cancer Screening.

● Colorectal Cancer Screening.

● Coronary Artery Disease (CAD): Angiotensin-converting Enzyme (ACE)CMS-1600-P 274

Inhibitor or Angiotensin Receptor Blocke r (ARB) Therapy -- Diabetes or Left Ventricular Systolic Dysfunction (LVEF < 40%).

● Adult Weight Screening and Follow-Up.

● Preventive Care and Screening: Screening for Clinical Depression.

● Coronary Artery Dise ase (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): Cont rolling High Blood Pressure.

● Ischemic Vascular Disease (IVD): Co mplete Lipid Panel and LDL Control.

● Preventive Care and Screening: Screening for High Blood Pressure and Follow-Up Documented. For EHR reporting, publicly report ed measures would include:

● Diabetes: Hemoglobin A1c Poor Control.

● Heart Failure (HF): Beta-Blocker Th erapy for Left Ventricular Systolic Dysfunction (LVSD).

● Preventive Care and Scr eening: Influenza Immunization.

● Pneumococcal Vaccination Status for Older Adults.

● Preventive Care and Screen ing: Breast Cancer Screening.

● Colorectal Cancer Screening.

● Adult Weight Screening and Follow-Up.

● Coronary Artery Dise ase (CAD): Lipid Control.

● Ischemic Vascular Disease (IVD): Use of Aspirin or Another Antithrombotic.

● Preventive Care and Screening: Tobacco Use: Screening and CessationCMS-1600-P 275

Intervention.

● Hypertension (HTN): Cont rolling High Blood Pressure.

● Ischemic Vascular Disease (IVD): Co mplete Lipid Panel and LDL Control.

● Preventive Care and Screening: Screening for High Blood Pressure and Follow-Up Documented. Consistent with the requirement under sec tion 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 Clin ician and Group Consumer Assessment of Healthcare Providers and Systems (CG-CA HPS) (77 FR 44804) including the following patient experience of care measures for group practices participati ng 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 a nd their staff, and patients’ perception of care. We finalized a decision to publicly re port performance on these measures on Physician Compare in 2014 for data collected for PY 2013 for group practices with 100 or more eligible professi onals participating in the PQRS GPRO in 2013 and reporting data through the GPRO web in terface. At least for data reported for 2013, we noted that we would administer and co llect patient experience survey data on a sample of the group practices’ beneficiaries.CMS-1600-P 276

For ACOs participating in the Shared Savi ngs Program, consistent with the PQRS policy of publicly reporting patient experience measures on Physician Compare starting with data collected for CY 2013, we will publ icly report patient experience data in addition to the measure data reported thr ough the GPRO web interf ace (76 FR 67948). Specifically, the patient experience measures that would be reported for ACOs include

the CG-CAHPS measures in the Patient/Care giver 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 propose to continue public re porting of these CGCAHPS data for PQRS GPRO group practices of 100 or mo re eligible professionals participating in the GPRO via the web inte rface and for Shared Savings Program ACOs reporting through the GPRO web interface or other CMS-approved tool or interface.

Consistent with what we finalized for CY 2013 under the PQRS GPRO, we will

administer and fund the collection of data fo r these groups. As we will administer and collect the data for these surveys, we do not anticipate public reporting to impose any notable burden on these groups. We believe these patient surveys are im portant tools for assessing beneficiary experience of care and outcomes, and under our authority under sec tion 1848(m)(3)(C) ofCMS-1600-P 277

the Act to select the measures for which a group practice must report under the PQRS, we seek to encourage groups of 25 or more eligible professi onals to report CG-CAHPS by proposing to make these measures availabl e for reporting the PQRS and for the Value Based Payment Modifier. We propose to publicly report CY 2 014 CG-CAHPS data for any group practice (regardless of size) that voluntarily chooses to report CG-CAHPS; however, CMS will not fund the surveys for these groups. CMS proposes to publically report comparable CG-CAHPS data collected by groups of any size collected via a

certified CAHPS vendor. We are dedicated to publicly reporti ng accurate, valid, and reliable data on Physician Compare and are aware that each gr oup 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 collecti on mechanism with strong support from the healthcare community, and that it provides th e best opportunity to collect useful and accurate data for the largest number of gr oup practices. We propose to use only those survey domains that are app licable to group practices or ACOs respectively, and believe that these domains have been well tested, and will therefore provide the best data for the largest number of groups.

In the CY 2013 PFS final rule with co mment period (77 FR 44804), we indicated our intention to publicly report performance rates on quality measures included in the 2014 PQRS and for individual e ligible professionals consis tent with the requirements

under section 10331 of the Affordable Care Ac t to provide information about physicians and other eligible professionals who partic ipate in PQRS. We believe that individuallevel measure data is important in helping c onsumers make informed healthcare decisions and that this information should be posted on the site as soon as t echnically feasible.CMS-1600-P 278

Therefore, we propose to publicly report compar able data, as noted below, collected for the CY 2014 PQRS via claims, EHR or registry from individual eligib le professionals as early as CY 2015. Specifically, we propose to post individual measures reported by individual eligible professiona ls in line with those meas ures reported by groups through

the GPRO web interface. These measures include:

● Diabetes: Hemoglobin A1c Poor Control.

● Heart Failure (HF): Beta-Blocker Th erapy for Left Ventricular Systolic Dysfunction (LVSD).

● Medication Reconciliation.

● Preventive Care and Scr eening: Influenza Immunization.

● Pneumococcal Vaccination Status for Older Adults.

● Preventive Care and Screen ing: Breast Cancer Screening.

● Colorectal Cancer Screening.

● Coronary Artery Disease (CAD): Angiotensin-converting Enzyme (ACE) Inhibitor or Angiotensin Receptor Blocke r (ARB) Therapy -- Diabetes or Left Ventricular Systolic Dysfunction (LVEF < 40%).

● Adult Weight Screening and Follow-Up.

● Preventive Care and Screening: Screening for Clinical Depression.

● Coronary Artery Dise ase (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): Cont rolling High Blood Pressure.

● Ischemic Vascular Disease (IVD): Co mplete Lipid Panel and LDL Control.CMS-1600-P 279

● Preventive Care and Screening: Screening for High Blood Pressure and Follow-Up Documented.

● Falls: Screening for Fall Risk.

● Diabetes Mellitus: Low Dens ity Lipoprotein (LDL-C) Control.

● Diabetes Mellitus: Hi gh Blood Pressure Control.

● Diabetes Mellitus: Hem oglobin A1c Control (<8%). Additionally, and in support of the HHS -wide Million Hearts Initiative, we propose to publicly report, no earlier than 2015, performance rates on measures in the PQRS Cardiovascular Prevention measures group (77 FR 44803) at the individual eligible professional level for data colle cted in 2014 for the PQRS (Table 50). We seek comment on posting performance on patient experience survey-based measures for individual eligible professionals starting with da ta collected for CY 2015. In future years, we will consider expanding public reporting of, and seek comment on, measures that have been devel oped and collected by approved and vetted specialty societies for individual eligible prof essionals as well as data collected via the new qualified clinical data registry option being proposed under the PQRS. Additionally, we seek comment on publicly reporting partic ipation by individual el igible healthcare professionals on initiatives such as Choosing Wisely, an initiative of the American Board

of Internal Medici ne Foundation. We are committed to making Physician Comp are a constructive tool for Medicare beneficiaries, successfully meeting the A ffordable Care Act mandate, and providing

consumers with information needed to make informed healthcare decisions. We have developed a plan, and begun implementing that plan with a phased approach of adding physician quality data to Physician Compare. We believe this staged approach to publicCMS-1600-P 280

reporting of physician quality information allo ws consumers access to information that is currently available while we continue to deve lop the infrastructure necessary to support additional types of data and information on physicians’ quality m easure performance. We intend to implement subsequent phases of th e plan in future rulemaking, as needed. We invite comments regarding our proposal s to: (1) publicly report performance rates on all quality measures that group pr actices submit through the GPRO web interface in 2014 under the PQRS GPRO and that ACOs participating in the Medicare Shared Savings Program submit using the GPRO web interface or another CMS-approved tool or interface; (2) publicly report performance on ce rtain quality measures collected under the 2014 PQRS GPRO via registry and EHR re porting mechanisms; (3) publicly report performance on patient experience measures for 2014 both for group practices and ACOs and for group practices of 25 or more profe ssionals who choose to voluntarily report CGCAHPS data as part of their participati on in the PQRS GPRO; (4) publicly report performance on certain measures that are re ported by individual el igible professionals reporting through an EHR, registry, or clai ms during 2014 under th e PQRS; and (5) in support of the HHS-wide Million Hearts Initiative, publicly report performance rates for

measures included in the Cardiovascular Prevention measures group reported by individual eligible professionals participating in the 2014 PQRS. We seek comment regarding: (1) publicly report patient experience survey data under the PQRS for individual eligible professi onals, starting with da ta reported in 2015; and 2) to publicly report pa rticipation by individual eligib le healthcare professionals on initiatives such as Choosing Wisely, an init iative of the American Board of Internal

Medicine Foundation. For the above proposals, we note that we would only post data on PhysicianCMS-1600-P 281

Compare as it is technically feasib le and as the data are availableCMS-1600-P 282

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

There are several healthcare quality improvement program s that affect physician payments under the Medicare PFS. As we stated previously, we believe that alignment of these quality improvement programs – such as the EHR Incentive Program, Value-based Payment Modifier, and Medicare Shared Sa vings Program – is critical for programs involving physicians and other healthcare elig ible professionals. The proposals that follow facilitate the alignment of programs, reporting systems, and quality measures. We believe that alignment of CMS quality impr ovement programs will decrease the burden of participation on physicians and allow them to spend more time and resources caring for beneficiaries. Furthermore, as the lead ers of care teams and the healthcare systems, physicians and other clinicians serve beneficiaries both as frontline and system-wide change agents to improve quality. We believe that to improve quality, quality measurement and reporting is an important comp onent. It is our inte nt that the following requirements will further improve alignment of physician-focused quality improvement programs, decrease burden and duplicative repo rting for eligible pr ofessionals, increase engagement of physicians and other eligible professionals in quality improvement, and ultimately, lead to higher quality care for beneficiaries. This section contains the requirement s 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 incen tive payments and payment adjustments to eligible professionals based on whether or not they satisfactorily report data on quality measures for covered professional services furnished during a speci fied reporting period. The regulation governing the PQRS is loca ted at §414.90. The program requirements forCMS-1600-P 283

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/QualityInitiatives-Patient-Assessme nt-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-AssessmentInstruments/PQRS/index.html.

In the CY 2013 PFS final rule with comme nt period (77 FR 69170), we finalized certain requirements for the 2013 and 2014 PQ RS incentives, as well as 2015 and 2016 PQRS payment adjustments. We also finali zed certain requirements for future years, such as the reporting periods for the PQRS pa yment adjustment, as well as requirements for the various PQRS reporting mechanisms. Below, we propose to change some requirements for the 2014 PQRS incentive a nd 2016 PQRS payment adjustment, as well as to make changes to the PQRS measure se t. Furthermore, we introduce our proposals for a new PQRS reporting option – satisfactory pa rticipation in a qualified clinical data registry. We then seek comment on a general plan for future years for PQRS, so that we may continue to consider stakeholder feedb ack as we develop policies and proposals for

the future. 1. Proposed Changes to §414.90 As noted previously, the regulation gove rning the PQRS is located at §414.90. We are proposing the following change s and technical corr ections to §414.90:

• Under §414.90(b), we are proposing to modify the definition of

administrative claims to eliminate the wo rds “the proposed” in the phrase “on theCMS-1600-P 284

proposed PQRS quality measures.” We are pr oposing to make this technical change because this language was inadvertently include d in the final regulat ion despite the fact that the quality measures that eligible profe ssionals report under the PQRS were finalized

in the CY 2013 PFS final rule w ith comment period (77 FR 69364).

• We propose to modify §414.90(f) to in clude the term “for satisfactory reporting” after the title “Use of consensu s-based quality measures for satisfactory reporting.” We are adding the term “for satisfact ory 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.

• We propose to modify the paragra ph heading of §414.90(g) to add the term “satisfactory reporting”, so that the title of the paragra ph reads “Satisfactory reporting requirements for the incentive paym ents.” We are proposing to make this change so that it is clear th at the paragraph refers to sa tisfactory reporting, not the new standard of satisfactorily participating in a qualified clinical data registry.

• We propose to modify the paragra ph heading of §414.90(h) to add the term “satisfactory reporting”, so that the title of the paragra ph reads “Satisfactory reporting requirements for the incentive paym ents.” We are proposing to make this change so that it is clear th at the paragraph refers to sa tisfactory reporting, not the new standard of satisfactorily participating in a qualified clinical data registry.

• We propose to delete paragraph §414 .90(i)(4), because §414.90(i)(4) list requirements that are identical to §414.90(i) (3). Therefore, § 414.90(i)(4) is redundant. In addition, we are considering further re vising the regulation at §414.90 to list all the specific satisfactory reporting require ments for the 2014 PQRS incentive and 2016CMS-1600-P 285

PQRS payment adjustment, so that the differe nt reporting requirements are specified in the regulation. We seek pub lic comment on these proposals. 2. Participation as a Group Practice in the Group Practice Reporting Option (GPRO) a. Proposed Changes to the Self-nomina tion, or Registration, Requirement for Group Practices to be Selected to Participate in the GPRO

In the CY 2013 PFS final rule with comme nt period (77 FR 69172), we finalized requirements for the self-nomination process gr oup practices must follow to participate in the PQRS GPRO. We propose to make two ch anges to the previously established selfnomination process for group practices. Firs t, we propose to change the deadline for group practices to submit a self-nomination stat ement, or register, to participate in the PQRS GPRO. We previously es tablished, that in order for a group practice to participate in PQRS under the GPRO, the group practice must submit a self-nomination statement, or register, via the web by October 15 of th e year in which the reporting period occurs. Starting with reporting periods occurring in 2014, we propose to change this deadline to September 30 of the year in which the re porting period occurs (that is September 30, 2014 for reporting periods occurring in 2014). We believe that the proposed deadline still gives group practices a reasonable amount of time to make a decision on whether to participate in the PQRS GP RO while allowing CMS more time to pull samples to populate the GPRO web-interface for those group practices that select that particular reporting mechanism. Second, we propose that group practices comprised of 25 or more individual eligible professiona ls that wish to report the CG CAHPS survey measures (which are discussed later in this section) would be require d to elect to report the CG CAHPS survey measures via the web as well. The website that a group practice would use to elect to report the CG CAHPS survey measures would be the same website used byCMS-1600-P 286

group practices to register to participate in the PQRS GP RO and used by group practices comprised of 10-99 eligible professionals to elect quality tiering for the Value-based Payment Modifier set forth in section III.M of this proposed rule. We believe that providing a single website wher eby group practices may make multiple elections (such as submitting the self-nomination statement to regi ster to participate in the PQRS GPRO, be evaluated for the PQRS GPRO using CG CAH PS measures, and also elect quality tiering for the Value-based Payment Modifier) would be desirable for group practices. We seek public comment on the proposed changes to th e PQRS GPRO self-nomination process. 3. Proposed Requirements for the PQRS Reporting Mechanisms The PQRS includes the following reporting mechanisms: claims, registry, EHR (including direct EHR pr oducts and EHR data submission vendor products), administrative claims, and the GPRO web- interface. 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 our proposed changes to these PQRS reporting mechanisms. In addition, this section contains our proposals for two new PQRS reporting mechanis ms. We propose a new certified survey vendor reporting mechanism for purposes of reporting CG CAHPS measures described below and a qualified clinical data registry reporting m echanism under the new PQRS “satisfactory participation” option. a. Registry-based Reporting Mechanism

In the CY 2013 PFS final rule with comme nt period, we finalized the following requirement for registries to become qua lified to participate in PQRS for 2013 and beyond: Be able to collect all needed data el ements and transmit to CMS the data at the TIN/NPI level for at least 3 measures (77 FR 69180). Since, as we describe in moreCMS-1600-P 287

detail below, we are proposing to increase th e number of measures eligible professionals would be required to report for the 2014 PQ RS incentive from 3 to 9 measures covering at least 3 of the National Quality Strategy domains, we are proposing to change this registry requirement as follows: A qualified re gistry 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 National Quality St rategy domains. We seek public comment on this proposal. b. Certified Survey Vendors As discussed later in this section, we are proposing to allow group practices comprised of 25 or more eligible professiona ls to report CG CAHPS survey measures. The data collected on these CAHPS survey m easures would not be transmitted to CMS via the previously established PQRS group practice reporting m echanisms (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 are proposing to modify § 414.90(b), §414.90(g)(3), and §414.90(h)(3) to propose a new reporting mechanism – th e certified survey vendor. In addition, §414.90(g)(3), and §414.90(h)(3) cu rrently requires group practices to use only one mechanism to meet the requireme nts 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) . As discussed further below, we propose 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. Therefore, we propose to modify §414.90(g)(3 ), and §414.90(h)(3) to indicate that groupsCMS-1600-P 288

selecting to use the certified survey vendor would be the exception to this requirement. Specifically, for purposes of PQRS, we are proposing to modify §414.90(b) to define a certified survey vendor as a vendor that is certifi ed by CMS for a particular program year to transmit survey measures data to CMS. To obtain CMS certification, we propos e 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 gr oup. The vendor would also be required to administer the survey according to establishe d protocols to ensure valid and reliable results. Survey vendors would be supplie d with mail and telephone versions of the survey in electronic form, and text for be neficiary pre-notificati on and cover letters. Surveys can be administered in English, Spanish, Cantonese, Mandarin, Korean, Russian

and/or Vietnamese. Vendors would be required to use a ppropriate quality control, encryption, security and backup procedures to maintain survey response data. The data would then be securely sent b ack 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 propose to require survey vendors to undergo this ce rtification process for each year in which the vendor seeks to transmit su rvey measures data to CMS. We seek public comment on these proposals. 4. Proposed 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 Meas ures Groups Submitted via Claims Individual eligible professionals may currently report PQRS quality measures

data to meet the criteria for satisfactor y reporting for the 2014 PQ RS incentive via theCMS-1600-P 289

claims, registry, and EHR-based reporting mechanisms. This section contains our proposed changes to the criteria for satisfact ory reporting of individual quality measures via claims and registries by individual eligible professiona ls for the 2014 PQRS incentive. Please note that we are not propos ing to modify the crit eria for satisfactory reporting of individual quality measures vi a EHR that were established in the CY 2013 PFS final rule with comment period (see Table 91, 77 FR 69194). a. Proposed Changes to the Criterion for Sa tisfactory Reporting of Individual Quality Measures via Claims for Individual Eligib le Professionals for the 2014 PQRS Incentive For 2014, in accordance with §414.90(c)(3), eligible professionals that satisfactorily report data on PQRS quality meas ures are eligible to receive an incentive equal to 0.5 percent of the to tal estimated Medicare Part B allowed charges for all covered professional services furnished by the eligible professi onal or group practice during the applicable reporti ng period. 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 pe riod 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 s een 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 prof essional would be subject to the Measures Applicability Validation (MAV) process, which would allo w us to determine whether an eligibleCMS-1600-P 290

professional should have reported quality da ta codes for additional measures (77 FR 69188).

For the reasons described below and based on our authority to revise the criteria for satisfactory reporting for the 2014 PQRS incentive under section 1848(m)(3)(d) of the Act, we propose to change the criterion fo r the satisfactory repor ting of individual, claims-based measures by individual eligib le professionals for the 2014 PQRS incentive as follows: For the 12-month reporting pe riod for the 2014 PQRS incentive, report at least 9 measures, covering at le ast 3 of the National Quality Strategy domains, OR, if less than 9 measures apply to the eligible pr ofessional, 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 eligib le professional who reports fewer than 9 measures via the claims-based reporting mech anism, the eligible professional would be subject to the MAV process, which would a llow us to determine whether an eligible professional should have reported qualit y data codes for additional measures. We note that this proposal would increase the number of meas ures an eligible professional is required to report via the claims-based reporting mechanism from 3

measures to 9. We understand that this is a significant increase in the number of measures an eligible professionals is require d to report. However, we believe that the need to collect enough quality measures data to better capture th e picture of the care being furnished to a beneficiary, especially wh en this data may be used to evaluate an eligible professional’s quality performan ce under the Value-based Payment Modifier, justifies the increase in measures. We seek public comment on the proposed change to the criterion for theCMS-1600-P 291

satisfactory reporting of individu al quality measures via claims for individual eligible professionals for the 2014 PQRS incentive. b. Proposed Changes to the Criterion for Sa tisfactory Reporting of Individual Quality Measures via Registry for Individual Eligib le Professionals for the 2014 PQRS Incentive

In the CY 2013 PFS final rule with co mment period, to maintain reporting

criterion with which individual eligible professionals are familiar, we finalized the same satisfactory reporting crit erion for individual elig ible professionals to report individual quality measures via registry that we finalized in prev ious 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 e ligible professional’s Medicare Part B FFS patients seen during the reporti ng period to which the measure applies. Measures with a 0 percent performance rate would not be c ounted (77 FR 69189). We propose 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 National Quality Strategy domains AND report each measure fo r at least 50 percent of the eligible professional’s Medicare Part B FFS patients s een during the reporting period to which the measure applies. Measures with a 0 percen t performance rate would not be counted. We note that this proposal would increase the number of meas ures an eligible professional is required to report via the registry-based reporting mechanism from 3 measures to 9 covering at least 3 of the National Quality Strategy domains. We understand that this is a signi ficant increase in the number of measures an eligible professional is required to re port. However, similar to the reasons we provided for proposing to increase the meas ure threshold from 3 measures to 9 for the claims-basedCMS-1600-P 292

reporting mechanism, we believe that the need to collect enough quality measures data to better capture the picture of the care being furnished to a beneficiary, especially when this data may be used to evaluate an elig ible professional’s quality performance under the Value-based Payment Modifier, justifies the chan ge. We believe that collecting data on 9 measures applicable to an e ligible professional’s practice as opposed to 3 measures would provide us with a better picture of the overa ll quality of care furnis hed by that eligible professional for purposes of having PQRS reporting being used to assess quality performance under the Value-based Payment Modi fier. We also note that, as PQRS has

used this same 3-measure criterion since the registry-based reporting mechanism was introduced in 2010, it would be conceivable that we would eventually propose to increase the number of measures an eligible professi onal is required to report. Our proposal to increase the number of measures reported vi a claims and registry would align with our established reporting option for the EHR-ba sed reporting mechanism or the 2014 PQRS incentive, which requires the reporting of 9 measures covering 3 of the National Quality Strategy domains (77 FR 69189). In addition, we note that this proposal w ould also decrease th e number of patients for which an eligible professional must report for each measure from 80 percent to 50 percent of an eligible profe ssional’s applicable patients. We are proposing to drop the percentage threshold from 80 to 50 percent pr imarily to align our percentage thresholds for registry reporting with the percentage threshold established for reporting via the claims-based reporting mechanism. We believe it is appropriate to drop the percentage threshold to 50, particularly since we are proposing to also incr ease the number of measures an eligible professional is require d to report via the re gistry-based reporting mechanism from 3 to 9 measures covering at least 3 of the National Quality StrategyCMS-1600-P 293

domains. The criteria for satisfactory re porting that we are proposing for the 2014 PQRS incentive payment are described in Table 24. We seek public comment on the proposed changes to the criterion for the satisfactory reporting of individu al quality measures via regi stry for individual eligible professionals for the 2014 PQRS incentive. c. Proposed Changes to the Criterion for Sa tisfactory Reporting of Measures Groups via Claims for Individual Eligible Prof essionals for the 2014 PQRS Incentive

In the CY 2013 PFS final rule with comme nt period, we finalized the following criteria for satisfactory reporti ng for individual eligible prof essionals to report measures groups via claims: Report at least 1 measur es group AND report each measures group for at least 20 Medicare Part B FFS patients. M easures groups containing a measure with a zero percent performance rate will not be c ounted (77 FR 69192). Since finalizing this criterion, we have recently 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 st reamline the reporting options available under the PQRS. The PQRS and eRx Experience Repo rt 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 Speci alty (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 effo rt to streamline the reportingCMS-1600-P 294

options available under the PQ RS and to eliminate reporting options that are not widely used, we are proposing to remove this sati sfactory reporting criterion for the 2014 PQRS incentive. Please note that, si nce we are proposing to remove this reporting criterion, the only manner in which an eligible professional would be able to report a PQRS measures group would be via registry. We s eek public comment on this proposal. 5. Proposed Criteria for Satisfactory Repor ting for the 2016 PQRS Payment Adjustment for Individual Eligible Professionals us ing the Claims and Registry Reporting

Mechanisms Section 1848(a)(8) of the Ac t, as added by section 3002(b) of the Affordable Care Act, provides that for covered professional serv ices furnished by an e ligible professional during 2015 or any subsequent year, if the e ligible professional doe s not satisfactorily report data on quality measures for covered pr ofessional services for the quality reporting period for the year, the fee sc hedule amount for services fu rnished 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. Fo r 2016 and subsequent years, the applicable percent is 98.0 percent. In the CY 2013 PFS final rule, we finaliz ed seven different criteria for the satisfactory reporting by indivi dual eligible prof essionals of data in PQRS quality measures for the 2016 PQRS payment adjustment ( see 77 FR 69200-69204 and Table 91 at 77 FR 69194). Although we are retaining fi ve of the final criteria for satisfactory reporting by individual eligible professionals of data on PQRS quality measures for the 2016 PQRS payment adjustment , we propose to eliminate two criteria, revise another,

and include two addition al criteria (based on tw o of the existing criter ia). Specifically, we propose to remove the following criteri on we previously finalized for the CY 2016CMS-1600-P 295

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 zero percent performance rate will not be counted). Our proposal to remove this crit erion would correspond to the same proposal we are making, as discussed above, for the 2014 PQRS incentive for individual eligible professionals. As we indicated, we believe it is important to streamline the program and eliminate criteria for reporting optio ns that are not widely used. We also propose to remove the following cr iterion we previously finalized for the 2016 payment adjustment for individual elig ible professionals reporting individual measures through a qualified registry (77 FR 69200 and Table 91, 77 FR 69164): Report at least 3 measures, AND report each measure for at least 80 per cent of the eligible professional’s Medicare Part B FFS patients s een during the reporting period to which the measures applies (Measures with a zero per cent performance rate wi ll not be counted). Finally, to maintain some consistency and to otherwise align with the criteria we are proposing for the 2014 PQRS incentive for i ndividual eligible pr ofessionals, we are proposing two other criteria for satisfactory re porting by individual e ligible professionals for the 2016 PQRS payment adjustment using the claims and registry reporting mechanisms. Specifically, we propose the fo llowing criterion for reporting individual measures via claims by individual eligible professionals for the 2016 PQRS payment adjustment: For the 12-month reporting pe riod for the 2014 PQRS incentive, report at least 9 measures, covering at le ast 3 of the National Quality Strategy domains, OR, if less than 9 measures apply to the eligible pr ofessional, report 1 —8 measures, AND report each measure for at least 50 percent of the Medicare Part B FFS patients seen during theCMS-1600-P 296

reporting period to which the measure applies. Measures with a 0 percent performance rate would not be counted. Similarly, for th e same reasons we discussed previously, we propose the following criterion fo r reporting individual measures via qualified registry by individual eligible professionals for th e 2016 PQRS payment adjustment: For the 12- month reporting period for the 2014 PQRS incentiv e, report at least 9 measures, covering at least 3 of the National Quality Strategy domains AND report each measure for at least 50% of the eligible professi onal’s Medicare Part B FFS patient s seen during the reporting period to which the measure applies. Measur es with a 0 percent performance rate would

not be counted.

Please note that in the CY 2013 PFS final ru le, we finalized the same criteria for satisfactorily reporting data on quality measures for covered professional services for the 2016 PQRS payment adjustment as those fo r the 2014 PQRS incentive for individual eligible professionals (77 FR 69200). Howeve r, if the proposals we are making in this proposed rule were finalized, there would be some differences between the criteria for satisfactory reporting for the 2016 PQRS pa yment adjustment and the 2014 PQRS incentive. In particular, there would be one more criterion for sa tisfactory reporting for the 2016 payment adjustment than for the 2014 PQRS incentive with respect to claimsbased reporting, but the other cr iteria would otherwise align. Although we considered, as an alternative, to propose to remove the criterion we previously finalized for the 2016 payment adjustment for individual eligible pr ofessionals reporting individual measures through claims, we believe it is still important to offer as ma ny options as possible for the 2016 PQRS payment adjustment, particularly si nce the penalty phase is relatively new under the PQRS. We also note that it would rema in true that if an individual eligible professional were to meet any of the criter ia for satisfactory re porting for the 2014 PQRSCMS-1600-P 297

incentive, the individual eligible profe ssional would meet the requirements for satisfactory reporting for the 2016 PQRS paymen t adjustment (note, however, that the reverse would not necessarily be true sin ce there would be one additional criterion for satisfactory reporting for the 2016 PQRS payment adjustment that would not apply to the 2014 PQRS incentive). The criteria for satisfactory reporting that we are proposing for the 2016 PQRS payment adjustment are described in Table 25. We believe such alignm ent still serves to reduce reporting burden, and as we have noted previously, we believe that proposing

similar criteria for satisfactor y reporting by individual eligible professionals for the 2014 PQRS incentive and 2016 PQRS payment adjustme nt is appropriate because the reporting period for the 2014 PQRS incentive and 2016 PQRS payment adjustment coincide. Aswe continue to implement the PQRS payment adjustment and fully implement the valuebased 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. We seek public comment on our proposed satisfactory reporting criteria for individual eligible professionals for the 2016 PQRS payment adjustment, including the alternative proposal considered for individual el igible professionals reporting individual measures through the claims-based reporting mechanism. 6. Proposals Related to Satisfact ory Participation in a Qualif ied Clinical Data Registry by Individual Eligible Professionals Section 601(b) of the American Taxpayer Relief Act of 2012 amends section 1848(m)(3) of the Act, by redesignating s ubparagraph (D) as subparagraph (F) and adding new subparagraph (D), to provide fo r a new standard for individual eligibleCMS-1600-P 298

professionals to satisfy the PQRS beginning in 2014, based on satisfactory participation in a qualified clinical data registry. Below, we set fort h our proposals for implementing this provision, includi ng the proposed requirements for qualif ied clinical data registries and our proposals for individual eligible prof essionals to satisfactor ily participate in a qualified clinical data registry with resp ect to the 2014 PQRS incentive and 2016 PQRS payment adjustment. On February 7, 2013, CMS published a 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) Incentiv e Program, and Other Reporting Programs” (78 FR 9057). The Request for Information included a solici tation for comments about section 601(b) of the American Taxpayer Relief Act of 2012. CMS received over 100 comments on this Request for Information, and much of the in formation provided in these comments were used to shape the proposals set forth in this section. a. Proposed 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 American Taxpayer Relief Act of 2012 (Pub. L. 112–240, enacted January 2, 2013), 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 el igible 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 secti on 601(b)(1) of the American Taxpayer Relief Act of 2012, authorizes the Secret ary to define a qualified clinical data registry under the PQRS. Specifically, the S ecretary is required to establish requirementsCMS-1600-P 299

for an entity to be considered a qualified clinical data regist ry (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). And in establishing such requirements, the Secretary must take certain factors into consideration. Generally, registries are entities that collect data related to patients with a specific diagnosis, condition, or procedure. In f act, the collection and submission of PQRS quality measures data on behalf of eligible professionals are the f unctions a traditional “qualified registry” currently performs under the PQRS for purposes of eligible professionals satisfactorily re porting. The majority of co mmenters in response to the February 7, 2013 Request for Information stat ed that these qualif ied clinical data registries should serve additional roles aimed at quality improvement other than collecting and transmitting quality data to CM S. The commenters saw qualified clinical data registries as entities th at should be at the forefront of quality improvement. We agree with the commenters. Therefore, we beli eve that a “qualified clinical data registry” specified under section 1848( m)(3)(E) of the Act, as a dded by section 601(b) of the American Taxpayer Relief Act of 2012, should serve additional roles that foster quality improvement in addition to the collection a nd submission of quality measures data. Section 1848(m)(3)(E)(ii) of the Act, as added by section 601(b)(1) of the American Taxpayer Relief Act of 2012, provi des that, when determining whether an entity should be considered a qualified clinical data registry, the Secr etary shall take into consideration whether the entity:

● Has in place mechanisms for the tr ansparency of data elements and specifications, risk models, and measures;CMS-1600-P 300

● Requires the submission of data from participants with respect to multiple

payers;

● Provides timely performance reports to participants at the individual participant level; and

● Supports quality improvement initiatives for participants. As an example of quality improvement initi atives by a clinical data registry, we note that the Society of Thoracic Surgeons established the STS National Database in 1989 for the purpose of quality assessment, improvement, and patient safety among cardiothoracic surgeons. The STS National Data base, which serves a traditional qualified registry under the PQRS, provides:

● A standardized, nationally benchmarked tool for assessing the care of patients undergoing cardiothoracic operations;

● The opportunity to participate in national quality improvement efforts for cardiothoracic surgery that have an impact at the local, regi onal, and national levels;

● A mechanism to target specific ar eas for clinical practice improvement;

● The ability to inves tigate regional and nationa l practice patterns in cardiothoracic surgery; and

● The ability to conduct clinical and co mparative effectiveness research using national aggregate data set. While we do not believe that it is necessary for a qualified clinical data registry to possess all of these characteristics for purpos es of the PQRS, we do believe that it is important for a qualified clinical data registry to possess the following characteristics:

● Benchmarking capacity for assessing the care furnished to patients by the eligible professionals participating in the qualified clinical data registry. We believe it isCMS-1600-P 301

important that a qualified clinical data regist ry possess benchmarking capacity in order to be able to compare the quality of care furnishe d by eligible professionals so that eligible professionals using the qualified clinical da ta registry are aware of how the care they furnished is rated as compared to other prof essionals. Eligible professionals would be able to use this information to adjust the ca re they provide, if appropriate. While having the capacity to benchmark performance nati onally is preferable, we believe that a qualified clinical data regist ry should, at a minimum, possess the capacity to benchmark performance across the eligible professionals using the qualifi ed clinical data registry.

● The ability to provide timely and frequent feedback to its eligible professionals. We believe it is important for eligible prof essionals using a clini cal data registry to receive frequent and timely feedback on the quality measures data they report through the qualified clinical data registry. A traditional PQ RS registry is required to provide at least 2 feedback reports to eligible professionals using the registry. Since we believe that qualified clinical data regist ries should possess a more r obust system, we believe that qualified clinical data registri es should provide timely feedback at least quarterly so eligible professionals could view their reporting at leas t 4 times during the yearly reporting period. Therefore, based on CMS’ authority to defi ne a qualified clinical data registry under section 1848(m)(3)(E) of th e Act, as added by secti on 601(b) of the American Taxpayer Relief Act of 2012, and accounting for the considerations a ddressed in section 1848(m)(3)(E)(ii) of the Act and for the reas ons stated above, we propose to modify §414.90(b) to add a proposed definition for a qualifi ed clinical data regi stry. Specifically, we propose to define a “qualified clinical da ta registry” for purposes of the PQRS as a CMS-approved entity (such as a registry, ce rtification board, colla borative, etc.) thatCMS-1600-P 302

collects medical and/or clinical data for the purpose of pa tient and disease tracking to foster improvement in the quality of care furnished to patients. First, we propose that a qualified clinical data registry must be able to submit quality measures data or results to CMS for purposes of demons trating that, for a reporting period, its eligible professionals have satisfactorily particip ated in PQRS. We propose that a qualified clinical data registry must have in place mechanisms for the transparency of data elements and specifi cations, risk models, and measures. Second, with regard to the consider ation under section 1848(m)(3)(E)( ii)(II) of the Act, as added by section 601(b) of the American Taxpa yer Relief Act of 2012 that requires the submission of data from participants with respect to multiple payers, we propose 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. Third, with regard to the consideratio n under section 1848(m)(3)(E)(ii)(III) of the Act, as added by section 601(b) of the Am erican Taxpayer Relief Act of 2012, that a qualified clinical data registry provide timel y performance reports to participants at the individual participant level, we propose that a qualified c linical data registry must provide timely feedback at least quarterly on the measures for which the qualified clinical data registry would report on the in dividual eligible prof essional’s behalf for purposes of the eligible professional meeting the criteria for satisfactory participation under PQRS. Fourth, to address section 1848(m)(3)(E)(ii )(IV) of the Act, as added by section 601(b) of the American Taxpayer Relief Ac t of 2012, regarding whether a qualified clinical data registry supports quality improvement initiatives for its participants, weCMS-1600-P 303

propose to require that a qualif ied clinical data registry possess a method to benchmark the quality of care measures an eligible profe ssional provides with th at of other eligible professionals performing the same or sim ilar functions. Benchmarking would require that a qualified clinical data registry provide 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 t hose provided by NCQA could serve to satisfy this requirement. Please note that it is possible for an entity to serve as a traditional, qualified registry and/or a qualified clinical data registry under the PQRS. b. Proposed Requirements for a Qua lified 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 c onsidered 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. Secti on 1848(m)(3)(E)(iv) of the Act, as added by section 601(b) of the American Taxpayer Re lief Act of 2012, requires CMS to consult with interested parties in carrying out this provision. Pursuant to this authority to establish the requirements for an entity to be considered a qualified clinical data registry, we are propos ing the following requirements that an entity must meet to serve as a qualified clinical data registry under the PQRS: First, we are proposing the following re quirements to ensure that the entity seeking to become a qualified clinical data registry is well-established:CMS-1600-P 304

● Be in existence as of January 1 the year prior to the year for which the entity seeks to become a qualified clinical data re gistry (for example, January 1, 2013, to be eligible to participate for purposes of data collected in 2014). Th is proposed requirement is also required of a traditional qualified regist ry. We believe it is important for an entity to test out its business practi ces to ensure that the practi ces 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 ex istence for less than one year prior to the year for which the entity seeks to become a qualifie d clinical data regist ry have not had an adequate opportunity to do so.

● Have at least 100 clinical data registry participants by Janu ary 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. We are pr oposing this requirement to ensu re that the entity seeking to become a qualified clinical data registry is sufficient in size and technical capability. As 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. Therefore, whereas we only required a traditiona l PQRS-qualified registry to have at least 25 registry partic ipants, we believe it is appropr iate that we require that a qualified clinical data registry have at least 100 participants.

● Not be owned or managed by an indi vidual, locally-owned, single-specialty group (for example, single-specialty practi ces with only 1 practice location or soloCMS-1600-P 305

practitioner practices would be precluded from becoming a qualified clinical data registry). In addition, for transparency purposes, we propose that a qualified clinical data registry must:

● Enter into and maintain with its pa rticipating professiona ls an appropriate Business Associate agreement that provides fo r 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 di sclosure of quality measure results.

● Describe to CMS the cost for eligible professionals that the qualified clinical data registry charges to submit data to CMS. We are also proposing to requi re qualified clinical data registries to meet the following requirements pertaining to the transm ission of quality measures data to CMS:

● To ensure that the qualified clinical da ta 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.

● Comply with a CMS-specified secure method for quality data submission.

● Provide information on each measure to be reported by an eligible professional, including a summary of supporti ng evidence/rationale , title, numerator, denominator, exclusions/exceptions, data elements and value sets in addition to measure level reporting rates, patient-level demographic da ta and/or the data elements needed to calculate the reporting rates by TIN/NPI.

● Submit an acceptable “validation st rategy” 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 strategyCMS-1600-P 306

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. For a template for data validation and integrity, please also see the requirements for certification of an EHR product by the O ffice of the National

Coordinator for Health Information T echnology (ONC) that are explained at http://www.healthit.gov/policy -researchers-implementers/2014-edition-final-test-method.

● Perform the validation outlined in the strategy and send evidence of successful results to CMS by June 30 of the year followi ng the reporting period (for example, June 30, 2015, for data collected in the re porting periods occurring in 2014).

● Obtain and keep on file for at le ast 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 m easure results and numerator and denominator data and/or patient-specifi c 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 qualifie d 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 cont ractual business associate agreements.

● Upon request and for oversight purpos es, provide CMS access to the qualified clinical data registry’s database to revi ew the beneficiary data on which the qualifiedCMS-1600-P 307

clinical data registry-based submissions are based or provide to CMS a copy of the actual

data.

● Prior to CMS posting the list of qualified clinic al data registries for a particular year, verify the information contained on the list (includes names, contact information, measures, cost, etc.) and agree to furnish/suppo rt all of the services listed on the list.

● Make available to CMS samples of patient level data to audit the entity for purposes of validating the data submitted to CM S by the qualified clinical data registry, if determined to be necessary.

● The entity must provide informati on on how the entity collects quality measurement data, if requested.

● By March 31 of the year in which the en tity seeks to participate in PQRS as a qualified clinical data registry, the entity must publically post (on the entity’s website or other publication available to the public) a detailed descri ption (rationale, numerator, denominator, exclusions/exceptions, data elements) of the quality measures it collects to ensure transparency of information to the public.

● The entity must report, on behalf of its individual el igible professional participants, a minimum of 9 measures that cross 3 National Quality Strategy domains.

● The entity, on behalf of its individual eligible professiona l participants, must report on at least one outcomes-based meas ure (defined in this section below).

● The entity, on behalf of its individual eligible professiona l participants, must report on a set of measures from one or more of the following categories: CG-CAHPS; NQF endorsed measures (informati on of which is available at http://www.qualityforum.org/Home.aspx); curr ent PQRS measures; measures used by boards or specialty societies; and measures used in regional quality collaboratives.CMS-1600-P 308

● The entity must demonstrate that it ha s a plan to publicly report their quality data through a mechanism where the public and registry participants can view data about individual eligible professiona ls, 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 determining rela tive quality performan ce where appropriate.

● 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 corr ective tool used to level the playing field regarding the reporting of patie nt 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 bypa ss surgery, there is less chance for a good outcome when compared with a healthy 40 ye ar 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 adjusted model is used to report surgery results. Should CMS find, pursuant to an audit, that a qualified clinical data registry has submitted inaccurate data, CMS proposes to disqua lify the qualified clinical data registry, meaning the entity will not be allowed to s ubmit 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, 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 in dividual eligible professional participants meeting the criteria for satisfactory part icipation under the PQRS. Additionally, weCMS-1600-P 309

propose that the inaccurate data collecte d would be discounted for purposes of an individual eligible professi onal meeting the criteria for satisfactory participation in a qualified clinical data registry. We seek comments on these proposals. As we noted, section 1848(m)(3)(E)(i) of the Act, as added by section 601(b) of the American Tax Relief Act of 2012, requires us to establish requirements for an entity to be considered a qualified clin ical data registry, including th at 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 propose that qualified clinical data registri es 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 informati on is necessary for purposes of determining whether individual eligible professionals have satisfactorily participated in a clinical qualified data registry under the PQRS. In addition, as discussed in section K, we are proposing 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 elig ible professional’s Medicare Part B PFS charges. Therefore, we propose to require that qualified clin ical data registries submit quality measures data to CMS. Specifically, to further ensure that the quality measures data elements are reported to CMS in standa rdized manner, we propose 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 reque st, 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-appr oved XML format is consistent with howCMS-1600-P 310

traditional qualified registries under the PQRS transmit data on quality measures to CMS. While our preference would be to receive data on quality meas ures via the QRDA category III format only since the QRDA categor y III format is one of the formats we require for an EP’s EHR or an EHR data s ubmission vendor to submit quality measures data (see 77 FR 69183), we understand that th e 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. In future years, it is our intention to require all qualified clinical data registries to provide quality measures data via the QRDA category III format. To ensure that the data provided by the qua lified clinical data registry is correct, we propose to require that qualified clinical data registries provid e CMS a signed, written

attestation statement via e-mail which states that the quality measure results and any and all data including numerator and denominato r data provided to CMS are accurate and complete. We propose 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 da ta no later than the last Friday occurring 2 months after the end of the respective re porting period (that is, February 27, 2015 for reporting periods occurring in 2014). We also propose that, if a qualified c linical data registry is submitting quality measures data on behalf of individual eligible professionals that are part of the same gr oup practice (but not participa ting in the PQRS GPRO), the qualified clinical data registry would have the option to repor t 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 indivi dual files for each el igible professional.CMS-1600-P 311

In conjunction with our proposal to require that qualified c linical data registries be able to provide data on quality measures in a CMS-approved XML format, we propose to require that qualified clinical data registries report b ack to participants on the completeness, integrity, and accuracy of its pa rticipants’ data. 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. Alternatively, with respect to the in formation CMS would require a qualified clinical data registry to furnish to CMS to determine that the eligible professionals have met the criteria for satisfactory partic ipation 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 that a qualified clinical data registry provide CMS with a list of the elig ible professionals (c ontaining the respective eligible professionals’ TIN/NPI information) who participated in and reported quality data to the qualified clinical data registry in order to determine which individual eligible professionals met the criteria for satisfact ory participation for the 2014 PQRS incentive and 2016 PQRS payment adjustment. We consid ered this alternativ e 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 seek public comment on these proposals. c. Proposed Process for Being Designated as a Qualified Clini cal Data Registry Section 1848(m)(3)(E)(v) of the Act, as a dded by section 601(b) of the American Taxpayer Relief Act of 2012, requires the Secret ary to establish a process to determine whether or not an entity meets the requirements estab lished under sectionCMS-1600-P 312

1848(m)(3)(E)(i) of the Act. Such process ma y involve one or both of the following: (I) A determination by the Secretary; (II) A de signation by the Secretary of one or more independent organizations to make such de termination. 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 propose that an entity must submit a self-nomination statement that indicates its intent to participate in PQRS as a qualified clinical data registry. We believe this selfnomination statement is necessary for CM S to anticipate how many clinical data registries would participate fo r a certain year as well as provide information to eligible professionals about potential par ticipating clinical data registries. We propose that the self-nomination statement contain the following information:

● The name of the entity seeking to b ecome a qualified clinical data registry.

● The entity’s contact information, in cluding phone number, email, and mailing

address.

● A point of contact, in cluding the contact’s email address and phone number, for which 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 regist ry would require its eligible professionals to report for purposes of participating in PQRS. In additi on, 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.CMS-1600-P 313

Since we believe that accepting these statem ents via email would be the most efficient method for collecting and processing self-nom ination statements, we propose to accept self-nomination statements via email only. Howeve r, in the event that it is not technically

feasible to collect this self -nomination statement via email, we propose that entities seeking to become qualified clinical data re gistries submit its self-nomination statement

via a mailed letter to CMS. The self-nom ination 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 propose that thes e self-nomination statements must be received by CMS by 5:00 p.m. Eastern Standard Time on January 31 of the year in which the clinical data registry seeks to be quali fied (that is, January 31, 2014 for purposes of becoming a qualified clinical data regist ry for the reporting periods fo r the 2014 PQRS incentive and 2016 PQRS payment adjustment). We understand that this is an early proposed deadline, particularly since this is a ne w reporting mechanism. However, it is necessary for us to propose a deadline of January 31 to ensure th at we have sufficient time to analyze the self-nomination statements we receive, ensure that the entity meets the basic requirements for being designated as a qualifie d clinical data regi stry, including whether or not the quality measures the entity intends to report on beha lf of eligible professionals meet the requirements set forth in secti on I.11 of this proposed rule, and allow for sufficient time for eligible professionals to vi ew a list of entities that are qualified as clinical data registries for the year prior to the end of the appli cable reporting period for satisfactory participation in a qualified clinical data registry. We anticipate posting a listCMS-1600-P 314

of the entities that ar e designated by CMS as qualified clinic al data registries in the Fall of the same year. Since participation in a qualified clini cal data registry is a new option for individual eligible professi onals, we anticipate 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 propose that en tities seeking to serve as qualified clinical data registries must self-nominate for each year that the entity seeks to participate. In the future, we anticipate moving towards a 2- year self-nomination process as the requirements for qualified clinical data registries become firm ly established; however, at this time, we are proposing self-nomination for any year in which a qua lified clinical data registry intends to par ticipate under the PQRS. We seek public comment on these proposals. d. Proposed Reporting Period for the Satisfact ory Participation by Individual Eligible Professionals in a Qualified Clinical Da ta Registry for the 2014 PQRS Incentive Section 1848(m)(3)(D) of the Act, as re designated and added by section 601(b) of the America Taxpayer Relief Act of 2012, authori zes the Secretary to treat an individual eligible professional as satisfactorily s ubmitting data on quality measures under section 1848(m)(A) of the Act if the el igible professional is satisf actorily participating in a qualified clinical data registry for the year. Given that sati sfactory participation is with regard to the year, and to provide consiste ncy with the reporting period applicable to individual eligible profes sionals who report quality m easures data under section 1848(m)(3)(A), we propose to modify §414.90(c)(5 ) to specify a 12-month, calendar year (CY) reporting period from January 1, 2014 through December 31, 2014 for individualCMS-1600-P 315

eligible professionals to satisfactorily particip ate in a qualified clinical data registry for purposes of the 2014 PQRS incentive. We are proposing a 12-month reporting period. Based on our experience with the 12 and 6-month reporting periods for the PQRS incentives, we believe that data on quali ty measures collected based on 12-months provides a more accurate assessment of actions performed in a clinical setting than data

collected based on shorter re porting periods. In addi tion, we believe a 12-month reporting period is appropriate given that the full calendar ye ar would be utilized with regard to the participation by the individual elig ible professional in the qualified clinical data registry. We invite public comme nt on the proposed 12-month, CY 2014 reporting period for the satisfactory partic ipation of individual eligible professionals in a qualified clinical data registry for the 2014 PQRS incentive. e. Proposed Criteria for Satisf actory Participation for Individu al Eligible Professionals In a Qualified Clinical Data Regi stry for the 2014 PQRS Incentive For 2014, in accordance with §414.90(c)(3), eligible professionals that satisfactorily report data on PQRS quality meas ures are eligible to receive an incentive equal to 0.5 percent of the to tal estimated Medicare Part B allowed charges for all covered professional services furnished by the eligible professi onal or group practice during the applicable repor ting period. Section 1848(m)(3)(D) of the Act, as redesignated and added by section 601(b) of the America Taxpayer Relief Act of 2012, authorizes the Secretary to treat an indivi dual eligible professi onal as satisfactorily submitting data on quality measures under sectio n 1848(m)(A) of the Act if, in lieu of reporting measures under secti on 1848(k)(2)(C) of the Act, th e 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 underlyingCMS-1600-P 316

standard of “satisfactory repor ting” data on covered profession al services that eligible professionals must meet to earn a PQRS incentive or avoid the PQRS payment adjustment. Therefore, we propose to modi fy §414.90 to add paragraph (c)(5) to indicate that individual eligible prof essionals shall be treated as satisfactorily reporting data on quality measures if individual eligible pr ofessionals satisfactor ily participate in a qualified clinical data registry for purposes of the PQRS incentive. This section also

contains the criterion we are proposing for individual eligible professionals to meet to satisfactorily participate in a qualified clin ical data registry for purposes of the 2014 PQRS incentive. We understand that qualified clinical data registries may have different ways to measure success in quality reporting among its registry participants. However, for purposes of the 2014 PQRS incentive, CMS must establish a standard for satisfactory participation in a qualified clinical data regi stry. Therefore, we propose that, to meet the criteria for satisfactory participation for th e 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 qu alified clinical data registry covering at least 3 of the National Quality Strategy doma ins, AND report each measure for at least 50 percent of the eligible professional’s applicab le patients. Of the measures reported via a qualified clinical data registry, the eligible professional must report on at least 1 outcome measure. We further propose that a qualifie d clinical data registry may submit data on more than 9 quality measures on behalf on an eligible professional. However, we propose that a qualified clinical data registry may not submit data on more than 20 measures on behalf of an eligible professional. We propose to place a limit on the number of measures that a qualified clinical data regi stry may submit on behalf of an eligibleCMS-1600-P 317

professional at this time because we have no experience with qualified clinical data registries and the types of data on qua lity measures that they collect. We note that this proposed criterion for satisfactory participat ion is consistent with proposed requirements set forth (for example, the repo rting period as well as the number of individual measures, domains, and applicable patients proposed to be reported) for meeting the criteria for the sa tisfactory reporting of individual PQRS quality measures using the traditional claims, regi stry, and EHR-based reporting mechanisms for the 2014 PQRS incentive (for ex ample, the reporting period as well as the number of individual measures, domains, and applicable patients proposed to be reported). We believe it is important to propose a similar qua lity data reporting crite rion for individual eligible professionals to satisfactorily participat e in a qualified clinical data registry as for satisfactory reporting for the 2014 PQRS incenti ve so that this proposed satisfactory participation option to satisfy the PQRS is not disproportionately mo re advantageous or less burdensome than the other proposed cr iteria for satisfactory reporting for the 2014 PQRS incentive. However, this proposed cr iterion for satisfactory participation departs from the proposed criteria for satisfactor y reporting for the 2014 PQRS incentive in a number of ways. First, an eligible professi onal using a qualified clinic al data registry is required to report on at least 1 outcome meas ure. Second, whereas the proposed criteria for satisfactory reporting on individual PQRS qu ality measures require the reporting of at least 1 Medicare Part B FFS patie nt, this proposed criterion fo r satisfactory participation in a qualified clinical data registry fo r the 2014 PQRS incentive would not require reporting on Medicare patients. Please note that because we are also proposing more stringent requirements for an entity to become a qualified clinical data registry than a traditional qualified registry, such as requiring benchmarking capacity, we believe thatCMS-1600-P 318

individual eligible professionals who participate in a qualified clinical data registry would be doing more than just reporting quality data to the qualified data registry for PQRS purposes. Over time, as we gain more e xperience with the capabilities of qualified clinical data registries, we anticipate that the criteria for satisfactory participation will further depart from the criteria for satis factory reporting under PQRS and incorporate other quality improvement func tions that may be provided by a qualified clinical data registry to its participants as this option evolves. We seek public comment on the proposed criterion for the satisfactory participation by individual elig ible professionals in a qualified clinical data registry for the 2014 PQRS incentive. f. Proposed Reporting Period for the Satisfact ory 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 re designated and added by section 601(b) of the American Tax Relief Act of 2012, authorizes the Secretary to tr eat an individual eligible professional as satisfactorily s ubmitting data on quality measures under section 1848(m)(A) of the Act if the el igible professional is satisf actorily participating in a qualified clinical data registry for the year. Given that sati sfactory participation is with regard to the year, and to pr ovide consistency with how indi vidual eligible professionals report quality measures data to a qualified clinical data re gistry, we propose to modify §414.90(e)(2) to specify a 12-month, calendar year (CY) reporting period from January 1, 2014 through December 31, 2014, for individual elig ible professionals to satisfactorily participate in a qualified clinical data re gistry for purposes of the 2016 PQRS payment adjustment. We are proposing a 12-m onth reporting period because, based on ourCMS-1600-P 319

experience with the 12 and 6-month reporti ng periods for the PQRS incentives, we believe that data on quality measures co llected based on 12-months provides a more accurate assessment of actions performed in a c linical setting than data collected based on shorter reporting period. We also believe that a 12-month reporting period is appropriate given that the full calendar year would be uti lized with regard to the participation by the individual eligible professional in the qualified clinical data registry. We are proposing a 12-month reporting pe riod occurring 2 y ears prior to the application of the 2016 PQRS pa yment adjustment for individua l eligible professionals to allow time to perform all reporting analyses, and make determinations about whether the individual eligible professiona l satisfactorily participated in a qualified clinical data registry, prior to applying payment adjustme nts on eligible professi onals’ Medicare Part B PFS claims in 2016. However, in future years, we may propose alternative reporting periods that could occur clos er in time to the appli cation of the PQRS payment adjustment. We invite public comment on the proposed 12-month, CY 2014 reporting period (that is, January 1, 2014 – December 31, 2 014) for the satisfactory participation of individual eligible professiona ls in a qualified clinical da ta registry for the 2016 PQRS payment adjustment. g. Proposed 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 cove red professional services furnished by an eligible professional during 2015 or any subsequent year, if the eligible professional does not satisf actorily report data on quali ty measures for covered professional services for the quality repor ting period for the year, the fee scheduleCMS-1600-P 320

amount for services furnished by such professi onal during the year sh all be equal to the applicable percent of the fee schedule am ount that would otherwise apply to such services. For 2016 and subsequent years, the applicable perc ent is 98.0 percent. Section 1848(m)(3)(D) of the Act, as re designated and added by section 601(b) of the American Tax Relief Act of 2012, authorizes the Secretary to tr eat an individual eligible professional as satisfactorily s ubmitting data on quality measures under section 1848(m)(A) of the Act if, in lieu of repor ting measures under s ection 1848(k)(2)(C) of the Act, the eligible professional is satisfactorily participating in a qualified clinical data registry for the year. “Satisfactory particip ation” is a new standa rd under the PQRS and is a substitute for the underly ing standard of “satisfactor y reporting” data on covered professional services that eligible professiona ls must meet to earn a PQRS incentive or avoid the PQRS payment adjustment. Ther efore, we propose to modify §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 e ligible professional satisfactorily participates in a qualified clinical data registry. This section also contains the criterion we are proposing for individua l eligible professionals to meet to satisfactorily participate in a qualified clin ical data registry for purposes of the 2016 PQRS payment adjustment. We propose that, 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), the exact same requirement we proposed above for satisfactory participation for the 2014 PQRS incentive. We believe it is appropriate to propose identical cr iteria for meeting the new standard for satisfactory participation given that the proposed 12-month reportingCMS-1600-P 321

period for satisfactory participation in a qualifie d clinical data registry for the respective 2014 PQRS incentive and 2016 PQRS pa yment adjustments coincide. We seek public comment on the proposed criterion for the satisfactory participation by individual elig ible professionals in a qualified clinical data registry for the 2016 PQRS payment adjustment. Tables 24 and 25 provide a summary of the proposed criteria for satisfactory reporting and satisfactory participation we discussed above for individual eligible professionals for the 2014 PQRS incen tive and 2016 PQRS payment adjustment respectively. TABLE 24: Summary of Proposals for the 2014 PQRS Incentive: Proposed Criteria for Satisfactory Reporting of Individual Qu ality Measures via Claims and Registries and Proposed Satisfactory Participat ion Criterion for Individual Eligible Professionals in Qualified C linical Data Registries Reporting Period Measure Type Reporting Mechanism Proposed Satisfactory Reporting Criteria and Satisfactory Participation Criteria 12-month (Jan 1 — Dec 31) Individual Measures * Claims Report at least 9 m easures covering at least 3 of the National Quality Strategy domains, OR, If less than 9 measures apply to the eligible professional, then the eligible professional must report 1-8 measures for which there is Medicare patient data; 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. 12-month (Jan 1 — Dec 31) Individual Measures Qualified Registry Report at least 9 measures , covering at least 3 of the National Quality Strategy domains AND report each measure for at least 50% 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. 12-month (Jan 1 — Dec 31) Measures selected by Qualified Clinical Qualified Clinical Data Registry 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% of the eligible professional’s patients. Of the measuresCMS-1600-P 322

Reporting Period Measure Type Reporting Mechanism Proposed Satisfactory Reporting Criteria and Satisfactory Participation Criteria Data Registry reported via a clinical data registry, the eligible professional must report on at least 1 outcome measure. *Subject to the MAV process. TABLE 25: Summary of Proposals fo r the 2016 PQRS Payment Adjustment: Proposed Criteria for Satisfactory Repo rting of Individual Quality Measures via Claims and Registries and Proposed Sa tisfactory Participation Criterion for Individual Eligible Professionals in Qu alified Clinical Data Registries Reporting Period Measure Type Reporting Mechanism Proposed Satisfactory Reporting and Participation Criteria 12-month (Jan 1 — Dec 31) Individual Measures *Claims Report at least 9 meas ures covering at least 3 of the National Quality Strategy domains, OR, If less than 9 measures apply to the eligible professional, then the eligible professional must report 1-8 measures for which there is Medicare patient data; 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. 12-month (Jan 1 — Dec 31) Individual Measures Registry Report at least 9 meas ures, covering at least 3 of the National Quality Strategy domains AND report each measure for at least 50% 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. 12-month (Jan 1 — Dec 31) Measures selected by the Qualified Clinical Data Registry Qualified Clinical Data Registry 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 profession al’s patients. Of the measures reported via a clinical data registry, the eligible professional must report on at least 1 outcome measure. *Subject to the MAV process. 7. Proposed Criteria for Satisfactory Repor ting for the 2014 PQRS Incentive for Group

Practices in the GPRO For 2014, in accordance with §414.90(c)(3), eligible professionals that satisfactorily report data on PQRS quality meas ures are eligible to receive an incentiveCMS-1600-P 323

equal to 0.5 percent of the to tal estimated Medicare Part B allowed charges for all covered professional services furnished by the eligible professi onal or group practice during the applicable reporting pe riod. We finalized criteria for the satisfactory reporting for group practices participating in the GP RO for the 2014 PQRS incentive in the CY 2013 PFS final rule with comment period (see Table 93, 77 FR 69195). In this section, we propose to change some of the criteria for satisfactory reporting for group practices under the GPRO using the registry and GP RO web interface reporting mechanisms. 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 mechanisms. Fo r the 2014 PQRS incentive, we 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 da ta fields for the first 218 consecutively ranked and assigned be neficiaries 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 beneficiarie s is less than 218, then report on 100 percent of assigned beneficiaries (77 FR 69195). We established this same criterion for the group practices of 25-99 eligible professionals for the 2013 PQRS incentive. Unfortunately, there has been low participation for this reporting option. We believe this is due to the fact that reporting using the GPRO web interface is more beneficial to larger practices because larger practices are better able to report on a more varied patient population. Therefore, to streamline the PQRS and eliminate repor ting options that are largely unused, we propose to eliminate this crit erion under the GPRO for th e 2014 PQRS incentive. As a result, group practices compri sed of 25-99 eligible profe ssionals would no longer haveCMS-1600-P 324

the option to report PQRS quality measures using the GPRO web interface for the 2014 PQRS incentive. We do not believe this ha rms these smaller groups’ practices, as group practices in the GPRO would st ill be able to report PQRS quality measures using either the registry or EHR-based reporting mechanisms. For reporting under the GPRO using the regi stry-based reporting mechanism, we finalized the following criterion for the sati sfactory reporting of PQ RS quality measures for group practices comprised of 2 or more eligible professionals for the 2014 PQRS

incentive in the CY 2013 final rule with co mment period: Report at least 3 measures, AND report each measure for at least 80 percen t 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 are proposing to increase the number of measures an indivi dual eligible must report as well as decrease the percentage thre shold for individual el igible professionals reporting via registry for the 2014 PQRS in centive, we propose the following modified criteria for the satisfactory reporting of i ndividual quality measures under the GPRO for the registry-based reporting mechanism: Report at least 9 measures covering at least 3 of the National Quality Strategy domains, AND repor t each measure for at least 50% of the group practice’s applicable s een during the reporting pe riod to which the measure applies. Measures with a 0 percent performance rate will not be counted. In addition, patient surveys are import ant tools for assessing beneficiary experience of care and outcomes. Many survey s are being used in both the private and public sectors, including the Medicare Hea lth Outcomes Survey used by Medicare Advantage (MA) plans, Consumer Assessmen t of Healthcare Providers and Systems (CAHPS) survey tools, and Health Resources Services Administration's (HRSA's) HealthCMS-1600-P 325

Center Patient Satisfaction Survey. Over the past two years, we have developed a

Consumer Assessment of Healthcare Provide rs and Systems (CAHPS) survey for use with the Medicare Shared Savings Program a nd the PQRS. In 2012, we field tested the survey with a sample of 6,750 Medicare Fe e-for-Service beneficiaries receiving care from nine group practices that participated in the Physician Group Practice Transition Demonstration. Subsequent to the field test, we refined the survey and in the spring of

2013 administered it for all Acc ountable Care Organizations (A COs) participating in the Pioneer ACO program and the Medicare Sh ared Savings Program during 2012. More information about the survey is available at the Federal Register (77 FR 73032 and 78 FR 17676). Because we believe these patient surv eys are important tools for assessing beneficiary experience of care and outc omes, under our author ity under section 1848(m)(3)(C)(i) of the Act to select the measures for which a group practice must report, we propose to provide group practi ces 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 satis factory reporting for the 2014 PQRS incentive and 2016 PQRS payment adjustment. We further propose that the survey would be administered following the close of the PQRS registration period. CMS also would provide each group a detailed report about the results of the survey. In addition, we propose 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 assi gning beneficiaries to a group based on whether the group provided the plurality of pr imary care services. Because we proposeCMS-1600-P 326

to assign beneficiaries to a group based on th e provision of primary care services, this survey is not an appropriate option for groups of physicians (for example, such as a group of surgeons) that do not provide primary car e services. In acco rdance 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 th e survey would be administered by certified survey vendor on behalf of the group pr actice for a sample of group’s assigned

beneficiaries. As noted earlie r, to complete this survey, a group practice must indicate its intent to report the CG CAHPS survey when it registers to participat e in the PQRS via the

GPRO. Please note that the CAHPS survey m easures only cover 1 National Quality Strategy domain. In order to be consistent w ith other group practice reporting criteria we are proposing that require the reporting of measures covering at least 3 National Quality Strategy domains, we are proposing that, if a group practice reports the CAHPS measures via a certified survey vendor, the group practice would be requi red to report on at least 6 additional measures covering at leas t 2 National Quality Strategy domains. Specifically, we are proposing the follow ing criteria for satis factory reporting for the 2014 PQRS incentive: Fo r 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 Na tional Quality Strategy domains using the qualified registry, direct EHR product, EHR data submission vendor, or GPRO web interface reporting mechanisms. We seek public comment on our proposed criterion for the sa tisfactory reporting of data on these PQRS quality measures unde r the GPRO for the 2014 PQRS incentive. 8. Criteria for Satisfactory Reporting for the 2016 PQRS Payment Adjustment for GroupCMS-1600-P 327

Practices in the GPRO This section addresses the proposed crit eria for satisfactory reporting for group practices in the GPRO for the 2016 PQRS paym ent 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 pa yment adjustment that apply for the 2014 PQRS incentive for the PQRS GPRO (77 FR 69200). We are making three of the same proposals for the criteria for satisfactor y reporting under the GP RO for the 2016 PQRS payment adjustment that we are proposing fo r the 2014 PQRS incentive. Specifically, we propose to eliminate the following criterion for satisfactory reporting of PQRS quality

measures via the GPRO web interface for group practices comprise d of 25-99 eligible professionals: Report on all measures incl uded 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. For the same reas ons discussed previously and to maintain consistent criteria for the 2016 PQRS paymen t adjustment and 2014 PQRS incentive, we believe this proposed change is appropriate. We also note that if this proposal is finalized, only groups of 100 or more eligible professionals would be able to use the web interface reporting mechanism to re port quality data under the GPRO. Second, we propose 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 th e reporting period to which the measureCMS-1600-P 328

applies. Measures with a 0 percent performance rate will not be counted. This would

allow us to maintain consistent criteria for the 2016 PQRS payment adjustment and 2014 PQRS incentive. Consistent with our proposal to provid e group practices comprised of 25 or more eligible professionals with a new satisfactor y reporting criterion th at would include the option to complete the CG CAHPS survey along with reporting 6 other PQRS measures for purposes of meeting the criteria fo r satisfactory reporting for the 2014 PQRS incentive, we also propose the same criteri on for purposes of meeting the criteria for satisfactory reporting for the 2016 PQRS paym ent adjustment. Specifically, we are proposing the following criteria for satisfa ctory reporting for the 2016 PQRS payment adjustment: For the 12-mont h reporting period for the 2016 PQRS payment adjustment, report all CAHPS survey measur es via a certified vendor, AND report at least 6 measures covering at least 2 of the National Quality St rategy domains using th e qualified registry, direct EHR product, EHR data submission vendor, or GPRO we b interface reporting mechanisms. As noted earlier, to complete th is survey, a group practice must indicate its intent to report the CG CAHPS survey when it registers to participat e in the PQRS via the

GPRO. In addition, we are proposing the same criteria for satisfactory reporting of individual quality measures under the GPRO for the registry-based reporting mechanism for the 2016 PQRS payment adjustment th at we proposed above for the 2014 PQRS Incentive: Report at least 9 measures covering at least 3 of the Nati onal Quality Strategy domains, AND report each measure for at least 50 percent of the group practice’s applicable patients seen during the reporti ng period to which the measure applies. Measures with a 0 percent performance rate will not be counted. In addition to theCMS-1600-P 329

reasons we noted previously for modifying the existing registry satisfactory reporting

criterion to increase the number of measur es reported from 3 to 9, we believe it is appropriate to continue to a lign, as closely as possible, the criteria for satisfactory reporting for both the 2016 PQRS payment adjustment and 2014 PQRS Incentive.

We note that the criteria for satisfact ory reporting under the GPRO for the 2014 PQRS incentive and the 2016 PQRS payment adjustment would align (such that a group practice would avoid the 2016 PQ RS payment adjustment by m eeting any of the criteria for satisfactory reporting adopted for th e 2014 PQRS incentive for the 12-month reporting period). We believe this is appropr iate since the reporting period for the 2014 PQRS incentive and 2016 PQRS payment adjust ment coincide. We seek public comment on these proposals as well as on whether we should offer alternative criteria for group practices participating in th e PQRS GPRO to satisfy the 2016 PQRS payment adjustment

similar to what we have established for i ndividual eligible prof essionals reporting via

claims. Tables 26 and 27 provides a summary of our proposed criteria for the satisfactory reporting of data on PQRS quality measures via the GPRO for the 2014 PQRS incentive and 2016 PQRS payment adjustment. TABLE 26: Summary of Proposals for the 2014 PQRS Incentive: Proposed Criteria for Satisfactory Reporting of Data on PQRS Quality Measures via the GPRO Reporting Period Reporting Mechanism Group Practice Size Proposed Reporting Criteria

12-month (Jan 1 — Dec 31) Qualified Registry 2 + eligible profession als Report at least 9 measures cove ring 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. 12-month (Jan 1 — Dec 31) Certified Survey Vendor + Qualified Registry, direct EHR 25+ eligible profession als Report all CG CAHPS survey measures via certified survey vendor, AND report at least 6 m easures covering at least 2 of the National Quality Strategy domains using the qualified registry, direct EHR product, EHR data submission vendor, or GPRO web interface reporting mechanisms.CMS-1600-P 330

Reporting Period Reporting Mechanism Group Practice Size Proposed Reporting Criteria product, EHR data submission vendor, or GPRO web interface

TABLE 27: Summary of Proposals for the 2016 PQRS Payment Adjustment: Proposed Criteria for Satisfactory Repo rting of Data on PQRS Quality Measures via the GPRO Reporting Period Reporting Mechanism Group Practice Size Proposed Reporting Criteria

12-month (Jan 1 — Dec 31) Qualified Registry 2 + eligible profession als Report at least 9 measures cove ring 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. 12-month (Jan 1 — Dec 31) Certified Survey Vendor + Qualified Registry, direct EHR product, EHR data submission vendor, or GPRO web interface 25+ eligible profession als Report all CG CAHPS survey measures via certified survey vendor, AND report at least 6 m easures covering at least 2 of the National Quality Strategy domains using the qualified registry, direct EHR product, EHR data submission vendor, or GPRO web interface reporting mechanisms.

9. Statutory Requirements and Other Consider ations for the Selection of PQRS Quality Measures for Meeting the Criteria for Satisfactory Reporting for 2013 and Beyond for Individual Eligible Profe ssionals and Group Practices CMS undergoes an annual Call for Measures that solicits new measures from the public for possible inclusion in the PQRS for 2014 and beyond. During the Call for Measures, we request measures for inclusion in PQRS that meet the following statutory and non-statutory criteria.CMS-1600-P 331

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 secti on 1890(a) of the Act (currently, that is the National Quality Foru m, 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 no t been endorsed by the NQF, section 1848(k)(2)(C)(ii) of the Act aut horizes the Secretary to specif y a measure that is not so endorsed as long as due consider ation is given to measures that have been endorsed or adopted by a consensus organization iden tified by the Secretary, such as the AQA alliance. In light of thes e 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 ensu re that eligible pr ofessionals have the opportunity to provide input during the development, endor sement, 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 th e measures be selected from measures that have been endorsed by the entity with a cont ract with the Secret ary under section 1890(a) (that is, the NQF) and are silent for how the measures that are submitted to the NQF for endorsement were developed. The basic step s for developing measures applicable to physicians and other eligible professionals prior to submission of the measures for endorsement may be carried out by a variet y of different organi zations. We do notCMS-1600-P 332

believe there needs to be any special rest rictions on the type or make-up of the organizations carrying out this basic process of development of physician measures, such as restricting the initi al development to physician-contro lled organizations. Any such restriction would unduly limit the basic devel opment 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, secti on 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 subsection 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 su ch measures as the quality measures selected for reporting under the PQRS . Pursuant to section 3014 of Affordable Care Act, the NQF convened multi-stakeholder groups by creating the Measure Applications Partnership (MAP). Secti on 1890(A)(a) of the Act requires that the Secretary establish a pre-rule making process in which the Secretary must make publicly available by December 1 st 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 1 st 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 Secret ary 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 selectCMS-1600-P 333

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 ha ve been endorsed or adopted by a consensus organization identified by the Secretary. Under this exception, aside from NQF endorsement, 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 ca re for Medicare beneficiaries.

● Measures that address gaps in th e quality of care delivered to Medicare

beneficiaries.

● Address Gaps in th e PQRS measure set.

● Measures impacting chr onic conditions (chronic kidney disease, diabetes mellitus, heart failure, hypertension and musculoskeletal).

● Measures applicable across care setti ngs (such as, outpatient , nursing facilities, domiciliary, etc.).

● Broadly applicable measur es that could be used to create a core measure set required of all participati ng eligible professionals.

● Measures groups that reflect the se rvices furnished to beneficiaries by a particular specialty. 10. Proposed PQRS Quality Measures Taking into consideration the statutory and non-statutory crit eria we described previously, this section contai ns our proposals for th e inclusion or removal of measures in PQRS for 2014 and beyond. We are classify ing all proposed measures against sixCMS-1600-P 334

domains based on the National Quality St rategy’s six priorities, as follows: (1) Person and Caregiver-Cente red Experience and Outcomes

. These are measures that reflect the potenti al to improve patient-centered care and the quality of care delivered to patients. They emphasize the importance of collecti ng 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 it s effective management. (2) Patient Safety

. These are measures that reflect the safe delivery of clinical services in both hospital and ambulatory set tings and include proce sses 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 c linical and preventive services among health professionals in the ca re team and with patients, caregivers, and families to improve appropriate and time ly 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 ha ve 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 er rors. These measures also impact and benefit a large number of patients and emphasi ze the use of evidence to best manage high priority conditions and determine appropr iate use of healthcare resources.CMS-1600-P 335

(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 proposed PQRS individual quality measure may differ from specifications for the same quality measure used in prior years. For example, for the proposed PQRS quality measures that were selected for reporting in 2013 and be yond, please note that detailed measure specifications, including the measure’s title, for the proposed 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 desi re to align measure

titles with the measure tit les that were proposed for 2013, 2014, 2015, and potentially subsequent years of the EHR Incentive Pr ogram, we note that the measure titles for measures available for reporting via EHR ma y change. To the extent that the EHR Incentive Program updates its measure titles to include version nu mbers (77 FR 13744),

we intend to use these version numbers to de scribe the PQRS EHR measures that will also be available for reporting for the EHR In centive Program. We will continue to work toward complete alignment of measure specifications across programs whenever possible. Through NQF’s measure maintenance pr ocess, 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 fr om more substantive changes to

measures that result in what are considered new or different measur es, and that they do not trigger the same agency obligations under the Administrative Procedure Act. In theCMS-1600-P 336

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 incorpor ate 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 possi ble, while preserving the public’s ability to comment on updates that so fundamentally ch ange an endorsed measure that it is no longer the same measure that we originally adopted. We also note that the NQF process incorporates an opportunity for public co mment and engagement in the measure maintenance process. We will revise the Specifications Manual and post notices to clearly identify the updates and provide li nks to where additional information on the updates can be found. Updates will also be available on the CMS PQRS Website at http://www.cms.gov/Medicare/Quality -Initiatives-Patient-AssessmentInstruments/PQRS/index.html. With respect to the PQRS EHR measures that are also reportable under the EHR Incentive Program (i.e., electronically specified clinical quality meas ures), please note that the updates to these measures will be provided on the EHR Incentive Program

website. We understand that the EHR Incentive Program may accept versions of electronically specified clinical quality measures that may be outdated. We propose that for purposes of the PQRS, eligible professi onals must report the most recent, updated

version of a clinical quality measure. For example, for purposes of reporting clinical quality measures that are electronically spec ified during the PQRS reporting periods that occur in 2014, we would only accept the reportin g of clinical quality measures that areCMS-1600-P 337

electronically specified using versions of th e electronic specifications that were updated and posted on June 2013, available at http://www.cms.gov/Regulations-andGuidance/Legislation/EHRIncentivePrograms/eCQM_Library.html . We also understand, for purposes of the EHR Incentive Program, th at once direct EHR products and EHR data

submission vendors are issued a 2014 Edition cer tification 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 cl inical quality measure when such versions are made available. We propose that for purposes of PQRS, however , that the eligible professional’s direct EHR product or EHR da ta submission vendor must be tested and certified to the most recent, updated version of an electronically specified clinical quality measure. For example, for purposes of reporting clinical quality measures that are electronically specified during the PQRS repor ting periods that occu r in 2014, we would only accept the reporting of clinical quality m easures from direct EHR products or EHR

data submission vendors that have been tested and certified to versi ons of the electronic specifications that were updated and post ed on June 2013. We seek comment on our proposals to require eligible professionals to both use the most rece nt, updated version of an electronically specified clinical quality m easure to report for PQRS and 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 electr onic specifications for PQRS purposes. a. Proposed Individual PQRS Measures and Measures within Measures Groups Available for Reporting for 2014 and Beyond (1) Proposed PQRS Core Measures Av ailable for Reporting for 2014 and Beyond

In the CY 2013 PFS final rule with co mment period, we finalized the HHSCMS-1600-P 338

Million Hearts Measures as a recommended set of core measures for which we encourage eligible professionals to re port in PQRS (77 FR 69209). In addition to the HHS Million Hearts Measures we previous ly finalized, we are proposi ng to include the measures specified in Table 28 as a dditional recommended core measures for 2014 and beyond (in the table we also identify the applicable PQRS reporting mechanism through which each measure could be submitted). These additional proposed recommended core measures

were also finalized as recommended core measures in the EHR Incentive Program for 2014. Therefore, due to our desire to ali gn with the recommended measures available under the EHR Incentive Program, we are proposing the additional recommended measures specified in Table 28 for 2014 and beyond. TABLE 28: Proposed Physician Qualit y Reporting System Recommended Core Measures for 2014 and BeyondNQF/PQRSCMS E-Measure ID National Quality Strategy Domain Measure Title and Description ¥Measure StewardClaimsRegistryEHRGPRO (Web Interface)*Measures GroupsOther Quality ReportingPrograms

0002/ 66 ** 146v2 Efficienc y and Cost Reductio n Appropriate Testing for Children with Pharyngitis: Percentage of children aged 2 through 18 years with a diagnosis of pharyngitis, who were prescribed an antibiotic and who received a group A streptococcus (strep) test for the episode. A higher rate represents better performance (i.e. appropriate testing). NCQA X X MU2CMS-1600-P 339NQF/PQRSCMS E-Measure ID National Quality Strategy Domain Measure Title and Description ¥Measure StewardClaimsRegistryEHRGPRO (Web Interface)*Measures GroupsOther Quality ReportingPrograms

0018/ 236 * 165v2 Effective Clinical Care Hypertension (HTN): Controlling High Blood Pressure: Percentage of patients aged 18 through 85 years of age who had a diagnosis of hypertension (HTN) and whose BP was adequately controlled (< 140/90 mmHg) NCQA X X X X X MU2 ACO Million Hearts

0022/ 238 * 156v2 Patient Safety Use of High-Risk Medications in the Elderly: Percentage of patients 66 years of age and older who were ordered high-risk medications. Two rates are reported. a. Percentage of patients who were ordered at least one high-risk medication. b. Percentage of patients who wereordered at least two different highrisk medications. NCQA X MU2

0024/ 239 ** 155v2 Communi ty/Popula tion Health Weight Assessment and Counseling for Nutrition and Physical Activity for Children and Adolescents : Percentage of patients 3-17 years of age who had an outpatient visit with a Primary Care Physician (PCP) or Obstetrician/Gynecologist (OB/GYN) and who had evidence of the following during the measurement period. Three rates are reported. - Percentage of patients with height, weight, and body mass index (BMI) percentile documentation - Percentage of patients with counseling for nutrition - Percentage of patients with counseling for physical activity NCQA X MU2CMS-1600-P 340NQF/PQRSCMS E-Measure ID National Quality Strategy Domain Measure Title and Description ¥Measure StewardClaimsRegistryEHRGPRO (Web Interface)*Measures GroupsOther Quality ReportingPrograms

0028/ 226 * 138v2 Communi ty/Popula tion Health Preventive Care and 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 AMAPCPI X X X X X MU2 ACO Million Hearts

0033/ 310 ** 153v2 Communi ty/Popula tion Health Chlamydia Screening for Women: Percentage of women aged 15 through 24 years who were identified as sexually active and who had at least one test for chlamydia during the measurement year NCQA X MU2

0036/ 311 ** 126v2 Effective Clinical Care Use of Appropriate Medications for Asthma: Percentage of patients aged 5 through 50 years of age who were identified as having persistent asthma and were appropriately prescribed medication during the measurement year NCQA X MU2

0038/ 240 ** 117v2 Communi ty/Popula tion Health Childhood Immunization Status: The percentage of children two years of age who had four diphtheria, tetanus and acellular pertussis (DTaP); three polio (IPV); one measles, mumps, rubella (MMR); three H influenza type B (HiB); three hepatitis B (Hep B); one chicken pox (VZV); four pneumococcal conjugate (PCV); two hepatitis A (Hep A); two or three rotavirus (RV); and two influenza (flu) vaccines by their second birthday NCQA X MU2

0052/ 312 * 166v2 Efficienc y and Cost Reductio n Use of Imaging Studies for Low Back Pain : Percentage of patients 18-50 years of age with a diagnosis of low back pain who did not have an imaging study (plain X-ray, MRI, CT scan) within 28 days of the diagnosis. NCQA X MU2CMS-1600-P 341NQF/PQRSCMS E-Measure ID National Quality Strategy Domain Measure Title and Description ¥Measure StewardClaimsRegistryEHRGPRO (Web Interface)*Measures GroupsOther Quality ReportingPrograms

0069/ 65 ** 154v2 Efficienc y and Cost Reductio n Appropriate Treatment for Children with Upper Respiratory Infection (URI):Percentage of children 3 months18 years of age who were diagnosed with upper respiratory infection (URI) and were not dispensed an antibiotic prescription on or three days after the episode. NCQA X X MU2

0108/ N/A ** 136v3 Effective Clinical Care ADHD: Follow-Up Care forChildren Prescribed AttentionDeficit/Hyperactivity Disorder (ADHD) Medication : Percentage of children 6-12 years of age and newly dispensed a medication for attention-deficit/hyperactivity disorder (ADHD) who had appropriate follow-up care. Two rates are reported. a. Percentage of children who had one follow-up visit with a practitioner with prescribing authority during the 30-Day Initiation Phase. b. Percentage of children who remained on ADHD medication for at least 210 days and who, in addition to the visit in the Initiation Phase, had at least two additional follow-up visits with a practitioner within 270 days (9 months) after the Initiation Phase ended. NCQA X MU2

0418/ 134 * ** 2v2 Communi ty/Popula tion Health Preventive Care and Screening: Screening for Clinical Depression and Follow-Up Plan : Percentage of patients aged 12 years and older screened for clinical depression on the date of the encounter using an age appropriate standardized depression screening tool AND if positive, a follow-up plan is documented on the date of the positive screen. CMS X X X X MU2 ACOCMS-1600-P 342NQF/PQRSCMS E-Measure ID National Quality Strategy Domain Measure Title and Description ¥Measure StewardClaimsRegistryEHRGPRO (Web Interface)*Measures GroupsOther Quality ReportingPrograms

0419/ 130 * 68v2 Patient Safety Documentation of Current Medications in the Medical Record: Percentage of specified visits for patients aged 18 years and older for which the eligible professional attests to documenting a list of current medications to the best of his/her knowledge and ability. This list must include ALL prescriptions, over-the-counters, herbals, and vitamin/mineral/dietary (nutritional) supplements AND must contain the medications’ name, dosage, frequency and route of administration CMS X X X X MU2

0421/ 128 * 69v1 Communi ty/Popula tion Health Preventive Care and Screening: Body Mass Index (BMI) Screening and Follow-Up: Percentage of patients aged 18 years and older with an encounter during the reporting period with a documented calculated BMI during the encounter or during the previous six months, AND when the BMI is outside of normal parameters, follow-up is documented during the encounter or during the previous six months of the encounter with the BMI outside of normal parameters

. Normal Parameters: Age 65 years and older BMI ≥ 23 and < 30; Age 18 – 64 years BMI ≥ 18.5 and < 25 CMS X X X X X MU2 ACO

N/A/ N/A ** 75v2 Effective Clinical Care Children who have dental decay or cavities: Percentage of children ages, 0-20 years, who have had tooth decay or cavities during the measurement period CMS X MU2CMS-1600-P 343NQF/PQRSCMS E-Measure ID National Quality Strategy Domain Measure Title and Description ¥Measure StewardClaimsRegistryEHRGPRO (Web Interface)*Measures GroupsOther Quality ReportingPrograms

N/A/ N/A * 50v2 Communi cation and Care Coordinat ion Closing the referral loop: receipt of specialist report: Percentage of patients with referrals, regardless of age, for which the referring provider receives a report from the provider to whom the patient was referred CMS X MU2

N/A/ N/A * 90v3 Person and Caregiver -Centered Experienc e and Outcomes Functional status assessment for complex chronic conditions: Percentage of patients aged 65 years and older with heart failurewho completed initial and followup patient-reported functional status assessments NQF X MU2

* Recommended Adult Core CQMs for eligible professionals ** Recommended Pediatric Core CQMs for eligible professionals ¥ Titles and descriptions in this table ar e aligned with the 2014 Physician Quality Reporting System Claims and Qualified Regi stry measure titles and descriptions, and may differ from existing measures in ot her programs. When reporting data on these measures, please reference the National Qu ality Forum (NQF) and Physician Quality Reporting System numbers for clarification. (2) Proposed Individual PQRS Measures Available for Reporting for 2014 and Beyond Table 29 contains the measures we are pr oposing to include in the PQRS measure set for 2014 and beyond. Please note that ou r rationale for proposing each of these measures is found below the measure descrip tion. We have also indicated the PQRS reporting mechanism or mechanisms through which each proposed measure could be

submitted.CMS-1600-P 344

TABLE 29: Proposed Individual Quality Meas ures and Those Included in Measures Groups for the Physician Quality Reporting System to be Available for Satisfactory Reporting via Claims, Regist ry, or EHR Beginning in 2014NQF/PQRSCMS E-Measure IDNational Quality StrategyDomain Measure Title and Description ¥Measure StewardClaimsRegistryEHRGPRO (Web Interface)*Measures GroupsOther Quality ReportingPrograms

0060/ N/A 148v2 Effective Clinical Care Hemoglobin A1c Test for Pediatric Patients: Percentage of patients 5-17 years of age with diabetes with an HbA1c test during the measurement period

Rationale: This measure satisfies 1848(k)(2)(C)(i) of the Act as this measure is NQF-endorsed. Furthermore, including this measure in the PQRS measure set is in accordance with our intention to align with the measures included in the EHR Incentive Program for 2014. This measure identifies specific gaps in care and encourages more provider reporting to assess quality care while allowing specialty professionals to participate in the program. NCQA X MU2CMS-1600-P 345NQF/PQRSCMS E-Measure IDNational Quality StrategyDomain Measure Title and Description ¥Measure StewardClaimsRegistryEHRGPRO (Web Interface)*Measures GroupsOther Quality ReportingPrograms

0108/ N/A 136v3 Effective Clinical Care ADHD: Follow-Up Care for ChildrenPrescribed AttentionDeficit/Hyperactivity Disorder (ADHD) Medication: Percentage of children 6-12 years of age and newly dispensed a medication for attention-deficit/hyperactivity disorder (ADHD) who had appropriate follow-up care. Two rates are reported. a. Percentage of children who had one follow-up visit with a practitioner with prescribing authority during the 30-Day Initiation Phase. b. Percentage of children who remained on ADHD medication for at least 210 days and who, in addition to the visit in the Initiation Phase, had at least two additional follow-up visits with a practitioner within 270 days (9 months) after the Initiation Phase ended

Rationale: This measure satisfies 1848(k)(2)(C)(i) of the Act as this measure is NQF-endorsed. We are proposing this measure for inclusion in PQRS because this measure is also included for reporting in the EHR Incentive Program for 2014. This measure identifies specific gaps in care and encourages more provider reporting to assess quality care while allowing specialty professionals to participate in the program. NCQA X MU2CMS-1600-P 346NQF/PQRSCMS E-Measure IDNational Quality StrategyDomain Measure Title and Description ¥Measure StewardClaimsRegistryEHRGPRO (Web Interface)*Measures GroupsOther Quality ReportingPrograms

0403/ N/A 62v2 Efficienc y and Cost Reductio n HIV/AIDS: Medical Visit: Percentage of patients, regardless of age, with a diagnosis of HIV/AIDS with at least two medical visits during the measurement year with a minimum of 90 days between each visit

Rationale: This measure satisfies 1848(k)(2)(C)(i) of the Act as this measure is NQF-endorsed. We are proposing this measure for inclusion in PQRS because this measure is also included for reporting in the EHR Incentive Program for 2014. This measure identifies specific gaps in care and encourages more provider reporting to assess quality care while allowing specialty professionals to participate in the program. NCQA X MU2

0110/ N/A 169v1 Effective Clinical Care Bipolar Disorder and Major Depression: Appraisal for Alcohol or Chemical Substance Use: Percentage of patients with depression or bipolar disorder with evidence of an initial assessment that includes an appraisal for alco hol or chemical substance use

Rationale: This measure satisfies 1848(k)(2)(C)(i) of the Act as this measure is NQF-endorsed. This measure is also included for reporting in the EHR Incentive Program for 2014. This measure identifies specific gaps in care and encourages more provider reporting to assess quality care while allowing specialty professionals to participate in the program. CQAI MH X MU2CMS-1600-P 347NQF/PQRSCMS E-Measure IDNational Quality StrategyDomain Measure Title and Description ¥Measure StewardClaimsRegistryEHRGPRO (Web Interface)*Measures GroupsOther Quality ReportingPrograms

0608/ N/A 158v2 Effective Clinical Care Pregnant Women that had HBsAg Testing: This measure identifies pregnant women who had a HBsAg (hepatitis B) test during their pregnancy

Rationale: This measure satisfies 1848(k)(2)(C)(i) of the Act as this measure is NQF-endorsed. This measure is also included for reporting in the EHR Incentive Program for 2014. This measure identifies specific gaps in care and encourages more provider reporting to assess quality care while allowing specialty professionals to participate in the program. Optum Insight X MU2

0710/ N/A 159v2 Effective Clinical Care Depression Remission at Twelve Months: Adult patients age 18 and older with major depression or dysthymia and an initial PHQ-9 score > 9 who demonstrate remission at twelve months defined as PHQ-9 score less than 5. This measure applies to both patients with newly diagnosed andexisting depression whose current PHQ9 score indicates a need for treatment

Rationale: This measure satisfies 1848(k)(2)(C)(i) of the Act as this measure is NQF-endorsed. This measure is also included for reporting in the EHR Incentive Program for 2014. This measure identifies specific gaps in care and encourages more provider reporting to assess quality care while allowing specialty professionals to participate in the program. MNC M X MU2CMS-1600-P 348NQF/PQRSCMS E-Measure IDNational Quality StrategyDomain Measure Title and Description ¥Measure StewardClaimsRegistryEHRGPRO (Web Interface)*Measures GroupsOther Quality ReportingPrograms

0712/ N/A 160v2 Effective Clinical Care Depression Utilization of the PHQ-9 Tool: Adult patients age 18 and older with the diagnosis of major depression or dysthymia who have a PHQ-9 tool administered at least once during a 4 month period in which there was a qualifying visit

Rationale: This measure satisfies 1848(k)(2)(C)(i) of the Act as this measure is NQF-endorsed. This measure is also included for reporting in the EHR Incentive Program for 2014. This measure identifies specific gaps in care and encourages more provider reporting to assess quality care while allowing specialty professionals to participate in the program. MNC M X MU2

1401/ N/A 82v1 Commu nity/Pop ulation Health Maternal Depre ssion Screening: The percentage of children who turned 6 months of age during the measurement year, who had a face-to-face visit between the clinician and the child during child’s first 6 months, and who had a maternal depression screening for the mother at least once between 0 and 6 months of life

Rationale: This measure satisfies 1848(k)(2)(C)(i) of the Act as this measure is NQF-endorsed. This measure is also included for reporting in the EHR Incentive Program for 2014. This measure identifies specific gaps in care and encourages more provider reporting to assess quality care while allowing specialty professionals to participate in the program. NCQA X MU2CMS-1600-P 349NQF/PQRSCMS E-Measure IDNational Quality StrategyDomain Measure Title and Description ¥Measure StewardClaimsRegistryEHRGPRO (Web Interface)*Measures GroupsOther Quality ReportingPrograms

N/A/ N/A 65v3 Effective Clinical Care Hypertension: Improvement in Blood Pressure: Percentage of patients aged 18-85 years of age with a diagnosis of hypertension whose blood pressure improved during the measurement period

Rationale: We are proposing this measure based on our exception authority under 1848(k)(2)(C)(ii) of the Act that 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). This measure is also included for reporting in the EHR Incentive Program for 2014. This measure identifies specific gaps in care and encourages more provider reporting to assess quality care while allowing specialty professionals to participate in the program. CMS X MU2

N/A/ N/A 50v2 Commu nication and Care Coordin ation Closing the referral loop: receipt of specialist report: Percentage of patients with referrals, regardless of age, for which the referring provider receives a report from the provider to whom the patient was referred

Rationale: We are proposing this measure based on our exception authority under 1848(k)(2)(C)(ii) of the Act that 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). This measure is also included for reporting in the EHR Incentive Program for 2014. This measure identifies specific gaps in care and encourages more provider reporting to assess quality care while allowing specialty professionals to participate in the program. CMS X MU2CMS-1600-P 350NQF/PQRSCMS E-Measure IDNational Quality StrategyDomain Measure Title and Description ¥Measure StewardClaimsRegistryEHRGPRO (Web Interface)*Measures GroupsOther Quality ReportingPrograms

N/A/ N/A 66v2 Effective Clinical Care Functional Status Assessment for Knee Replacement: Percentage of patients aged 18 years and older with primary total knee arthroplasty (TKA) who completed baseline and follow-up (patient-reported) functional status assessments

Rationale: We are proposing this measure based on our exception authority under 1848(k)(2)(C)(ii) of the Act that 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). This measure is also included for reporting in the EHR Incentive Program for 2014. This measure identifies specific gaps in care and encourages more provider reporting to assess quality care while allowing specialty professionals to participate in the program. CMS X MU2CMS-1600-P 351NQF/PQRSCMS E-Measure IDNational Quality StrategyDomain Measure Title and Description ¥Measure StewardClaimsRegistryEHRGPRO (Web Interface)*Measures GroupsOther Quality ReportingPrograms

N/A/ N/A 56v2 Person and CaregiverCentered Experien ce and Outcome s Functional Status Assessment for Hip Replacement: Percentage of patients aged 18 years and older with primary total hip arthroplasty (THA) who completed baseline and follow-up (patient-reported) functional status assessments

Rationale: We are proposing this measure based on our exception authority under 1848(k)(2)(C)(ii) of the Act that 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). This measure is also included for reporting in the EHR Incentive Program for 2014. This measure identifies specific gaps in care and encourages more provider reporting to assess quality care while allowing specialty professionals to participate in the program. CMS X MU2CMS-1600-P 352NQF/PQRSCMS E-Measure IDNational Quality StrategyDomain Measure Title and Description ¥Measure StewardClaimsRegistryEHRGPRO (Web Interface)*Measures GroupsOther Quality ReportingPrograms

N/A/ N/A 90v3 Person and CaregiverCentered Experien ce and Outcome s Functional Status Assessment for Complex Chronic Conditions: Percentage of patients aged 65 years and older with heart failure whocompleted initial and follow-up patientreported functional status assessments

Rationale: We are proposing this measure based on our exception authority under 1848(k)(2)(C)(ii) of the Act that 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). This measure is also included for reporting in the EHR Incentive Program for 2014. This measure identifies specific gaps in care and encourages more provider reporting to assess quality care while allowing specialty professionals to participate in the program. CMS X MU2

N/A/ N/A 75v2 Effective Clinical Care Children Who Have Dental Decay or Cavities: Percentage of children, age 0- 20 years, who have had tooth decay or cavities during the measurement period

Rationale: We are proposing this measure based on our exception authority under 1848(k)(2)(C)(ii) of the Act that 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). This measure is also included for reporting in the EHR Incentive Program for 2014. This measure identifies specific gaps in care and encourages more provider reporting to assess quality care while allowing specialty professionals to participate in the program. CMS X MU2CMS-1600-P 353NQF/PQRSCMS E-Measure IDNational Quality StrategyDomain Measure Title and Description ¥Measure StewardClaimsRegistryEHRGPRO (Web Interface)*Measures GroupsOther Quality ReportingPrograms

N/A/ N/A 74v3 Effective Clinical Care Primary Caries Prevention Intervention as offered by Primary Care Providers, including Dentists: Percentage of children, age 0-20 years, who received a fluoride varnish application during the measurement period

Rationale: We are proposing this measure based on our exception authority under 1848(k)(2)(C)(ii) of the Act that 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). This measure is also included for reporting in the EHR Incentive Program for 2014. This measure identifies specific gaps in care and encourages more provider reporting to assess quality care while allowing specialty professionals to participate in the program. CMS X MU2CMS-1600-P 354NQF/PQRSCMS E-Measure IDNational Quality StrategyDomain Measure Title and Description ¥Measure StewardClaimsRegistryEHRGPRO (Web Interface)*Measures GroupsOther Quality ReportingPrograms

N/A/ N/A 179v2 Patient Safety ADE Prevention and Monitoring: Warfarin Time in Therapeutic Range: Average percentage of time in which patients aged 18 and older with atrial fibrillation who are on chronic warfarin therapy have International Normalized Ratio (INR) test results within the therapeutic range (i.e., TTR) during the measurement period

Rationale: We are proposing this measure based on our exception authority under 1848(k)(2)(C)(ii) of the Act that 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). This measure is also included for reporting in the EHR Incentive Program for 2014. This measure identifies specific gaps in care and encourages more provider reporting to assess quality care while allowing specialty professionals to participate in the program. CMS X MU2

1365/ N/A 177v2 Patient Safety Child and Adolescent Major Depressive Disorder (MDD): Suicide Risk Assessment: Percentage of patient visits for those patients aged 6 through 17 years with a diagnosis of major depressive disorder with an assessment for suicide risk

Rationale: This measure satisfies 1848(k)(2)(C)(i) of the Act as this measure is NQF-endorsed. This measure is also included for reporting in the EHR Incentive Program for 2014. This measure identifies specific gaps in care and encourages more provider reporting to assess quality care while allowing specialty professionals to participate in the program. AMAPCPI X MU2CMS-1600-P 355NQF/PQRSCMS E-Measure IDNational Quality StrategyDomain Measure Title and Description ¥Measure StewardClaimsRegistryEHRGPRO (Web Interface)*Measures GroupsOther Quality ReportingPrograms

N/A/ N/A 77v2 Effective Clinical Care HIV/AIDS: RNA Control for Patients with HIV: Percentage of patients aged 13 years and older with a diagnosis of HIV/AIDS, with at least two visits during the measurement year, with at least 90 days between each visit, whose most recent HIV RNA level is <200 copies/mL

Rationale: We are proposing this measure based on our exception authority under 1848(k)(2)(C)(ii) of the Act that 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). This measure is also included for reporting in the EHR Incentive Program for 2014. This measure identifies specific gaps in care and encourages more provider reporting to assess quality care while allowing specialty professionals to participate in the program. CMS X MU2

2082/ N/A Effective Clinical Care HIV Viral Load Suppression: 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.

Rationale: This measure satisfies 1848(k)(2)(C)(i) of the Act as this measure is NQF-endorsed. This measure identifies specific gaps in care and encourages more provider reporting to assess quality care while allowing specialty professionals to participate in the program. It aligns to current clinical standards for treatment for patient with the chronic condition of HIV. HRSA X XCMS-1600-P 356NQF/PQRSCMS E-Measure IDNational Quality StrategyDomain Measure Title and Description ¥Measure StewardClaimsRegistryEHRGPRO (Web Interface)*Measures GroupsOther Quality ReportingPrograms

2083/ N/A Effective Clinical Care Prescription of HIV 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

Rationale: This measure satisfies 1848(k)(2)(C)(i) of the Act as this measure is NQF-endorsed. This measure identifies specific gaps in care and encourages more provider reporting to assess quality care while allowing specialty professionals to participate in the program. It aligns to current clinical standards for treatment for patient with the chronic condition of HIV. HRSA X X

2079/ N/A Efficienc y and Cost Reductio n HIV Medical Visit Frequency: 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

Rationale: This measure satisfies 1848(k)(2)(C)(i) of the Act as this measure is NQF-endorsed. This measure is in alignment with the HHS/HRSA strategy for having a core set of HIV measures. HRSA X

2080/ N/A Efficienc y and Cost Reductio n Gap in HIV medical visits: Percentage of patients, regardless of age, with a diagnosis of HIV who did not have a medical visit in the last 6 month of the measurement year

Rationale: This measure satisfies 1848(k)(2)(C)(i) of the Act as this measure is NQF-endorsed. This measure is in alignment with the HHS/HRSA strategy for having a core set of HIV measures. HRSA XCMS-1600-P 357NQF/PQRSCMS E-Measure IDNational Quality StrategyDomain Measure Title and Description ¥Measure StewardClaimsRegistryEHRGPRO (Web Interface)*Measures GroupsOther Quality ReportingPrograms

N/A/ N/A Effective Clinical Care Screening Colonoscopy Adenoma Detection Rate Measure: The percentage of patients age 50 years or older with at least one adenoma or other colorectal cancer precursor or colorectal cancer detected during screening colonoscopy

Rationale: We are proposing this measure based on our exception authority under 1848(k)(2)(C)(ii) of the Act that 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). This measure addresses a broad patient population for screening and detection of colorectal cancer and is medically significant in the measurement of utilizing preventive healthcare services. The individual measure is reportable for Gastroenterologist and other eligible professionals within this scope of practice. Currently, PQRS has 2 specific measures that are applicable to this scope of practice. ACGA GA/A SGE XCMS-1600-P 358NQF/PQRSCMS E-Measure IDNational Quality StrategyDomain Measure Title and Description ¥Measure StewardClaimsRegistryEHRGPRO (Web Interface)*Measures GroupsOther Quality ReportingPrograms

N/A/ N/A Commu nication and Care Coordin ation Total Knee Replacement: Shared Decision-Making: Trial of Conservative (Non-surgical) Therapy: Percentage of patients undergoing a total knee replacementwith documented shared decisionmaking with discussion of conservative (non-surgical) therapy (e.g. NSAIDs, analgesics, exercise, injections) prior to the procedure

Rationale: We are proposing this measure based on our exception authority under 1848(k)(2)(C)(ii) of the Act that 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). This measure is contained within the Total Knee Replacement Measures Group. This measures group provides eligible professionals opportunity to report assessments prior to a total knee surgery such as shared decision-making reviewing conservative therapy prior to invasive surgery, risk assessment, prophylactic antibiotic prior to tourniquet inflation, and identification of prosthesis implant within medical chart. This measures group allows Orthopedic Surgeons and other eligible professionals within this scope of practice a measures group to report. AAHK S/AMAPCPI XCMS-1600-P 359NQF/PQRSCMS E-Measure IDNational Quality StrategyDomain Measure Title and Description ¥Measure StewardClaimsRegistryEHRGPRO (Web Interface)*Measures GroupsOther Quality ReportingPrograms

N/A/ N/A Patient Safety Total Knee Replacement: Venous Thromboembolic and Cardiovascular Risk Evaluation: Percentage of patients 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 (DVT), pulmonary embolism (PE), myocardial infarction (MI), arrhythmia and stroke

Rationale: We are proposing this measure based on our exception authority under 1848(k)(2)(C)(ii) of the Act that 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). This measure is contained within the Total Knee Replacement Measures Group. This measures group provides eligible professionals opportunity to report assessments prior to a total knee surgery such as shared decision-making reviewing conservative therapy prior to invasive surgery, risk assessment, prophylactic antibiotic prior to tourniquet inflation, and identification of prosthesis implant within medical chart. This measures group allows Orthopedic Surgeons and other eligible professionals within this scope of practice a measures group to report. AAHK S/AMAPCPI XCMS-1600-P 360NQF/PQRSCMS E-Measure IDNational Quality StrategyDomain Measure Title and Description ¥Measure StewardClaimsRegistryEHRGPRO (Web Interface)*Measures GroupsOther Quality ReportingPrograms

N/A/ N/A Patient Safety Total Knee Replacement: Preoperative Antibiotic Infusion with Proximal Tourniquet: Percentage of patients undergoing a total knee replacement who had the prophylactic antibiotic completely infused prior to the inflation of the proximal tourniquet

Rationale: We are proposing this measure based on our exception authority under 1848(k)(2)(C)(ii) of the Act that 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). This measure is contained within the Total Knee Replacement Measures Group. This measures group provides eligible professionals opportunity to report assessments prior to a total knee surgery such as shared decision-making reviewing conservative therapy prior to invasive surgery, risk assessment, prophylactic antibiotic prior to tourniquet inflation, and identification of prosthesis implant within medical chart. This measures group allows Orthopedic Surgeons and other eligible professionals within this scope of practice a measures group to report. AAHK S/AMAPCPI XCMS-1600-P 361NQF/PQRSCMS E-Measure IDNational Quality StrategyDomain Measure Title and Description ¥Measure StewardClaimsRegistryEHRGPRO (Web Interface)*Measures GroupsOther Quality ReportingPrograms

N/A/ N/A Patient Safety Total Knee Replacement: Identification of Implanted Prosthesis in Operative Report: Percentage of patients undergoing total knee replacement whose operative report identifies the prosthetic implant specifications including the prosthetic implant manufacturer, the brand name of prosthetic implant and the size of prosthetic implant

Rationale: We are proposing this measure based on our exception authority under 1848(k)(2)(C)(ii) of the Act that 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). This measure is contained within the Total Knee Replacement Measures Group. This measures group provides eligible professionals opportunity to report assessments prior to a total knee surgery such as shared decision-making reviewing conservative therapy prior to invasive surgery, risk assessment, prophylactic antibiotic prior to tourniquet inflation, and identification of prosthesis implant within medical chart. This measures group allows Orthopedic Surgeons and other eligible professionals within this scope of practice a measures group to report. AAHK S/AMAPCPI XCMS-1600-P 362NQF/PQRSCMS E-Measure IDNational Quality StrategyDomain Measure Title and Description ¥Measure StewardClaimsRegistryEHRGPRO (Web Interface)*Measures GroupsOther Quality ReportingPrograms

N/A/ N/A Commu nication and Care Coordin ation Optimizing Patient 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 institutions computer systems

Rationale: We are proposing this measure based on our exception authority under 1848(k)(2)(C)(ii) of the Act that 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). This measure is contained within the Optimizing Patient Exposure to Ionizing Radiation Measures Group. This measures group represents a new clinical theme for eligible professionals to report and addresses a clinical gap. This measure set includes measures collecting data for standardized nomenclature, count of high dose radiation, reporting to a radiation dose index registry, availability of CT images for follow-up/ comparison, and search of CT images through a secure, authorized, media-free, shared archive, and CT follow-up for incidental pulmonary nodules. This measures group allows specialty Radiologist and other eligible professionals within this scope of practice a measures group to report. AMAPCPI XCMS-1600-P 363NQF/PQRSCMS E-Measure IDNational Quality StrategyDomain Measure Title and Description ¥Measure StewardClaimsRegistryEHRGPRO (Web Interface)*Measures GroupsOther Quality ReportingPrograms

N/A/ N/A Patient Safety Optimizing Patient 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-mont h period prior to the current study

Rationale: We are proposing this measure based on our exception authority under 1848(k)(2)(C)(ii) of the Act that 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). This measure is contained within the Optimizing Patient Exposure to Ionizing Radiation Measures Group. This measures group represents a new clinical theme for eligible professionals to report and addresses a clinical gap. This measure set includes measures collecting data for standardized nomenclature, count of high dose radiation, reporting to a radiation dose index registry, availability of CT images for follow-up/ comparison, and search of CT images through a secure, authorized, media-free, shared archive, and CT follow-up for incidental pulmonary nodules. This measures group allows speciality Radiologist and other eligible professionals within this scope of practice a measures group to report. AMAPCPI XCMS-1600-P 364NQF/PQRSCMS E-Measure IDNational Quality StrategyDomain Measure Title and Description ¥Measure StewardClaimsRegistryEHRGPRO (Web Interface)*Measures GroupsOther Quality ReportingPrograms

N/A/ N/A Patient Safety Optimizing Patient 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

Rationale: We are proposing this measure based on our exception authority under 1848(k)(2)(C)(ii) of the Act that 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). This measure is contained within the Optimizing Patient Exposure to Ionizing Radiation Measures Group. This measures group represents a new clinical theme for eligible professionals to report and addresses a clinical gap. This measure set includes measures collecting data for standardized nomenclature, count of high dose radiation, reporting to a radiation dose index registry, availability of CT images for follow-up/ comparison, and search of CT images through a secure, authorized, media-free, shared archive, and CT follow-up for incidental pulmonary nodules. This measures group allows speciality Radiologist and other eligible professionals within this scope of practice a measures group to report. AMAPCPI XCMS-1600-P 365NQF/PQRSCMS E-Measure IDNational Quality StrategyDomain Measure Title and Description ¥Measure StewardClaimsRegistryEHRGPRO (Web Interface)*Measures GroupsOther Quality ReportingPrograms

N/A/ N/A Commu nication and Care Coordin ation Optimizing Patient 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

Rationale: We are proposing this measure based on our exception authority under 1848(k)(2)(C)(ii) of the Act that 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). This measure is contained within the Optimizing Patient Exposure to Ionizing Radiation Measures Group. This measures group represents a new clinical theme for eligible professionals to report and addresses a clinical gap. This measure set includes measures collecting data for standardized nomenclature, count of high dose radiation, reporting to a radiation dose index registry, availability of CT images for follow-up/ comparison, and search of CT images through a secure, authorized, media-free, shared archive, and CT follow-up for incidental pulmonary nodules. This measures group allows speciality Radiologist and other eligible professionals within this scope of practice a measures group to report. AMAPCPI XCMS-1600-P 366NQF/PQRSCMS E-Measure IDNational Quality StrategyDomain Measure Title and Description ¥Measure StewardClaimsRegistryEHRGPRO (Web Interface)*Measures GroupsOther Quality ReportingPrograms

N/A/ N/A Commu nication and Care Coordin ation Optimizing Patient Exposure to Ionizing Radiation: Search for Prior Computed Tomography (CT) 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

Rationale: We are proposing this measure based on our exception authority under 1848(k)(2)(C)(ii) of the Act that 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). This measure is contained within the Optimizing Patient Exposure to Ionizing Radiation Measures Group. This measures group represents a new clinical theme for eligible professionals to report and addresses a clinical gap. This measure set includes measures collecting data for standardized nomenclature, count of high dose radiation, reporting to a radiation dose index registry, availability of CT images for follow-up/ comparison, and search of CT images through a secure, authorized, media-free, shared archive, and CT follow-up for incidental pulmonary nodules. This measures group allows speciality Radiologist and other eligible professionals within this scope of practice a measures group to report. AMAPCPI XCMS-1600-P 367NQF/PQRSCMS E-Measure IDNational Quality StrategyDomain Measure Title and Description ¥Measure StewardClaimsRegistryEHRGPRO (Web Interface)*Measures GroupsOther Quality ReportingPrograms

N/A/ N/A Commu nication and Care Coordin ation Optimizing Patient 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 (e.g., follow-up CT imaging studies needed or that no follow-up is needed) based at a minimum on nodule size AND patient risk factors

Rationale: We are proposing this measure based on our exception authority under 1848(k)(2)(C)(ii) of the Act that 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). This measure is contained within the Optimizing Patient Exposure to Ionizing Radiation Measures Group. This measures group represents a new clinical theme for eligible professionals to report and addresses a clinical gap. This measure set includes measures collecting data for standardized nomenclature, count of high dose radiation, reporting to a radiation dose index registry, availability of CT images for follow-up/ comparison, and search of CT images through a secure, authorized, media-free, shared archive, and CT follow-up for incidental pulmonary nodules. This measures group allows speciality Radiologist and other eligible professionals within this scope of practice a measures group to report. AMAPCPI XCMS-1600-P 368NQF/PQRSCMS E-Measure IDNational Quality StrategyDomain Measure Title and Description ¥Measure StewardClaimsRegistryEHRGPRO (Web Interface)*Measures GroupsOther Quality ReportingPrograms

N/A/ N/A Effective Clinical Care Rate of Endovascular Aneurysm Repair (EVAR) of Small or Moderate Non-Ruptured Abdominal Aortic Aneurysms (AAA) who Die while in Hospital: Percent of patients undergoing endovascular repair of small or moderate abdominal aortic aneurysms (AAA) who die while in the hospital

Rationale: We are proposing this measure based on our exception authority under 1848(k)(2)(C)(ii) of the Act that 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). This measure would be reported by Vascular Surgical elig ible professionals. Currently, PQRS has 5 specific measures that are applicable to this scope of practice. PQRS does include other general measures that would be potentially applicable for these eligible professionals to report, such as measure #130: Documentation of Current Medications in the Medical Record or #131: Pain Assessment and Follow-Up. This measure would produce data that evaluates procedural death and sequela events such as bleeding and could allow eligible professionals reporting to "benchmark" patient health post-surgery or procedure. This measure represents an outcome measure for this specific specialty. SVS XCMS-1600-P 369NQF/PQRSCMS E-Measure IDNational Quality StrategyDomain Measure Title and Description ¥Measure StewardClaimsRegistryEHRGPRO (Web Interface)*Measures GroupsOther Quality ReportingPrograms

N/A/ N/A Effective Clinical Care Rate of postoperative stroke or death in Asymptomatic Patients undergoing Carotid Endarterectomy (CEA): Percent of asymptomatic patients undergoing CEA who experience stroke or death following surgery while in the hospital

Rationale: We are proposing this measure based on our exception authority under 1848(k)(2)(C)(ii) of the Act that 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). This measure would be reported by Vascular Surgical elig ible professionals. Currently, PQRS has 5 specific measures that are applicable to this scope of practice. PQRS does include other general measures that would be potentially applicable for these eligible professionals to report, such as measure #130: Documentation of Current Medications in the Medical Record or #131: Pain Assessment and Follow-Up. This measure would produce data that evaluates procedural death and sequela events such as stroke and could allow eligible professionals reporting to "benchmark" patient health post-surgery or procedure. This measure represents an outcome measure for this specific specialty. SVS XCMS-1600-P 370NQF/PQRSCMS E-Measure IDNational Quality StrategyDomain Measure Title and Description ¥Measure StewardClaimsRegistryEHRGPRO (Web Interface)*Measures GroupsOther Quality ReportingPrograms

N/A/ N/A Effective Clinical Care Rate of postoperative stroke or death in Asymptomatic Patients undergoing Carotid Artery Stenting (CAS): Percent of asymptomatic patients undergoing CAS who experience stroke or death following surgery while in the hospital

Rationale: We are proposing this measure based on our exception authority under 1848(k)(2)(C)(ii) of the Act that 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). This measure would be reported by Vascular Surgical elig ible professionals. Currently, PQRS has 5 specific measures that are applicable to this scope of practice. PQRS does include other general measures that would be potentially applicable for these eligible professionals to report, such as measure #130: Documentation of Current Medications in the Medical Record or #131: Pain Assessment and Follow-Up. This measure would produce data that evaluates procedural death and sequela events such as stroke. This data could allow eligible professionals reporting to "benchmark" patient health post-surgery or procedure. This measure represents an outcome measure for this specific specialty. SVS XCMS-1600-P 371NQF/PQRSCMS E-Measure IDNational Quality StrategyDomain Measure Title and Description ¥Measure StewardClaimsRegistryEHRGPRO (Web Interface)*Measures GroupsOther Quality ReportingPrograms

N/A/ N/A Effective Clinical Care Rate of Major Complications(Discharged to Home by PostOperative Day #2) Carotid Artery Stenting (CAS) for Asymptomatic Patients, without Major Complications (Discharged to Home by Post-Operative Day #2): Percent of asymptomatic patients undergoing CAS who are discharged to home no later than post- operative day #2

Rationale: We are proposing this measure based on our exception authority under 1848(k)(2)(C)(ii) of the Act that 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). This measure would be reported by Vascular Surgical elig ible professionals. Currently, PQRS has 5 specific measures that are applicable to this scope of practice. PQRS does include other general measures that would be potentially applicable for these eligible professionals to report, such as measure #130: Documentation of Current Medications in the Medical Record or #131: Pain Assessment and Follow-Up. This measure would produce data that evaluates procedural death and sequela events such as stroke. This data could allow eligible professionals reporting to "benchmark" patient health post-surgery or procedure. This measure represents an outcome measure for this specific specialty. SVS XCMS-1600-P 372NQF/PQRSCMS E-Measure IDNational Quality StrategyDomain Measure Title and Description ¥Measure StewardClaimsRegistryEHRGPRO (Web Interface)*Measures GroupsOther Quality ReportingPrograms

N/A/ N/A Effective Clinical Care Vascular Composite: Optimal Vascular Care: Patients ages 18 to 75 with ischemic vascular disease (IVD) who meet all of the numerator targets of this composite measure: LDL less than 100, Blood Pressure less than 140/90, Tobacco-Free Status, and Daily Aspirin Use (unless contraindicated)

Rationale: We are proposing this measure based on our exception authority under 1848(k)(2)(C)(ii) of the Act that 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). This composite measure encompasses measurements that address risk factors for this specific patient population. This composite measure would be able to be reported by a variety of eligible professionals ranging from Family Practice to Vascular and potentially Cardiologist. MNC M XCMS-1600-P 373NQF/PQRSCMS E-Measure IDNational Quality StrategyDomain Measure Title and Description ¥Measure StewardClaimsRegistryEHRGPRO (Web Interface)*Measures GroupsOther Quality ReportingPrograms

N/A/ N/A Effective Clinical Care HRS-3: Implantable CardioverterDefibrillator (ICD) Complications Rate: Physician-specific riskstandardized rates of procedural complications following the implantation of an ICD

Rationale: We are proposing this measure based on our exception authority under 1848(k)(2)(C)(ii) of the Act that 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). Electrophysiologists and eligible professionals within this scope of practice would report this measure. Currently, PQRS does not contain any measures that are specific to this scope of practice. It may be possible for these eligible professionals to report on general measures such as #130: Documentation of Current Medications in the Medical Reco rd. CMS recognizes that PQRS contains measures that are clinically heart related, but concedes that these measures may be more relevant to General Cardiology rather than Electrophysiology. This measure would produce data that evaluates procedural death and sequela events such as lead dislodgement. This data could allow eligible professionals reporting to "benchmark" patient health post procedure. This measure represents an outcome based measure. HRS XCMS-1600-P 374NQF/PQRSCMS E-Measure IDNational Quality StrategyDomain Measure Title and Description ¥Measure StewardClaimsRegistryEHRGPRO (Web Interface)*Measures GroupsOther Quality ReportingPrograms

0209/ N/A Person and CaregiverCentered Experien ce and Outcome s Pain Brought under Control within 48 Hours: Number of patients who report being uncomfortable because of pain at the initial assessment (after admission to hospice services) who report pain was brought to a comfortable level within 48 hours

Rationale: This measure satisfies 1848(k)(2)(C)(i) of the Act as this measure is NQF-endorsed. This measure concept would be new for PQRS. There are no measures currently within the program th at address care for patients that are being managed by palliative care or eligible professionals that would provide these services to patients. Pain management for patients receiving palliative care would add beneficial data to a medical concept that currently has no measurement available within this program. NHPC O XCMS-1600-P 375NQF/PQRSCMS E-Measure IDNational Quality StrategyDomain Measure Title and Description ¥Measure StewardClaimsRegistryEHRGPRO (Web Interface)*Measures GroupsOther Quality ReportingPrograms

N/A/ N/A Effective Clinical Care Adult Kidney Disease: Catheter Use at Initiation of Hemodialysis Access is a Catheter at the Time Maintenance Hemodialysis is Initiated: Percentage of patients aged 18 years and older with a diagnosis of ESRD who initiate maintenance hemodialysis during the measurement period, whose mode of vascular access is via a catheter at the time maintenance hemodialysis is initiated

Rationale: We are proposing this measure based on our exception authority under 1848(k)(2)(C)(ii) of the Act that 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). This measure expands upon the care that is represented in adult kidney disease patient population. It allows eligible professionals providing care for these patients a greater variety of measures to report. PQRS currently has 5 adult kidney disease and 2 pediatric kidney disease individual measures for reporting. PQRS also currently has an Adult Kidney Disease Measures Group available to report. AMAPCPI XCMS-1600-P 376NQF/PQRSCMS E-Measure IDNational Quality StrategyDomain Measure Title and Description ¥Measure StewardClaimsRegistryEHRGPRO (Web Interface)*Measures GroupsOther Quality ReportingPrograms

N/A/ N/A Effective Clinical Care Adult Kidney Disease: Catheter Use for Greater than or Equal to 90 Days: Percentage of patients aged 18 years and older with a diagnosis of ESRD receiving maintenance hemodialysis for greater than or equal to 90 days whose mode of vascular access is a catheter

Rationale: We are proposing this measure based on our exception authority under 1848(k)(2)(C)(ii) of the Act that 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). This measure expands upon the care that is represented in adult kidney disease patient population. It allows eligible professionals providing care for these patients a greater variety of measures to report. PQRS currently has 5 adult kidney disease and 2 pediatric kidney disease individual measures for reporting. PQRS also currently has an Adult Kidney Disease Measures Group available to report. AMAPCPI XCMS-1600-P 377NQF/PQRSCMS E-Measure IDNational Quality StrategyDomain Measure Title and Description ¥Measure StewardClaimsRegistryEHRGPRO (Web Interface)*Measures GroupsOther Quality ReportingPrograms

N/A/ N/A Effective Clinical Care Adult Sinusitis: Antibiotic Prescribed for Acute Sinusitis (Appropriate Use): Percentage of patients, aged 18 years and older, with a diagnosis of acute sinusitis who were prescribed an antibiotic within 7 days of diagnosis

Rationale: We are proposing this measure based on our exception authority under 1848(k)(2)(C)(ii) of the Act that 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). This measure represents a new medical concept within PQRS. The measure is reportable by Ear, Nose and Throat (ENT) and other eligible professionals within this specific scope of practice. ENT eligible professionals have a limited number of measures in the program within their scope of practice. PQRS does include other general measures that would be potentially applicable for these eligible professionals to report, such as measure #130: Documentation of Current Medications in the Medical Record and/or #317: Preventive Care and Screening: Screening for High Blood Pressure and Follow-Up Documented.

These measures would also be reportable by Family Physicians, Internal Medicine and other related eligible professionals within those scopes of practice. AMAPCPI XCMS-1600-P 378NQF/PQRSCMS E-Measure IDNational Quality StrategyDomain Measure Title and Description ¥Measure StewardClaimsRegistryEHRGPRO (Web Interface)*Measures GroupsOther Quality ReportingPrograms

N/A/ N/A Effective Clinical Care Adult Sinusitis: Appropriate Choice of Antibiotic: Amoxicillin Prescribed for Acute Bacterial Sinusitis (Appropriate Use): Percentage of patients, aged 18 years and older with a diagnosis of acute bacterial sinusitis that were prescribed amoxicillin, without clavulante, as a first line antibiotic at the time of diagnosis

Rationale: We are proposing this measure based on our exception authority under 1848(k)(2)(C)(ii) of the Act that 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). These measures represent a new medical concept within PQRS. The measure is reportable by ENT and other eligible professionals within this specific scope of practice. ENT eligible professionals have a limited number of measures within their scope of practice. PQRS does include other general measures that would be potentially applicable for these eligible professionals to report, such as measure #130: Documentation of Current Medications in the Medical Record and/or #317: Preventive Care and Screening: Screening for High Blood Pressure and Follow-Up Documented.

These measures would also be reportable by Family Physicians, Internal Medicine and other related eligible professionals within those scopes of practice. AMAPCPI XCMS-1600-P 379NQF/PQRSCMS E-Measure IDNational Quality StrategyDomain Measure Title and Description ¥Measure StewardClaimsRegistryEHRGPRO (Web Interface)*Measures GroupsOther Quality ReportingPrograms

N/A/ N/A Efficienc y and Cost Reductio n Adult Sinusitis: Computerized Tomography for Acute Sinusitis (Overuse): Percentage of patients, aged 18 years and older, with a diagnosis of acute sinusitis who had a computerized tomography (CT) scan of the paranasal sinuses ordered at the time of diagnosis or received within 28 days after date of diagnosis

Rationale: We are proposing this measure based on our exception authority under 1848(k)(2)(C)(ii) of the Act that 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). These measures represent a new medical concept within PQRS. The measure is reportable by ENT and other eligible professionals within this specific scope of practice. ENT eligible professionals have a limited number of measures within their scope of practice. PQRS does include other general measures that would be potentially applicable for these eligible professionals to report, such as measure #130: Documentation of Current Medications in the Medical Record and/or #317: Preventive Care and Screening: Screening for High Blood Pressure and Follow-Up Documented.

These measures would also be reportable by Family Physicians, Internal Medicine and other related eligible professionals within those scopes of practice. AMAPCPI XCMS-1600-P 380NQF/PQRSCMS E-Measure IDNational Quality StrategyDomain Measure Title and Description ¥Measure StewardClaimsRegistryEHRGPRO (Web Interface)*Measures GroupsOther Quality ReportingPrograms

N/A/ N/A Efficienc y and Cost Reductio n Adult Sinusitis: More than 1 Computerized Tomography (CT) Scan Within 90 Days for Chronic Sinusitis (Overuse): Percentage of patients aged 18 years and older with a diagnosis of chronic sinusitis who had more than one CT scan of the paranasal sinuses ordered at the time of diagnosis or received within a 90 day period after date of diagnosis

Rationale: We are proposing this measure based on our exception authority under 1848(k)(2)(C)(ii) of the Act that 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). These measures represent a new medical concept within PQRS. The measure is reportable by ENT and other eligible professionals within this specific scope of practice. ENT eligible professionals have a limited number of measures within their scope of practice. PQRS does include other general measures that would be potentially applicable for these eligible professionals to report, such as measure #130: Documentation of Current Medications in the Medical Record and/or #317: Preventive Care and Screening: Screening for High Blood Pressure and Follow-Up Documented.

These measures would also be reportable by Family Physicians, Internal Medicine and other related eligible professionals within those scopes of practice. AMAPCPI XCMS-1600-P 381NQF/PQRSCMS E-Measure IDNational Quality StrategyDomain Measure Title and Description ¥Measure StewardClaimsRegistryEHRGPRO (Web Interface)*Measures GroupsOther Quality ReportingPrograms

N/A/ N/A Patient Safety Maternity Care: Elective Delivery or Early Induction Without Medical Indication at >=37 and < 39 weeks (Overuse): Percentage of patients, regardless of age, who gave birth during a 12-month period who delivered a live singleton at =37 and < 39 weeks of gestation completed who had elective deliveries or early inductions without medical indication

Rationale: We are proposing this measure based on our exception authority under 1848(k)(2)(C)(ii) of the Act that 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). This measure represents a new medical concept within PQRS. These individual measures are reportable by Obstetrics/Gynecologist and other eligible professionals within this specific scope of practice. They currently have a limited number of measures, including urinary incontinence, within their scope of practice. This measure would allow this specialty type of eligible professional the opportunity to report upon a specific patient sample directly related to mother/baby. PQRS does include other general measures that would be potentially applicable for these eligible professionals to report, such as measure #130: Documentation of Current Medications in the Medical Record and/or #317: Preventive Care and Screening: Screening for High Blood Pressure and Follow-Up Documented. These measures could also possibly be reportable by Family Physicians and other related eligible professionals in a rural setting where this is seen more often. AMAPCPI XCMS-1600-P 382NQF/PQRSCMS E-Measure IDNational Quality StrategyDomain Measure Title and Description ¥Measure StewardClaimsRegistryEHRGPRO (Web Interface)*Measures GroupsOther Quality ReportingPrograms

N/A/ N/A Commu nication and Care Coordin ation Maternity Care: Post-Partum FollowUp and Communication and Care Coordination: Percentage of patients, regardless of age, who gave birth during a 12-month period who were seen for post- partum care within 8 weeks of giving birth who received a breastfeeding evaluation and education, postpartum depression screening, postpartum glucose screening for gestational diabetes patients, and family and contraceptive planning

Rationale: We are proposing this measure based on our exception authority under 1848(k)(2)(C)(ii) of the Act that 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). This measure represents a new medical concept within PQRS. These individual measures are reportable by Obstetrics/Gynecologist and other eligible professionals within this specific scope of practice. They currently have a limited number of measures, including urinary incontinence, within their scope of practice. This measure would allow this specialty type of eligible professionals the opportunity to report upon a specific patient sample directly related to mother/baby. PQRS does include other general measures that would be potentially applicable for these eligible professionals to report, such as measure #130: Documentation of Current Medications in the Medical Record and/or #317: Preventive Care and Screening: Screening for High Blood Pressure and Follow-Up Documented. These measures could also possibly be reportable by Family Physicians and other related eligible professionals in a rural setting where this is seen more often AMAPCPI XCMS-1600-P 383NQF/PQRSCMS E-Measure IDNational Quality StrategyDomain Measure Title and Description ¥Measure StewardClaimsRegistryEHRGPRO (Web Interface)*Measures GroupsOther Quality ReportingPrograms

N/A/ N/A Patient Safety Atopic Dermatitis: Overuse: Role of Antihistamine: Percentage of patients aged 25 years or younger seen at one or more visits within a 12-month period with a diagnosis of atopic dermatitis, who did not have a diagnosis of allergic rhinitis or urticaria, who were prescribed oral nonsedating antihistamines

Rationale: We are proposing this measure based on our exception authority under 1848(k)(2)(C)(ii) of the Act that 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). Atopic dermatitis is a new medical concept for reporting within PQRS. This would provide Dermatology and other related eligible professionals with an additional measure to report within PQRS. Dermatologists could also report upon general measures such as measure #130: Documentation of Current Medications in the Medical Record. AMAPCPI XCMS-1600-P 384NQF/PQRSCMS E-Measure IDNational Quality StrategyDomain Measure Title and Description ¥Measure StewardClaimsRegistryEHRGPRO (Web Interface)*Measures GroupsOther Quality ReportingPrograms

N/A/ N/A Effective Clinical Care Tuberculosis Prevention for Psoriasis and Psoriatic Arthritis Patients on a Biological Immune Response Modifier: This measure evaluates whether providers are ensuring active tuberculosis prevention either through yearly negative standard tuberculosis screening tests or are reviewing the patient’s history to determine if they have had appropriate management for a recent or prior positive test

Rationale: We are proposing this measure based on our exception authority under 1848(k)(2)(C)(ii) of the Act that 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). Psoriasis is a new medical concept for reporting within PQRS. This measure would provide Dermatology and other related eligible professionals an additional measure to report within PQRS. This measure could also be reported by other prof essionals that treat joint care such as Family Practice and Rheumatologists. Other than the Family Practice, the other specialists listed above are limited in the currently PQRS measures. They could report general measures such as measure #130: Documentation of Current Medications in the Medical Record. AAD XCMS-1600-P 385NQF/PQRSCMS E-Measure IDNational Quality StrategyDomain Measure Title and Description ¥Measure StewardClaimsRegistryEHRGPRO (Web Interface)*Measures GroupsOther Quality ReportingPrograms

N/A/ N/A Effective Clinical Care Neurosurgery: Initial Visit: The percentage of patients aged 18 through 80 years with a diagnosis of a neurosurgical procedure or pathology who had function assessed during the initial visit to the clinician for the episode of the condition

Rationale: We are proposing this measure based on our exception authority under 1848(k)(2)(C)(ii) of the Act that 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). This measure would be most applicable to Neurologists and Neurosurgeons and other eligible professionals within this scope of practice. Th ere are currently no measures in the PQRS program that are reportable for this scope of practice. This measure may represent a broad patient sample. AANS /CNS XCMS-1600-P 386NQF/PQRSCMS E-Measure IDNational Quality StrategyDomain Measure Title and Description ¥Measure StewardClaimsRegistryEHRGPRO (Web Interface)*Measures GroupsOther Quality ReportingPrograms

N/A/ N/A Person and CaregiverCentered Experien ce and Outcome s Patient-Centered Surgical Risk Assessment and Communication: The Percent of Patients who Underwent Non-Emergency Major Surgery Who Received Preoperative Risk Assessment for Procedure-Specific Postoperative Complications using a Data-Based, Patient-Specific Risk Calculator, and who also Received a Personal Discussion of Risks with the Surgeon: Percentage of patients who underwent a non-emergency major surgery who had their risks of postoperative complications assessed by their surgical team prior to surgery using a data-based, patient-specific risk calculator and who received personal discussion of those risks. A higher value for this measure corresponds to higher quality

Rationale: We are proposing this measure based on our exception authority under 1848(k)(2)(C)(ii) of the Act that 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). This measure would be broadly applicable to a variety of surgical eligible professionals and could potentially allow reporting in surgical settings not currently available within PQRS. PQRS currently includes Perioperative surgical measures and a Perioperative Measures Group, but the procedures included in those denominators are limited to certain types of procedures or determination of pre-procedure indications such as prophylactic antibiotics. Clinically, not all surgeries are indicated fo r prophylactic antibiotics. This measure would potentially not have any clinical limitations. ACS XCMS-1600-P 387NQF/PQRSCMS E-Measure IDNational Quality StrategyDomain Measure Title and Description ¥Measure StewardClaimsRegistryEHRGPRO (Web Interface)*Measures GroupsOther Quality ReportingPrograms

N/A/ N/A Effective Clinical Care Ventral Hernia, Appendectomy, AV Fistula, Cholecystectomy, Thyroidectomy, Mastectomy +/- Lymphadenectomy or SLNB, Partial Mastectomy or Breast Biopsy/Lumpectomy +/- Lymphadenectomy or SLNB: Iatrogenic Injury to Adjacent Organ/Structure: Percentage of patients age 65 and older who had an iatrogenic injury documented in the operative note, postoperative note, or progress note. Iatrogenic injury is an unplanned laceration, puncture, transection or cautery injury to an adjacent structure (e.g., sphincters, vasculature, nerve, other) that occurs during the index procedure, whether recognized at the time of surgery or post-operatively. Synonyms for the injury could include: hole, wound, perforation, tear, injury, laceration, cautery injury, damage, disruption, or defect

Rationale: We are proposing this measure based on our exception authority under 1848(k)(2)(C)(ii) of the Act that 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). Addition of a General Surgery Measures Group including procedures such as ventral hernia, appendectomy, AV fistula, cholecystectomy, thyroidectomy, mastectomy, lymphadenectomy, sentinel lymph node biopsy (SLNB), or lumpectomy/breast biopsy would allow surgeons another opportunity to report via measures group reporting. PQRS currently has another measures group in which Surgeons and other eligible professionals may report: Perioperative Measures Group. This measure set would produce data that specifically e valuate procedural ACS XCMS-1600-P 388NQF/PQRSCMS E-Measure IDNational Quality StrategyDomain Measure Title and Description ¥Measure StewardClaimsRegistryEHRGPRO (Web Interface)*Measures GroupsOther Quality ReportingPrograms

N/A/ N/A Effective Clinical Care Ventral Hernia, Appendectomy, AV Fistula, Cholecystectomy, Thyroidectomy, Mastectomy +/- Lymphadenectomy or SLNB, Partial Mastectomy or Breast Biopsy/Lumpectomy +/- Lymphadenectomy or SLNB: Unplanned Reoperation within the 30 Day Postoperative Period: Percentage of patients age 65 and older who had any unplanned return to the operating room for a surgical procedure, for any reason, within 30 days of the principal operative procedure. The return to the OR may occur at any hospital or surgical facility (i.e. your hospital or at an outside hospital). Note: This definition is not meant to capture patients who go back to the operating room within 30 days for a follow-up procedure based on the pathology results from the principal operative procedure or concurrent procedure. Examples: Exclude breast biopsies which return for re-excisions; insertion of port-a-cath for chemotherapy

Rationale: We are proposing this measure based on our exception authority under 1848(k)(2)(C)(ii) of the Act that 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). Addition of a General Surgery Measures Group including procedures such as ventral hernia, appendectomy, AV fistula, cholecystectomy, thyroidectomy, mastectomy, lymphadenectomy, sentinel lymph node biopsy (SLNB), or lumpectomy/breast biopsy. PQRS currently has another measures group in which Surgeons and other eligible professionals may report: Perioperative Measures Group. These measures would produce data that specifically evaluates procedural ACS XCMS-1600-P 389NQF/PQRSCMS E-Measure IDNational Quality StrategyDomain Measure Title and Description ¥Measure StewardClaimsRegistryEHRGPRO (Web Interface)*Measures GroupsOther Quality ReportingPrograms

N/A/ N/A Effective Clinical Care Ventral Hernia, Appendectomy, AV Fistula, Cholecystectomy, Thyroidectomy, Mastectomy +/- Lymphadenectomy or SLNB, Partial Mastectomy or Breast Biopsy/Lumpectomy +/- Lymphadenectomy or SLNB: Unplanned Hospital Readmission within 30 Days of Principal Procedure: Percentage of patients age 65 and older who had a readmission (to the same or another hospital) for any reason, within 30 days of the principal procedure. The readmission has to be classified as an “inpatient” stay by the readmitting hospital, or reported by the patient/family as such

Rationale: We are proposing this measure based on our exception authority under 1848(k)(2)(C)(ii) of the Act that 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). Addition of a General Surgery Measures Group including procedures such as ventral hernia, appendectomy, AV fistula, cholecystectomy, thyroidectomy, mastectomy, lymphadenectomy, sentinel lymph node biopsy (SLNB), or lumpectomy/breast biopsy. PQRS currently has another measures group in which Surgeons and other eligible professionals may report: Perioperative Measures Group. These measures would produce data that specifically evaluates procedural endpoints such as iatrogenic injury to adjacent organ, unplanned reoperation within 30 days, unplanned readmission within 30 days, and site infection. This data could allow eligible professionals reporting to "benchmark" patient health post-surgery or procedure.

This measure contained within the ACS XCMS-1600-P 390NQF/PQRSCMS E-Measure IDNational Quality StrategyDomain Measure Title and Description ¥Measure StewardClaimsRegistryEHRGPRO (Web Interface)*Measures GroupsOther Quality ReportingPrograms

N/A/ N/A Effective Clinical Care Ventral Hernia, Appendectomy, AV Fistula, Cholecystectomy, Thyroidectomy, Mastectomy +/- Lymphadenectomy or SLNB, Partial Mastectomy or Breast Biopsy/Lumpectomy +/- Lymphadenectomy or SLNB: Surgical Site Infection (SSI): Percentage of patients age 65 and older who had a surgical site infection

Rationale: We are proposing this measure based on our exception authority under 1848(k)(2)(C)(ii) of the Act that 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). Addition of a General Surgery Measures Group including procedures such as ventral hernia, appendectomy, AV fistula, cholecystectomy, thyroidectomy, mastectomy, lymphadenectomy, sentinel lymph node biopsy (SLNB), or lumpectomy/breast biopsy. PQRS currently has another measures group in which Surgeons and other eligible professionals may report: Perioperative Measures Group. These measures would produce data that specifically evaluates procedural endpoints such as iatrogenic injury to adjacent organ, unplanned reoperation within 30 days, unplanned readmission within 30 days, and s ite infection. This data could allow eligible professionals reporting to "benchmark" patient health post-surgery or procedure.

This measure contained within the General Surgery Measures Group is an outcome measure specifically relevant to these general surgery procedures. ACS XCMS-1600-P 391NQF/PQRSCMS E-Measure IDNational Quality StrategyDomain Measure Title and Description ¥Measure StewardClaimsRegistryEHRGPRO (Web Interface)*Measures GroupsOther Quality ReportingPrograms

N/A/ N/A Effective Clinical Care Bariatric Laparoscopic or Open Roux-en Y Gastric Bypass, Bariatric Sleeve Gastrectomy, and Colectomy: Iatrogenic Injury to Adjacent Organ/Structure: Percentage of patients age 65 and older who had an iatrogenic injury documented in the operative note, postoperative note, or progress note. Iatrogenic injury is an unplanned laceration, puncture, transection or cautery injury to an adjacent structure (e.g., sphincters, vasculature, nerve, other) that occurs during the index procedure, whether recognized at the time of surgery or post-operatively. Synonyms for the injury could include: hole, wound, perforation, tear, injury, laceration, cautery injury, damage, disruption, or defect

Rationale: We are proposing this measure based on our exception authority under 1848(k)(2)(C)(ii) of the Act that 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). This measure contained within the Gastrointestinal (GI) Measures Group could be reported by specialized general surgical eligible prof essionals that focus on bariatric and colectomy procedures. PQRS currently has another measures group in which Surgeons and other eligible professionals may report: Perioperative Measures Group. These measures would produce data that specifically evaluate iatrogenic injury to adjacent organ, anastomotic leak intervention, unplanned reoperation within 30 days, unplanned hospital admission within 30 days, and site infection. This data could allow eligible professionals reporting to "benchmark" patient health post-surgery or procedure ACS XCMS-1600-P 392NQF/PQRSCMS E-Measure IDNational Quality StrategyDomain Measure Title and Description ¥Measure StewardClaimsRegistryEHRGPRO (Web Interface)*Measures GroupsOther Quality ReportingPrograms

N/A/ N/A Effective Clinical Care Bariatric Laparoscopic or Open Roux-en Y Gastric Bypass, Bariatric Sleeve Gastrectomy, and Colectomy: Anastomotic Leak Intervention: Percentage of patients age 65 and older who had an intervention (via return to operating room, interventional radiology, or interventional gastroenterology) for presence of leak of endoluminal contents (such as air, fluid, GI contents, or contrast material) through an anastomosis. The presence of an infection/abscess thought to be related to an anastomosis, even if the leak cannot be definitively identified as visualized during an operation, or by contrast extravasation would also be considered an anastomotic leak

Rationale: We are proposing this measure based on our exception authority under 1848(k)(2)(C)(ii) of the Act that 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). This measure contained within the Gastrointestinal (GI) Measures Group could be reported by specialized general surgical eligible prof essionals that focus on bariatric and colectomy procedures. PQRS currently has another measures group in which Surgeons and other eligible professionals may report: Perioperative Measures Group. These measures would produce data that specifically evaluate iatrogenic injury to adjacent organ, anastomotic leak intervention, unplanned reoperation within 30 days, unplanned hospital admission within 30 days, and site infection. This data could allow eligible professionals reporting to "benchmark" patient health post-surgery or procedure. ACS XCMS-1600-P 393NQF/PQRSCMS E-Measure IDNational Quality StrategyDomain Measure Title and Description ¥Measure StewardClaimsRegistryEHRGPRO (Web Interface)*Measures GroupsOther Quality ReportingPrograms

N/A/ N/A Effective Clinical Care Bariatric Laparoscopic or Open Roux-en Y Gastric Bypass, Bariatric Sleeve Gastrectomy, and Colectomy: Unplanned Reoperation within the 30 Day Postoperative Period: Percentage of patients age 65 and older who had any unplanned return to the operating room for a surgical procedure, for any reason, within 30 days of the principal operative procedure. The return to the OR may occur at any hospital or surgical facility (i.e. your hospital or at an outside hospital). Note: This definition is not meant to capture patients who go back to the operating room within 30 days for a follow-up procedure based on the pathology results from the principal operative procedure or concurrent procedure. Examples: Exclude breast biopsies which return for re-excisions; insertion of port-a-cath for chemotherapy

Rationale: We are proposing this measure based on our exception authority under 1848(k)(2)(C)(ii) of the Act that 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). This measure contained within the Gastrointestinal (GI) Measures Group could be reported by specialized general surgical eligible prof essionals that focus on bariatric and colectomy procedures. PQRS currently has another measures group in which Surgeons and other eligible professionals may report: Perioperative Measures Group. These measures would produce data that specifically evaluate iatrogenic injury to adjacent organ, anastomotic leak intervention, unplanned reoperation within 30 days, unplanned hospital admission within 30 days, and site infection. This data could allow eligible professionals reporting to "benchmark" patient health p ost surgery or ACS XCMS-1600-P 394NQF/PQRSCMS E-Measure IDNational Quality StrategyDomain Measure Title and Description ¥Measure StewardClaimsRegistryEHRGPRO (Web Interface)*Measures GroupsOther Quality ReportingPrograms

N/A/ N/A Effective Clinical Care Bariatric Laparoscopic or Open Roux-en Y Gastric Bypass, Bariatric Sleeve Gastrectomy, and Colectomy: Unplanned Hospital Readmission within 30 Days of Principal Procedure: Percentage of patients age 65 and older who had a readmission (to the same or another hospital) for any reason, within 30 days of the principal procedure. The readmission has to be classified as an “inpatient” stay by the readmitting hospital, or reported by the patient/family as such

Rationale: We are proposing this measure based on our exception authority under 1848(k)(2)(C)(ii) of the Act that 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). This measure contained within the Gastrointestinal (GI) Measures Group could be reported by specialized general surgical eligible prof essionals that focus on bariatric and colectomy procedures. PQRS currently has another measures group in which Surgeons and other eligible professionals may report: Perioperative Measures Group. These measures would produce data that specifically evaluate iatrogenic injury to adjacent organ, anastomotic leak intervention, unplanned reoperation within 30 days, unplanned hospital admission within 30 days, and site infection. This data could allow eligible professionals reporting to "benchmark" patient health post-surgery or procedure. This measure contained within the Gastrointestinal (GI) Measures Group is an outcome measure specifically relevant to these general surgery procedures. ACS XCMS-1600-P 395NQF/PQRSCMS E-Measure IDNational Quality StrategyDomain Measure Title and Description ¥Measure StewardClaimsRegistryEHRGPRO (Web Interface)*Measures GroupsOther Quality ReportingPrograms

N/A/ N/A Effective Clinical Care Bariatric Laparoscopic or Open Roux-en Y Gastric Bypass, Bariatric Sleeve Gastrectomy, and Colectomy: Surgical Site Infection (SSI): Percentage of patients age 65 and older who had a surgical site infection

Rationale: We are proposing this measure based on our exception authority under 1848(k)(2)(C)(ii) of the Act that 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). This measure contained within the Gastrointestinal (GI) Measures Group could be reported by specialized general surgical eligible prof essionals that focus on bariatric and colectomy procedures. PQRS currently has another measures group in which Surgeons and other eligible professionals may report: Perioperative Measures Group. These measures would produce data that specifically evaluate iatrogenic injury to adjacent organ, anastomotic leak intervention, unplanned reoperation within 30 days, unplanned hospital admission within 30 days, and site infection. This data could allow eligible professionals reporting to "benchmark" patient health post-surgery or procedure. This measure contained within the Gastrointestinal (GI) Measures Group is an outcome measure specifically relevant to these general surgery procedures. ACS XCMS-1600-P 396NQF/PQRSCMS E-Measure IDNational Quality StrategyDomain Measure Title and Description ¥Measure StewardClaimsRegistryEHRGPRO (Web Interface)*Measures GroupsOther Quality ReportingPrograms

0147/ N/A Patient Safety PN-6: Initial Antibiotic Selection for CAP in Immunocompetent Patient: Immunocompetent patients with Community-Acquired Pneumonia who receive an initial antibiotic regimen during the first 24 hours that is consistent with current guidelines

Rationale: This measure satisfies 1848(k)(2)(C)(i) of the Act as this measure is NQF-endorsed. CMS believes this measure addresses a performance gap for eligible professionals providing care to patients admitted within a hospital setting. Including this measure from Hospital Inpatient Quality Reporting (IQR) in the PQRS measure set is in accordance with our intent to align measures throughout CMS reporting programs. CMS X IQR

0372/ N/A Patient Safety VTE-2: Intensive Care Unit Venous Thromboembolism Prophylaxis: This measure assesses the number of patients who received VTE prophylaxis or have documentation why no VTE prophylaxis was given the day of or the day after the initial admission (or transfer) to the Intensive Care Unit (ICU) or surgery end date for surgeries that start the day of or the day after ICU admission (or transfer).

Rationale: This measure satisfies 1848(k)(2)(C)(i) of the Act as this measure is NQF-endorsed. CMS believes this measure set addresses a performance gap for eligible professionals providing care to patients admitted within a hospital setting. Including this measure from Hospital Inpatient Quality Reporting (IQR) in the PQRS measure set is in accordance with our intent to align measures throughout CMS reporting programs. The Joint Comm ission X IQRCMS-1600-P 397NQF/PQRSCMS E-Measure IDNational Quality StrategyDomain Measure Title and Description ¥Measure StewardClaimsRegistryEHRGPRO (Web Interface)*Measures GroupsOther Quality ReportingPrograms

N/A/ N/A Patient Safety VTE-4: Venous Thromboembolism Patients Receiving Unfractionated Heparin with Dosages/Platelet Count Monitoring by Protocol: This measure assesses the number of patients diagnosed with confirmed VTE who received intravenous (IV) UFH therapy dosages AND had their platelet counts monitored using defined parameters such as a nomogram or protocol.

Rationale: We are proposing this measure based on our exception authority under 1848(k)(2)(C)(ii) of the Act that 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). CMS believes this measure set addresses a performan ce gap for eligible professionals providing care to patients admitted within a hospital setting. Including this measure from Hospital Inpatient Quality Reporting (IQR) in the PQRS measure set is in accordance with our intent to align measures throughout CMS reporting programs. The Joint Comm ission X IQRCMS-1600-P 398NQF/PQRSCMS E-Measure IDNational Quality StrategyDomain Measure Title and Description ¥Measure StewardClaimsRegistryEHRGPRO (Web Interface)*Measures GroupsOther Quality ReportingPrograms

0495/ N/A Commu nication and Care Coordin ation ED-1a: Median Time from ED Arrival to ED Departure for Admitted ED Patients - Overall Rate: Median time from emergency department arrival to time of departure from the emergency room for patients admitted to the facility from the emergency department

Rationale: This measure satisfies 1848(k)(2)(C)(i) of the Act as this measure is NQF-endorsed. CMS believes this measure addresses a performance gap for eligible professionals providing care to patients assessed in the emergency department (ED). This measure would provide statistical data representing individual eligible professionals providing and coordinating medical care for patients seeking medical attention from the emergency department. Including this measure from Hospital Inpatient Quality Reporting (IQR) in the PQRS measure set is in accordance with our intent to align measures throughout CMS reporting programs. CMS X IQRCMS-1600-P 399NQF/PQRSCMS E-Measure IDNational Quality StrategyDomain Measure Title and Description ¥Measure StewardClaimsRegistryEHRGPRO (Web Interface)*Measures GroupsOther Quality ReportingPrograms

0495/ N/A Commu nication and Care Coordin ation ED-1d: Median Time from ED Arrival to ED Departure for Admitted Patients - Psychiatric/Mental Health Patients: Median time from emergency department arrival to time of departure from the emergency room for patients admitted to the facility from the emergency department

Rationale: This measure satisfies 1848(k)(2)(C)(i) of the Act as this measure is NQF-endorsed. CMS believes this measure addresses a performance gap for eligible professionals providing care to patients assessed in the emergency department (ED). This measure would provide statistical data representing individual eligible professionals providing and coordinating medical care for patients seeking medical attention from the emergency department. Including this measure from Hospital Inpatient Quality Reporting (IQR) in the PQRS measure set is in accordance with our intent to align measures throughout CMS reporting programs. CMS X IQRCMS-1600-P 400NQF/PQRSCMS E-Measure IDNational Quality StrategyDomain Measure Title and Description ¥Measure StewardClaimsRegistryEHRGPRO (Web Interface)*Measures GroupsOther Quality ReportingPrograms

1659/ N/A Commu nity/Pop ulation Health IMM-1c: Pneumococcal Immunization (PPV23) – High Risk Populations (Age 5 through 64 years): This prevention measure addresses acute care hospitalized inpatients 65 years of age and older (IMM-1b) AND inpatients aged between 5 and 64 years (IMM-1c) who are considered high risk and were screened for receipt of pneumococcal vaccine and were vaccinated prior to discharge if indicated. The numerator captures two activities; screening and the intervention of vaccine administration when indicated. As a result, patients who had documented contraindications to pneumococcal vaccine, patients who were offered and declined pneumococcal vaccine and patients who received pneumococcal vaccine anytime in the past are captured as numerator events.

Rationale: This measure satisfies 1848(k)(2)(C)(i) of the Act as this measure is NQF-endorsed. CMS believes this measure addresses a performance gap for eligible professionals providing care to patients admitted within a hospital setting. The measure represented would provide statistical data representing population and community hea lth for patients within a hospital setting. Including this measure from Hospital Inpatient Quality Reporting (IQR) in the PQRS measure set is in accordance with our intent to align measures throughout CMS reporting programs. CMS X IQRCMS-1600-P 401NQF/PQRSCMS E-Measure IDNational Quality StrategyDomain Measure Title and Description ¥Measure StewardClaimsRegistryEHRGPRO (Web Interface)*Measures GroupsOther Quality ReportingPrograms

0166/ N/A Commu nication and Care Coordin ation HCAHPS: Hospital Consumer Assessment of Healthcare Providers and Systems Survey: 27-items survey instrument with 7 domain-level composites including: communication with doctors, communication with nurses, responsiveness of hospital staff, pain control, communication about medicines, cleanliness and quiet of the hospital environment, and discharge information

Rationale: This measure satisfies 1848(k)(2)(C)(i) of the Act as this measure is NQF-endorsed. CMS believes this measure addresses a performance gap for eligible professionals providing care to patients admitted within a hospital setting. This measure would provide statisticaldata representing person and caregivercentered experience and outcomes for patients that have experienced care within a hospital setting. Including this measure from Hospital Inpatient Quality Reporting (IQR) in the PQRS measure set is in accordance with our intent to align measures throughout CMS reporting programs. AHRQ X IQR

¥ Titles and descriptions in this table are aligned with proposed 2014 Health Information Technology for Economic and Clinical Health (HITECH) measure titles, and may differ from existing measures in other programs . When reporting data on these measures, please reference the National Quality Foru m (NQF) and Physician Quality Reporting System numbers for clarification.CMS-1600-P 402

In Table 30, we specify the measures we are proposing to remove from reporting under the PQRS. Please note that the rationale we have for each measure we are proposing to remove is specified afte r the measure title and description.

TABLE 30: Measures Proposed for Removal from the Existing Physician Quality Reporting System Measure Set Beginning in 2014NQF/PQRS National Quality Strategy Domain Measure Title and Description ¥Measure StewardClaimsRegistryEHRGPRO (Web Interface)*Measures GroupsOther QualityReporting Programs

0061 / 3 Effective Clinical Care Diabetes Mellitus: High Blood Pressure Control: Percentage of patients aged 18 through 75 years with diabetes mellitus who had most recent blood pressure in control (less than 140/90 mmHg)

Rationale: Eliminating duplicative measures within PQRS. NCQ A X X X X MU 1

N/A/ 86 Effective Clinical Care Hepatitis C: Antiviral Treatment Prescribed: Percentage of patients aged 18 years and older with a diagnosis of chronic hepatitis C who were prescribed at a minimum peginterferon and ribavirin therapy within the 12-month reporting period

Rationale: Measure lost NQF Endorsement/Measure Owner Support. Therefore, there measure will not be maintained for reporting beginning in 2014. AMAPCPI X X XCMS-1600-P 403NQF/PQRS National Quality Strategy Domain Measure Title and Description ¥Measure StewardClaimsRegistryEHRGPRO (Web Interface)*Measures GroupsOther QualityReporting Programs

N/A/ 89 Effective Clinical Care Hepatitis C: Counseling Regarding Risk of Alcohol Consumption: Percentage of patients aged 18 years and older with a dia gnosis of hepatitis C who were counseled about the risks of alcohol use at least once within 12- months

Rationale: Measure lost NQF Endorsement/Measure Owner Support. Therefore, there measure will not be maintained for reporting beginning in 2014. AMAPCPI X X X

N/A/ 90 Effective Clinical Care Hepatitis C: Counseling Regarding Use of Contraception Prior to Antiviral Therapy: Percentage of female patients aged 18 through 44 years and all men aged 18 years and older with a diagnosis of chronic hepatitis C who are receiving antiviral treatment who were counseled regarding contraception prior to the initiation of treatment

Rationale: Measure lost NQF Endorsement/Measure Owner Support. Therefore, there measure will not be maintained for reporting beginning in 2014. AMAPCPI X X XCMS-1600-P 404NQF/PQRS National Quality Strategy Domain Measure Title and Description ¥Measure StewardClaimsRegistryEHRGPRO (Web Interface)*Measures GroupsOther QualityReporting Programs

N/A/ 161 Effective Clinical Care HIV/AIDS: Adolescent and Adult Patients with HIV/AIDS Who Are Prescribed Potent Antiretroviral Therapy: Percentage of patients with a diagnosis of HIV/AIDS aged 13 years and older: who have a history of a nadir CD4+ cell count below 350/mm 3 or who have a history of an AIDS-defining condition, regardless of CD4+ cell count; or who are pregnant, regardless of CD4+ cell count or age, who were prescribed potent antiretroviral therapy

Rationale: Measure lost NQF Endorsement/Measure Owner Support. Therefore, there measure will not be maintained for reporting beginning in 2014. AMAPCPI /NC QA X X

N/A/ 162 Effective Clinical Care HIV/AIDS: HIV RNA Control After Six Months of Potent Antiretroviral Therapy: Percentage of patients aged 13 years and older with a diagnosis of HIV/AIDS who are receiving potent antiretroviral therapy, who have a viral load below limits of quantification after at least 6 months of potent antiretroviral therapy or patients whose viral load is not below limits of quantification after at least 6 months of potent antiretr oviral therapy and have documentation of a plan of care

Rationale: Measure lost NQF Endorsement/Measure Owner Support. Therefore, there measure will not be maintained for reporting beginning in 2014. AMAPCPI /NC QA X XCMS-1600-P 405NQF/PQRS National Quality Strategy Domain Measure Title and Description ¥Measure StewardClaimsRegistryEHRGPRO (Web Interface)*Measures GroupsOther QualityReporting Programs

AQ A adop ted/ 173 Commun ity/Popul ation Health Preventive Care and 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

Rationale: We are deleting this measure to align with the measures available under the EHR Incentive Program, that does not have this measure available for reporting in 2014. AMAPCPI X X X X

N/A/ 184 Commun ity/Popul ation Health Hepatitis C: Hepatitis B Vaccination in Patients with HCV: Percentage of patients aged 18 years and older with a diagnosis of hepatitis C who received at least one injection of hepatitis B vaccine, or who have documented immunity to hepatitis B

Rationale: Measure lost NQF Endorsement/Measure Owner Support. Therefore, there measure will not be maintained for reporting beginning in 2014. AMAPCPI X XCMS-1600-P 406NQF/PQRS National Quality Strategy Domain Measure Title and Description ¥Measure StewardClaimsRegistryEHRGPRO (Web Interface)*Measures GroupsOther QualityReporting Programs

N/A/ 188 Commun ication and Care Coordina tion Referral for Otologic Evaluation for Patients with Congenital or Traumatic Deformity of the Ear: Percentage of patie nts aged birth and older referred to a physician (preferably a physician with training in disorders of the ear) for an otologic evaluation subsequent to an audiologic evaluation after presenting with a congenital or traumatic deformity of the ear (internal or external)

Rationale: Measure lost Measure Owner support. Therefore, there measure will not be maintained for reporting beginning in 2014. AQC X X

N/A/ 200 Effective Clinical Care Heart Failure: Warfarin Therapy for Patients with Atrial Fibrillation: Percentage of all patients aged 18 and older with a diagnosis of heart failure and paroxysmal or chronic atrial fibrillation who were prescribed warfarin therapy

Rationale: Measure lost NQF Endorsement/Measure Owner Support. Therefore, there measure will not be maintained for reporting beginning in 2014. AMAPCPI /AC CF/A HA X MU 1CMS-1600-P 407NQF/PQRS National Quality Strategy Domain Measure Title and Description ¥Measure StewardClaimsRegistryEHRGPRO (Web Interface)*Measures GroupsOther QualityReporting Programs

0073 / 201 Effective Clinical Care Ischemic Vascular Disease (IVD): Blood Pressure Management: Percentage of patients aged 18 to 75 years with Ischemic Vascular Disease (IVD) who had most recent blood pressure in control (less than 140/90 mmHg)

Rationale: Eliminating duplicative measures within PQRS. NCQ A X X X X MU 1

0410 /208 Effective Clinical Care HIV/AIDS: Sexually Transmitted Disease Screening for Syphilis: Percentage of patients aged 13 years and older with a diagnosis of HIV/AIDS who were screened for syphilis at least once within 12 months

Rationale: Measure owner combined NQF 0410 with NQF 0409. AMAPCPI /NC QA X X

0445 / 209 Effective Clinical Care Functional Communication Measure - Spoken Language Comprehension: Percentage of patients aged 16 years and older with a diagnosis of late effects of cerebrovascular disease (CVD) that make progress on the Spoken Language Comprehension Functional Communication Measure

Rationale: Measure lost Measure Owner support. Therefore, there measure will not be maintained for reporting beginning in 2014. ASH A XCMS-1600-P 408NQF/PQRS National Quality Strategy Domain Measure Title and Description ¥Measure StewardClaimsRegistryEHRGPRO (Web Interface)*Measures GroupsOther QualityReporting Programs

0449 / 210 Effective Clinical Care Functional Communication Measure – Attention: Percentage of patients aged 16 years and older with a diagnosis of late effects of cerebrovascular disease (CVD) that make progress on the Attention Functional Communication Measure

Rationale: Measure lost Measure Owner support. Therefore, there measure will not be maintained for reporting beginning in 2014. ASH A X

0448 / 211 Effective Clinical Care Functional Communication Measure – Memory: Percentage of patients aged 16 years and older with a diagnosis of late effects of cerebrovascular disease (CVD) that make progress on the Memory Functional Communication Measure

Rationale: Measure lost Measure Owner support. Therefore, there measure will not be maintained for reporting beginning in 2014. ASH A X

0447 / 212 Effective Clinical Care Functional Communication Measure - Motor Speech: Percentage of patients aged 16 years and older with a diagnosis of late effects of cerebrovascular disease (CVD) that make progress on the Motor Speech Functional Communication Measure

Rationale: Measure lost Measure Owner support. Therefore, there measure will not be maintained for reporting beginning in 2014. ASH A XCMS-1600-P 409NQF/PQRS National Quality Strategy Domain Measure Title and Description ¥Measure StewardClaimsRegistryEHRGPRO (Web Interface)*Measures GroupsOther QualityReporting Programs

0446 / 213 Effective Clinical Care Functional Communication Measure – Reading: Percentage of patients aged 16 years and older with a diagnosis of late effects of cerebrovascular disease (CVD) that make progress on the Reading Functional Communication Measure

Rationale: Measure lost Measure Owner support. Therefore, there measure will not be maintained for reporting beginning in 2014. ASH A X

0444 / 214 Effective Clinical Care Functional Communication Measure - Spoken Language Expression: Percentage of patients aged 16 years and older with a diagnosis of late effects of cerebrovascular disease (CVD) that make progress on the Spoken Language Expression Functional Communication Measure

Rationale: Measure lost Measure Owner support. Therefore, there measure will not be maintained for reporting beginning in 2014. ASH A X

0442 / 215 Effective Clinical Care Functional Communication Measure – Writing: Percentage of patients aged 16 years and older with a diagnosis of late effects of cerebrovascular disease (CVD) that make progress on the Writing Functional Communication Measure

Rationale: Measure lost Measure Owner support. Therefore, there measure will not be maintained for reporting beginning in 2014. ASH A XCMS-1600-P 410NQF/PQRS National Quality Strategy Domain Measure Title and Description ¥Measure StewardClaimsRegistryEHRGPRO (Web Interface)*Measures GroupsOther QualityReporting Programs

0443 / 216 Effective Clinical Care Functional Communication Measure – Swallowing: Percentage of patients aged 16 years and older with a diagnosis of late effects of cerebrovascular disease (CVD) that make progress on the Swallowing Functional Communication Measure

Rationale: Measure lost Measure Owner support. Therefore, there measure will not be maintained for reporting beginning in 2014. ASH A X

0013 / 237 Effective Clinical Care Hypertension (HTN): Blood Pressure Measurement: Percentage of patient visits for patients aged 18 years and older with a diagnosis of HTN with blood pressure (BP) recorded

Rationale: We are deleting this measure to align with the measures available under the EHR Incentive Program, which does not have this measure available for reporting in 2014. AMAPCPI X

N/A/ 244 Effective Clinical Care Hypertension: Blood Pressure Management: Percentage of patients aged 18 years and older with a diagnosis of hypertension seen within a 12 month period with a blood pressure < 140/90 mmHg OR patients with a blood pressure ≥ 140/90 mmHgand prescribed two or more antihypertensive medications during the most recent office visit

Rationale: Measure deletion due to duplicative measures within PQRS. AMAPCPI /AC CF/A HA XCMS-1600-P 411NQF/PQRS National Quality Strategy Domain Measure Title and Description ¥Measure StewardClaimsRegistryEHRGPRO (Web Interface)*Measures GroupsOther QualityReporting Programs

0503 /252 Effective Clinical Care Anticoagulation for Acute Pulmonary Embolus Patients: Anticoagulation ordered for patients who have been discharged from the emergency department (ED) with a diagnosis of acute pulmonary embolus

Rationale: Measure lost Measure Owner support. Therefore, there measure will not be maintained for reporting beginning in 2014. ACE P X X

N/A/ 256 Commun ication and Care Coordina tion Surveillance after Endovascular Abdominal Aortic Aneurysm Repair (EVAR): Percentage of patients 18 years of age or older undergoing endovascular abdominal aortic aneurysm repair (EVAR) who have at least one follow-up imaging study after 3 months and within 15 months of EVAR placement that documents aneurysm sac diameter and endoleak status

Rationale: Measure lost Measure Owner support. Therefore, there measure will not be maintained for reporting beginning in 2014. SVS XCMS-1600-P 412NQF/PQRS National Quality Strategy Domain Measure Title and Description ¥Measure StewardClaimsRegistryEHRGPRO (Web Interface)*Measures GroupsOther QualityReporting Programs

0012 / 306 Commun ity/Popul ation Health Prenatal Care: Screening for Human Immunodeficiency Virus (HIV): Percentage of patients, regardless of age, who gave birth during a 12-month period who were screened for HIV infection during the first or second prenatal visit

Rationale: We are deleting this measure to align with the measures available under the EHR Incentive Program, which does not have this measure available for reporting in 2014. AMAPCPI X MU 1

0014 / 307 Patient Safety Prenatal Care: Anti-D Immune Globulin: Percentage of D (Rh) negative, unsensitized patients, regardless of age, who gave birth during a 12-month period who received anti-D immune globulin at 26-30 weeks gestation

Rationale: We are deleting this measure to align with the measures available under the EHR Incentive Program, which does not have this measure available for reporting in 2014. AMAPCPI X MU 1CMS-1600-P 413NQF/PQRS National Quality Strategy Domain Measure Title and Description ¥Measure StewardClaimsRegistryEHRGPRO (Web Interface)*Measures GroupsOther QualityReporting Programs

0027 / 308 Commun ity/Popul ation Health Smoking and Tobacco Use Cessation, Medical Assistance: a. Advising Smokers and Tobacco Users to Quit, b. Discussing Smoking and Tobacco Use Cessation Medications, c. Discussing Smoking and Tobacco Use Cessation Strategies: Percentage of patients aged 18 years and older who were current smokers or tobacco users, who were seen by a practitioner during the measurement year and who received advice to quit smoking or tobacco use or whose practitioner recommended or discussed smoking or tobacco use cessation medications, methods or strategies

Rationale: We are deleting this measure to align with the measures available under the EHR Incentive Program, which does not have this measure available for reporting in 2014. NCQ A X MU 1

0575 / 313 Effective Clinical Care Diabetes Mellitus: Hemoglobin A1c Control (< 8%): The percentage of patients 18 through 75 years of age with a diagnosis of diabetes (type 1 or type 2) who had HbA1c < 8%

Rationale: We are deleting this measure to align with the measures available under the EHR Incentive Program, which does not have this measure available for reporting in 2014. NCQ A XCMS-1600-P 414NQF/PQRS National Quality Strategy Domain Measure Title and Description ¥Measure StewardClaimsRegistryEHRGPRO (Web Interface)*Measures GroupsOther QualityReporting Programs

0493 / 321 Commun ication and Care Coordina tion Participation by a Hospital, Physician or Other Clinician in a Systematic Clinical Database Registry that Includes Consensus Endorsed Quality: Participation in a systematic qualified clinical database registry involves: a. Physician or other clinician submits standardized data elements to registry. b. Data elements are applicable to consensus endorsed quality measures. c. Registry measures shall include at least two (2) representative NQF consensus endorsed measures for registry's clinical topic(s) and report on all patients eligible for the selected measures. d. Registry provides calculated measures results, benchmarking, and quality improvement information to individual physicians and clinicians. e. Registry must receive data from more than 5 separate practices and may not be located (warehoused) at an individual group’s practice.Participation in a national or statewide registry is encouraged for this measure. f. Registry may provide feedback directly to the provi der’s local registry if one exists.

Rationale: Due to the proposed inclusion of Qualified Clinical Data Registries, we believe this measure is redundant. Therefore, CMS is proposing to remove this measure. OFM Q X XCMS-1600-P 415NQF/PQRS National Quality Strategy Domain Measure Title and Description ¥Measure StewardClaimsRegistryEHRGPRO (Web Interface)*Measures GroupsOther QualityReporting Programs

N/A/ N/A Commun ication and Care Coordina tion Total Knee Replacement: Coordination of Post Discharge Care: Percentage of patients undergoing total knee replacement who received written instructions for post discharge care including all the following: post discharge physical therapy, home health care, post discharge deep vein thrombosis (DVT) prophylaxis and follow-up physician visits

Rationale: Measure Owner decision to remove this measure from Total Knee Replacement and replace withthe measure: Shared DecisionMaking: Trial of Conservative (Nonsurgical) Therapy AAH KS/AMAPCPI X

N/A/ N/A Person and CaregiverCentered Experien ce and Outcome s Chronic Wound Care: Patient Education Regarding Long-Term Compression Therapy: Percentage of patients aged 18 years and older with a diagnosis of venous ulcer who received education regarding the need for long term compression therapy including interval replacement of compression stockings within the 12 month reporting period

Rationale: This measure concept is routinely met in a clinical setting. CMS believes it would not indicate a true quality outcome. AMAPCPI X XCMS-1600-P 416NQF/PQRS National Quality Strategy Domain Measure Title and Description ¥Measure StewardClaimsRegistryEHRGPRO (Web Interface)*Measures GroupsOther QualityReporting Programs

N/A/ N/A Effective Clinical Care Osteoporosis: Status of Participation in Weight-Bearing Exercise and Weight-bearing Exercise Advice: Percentage of patients aged 18 and older with a diagnosis of osteoporosis, osteopenia, or prior low impact fracture; women age 65 and older; or men age 70 and older whose status regarding participation in weight-bearing exercise was documented and for those not participating regularly who received advice within 12 months to participate in weight-bearing exercise

Rationale: This measures group is proposed for deletion due to the amount of measures that have duplicative medical concepts within the PQRS program ABI M X

N/A/ N/A Effective Clinical Care Osteoporosis: Current Level of Alcohol Use and Advice on Potentially Hazardous Drinking Prevention: Percentage of patients aged 18 and older with a diagnosis of osteoporosis, osteopenia, or prior low impact fracture; women age 65 and older; or men age 70 and older whose current level of alcohol use was documented and for those engaging in potentially hazardous drinking who received counseling within 12 months

Rationale: Propose to delete this measures group due to the amount of measures that have duplicative medical concepts within the PQRS program. ABI M XCMS-1600-P 417NQF/PQRS National Quality Strategy Domain Measure Title and Description ¥Measure StewardClaimsRegistryEHRGPRO (Web Interface)*Measures GroupsOther QualityReporting Programs

N/A/ N/A Patient Safety Osteoporosis: Screen for Falls Risk Evaluation and Complete Falls Risk Assessment and Plan of Care: Percentage of patients aged 18 and older with a diagnos is of osteoporosis, osteopenia, or prior low impact fracture; women age 65 and older; or men age 70 and older who had a screen for falls risk evaluation within the past 12 months and for those reported as having a history of two or more falls, or fall-related injury who had a complete risk assessment for falls and a falls plan of care within the past 12 months

Rationale: Propose to delete this measures group due to the amount of measures that have duplicative medical concepts within the PQRS program. ABI M X

N/A/ N/A Effective Clinical Care Osteoporosis: Dual-Emission X-ray Absorptiometry (DXA) Scan: Percentage of patients aged 18 and older with a diagnos is of osteoporosis, osteopenia, or prior low impact fracture; women age 65 and older; or men age 70 and older who had a DXA scan and result documented

Rationale: This measures group is proposed for deletion due to the amount of measures that have duplicative medical concepts within the PQRS program. ABI M XCMS-1600-P 418NQF/PQRS National Quality Strategy Domain Measure Title and Description ¥Measure StewardClaimsRegistryEHRGPRO (Web Interface)*Measures GroupsOther QualityReporting Programs

N/A/ N/A Effective Clinical Care Osteoporosis: Calcium Intake Assessment and Counseling: Percentage of patients aged 18 and older with a diagnos is of osteoporosis, osteopenia, or prior low impact fracture; women age 65 and older; or men age 70 and older who had calcium intake assessment and counseling at least once within 12 months

Rationale: Propose to delete this measures group due to the amount of measures that have duplicative medical concepts within the PQRS program. ABI M X

N/A/ N/A Effective Clinical Care Osteoporosis: Vitamin D Intake Assessment and Counseling: Percentage of patients aged 18 and older with a diagnos is of osteoporosis, osteopenia, or prior low impact fracture; women age 65 and older; or men age 70 and older who had vitamin D intake assessment and counseling at least once within 12 months

Rationale: This measures group is proposed for deletion due to the amount of measures that have duplicative medical concepts within the PQRS program. ABI M XCMS-1600-P 419NQF/PQRS National Quality Strategy Domain Measure Title and Description ¥Measure StewardClaimsRegistryEHRGPRO (Web Interface)*Measures GroupsOther QualityReporting Programs

N/A/ N/A Effective Clinical Care Osteoporosis: Pharmacologic Therapy: Percentage of patients aged 18 and older with a diagnosis of osteoporosis, osteopenia, or prior low impact fracture; women age 65 and older; or men age 70 and older who were prescribed pharmacologic therapy approved by the Food and Drug Administration

Rationale: This measures group is proposed for deletion due to the amount of measures that have duplicative medical concepts within the PQRS program. ABI M X

N/A/ N/A Effective Clinical Care Preventive Cardiology Composite: Blood Pressure at Goal: Percentage of patients in the sample whose most recent blood pressure reading was at goal

Rationale: This measures group is proposed for deletion due to the amount of measures that have duplicative medical concepts within the PQRS program. ABI M XCMS-1600-P 420NQF/PQRS National Quality Strategy Domain Measure Title and Description ¥Measure StewardClaimsRegistryEHRGPRO (Web Interface)*Measures GroupsOther QualityReporting Programs

N/A/ N/A Effective Clinical Care Preventive Cardiology Composite: Low Density Lipids (LDL) Cholesterol at Goal: Percentage of patients in the sample whose LDL cholesterol is considered to be at goal, based upon their coronary heart disease (CHD) risk factors

Rationale: This measures group is proposed for deletion due to the amount of measures that have duplicative medical concepts within the PQRS program. ABI M XCMS-1600-P 421NQF/PQRS National Quality Strategy Domain Measure Title and Description ¥Measure StewardClaimsRegistryEHRGPRO (Web Interface)*Measures GroupsOther QualityReporting Programs

N/A/ N/A Effective Clinical Care Preventive Cardiology Composite: Timing of Lipid Testing Complies with Guidelines: Percentage of patients in the sample whose timing of lipid testing complies with guidelines (lipid testing performed in the preceding 12-month period (with a three-month grace period) for patients with known coronary heart disease (CHD) or CHD risk equivalent (prior myocardial infarction (MI), other clinical CHD, symptomatic carotid artery disease, peripheral artery disease, abdominal aortic aneurysm, diabetes mellitus); or in the preceding 24-month period (with a three-month grace period) for patients with ≥ 2 risk factors for CHD (smoking, hypertension, low high density lipid (HDL), men ≥ 45 years, women ≥ 55 years, family history of premature CHD; HDL ≥ 60 mg/dL acts as a negative risk factor); or in the preceding 60-month period (with a three-month grace period) for patients with ≤ 1 risk factor for CHD)

Rationale: This measures group is proposed for deletion due to the amount of measures that have duplicative medical concepts within the PQRS program. ABI M XCMS-1600-P 422NQF/PQRS National Quality Strategy Domain Measure Title and Description ¥Measure StewardClaimsRegistryEHRGPRO (Web Interface)*Measures GroupsOther QualityReporting Programs

N/A/ N/A Effective Clinical Care Preventive Cardiology Composite: Diabetes Documentation or Screen Test: Percentage of patients in the sample who had a screening test for type 2 diabetes or had a diagnosis of diabetes

Rationale: This measures group is proposed for deletion due to the amount of measures that have duplicative medical concepts within the PQRS program. ABI M X

N/A/ N/A Effective Clinical Care Preventive Cardiology Composite: Counseling for Diet and Physical Activity: Percentage of patients who received dietary and physical activity counseling

Rationale: This measures group is proposed for deletion due to the amount of measures that have duplicative medical concepts within the PQRS program ABI M X

N/A/ N/A Effective Clinical Care Preventive Cardiology Composite: Correct Determination of Ten-Year Risk for Coronary Death or Myocardial Infarction (MI): Number of patients in the sample whose ten-year risk of coronary death or MI is correctly assessed and documented

Rationale: This measures group is proposed for deletion due to the amount of measures that have duplicative medical concepts within the PQRS program ABI M XCMS-1600-P 423NQF/PQRS National Quality Strategy Domain Measure Title and Description ¥Measure StewardClaimsRegistryEHRGPRO (Web Interface)*Measures GroupsOther QualityReporting Programs

N/A/ N/A Effective Clinical Care Preventive Cardiology Composite: Appropriate Use of Aspirin or Other Antiplatelet/Anticoagulant Therapy: Percentage of patients in the sample who are: 1) taking aspirin or other anticoagulant/antiplatelet therapy, or 2) under age 30, or 3) age 30 or older and who are documented to be at low risk. Low-risk patients include those who are documented with no prior coronary heart disease (CHD) or CHD risk equivalent (prior myocardial infarction (MI), other clinical CHD, symptomatic carotid artery disease, peripheral artery disease, abdominal aortic aneurysm, diabetes mellitus) and whose ten-year risk of developing CHD is < 10%

Rationale: This measures group is proposed for deletion due to the amount of measures that have duplicative medical concepts within the PQRS program ABI M XCMS-1600-P 424NQF/PQRS National Quality Strategy Domain Measure Title and Description ¥Measure StewardClaimsRegistryEHRGPRO (Web Interface)*Measures GroupsOther QualityReporting Programs

N/A/ N/A Effective Clinical Care Preventive Cardiology Composite: Smoking Status and Cessation Support: Percentage of patients in the sample whose current smoking status is documented in the chart, and if they were smokers, were documented to have received smoking cessation counseling during the reporting period.

Rationale: This measures group is proposed for deletion due to the amount of measures that have duplicative medical concepts within the PQRS program ABI M X

¥ Titles and descriptions in this table ar e aligned with the 2014 Physician Quality Reporting System Claims and Qualified Regi stry measure titles and descriptions, and may differ from existing measures in othe r programs. Please reference the National Quality Forum (NQF) and Physician Quality Reporting System numbers for clarification. b. Proposed PQRS Measures Groups Section 414.90(b) defines a measures gr oup as “a subset of four or more Physician Quality Reporting System measures th at have a particular clinical condition or

focus in common. The denominator defi nition and coding of the measures group

identifies the condition or focus that is shar ed across the measures within a particular measures group.” As we discussed in sect ion IV.I.4. above, we propose to increase the number of measures reported by individual eligible professionals via claims and registry from 3 to 9. Since we are proposing to incr ease the number of individual measures to be reported via claims and registry, we believe it is also appropriate to increase the numberCMS-1600-P 425

of measures that would be reported in a measures group. Specifically, we propose to modify the minimum amount of measures th at may be included in a PQRS measures group from four to six. Therefore, we ar e proposing to modify the definition of a measures group at §414.90(b) to indicate that a measures grou p would consist of at least six measures. Consequently, we are proposing to add additional measures to measures groups that previously containe d less than six measures. We believe that, although it is appropriate to increase the number of measur es in a measures group, we do not believe it would be appropriate to in crease the minimum number of reportable measures in a measures group to 9, such as we are proposi ng for individual eligible professionals who report individual quality measures via claims and registry. Unlike reporting individual measures, where an eligible professional woul d be able to report on any 9 measures of his/her choosing, an eligible professional is required to report on ALL the measures contained in a measures group. We believe increasing the number of minimum measures in a measures group to six is reasonable, as it would only require the eligible professional to report on an additional two measures. Tables 31 through 53 specify our proposed measures groups in light of our proposal to increase the minimum number of me asures in a measures group in previously established measures groups, so that each m easures group contains at least 6 measures (77 FR 69272). In addition to the measures groups that we finalized for 2013 and beyond, we are proposing the following three additional measures groups, which are identified in Tables 54 through 56:

● Optimizing Patient Expos ure to Ionizing Radiation : This measures group represents a new clinical theme for eligib le professionals to report and addresses aCMS-1600-P 426

clinical gap. This measur e set includes measures colle cting data for standardized nomenclature, count of high dose radiation, re porting to a radiati on dose index registry, availability of CT images for follow-up/ co mparison, and search of CT images through a secure, authorized, media-free, shared ar chive, and CT follow-up for incidental pulmonary nodules. This would be a measur es group that specialty Radiologists and other eligible profession als within this scope of practice could report.

● General Surgery : Addition of a General Surg ery Measures Group including procedures such as ventral hernia, ap pendectomy, AV fistula, cholecystectomy, thyroidectomy, mastectomy, lymphadenectomy, sentinel lymph node biopsy (SLNB), or lumpectomy/breast biopsy woul d allow surgeons another opportunity to report via measures group reporting.

● Gastrointestinal Surgery : This measures group could be reported by specialized general surgical eligible profe ssionals that focus on ba riatric and colectomy procedures. PQRS currently has another measures group in which Surgeons and other eligible professionals may report: Peri operative Measures Group. However, these measures address a gap in that it would produce data that specifically evaluate iatrogenic injury to adjacent organ, anastomotic l eak intervention, and unplanned reoperation. Please note that, since we are proposing to eliminate the option to report measures groups via claims, all measures grou ps proposed for 2014 and beyond would be reportable through registry -based reporting only. ¥ Titles and descriptions in these tables are aligned with the 2014 Physician Quality Reporting System Claims and Registry measur e titles and descrip tions, and may differ from existing measures in other programs. Please reference the National Quality Forum (NQF) and Physician Quality Reporting System numbers for clarification. TABLE 31: Proposed Diabetes Mellitus Measures Group for 2014 and BeyondCMS-1600-P 427NQF/PQRS Measure Title and DescriptionMeasureDeveloper

0059/ 1 Diabetes Mellitus: Hemoglobin A1c Poor Control: Percentage of patients aged 18 through 75 years with diabetes mellitus who had most recent hemoglobin A1c greater than 9.0% NCQA

0064/ 2 Diabetes Mellitus: Low Density Lipoprotein (LDL-C) Control: Percentage of patients aged 18 throu gh 75 years with diabetes mellitus who had most recent LDL-C level in control (less than 100 mg/dL) NCQA

0055/ 117 Diabetes Mellitus: Dilated Eye Exam: Percentage of patients 18-75 years of age with diabetes who had a retinal or dilated eye exam by an eye care professional during the measurement pe riod or a negative retinal exam (no evidence of retinopathy) in the 12 mont hs prior to the measurement period NCQA

0062/ 119 Diabetes Mellitus: Urine Protein Screening : The percentage of patients 18-75 years of age with diabetes who had a nephropathy sc reening test or evidence of nephropathy duri ng the measurement period NCQA

0419/ 130 Documentation of Current Medications in the Medical Record: Percentage of specified vi sits for patients aged 18 years and older for which the eligible professional attests to do cumenting a list of current medications to the best of his/her knowl edge and ability. This list must include ALL prescriptions, over-the-counters, he rbals, and vitamin/mineral/dietary (nutritional) supplements AND must contain the medications’ name, dosage, frequency and route of administration CMS

0056/ 163 Diabetes Mellitus: Foot Exam: The percentage of pa tients aged 18 through 75 years with diabetes who had a foot examination NCQA

TABLE 32: Proposed Chronic Kidney Dise ase (CKD) Measures Group for 2014 and BeyondNQF/PQRS Measure Title and DescriptionMeasureDeveloper

0041/ 110 Preventive Care and Screening: Influenza Immunization: Percentage of patients aged 6 months and older s een for a visit between October 1 and March 31 who received an influe nza immunization OR who reported previous receipt of an influenza immunization AMAPCPI

1668/ 121 Adult Kidney Disease: Laborato ry 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 AMAPCPICMS-1600-P 428

AQA adopted /122 Adult Kidney Disease: Blood Pressure Management: Percentage of patient visits for those patients aged 18 years and older with a diagnosis of chronic kidney disease (CKD) (sta ge 3, 4, or 5, not receiving Renal Replacement Therapy [RRT]) and proteinuria with a blood pressure < 130/80 mmHg OR ≥ 130/80 mmHg with a documented plan of care AMAPCPI

1666/12 3 Adult Kidney Disease: Patients On Erythropoiesis-Stimulating Agent (ESA) - Hemoglobin Level > 12.0 g/dL: Percentage of calendar months within a 12-month period during whic h a Hemoglobin level is measured for patients aged 18 years and older w ith 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 receiv ing erythropoiesisstimulating agent (ESA) therapy AND have a hemoglobin level > 12.0 g/dL AMAPCPI

0419/ 130 Documentation of Current Medications in the Medical Record: Percentage of specified visits for patients aged 18 years and older for which the eligible professional atte sts to documenting a list of current medications to the best of his/he r knowledge and ability. This list must include ALL prescriptions, over- the-counters, herbals, and vitamin/mineral/dietary ( nutritional) supplements AND must contain the medications’ name, dosage, freque ncy and route of administration CMS

0028/ 226 Preventive Care and 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 interv ention if identified as a tobacco user AMAPCPI

TABLE 33: Proposed Preventive Care Measures Group for 2014 and BeyondNQF/PQRS Measure Title and DescriptionMeasureDeveloper

0046/ 39 Screening or Therapy for Osteoporosis for Women Aged 65 Years and Older: Percentage of female patients ag ed 65 years and older who have a central dual-energy X- ray absorptiom etry (DXA) measurement ordered or performed at least once since age 60 or pharmacologic therapy prescribed within 12 months AMAPCPI/ NCQA

0098/ 48 Urinary Incontinence: 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 AMAPCPI/ NCQA

0041/ 110 Preventive Care and Screening: Influenza Immunization: Percentage of patients aged 6 months and older s een for a visit between October 1 and March 31 who received an influe nza immunization OR who reported previous receipt of an influenza immunization AMAPCPICMS-1600-P 429

0043/ 111 Preventive Care and Screening: Pneumococcal Vaccination for Patients 65 Years and Older: Percentage of patients aged 65 years and older who have ever received a pneumococcal vaccine NCQA

0031/ 112 Preventive Care and Screening: Breast Cancer Screening: Percentage of women aged 40 through 69 years w ho had a mammogram to screen for breast cancer within 24 months NCQA

0034/ 113 Preventive Care and Screening: Colorectal Cancer Screening: Percentage of patients aged 50 through 75 years who received the appropriate colorectal cancer screening NCQA

0421/ 128 Preventive Care and Screening: Body Mass Index (BMI) Screening and Follow-Up: Percentage of patients aged 18 years and older with an encounter during the reporting period with a documented calculated BMI during the encounter or during the previous six months, AND when the BMI is outside of normal parameters, follow-up is documented during the encounter or during the pr evious six months of th e encounter with the BMI outside of normal parameters

. Normal Parameters: Age 65 years and older BMI > 23and < 30; Age 18 – 64 years BMI > 18.5 and < 25 CMS

0028/ 226 Preventive Care and 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 interv ention if identified as a tobacco user AMAPCPI

TABLE 34: Proposed Coronary Artery Bypass Graft (CABG) Measures Group for 2014 and BeyondNQF/PQRS Measure Title and DescriptionMeasureDeveloper

0134/ 43 Coronary Artery Bypass Graft (CABG): Use of Internal Mammary Artery (IMA) in Patients with Isolated CABG: Surgery Percentage of patients aged 18 years and older und ergoing isolated CABG surgery who received an IMA graft STS

0236/ 44 Coronary Artery Bypass Graft (CAB G): 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 CMS/ QIP

0129/ 164 Coronary Artery Bypass Graft (CABG): Prolonged Intubation: Percentage of patients aged 18 years and older undergoing isolated CABG surgery who require postoperative intubation > 24 hours STS

0130/ 165 Coronary Artery Bypass Graft (CAB G): Deep Sternal Wound Infection Rate: Percentage of patients aged 18 years and older undergoing isolated CABG surgery who, within 30 days pos toperatively, develop deep sternal wound infection (involving muscle, b one, and/or mediastinum requiring operative intervention) STSCMS-1600-P 430

0131/ 166 Coronary Artery Bypass Graft (CABG): Stroke: Percentage of patients aged 18 years and older undergoing is olated CABG surgery who have a postoperative stroke (i.e., any confirmed neur ological deficit of abrupt onset caused by a disturbance in blood supply to the brain) that did not resolve within 24 hours STS

0114/ 167 Coronary Artery Bypass Graft (CABG): Postoperative Renal Failure: Percentage of patients aged 18 years and older undergoing isolated CABG surgery (without pre-existing renal failu re) who develop postoperative renal failure or require dialysis STS

0115/ 168 Coronary Artery Bypass Graft (CABG): Surgical Re-Exploration: Percentage of patients aged 18 years and older undergoing isolated CABG surgery who require a return to the op erating room (OR) during the current hospitalization for mediastinal bleeding with or without tamponade, graft occlusion, valve dysfuncti on, or other cardiac reason STS

0116/ 169 Coronary Artery Bypass Graft (CAB G): Antiplatelet Medications at Discharge: Percentage of patients aged 18 years and older undergoing isolated CABG surgery who were di scharged on antiplatelet medication STS

0117/ 170 Coronary Artery Bypass Graft (CABG): Beta-Blockers Administered at Discharge: Percentage of patients aged 18 years and older undergoing isolated CABG surgery who were discharged on beta-blockers STS

0118/ 171 Coronary Artery Bypass Graft (CABG): Anti-Lipid Treatment at Discharge: Percentage of patients aged 18 years and older undergoing isolated CABG surgery who were disc harged on a statin or other lipidlowering regimen STS

TABLE 35: Proposed Rheumatoid Arth ritis (RA) Measures Group for 2014 and BeyondNQF/PQRS Measure Title and DescriptionMeasureDeveloper

0054/ 108 Rheumatoid Arthritis (RA): Diseas e Modifying Anti-Rheumatic Drug (DMARD) Therapy: Percentage of patients aged 18 years and older who were diagnosed with RA and were pr escribed, dispensed, or administered at least one ambulatory prescription for a DMARD NCQA

AQA adopted /176 Rheumatoid Arthritis (RA ): Tuberculosis Screening: Percentage of patients aged 18 years and older w ith a diagnosis of 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-modify ing anti-rheumatic drug (DMARD) AMAPCPI

AQA adopted /177 Rheumatoid Arthritis (RA): Periodic Assessment of Disease Activity: Percentage of patients aged 18 years a nd older with a diagnosis of RA who have an assessment and classification of disease activity within 12 months AMAPCPI AQA adopted /178 Rheumatoid Arthritis (RA): Functional Status Assessment: Percentage of patients aged 18 years and older w ith a diagnosis of RA for whom a functional status assessment was performed at least once within 12 months AMAPCPI AQA Rheumatoid Arthritis (RA): Assessme nt and Classification of Disease AMA-CMS-1600-P 431NQF/PQRS Measure Title and DescriptionMeasureDeveloper

adopted /179 Prognosis: Percentage of patients aged 18 y ears and older with a diagnosis of RA who have an assessment and cl assification of disease prognosis at least once within 12 months PCPI

AQA adopted /180 Rheumatoid Arthritis (RA): Glucocorticoid Management: Percentage of patients aged 18 years and older with a diagnosis of RA who have been assessed for glucocorticoid use a nd, 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 AMAPCPI

TABLE 36: Proposed Perioperative Care Measures Group for 2014 and BeyondNQF/PQRS Measure Title and DescriptionMeasureDeveloper

0270/ 20 Perioperative Care: Timing of Prophylactic Parenteral Antibiotic – Ordering Physician: Percentage of surgical patients aged 18 years and older undergoing procedures with the indi cations for prophylactic parenteral antibiotics, who have an order for prophyl actic parenteral antibiotic to be given within one hour (if fluoroquinol one or vancomycin, two hours), prior to the surgical incision (or start of pr ocedure when no incision is required) AMAPCPI/ NCQA

0268/ 21 Perioperative Care: Selection of Pr ophylactic Antibiotic – First OR Second Generation Cephalosporin: Percentage of surgical patients aged 18 years and older undergoing procedures w ith the indications for a first OR second generation cephalosporin prophyl actic antibiotic, who had an order for a first OR second generation cephalosporin for antimicrobial prophylaxis AMAPCPI/ NCQA

0271/ 22 Perioperative Care: Discontinuati on of Prophylactic Parenteral Antibiotics (Non-Cardiac Procedures): Percentage of non- cardiac surgical patients aged 18 years and older undergoi ng procedures with the indications for prophylactic parenteral antibio tics AND who received a prophylactic parenteral antibiotic, who have an or der for discontinuation of prophylactic parenteral antibiotics within 24 hours of surgical end time AMAPCPI/ NCQA

0239/ 23 Perioperative Care: Venous Thro mboembolism (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 Unfract ionated Heparin (LDUH), adjusteddose warfarin, fondaparinux or mechanical prophylaxis to be given within 24 hours prior to incision time or within 24 hours after surgery end time AMAPCPI/ NCQACMS-1600-P 432

0419/ 130 Documentation of Current Medicat ions in the Medical Record: Percentage of specified vi sits for patients aged 18 years and older for which the eligible professional attests to do cumenting a list of current medications to the best of his/her knowl edge and ability. This list must include ALL prescriptions, over-the-counters, he rbals, and vitamin/mineral/dietary (nutritional) supplements AND must contain the medications’ name, dosage, frequency and route of administration CMS

0028/ 226 Preventive Care and Screening: Toba cco 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 AMAPCPI

N/A/ N/A Patient-Centered Surgical Risk Assessment and Communication: The Percent of Patients who Underwen t Non-Emergency Major Surgery Who Received Preoperative Risk Assessment for Procedure-Specific Postoperative Complications using a Data-Based, Patient-Specific Risk Calculator, and who also Received a P ersonal Discussion of Risks with the Surgeon: Percentage of patients who underwent a non-emergency major surgery who had their risks of postope rative complications assessed by their surgical team prior to surgery usin g a data-based, patient-specific risk calculator and who received personal discussion of those risks. A higher value for this measure corresponds to higher quality ACS

TABLE37: Proposed Back Pain Measures Group for 2014 and BeyondNQF/PQRS Measure Title and DescriptionMeasureDeveloper

0419/ 130 Documentation of Current Medications in the Medical Record: Percentage of specified vi sits for patients aged 18 years and older for which the eligible professional attests to do cumenting a list of current medications to the best of his/her knowl edge and ability. This list must include ALL prescriptions, over-the-counters, he rbals, and vitamin/mineral/dietary (nutritional) supplements AND must contain the medications’ name, dosage, frequency and route of administration CMS

0420/ 131 Pain Assessment and Follow-Up: Percentage of visits for patients aged 18 years and older with documentation of a pain assessment through discussion with the patient including the use of a standardized tool(s) on each visit AND documentation of a follow-up plan when pain is present CMS

0322/ 148 Back Pain: Initial 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 asse ssed during the initi al visit to the clinician for the episode of back pain NCQA

0319/ 149/ Back Pain: Physical 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 vis it to the clinician for the episode of back pain NCQACMS-1600-P 433

0314/ 150 Back Pain: Advice for 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 epis ode of back pain NCQA

0313/ 151 Back Pain: Advice Against Bed Rest: The percentage of patients aged 18 through 79 years with a diagnosis of b ack pain or undergoing back surgery who received advice against bed rest lasti ng four days or longer at the initial visit to the clinician for the episode of back pain NCQA

TABLE 38: Proposed Hepatitis C Measures Group for 2014 and BeyondNQF/PQRS Measure Title and DescriptionMeasureDeveloper

0395/ 84 Hepatitis C: Ribonucleic Acid (RNA) Testing Before Initiating Treatment: Percentage of patients aged 18 y ears and older with a diagnosis of chronic hepatitis C who are recei ving antiviral treatment for whom quantitative HCV RNA testing was perf ormed within 6 months prior to initiation of antiviral treatment AMAPCPI

0396/ 85 Hepatitis C: HCV Genotype Testing Prior to Treatment: Percentage of patients aged 18 years and older with a diagnosis of chronic hepatitis C who are receiving antiviral treatment for whom HCV genotype testing was performed prior to initiati on of antiviral treatment AMAPCPI

0398/ 87 Hepatitis C: Hepatitis C Virus (HCV) Ribonucleic Acid (RNA) Testing at Week 12 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 HCV RNA testi ng was performed at no greater than 12 weeks from the initiation of antiviral treatment AMAPCPI

0419/ 130 Documentation of Current Medications in the Medical Record: Percentage of specified vi sits for patients aged 18 years and older for which the eligible professional attests to do cumenting a list of current medications to the best of his/her knowl edge and ability. This list must include ALL prescriptions, over-the-counters, he rbals, and vitamin/mineral/dietary (nutritional) supplements AND must contain the medications’ name, dosage, frequency and route of administration CMS

0399/ 183 Hepatitis C: Hepatitis A Vaccination in Patients with Hepatitis C Virus (HCV): Percentage of patients aged 18 year s and older with a diagnosis of hepatitis C who have received at least one injection of hepatitis A vaccine, or who have documented immunity to hepatitis A AMAPCPI

0028/ 226 Preventive Care and Screening: Toba cco 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 AMAPCPI

TABLE 39: Proposed Heart Failure (HF) Measures Group for 2014 and BeyondCMS-1600-P 434NQF/PQRS Measure Title and DescriptionMeasureDeveloper

0081/ 5 Heart Failure (HF): Angiotensin-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 failur e (HF) with a current or prior left ventricular ejection fraction (LVEF) < 40% who were prescribed ACE inhibitor or ARB therapy either within a 12 month period when seen in the outpatient setting OR at each hospital discharge AMAPCPI/ ACCF/ AHA

0083/ 8 Heart Failure (HF): Beta-Blocker Thera py for Left Ventricular Systolic Dysfunction (LVSD): Percentage of patients aged 18 years and older with a diagnosis of heart failure (HF) with a cu rrent or prior left ventricular ejection fraction (LVEF) < 40% who were prescr ibed beta-blocker therapy either within a 12 month period when seen in the outpatient setting OR at each hospital discharge AMAPCPI/ ACCF/ AHA

0421/ 128 Preventive Care and Screening: Body Mass Index (BMI) Screening and Follow-Up: Percentage of patients aged 18 years and older with an encounter during the reporting period with a documented calculated BMI during the encounter or during the previous six months, AND when the BMI is outside of normal parameters, follow-up is documented during the encounter or during the pr evious six months of th e encounter with the BMI outside of normal parameters

. Normal Parameters: Age 65 years and older BMI > 23and < 30; Age 18 – 64 years BMI > 18.5 and < 25 CMS

0419/ 130 Documentation of Current Medications in the Medical Record: Percentage of specified vi sits for patients aged 18 years and older for which the eligible professional attests to do cumenting a list of current medications to the best of his/her knowl edge and ability. This list must include ALL prescriptions, over-the-counters, he rbals, and vitamin/mineral/dietary (nutritional) supplements AND must contain the medications’ name, dosage, frequency and route of administration CMS

0079/ 198 Heart Failure: Left Ventricular Ej ection Fraction (LVEF) Assessment: Percentage of patients aged 18 years and older with a diagnosis of heart failure for whom the quantitative or qual itative results of a recent or prior [any time in the past] LVEF assessment is documented within a 12 month period AMAPCPI/ ACCF/ AHA

0028/ 226 Preventive Care and Screening: Toba cco 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 AMAPCPI

TABLE 40: Proposed Coronary Artery Disease (CAD) Measures Group for 2014 and BeyondCMS-1600-P 435NQF/PQRS Measure Title and DescriptionMeasureDeveloper

0067/ 6 Coronary Artery Disease (CAD): 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 aspiri n or clopidogrel AMAPCPI/ ACCF/ AHA 0421/ 128 Preventive Care and Screening: Body Mass Index (BMI) Screening and Follow-Up: Percentage of patients aged 18 years and older with an encounter during the reporting period with a documented calculated BMI during the encounter or during the previous six months, AND when the BMI is outside of normal parameters, follow-up is documented during the encounter or during the pr evious six months of th e encounter with the BMI outside of normal parameters

. Normal Parameters: Age 65 years and older BMI > 23and < 30; Age 18 – 64 years BMI > 18.5 and < 25 CMS

0419/ 130 Documentation of Current Medications in the Medical Record: Percentage of specified vi sits for patients aged 18 years and older for which the eligible professional attests to do cumenting a list of current medications to the best of his/her knowl edge and ability. This list must include ALL prescriptions, over-the-counters, he rbals, and vitamin/mineral/dietary (nutritional) supplements AND must contain the medications’ name, dosage, frequency and route of administration CMS

0074/ 197 Coronary Artery Disease (CAD): Lipid Control: Percentage of patients aged 18 years and older with a diagnosi s of coronary artery disease seen within a 12 month period who have a LDL-C result < 100 mg/dL OR patients who have a LDL-C result ≥ 100 mg/dL and have a documented plan of care to achieve LDL-C < 100 mg/d L, including at a minimum the prescription of a statin AMAPCPI/ ACCF/ AHA

0028/ 226 Preventive Care and Screening: Toba cco 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 AMAPCPI

N/A/ 242 Coronary Artery Disease (CAD): Symptom Management: Percentage of patients aged 18 years and older with a diagnosis of coronary artery disease seen within a 12 month period with an evaluation of level of activity and an assessment of whether anginal sympto ms are present or absent with appropriate management of anginal symptoms within a 12 month period AMAPCPI/ ACCF/ AHA

TABLE 41: Proposed Ischemic Vascular Disease (IVD) Measures Group for 2014 and BeyondNQF/PQRS Measure Title and DescriptionMeasureDeveloperCMS-1600-P 436

0421/ 128 Preventive Care and Screening: Body Mass Index (BMI) Screening and Follow-Up: Percentage of patients aged 18 years and older with an encounter during the reporting period with a documented calculated BMI during the encounter or dur ing the previous six months, AND when the BMI is outside of normal parameters, follow-up is documented during the encounter or during the pr evious six months of th e encounter with the BMI outside of normal parameters

. CMS

0419/ 130 Documentation of Current Medicat ions in the Medical Record: Percentage of specified vi sits for patients aged 18 years and older for which the eligible professional attests to do cumenting a list of current medications to the best of his/her knowl edge and ability. This list must include ALL prescriptions, over-the-counters, he rbals, and vitamin/mineral/dietary (nutritional) supplements AND must contain the medications’ name, dosage, frequency and route of administration CMS

0068/ 204 Ischemic Vascular Disease (IVD ): Use of Aspirin or Another Antithrombotic: Percentage of patients ag ed 18 years and older with ischemic vascular disease (IVD) with documented use of aspirin or another antithrombotic NCQA

0028/ 226 Preventive Care and Screening: Toba cco 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 AMAPCPI

0018/ 236 Hypertension (HTN): Contro lling High Blood Pressure: Percentage of patients aged 18 through 85 years of age who had a diagnosis of hypertension (HTN) and whose BP wa s adequately controlled (< 140/90 mmHg) NCQA

0075/ 241 Ischemic Vascular Disease (IVD): Complete Lipid Panel and Low Density Lipoprotein (LDL-C) Control: Percentage of patients aged 18 years and older with Ischemic Vascular Disease (IVD) who received at least one lipid profile within 12 months a nd whose most recent LDL-C level was in control (less than 100 mg/dL) NCQA

TABLE 42: Proposed HIV/AIDS Measures Group for 2014 and BeyondNQF/PQRS Measure Title and DescriptionMeasureDeveloper

0419/ 130 Documentation of Current Medications in the Medical Record: Percentage of specified vi sits for patients aged 18 years and older for which the eligible professional attests to do cumenting a list of current medications to the best of his/her knowl edge and ability. This list must include ALL prescriptions, over-the-counters, he rbals, and vitamin/mineral/dietary (nutritional) supplements AND must contain the medications’ name, dosage, frequency and route of administration CMS

0404/ 159 HIV/AIDS: CD4+ Cell Count or CD4+ Percentage: Percentage of patients aged 6 months and older with a diag nosis of HIV/AIDS for whom a CD4+ AMAPCPI/CMS-1600-P 437

cell count or CD4+ cell percentage was performed at least once every 6 months NCQA

0405/ 160 HIV/AIDS: Pneumocystis Jiroveci Pneumonia (PCP) Prophylaxis: Percentage of patients aged 6 years a nd older with a diagnosis of HIV/AIDS and CD4+ cell count < 200 cells/mm 3 who were prescribed PCP prophylaxis within 3 months of low CD4+ cell count AMAPCPI/ NCQA

0409/ 205 HIV/AIDS: Sexually Transmitted 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 on ce since the diagnosis of HIV infection and who were screened for syphilis at least once within 12 months AMAPCPI/ NCQA

2082/ N/A HIV Viral Load Suppression: Percentage of patients, regardless of age, with a diagnosis of HIV with a HIV vira l load less than 200 copies/mL at last HIV viral load test during the measurement year HRSA

2083/ N/A Prescription of HIV Antiretroviral Therapy: Percentage of patients, regardless of age, with a diagnosis of HIV prescribed antiretroviral therapy for the treatment of HIV infec tion during the measurement year HRSA

2079/ N/A HIV Medical Visit Frequency: 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 HRSA

2080/ N/A Gap in HIV medical visits: Percentage of patients, re gardless of age, with a diagnosis of HIV who did not have a medical visit in the last 6 month of the measurement year HRSA

TABLE 43: Proposed Asthma Measures Group for 2014 and BeyondNQF/PQRS Measure Title and DescriptionMeasureDeveloper

0047/ 53 Asthma: Pharmacologic 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. Three rates are reported for this measure: 1. Patients prescribed inhaled corticosteroids (ICS) as their long term control medication. 2. Patients prescribed other alternat ive long term control medications (non-ICS). 3. Total patients prescribed l ong-term control medication AMAPCPI/ NCQA

0001/ 64 Asthma: Assessment of Asthma Cont rol – Ambulatory Care Setting: Percentage of patients aged 5 through 64 years with a diagnosis of asthma who were evaluated at least once duri ng the measurement period for asthma control (comprising asthma impairment and asthma risk) AMAPCPI/ NCQA

0041/ 110 Preventive Care and Screening: Influenza Immunization: Percentage of patients aged 6 months and older seen for a visit between October 1 and March 31 who received an influe nza immunization OR who reported AMAPCPICMS-1600-P 438

previous receipt of an influenza immunization 0419/ 130 Documentation of Current Medicat ions in the Medical Record: Percentage of specified vi sits for patients aged 18 years and older for which the eligible professional attests to do cumenting a list of current medications to the best of his/her knowl edge and ability. This list must include ALL prescriptions, over-the-counters, he rbals, and vitamin/mineral/dietary (nutritional) supplements AND must contain the medications’ name, dosage, frequency and route of administration CMS

N/A/ 231 Asthma: Tobacco Use: Screenin g - Ambulatory Care Setting: Percentage of patients (or their primary caregi ver) aged 5 through 50 years with a diagnosis of asthma who were queried about tobacco use and exposure to second hand smoke within their home e nvironment at leas t once during the one-year measurement period AMAPCPI/ NCQA

N/A/ 232 Asthma: Tobacco Use: Intervention - Ambulatory Care Setting: Percentage of patients (or their prim ary caregiver) aged 5 through 50 years with a diagnosis of asthma who were identified as tobacco users (patients who currently use tobacco AND patients who do not currently use tobacco, but are exposed to second hand smok e in their home environment) who received tobacco cessation interventi on at least once during the one-year measurement period AMAPCPI/ NCQA

TABLE 44: Proposed Chronic Obstructiv e Pulmonary Disease (COPD) Measures Group for 2014 and BeyondNQF/PQRS Measure Title and DescriptionMeasureDeveloper

0091/ 51 Chronic Obstructive Pulmonary Disease (COPD): Spirometry Evaluation: Percentage of patients aged 18 y ears and older with a diagnosis of COPD who had spirometry evaluation results documented AMAPCPI

0102/ 52 Chronic Obstructive Pulmonary Disease (COPD): Inhaled Bronchodilator Therapy: Percentage of patients aged 18 years and older with a diagnosis of COPD and who ha ve an FEV1/FVC less than 60% and have symptoms who were prescribed an inhaled bronchodilator AMAPCPI

0041/ 110 Preventive Care and Screening: Influenza Immunization: Percentage of patients aged 6 months and older seen for a visit between October 1 and March 31 who received an influe nza immunization OR who reported previous receipt of an influenza immunization AMAPCPI

0419/ 130 Documentation of Current Medications in the Medical Record: Percentage of specified vi sits for patients aged 18 years and older for which the eligible professional attests to do cumenting a list of current medications to the best of his/her knowl edge and ability. This list must include ALL prescriptions, over-the-counters, he rbals, and vitamin/mineral/dietary (nutritional) supplements AND must contain the medications’ name, dosage, frequency and route of administration CMS

0043/ 111 Preventive Care and Screening: Pneumo coccal Vaccination for Patients 65 Years and Older: Percentage of patients aged 65 years and older who NCQACMS-1600-P 439

have ever received a pneumococcal vaccine 0028/ 226 Preventive Care and Screening: Toba cco 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 AMAPCPI

TABLE 45: Proposed Inflammatory Bowe l Disease (IBD) Measures Group for 2014 and BeyondNQF/PQRS Measure Title and DescriptionMeasureDeveloper

0028/ 226 Preventive Care and Screening: Toba cco 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 AMAPCPI

N/A/ 269 Inflammatory Bowel Disease (IBD): Type, Anatomic Location and Activity All Documented: Percentage of patients aged 18 years and older with a diagnosis of inflammatory bow el disease who have documented the disease type, anatomic location a nd activity, at least once during the reporting period AGA

N/A/ 270 Inflammatory Bowel Disease (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 e qual to 10 mg/day for 60 or greater consecutive days that have been prescr ibed corticosteroid sparing therapy in the last reporting year AGA

N/A/ 271 Inflammatory Bowel Disease (IBD): Preventive Care: Corticosteroid Related Iatrogenic Injury – Bone Loss Assessment: Percentage of patients aged 18 years and older with a diagnosi s of inflammatory bowel disease who have received dose of corticosteroids gr eater than or equa l to 10 mg/day for 60 or greater consecutive days and we re assessed for risk of bone loss once per the reporting year AGA

N/A/ 272 Inflammatory Bowel Disease (IBD): Preventive Care: Influenza Immunization: Percentage of patients aged 18 years and older with a diagnosis of inflammatory bowel dise ase for whom influenza immunization was recommended, administered or previ ously received duri ng the reporting year AGA

N/A/ 273 Inflammatory Bowel Disease (IBD): Preventive Care: Pneumococcal Immunization: Percentage of patients aged 18 years and older with a diagnosis of inflammatory bowel dise ase that had pneumococcal vaccination administered or previously received AGACMS-1600-P 440

N/A/ 274 Inflammatory Bowel Disease (IBD): Testing for Latent Tuberculosis (TB) Before Initiating Anti-TNF (Tumor Necrosis Factor) Therapy: Percentage of patients aged 18 year s 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 AGA

N/A/ 275 Inflammatory Bowel Disease (IBD): Assessment of Hepatitis B Virus (HBV) Status Before Initiating An ti-TNF (Tumor Necrosis Factor) Therapy: Percentage of patients aged 18 year s and older with a diagnosis of inflammatory bowel disease who ha d Hepatitis B Virus (HBV) status assessed and results interpreted within one year prior to receiving a first course of anti-TNF (tumor necrosis factor) therapy AGA

TABLE 46: Proposed Sleep Apnea Measures Group for 2014 and BeyondNQF/PQRS Measure Title and DescriptionMeasureDeveloper

0421/ 128 Preventive Care and Screening: Body Mass Index (BMI) Screening and Follow-Up: Percentage of patients aged 18 years and older with an encounter during the reporting period with a documented calculated BMI during the encounter or during the previous six months, AND when the BMI is outside of normal parameters, follow-up is documented during the encounter or during the pr evious six months of th e encounter with the BMI outside of normal parameters

. Normal Parameters: Age 65 years and older BMI > 23and < 30; Age 18 – 64 years BMI > 18.5 and < 25 CMS

0419/ 130 Documentation of Current Medications in the Medical Record: Percentage of specified visits for patients aged 18 years and older for which the eligible professional atte sts to documenting a list of current medications to the best of his/he r knowledge and ability. This list must include ALL prescriptions, over- the-counters, herbals, and vitamin/mineral/dietary ( nutritional) supplements AND must contain the medications’ name, dosage, freque ncy and route of administration CMS

0028/ 226 Preventive Care and 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 interv ention if identified as a tobacco user AMAPCPI

N/A/ 276 Sleep Apnea: Assessment of 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 AMAPCPI/ NCQA

N/A/ 277 Sleep Apnea: Severity Asse ssment at Initial Diagnosis: Percentage of patients aged 18 years and older with a diagnosis of obstructive sleep apnea who had an apnea hypopnea in dex (AHI) or a respiratory disturbance index (RDI) measured at the time of initial diagnosis AMAPCPI/ NCQACMS-1600-P 441

N/A/ 278 Sleep Apnea: Positive Airway Pressure Therapy Prescribed: Percentage of patients aged 18 year s and older with a diagnosis of moderate or severe obstructive sleep apnea who were prescribed positive airway pressure therapy AMAPCPI/ NCQA

N/A/ 279 Sleep Apnea: Assessment of Adh erence 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 AMAPCPI/ NCQA

TABLE 47: Proposed Dementia Mea sures Group for 2014 and BeyondNQF/PQRS Measure Title and DescriptionMeasureDeveloper

N/A / 280 Dementia: Staging of Dementia: Percentage of patients, regardless of age, with a diagnosis of dementia whose severity of dementia was classified as mild, moderate or seve re at least once within a 12 month period AMAPCPI

N/A / 281 Dementia: Cognitive Assessment: 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 AMAPCPI

N/A / 282 Dementia: Functional Status Assessment: Percentage of patients, regardless of age, with a diagnosis of dementia for whom an assessment of patient’s functional status is performe d and the results reviewed at least once within a 12 month period AMAPCPI

N/A / 283 Dementia: Neuropsychiatric Symptom Assessment: Percentage of patients, regardless of age, with a diagnosis of dementia and for whom an assessment of patient’s neuropsychiatric symptoms is performed and results reviewed at least once in a 12 month period AMAPCPI

N/A / 284 Dementia: Management of Neuropsychiatric Symptoms: Percentage of patients, regardless of age, with a di agnosis of dementia who have one or more neuropsychiatric symptoms wh o received or were recommended to receive an intervention for neuropsyc hiatric symptoms within a 12 month period AMAPCPI

N/A / 285 Dementia: Screening for Depressive Symptoms: Percentage of patients, regardless of age, with a diagnosis of dementia who were screened for depressive symptoms within a 12 month period AMAPCPI

N/A / 286 Dementia: Counseling Regarding 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 AMAPCPI

N/A / 287 Dementia: Counseling Regarding Risks of Driving: Percentage of patients, regardless of age, with a diagnosis of dementia or their caregiver(s) who were counseled re garding the risks of driving and alternatives to driving at leas t once within a 12 month period AMAPCPICMS-1600-P 442

N/A / 288 Dementia: Caregiver Education 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 add itional sources for support within a 12 month period AMAPCPI

TABLE 48: Proposed Parkinson’s Dise ase Measures Group for 2014 and BeyondNQF/PQRS Measure Title and DescriptionMeasureDeveloper

N/A / 289 Parkinson’s Disease: Annual Parkin son’s Disease Diagnosis Review: All patients with a diagnosis of Pa rkinson’s disease who had an annual assessment including a review of curren t medications (e.g., medications that can produce Parkinson-like signs or symptoms) and a review for the presence of atypical features (e.g., fa lls at presentation and early in the disease course, poor response to le vodopa, symmetry at onset, rapid progression [to Hoehn and Yahr stage 3 in 3 years], lack of tremor or dysautonomia) at least annually AAN

N/A / 290 Parkinson’s Disease: Psychiatri c 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 cont rol disorder) at least annually AAN

N/A / 291 Parkinson’s Disease: Cognitiv e Impairment or Dysfunction Assessment: All patients with a diagnosis of Parkinson’s disease who were assessed for cognitive impairment or dysfunction at least annually AAN

N/A / 292 Parkinson’s Disease: Querying about Sleep Disturbances: All patients with a diagnosis of Parkinson’s diseas e (or caregivers, as appropriate) who were queried about sleep dist urbances at least annually AAN

N/A / 293 Parkinson’s Disease: Rehabilitative Therapy Options: All patients with a diagnosis of Parkinson’s disease (or caregiv er(s), as appropriate) who had rehabilitative therapy options (e.g., physical, occupational, or speech therapy) discussed at least annually AAN

N/A / 294 Parkinson’s Disease: Parkinson’s Disease Medical and Surgical Treatment Options Reviewed: All patients with a diagnosis of Parkinson’s disease (or caregiver(s), as appropria te who had the Parkinson’s disease treatment options (e.g., non-pharmacol ogical treatment, pharmacological treatment, or surgical treatment) reviewed at least once annually AAN

TABLE 49: Proposed Hypertension Measures Group for 2014 and BeyondNQF/PQRS Measure Title and DescriptionMeasureDeveloper

0028/ Preventive Care and Screening: Tobacco Use: Screening and AMA-CMS-1600-P 443

226 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 interv ention if identified as a tobacco user PCPI

N/A/ 295 Hypertension: Appropriate Use of Aspirin or 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 prescr ibed aspirin or other antithrombotic therapy ABIM

N/A/ 296 Hypertension: Complete Lipid Profile: Percentage of patients aged 18 through 90 years old with a diagnos is of hypertension who received a complete lipid profile within 60 months ABIM

N/A/ 297 Hypertension: Urine Protein Test: Percentage of patients aged 18 through 90 years old with a diagnosis of hypertension who either have chronic kidney disease diagnosis docum ented or had a urine protein test done within 36 months ABIM

N/A/ 298 Hypertension: Annual Serum Creatinine Test: Percentage of patients aged 18 through 90 years old with a di agnosis of hypertension who had a serum creatinine test done within 12 months ABIM

N/A/ 299 Hypertension: Diabetes Mellitus Screening Test: Percentage of patients aged 18 through 90 years old with a di agnosis of hypertension who had a diabetes screening test within 36 months ABIM

N/A/ 300 Hypertension: Blood Pressure Control: Percentage of patients aged 18 through 90 years old with a diagnosis of hypertension who had most recent blood pressure level under control (< 140/90 mmHG) ABIM

N/A/ 301 Hypertension: Low Density Lipoprotein (LDL-C) Control: Percentage of patients aged 18 through 90 years old with a diagnosis of hypertension who had most recent LDL choleste rol level under c ontrol (at goal) ABIM

N/A/ 302 Hypertension: Dietary and Phys ical Activity Modifications Appropriately Prescribed: Percentage of patie nts aged 18 through 90 years old with a diagnosis of hypertension who received dietary and physical activity counseling at least once within 12 months ABIM

TABLE 50: Proposed Cardiovascular Prevention Measures Group for 2014 and BeyondNQF/PQRS Measure Title and DescriptionMeasureDeveloper

0064/ 2 Diabetes Mellitus: Low Density Lipoprotein (LDL-C) Control: Percentage of patients aged 18 throu gh 75 years with diabetes mellitus who had most recent LDL-C level in control (less than 100 mg/dL) NCQA

0068/ 204 Ischemic Vascular Disease (IVD ): Use of Aspirin or Another Antithrombotic: Percentage of patients ag ed 18 years and older with ischemic vascular disease (IVD) with documented use of aspirin or another antithrombotic NCQA

0028/ Preventive Care and Screening: Tobacco Use: Screening and AMA-CMS-1600-P 444

226 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 interv ention if identified as a tobacco user PCPI

0018/ 236 Hypertension (HTN): Contro lling High Blood Pressure: Percentage of patients aged 18 through 85 years of age who had a diagnosis of hypertension (HTN) and whose BP wa s adequately controlled (< 140/90 mmHg) NCQA

0075/ 241 Ischemic Vascular Disease (IVD): Complete Lipid Panel and Low Density Lipoprotein (LDL-C) Control: Percentage of patients aged 18 years and older with Ischemic Vascular Disease (IVD) who received at least one lipid profile within 12 months and whose most recent LDL-C level was in control (less than 100 mg/dL) NCQA

N/A/ 317 Preventive Care and Screening: Screening for High Blood Pressure and Follow-Up Documented: Percentage of patients aged 18 years and older seen during the reporting peri od who were screened for high blood pressure (BP) AND a recommended follo w-up plan is documented based on the current blood pressure reading as indicated CMS/ QIP

TABLE 51: Proposed Cataracts Measures Group for 2014 and BeyondNQF/PQRS Measure Title and DescriptionMeasureDeveloper

0419/ 130 Documentation of Current Medications in the Medical Record: Percentage of specified vi sits for patients aged 18 years and older for which the eligible professional attests to do cumenting a list of current medications to the best of his/her knowl edge and ability. This list must include ALL prescriptions, over-the-counters, he rbals, and vitamin/mineral/dietary (nutritional) supplements AND must contain the medications’ name, dosage, frequency and route of administration CMS

0565/ 191 Cataracts: 20/40 or Better Visual Acuity within 90 Days Following Cataract Surgery: Percentage of patients aged 18 years and older with a diagnosis of uncomplicated catarac t 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 fo llowing the cataract surgery AMAPCPI/ NCQA

0564/ 192 Cataracts: 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 whic h would indicate the occurrence of any of the following major complications: retained nuclear fragments, endophthalmitis, dislocated or wrong pow er IOL, retinal detachment, or wound dehiscence AMAPCPI/ NCQA

0028/ 226 Preventive Care and Screening: Toba cco Use: Screening and Cessation Intervention: Percentage of patients 18 years and older who were screened AMAPCPICMS-1600-P 445

for tobacco use one or more times within 24 months AND who received cessation counseling intervention if identified as a tobacco user N/A/ 303 Cataracts: Improvement in Patient’s Visual Function within 90 Days Following Cataract Surgery: Percentage of patients aged 18 years and older in sample who had cataract surg ery and had improvement in visual function achieved w ithin 90 days following the cataract surgery, based on completing a pre-operative and post- operative visual function survey AAO

N/A/ 304 Cataracts: Patient Satisfaction within 90 Days Following Cataract Surgery: Percentage of patients aged 18 y ears and older in sample who had cataract surgery and were satisfied with their care within 90 days following the cataract surgery, based on comple tion of the Consumer Assessment of Healthcare Providers and Systems Surgical Care Survey AAO

N/A/ N/A Patient-Centered Surgical Risk Assessment and Communication: The Percent of Patients who Underwen t Non-Emergency Major Surgery Who Received Preoperative Risk Assessment for Procedure-Specific Postoperative Complications using a Data-Based, Patient-Specific Risk Calculator, and who also Received a P ersonal Discussion of Risks with the Surgeon: Percentage of patients who underwent a non-emergency major surgery who had their risks of postoperative compli cations assessed by their surgical team prior to surger y using a data-based, patient-specific risk calculator and who received pe rsonal discussion of those risks. A higher value for this measure corresponds to higher quality ACS

TABLE 52: Proposed Oncology Measures Group for 2014 and BeyondNQF/PQRS Measure Title and DescriptionMeasureDeveloper

0387/ 71 Breast Cancer: Hormonal Therapy for 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 br east cancer who were prescribed tamoxifen or aromatase inhibitor (A I) during the 12-month reporting period AMAPCPI/ ASCO/ NCCN

0385/ 72 Colon Cancer: Chemotherapy for AJCC 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 previ ously received adjuvant chemotherapy within the 12-month reporting period AMAPCPI/ ASCO/ NCCN

0041/ 110 Preventive Care and Screening: Influenza Immunization: Percentage of patients aged 6 months and older seen for a visit between October 1 and March 31 who received an influe nza immunization OR who reported previous receipt of an influenza immunization AMAPCPICMS-1600-P 446

0419/ 130 Documentation of Current Medicat ions in the Medical Record: Percentage of specified vi sits for patients aged 18 years and older for which the eligible professional attests to do cumenting a list of current medications to the best of his/her knowl edge and ability. This list must include ALL prescriptions, over-the-counters, he rbals, and vitamin/mineral/dietary (nutritional) supplements AND must contain the medications’ name, dosage, frequency and route of administration CMS/ QIP

0384/ 143 Oncology: Medical and Radiation – Pain Intensity Quantified: Percentage of patients, regardless of pa tient age, with a diagnosis of cancer currently receiving chemotherapy or radiation therapy in which pain intensity is quantified AMAPCPI

0383/ 144 Oncology: Medical and 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 repor t having pain with a documented plan of care to address pain AMAPCPI

0386/ 194 Oncology: Cancer Stage Documented: Percentage of patients, regardless of age, with a diagnosis of cancer w ho are seen in the ambulatory setting who have a baseline American Join t 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 AMAPCPI/ ASCO

0028/ 226 Preventive Care and Screening: Toba cco 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 AMAPCPI

TABLE 53: Proposed Total Knee Replacement Measures Group for 2014 and BeyondNQF/PQRS

Measure TitleMeasureDeveloper

0419/ 130 Documentation of Current Medicat ions in the Medical Record: Percentage of specified vi sits for patients aged 18 years and older for which the eligible professional attests to do cumenting a list of current medications to the best of his/her knowl edge and ability. This list must include ALL prescriptions, over-the-counters, he rbals, and vitamin/mineral/dietary (nutritional) supplements AND must contain the medications’ name, dosage, frequency and route of administration CMS/ QIP

0028/ 226 Preventive Care and Screening: Toba cco 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 AMAPCPI

N/A / N/A Total Knee Replacement: Shared Decision-Making: Trial of Conservative (Non-surgical) Therapy: Percentage of patients undergoing a total knee replacement with documen ted shared decision-making with discussion of conservative (non-surgi cal) therapy (e.g. NSAIDs, analgesics, exercise, injections) pr ior to the procedure AAHKS/AMAPCPICMS-1600-P 447

N/A / N/A Total Knee Replacement: Venous Thromboembolic and Cardiovascular Risk Evaluation: Percentage of patients 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 (DVT), pulmonary embolism (PE), myocardial infarcti on (MI), arrhythmia and stroke AAHKS/AMAPCPI

N/A / N/A Total Knee Replacement: Preoperati ve Antibiotic Infusion with Proximal Tourniquet: Percentage of patients undergoing a total knee replacement who had the prophylactic anti biotic completely infused prior to the inflation of the proximal tourniquet AAHKS/AMAPCPI

N/A / N/A Total Knee Replacement: Identificati on of Implanted Prosthesis in Operative Report: Percentage of patients undergoing total knee replacement whose operative report identifies the prosthetic implant specifications including the prosthetic implant manufacturer, the brand name of prosthetic implant and th e size of prosthetic implant AAHKS/AMAPCPI

TABLE 54: Proposed Optimizing Patient Exposure to Ionizing Radiation Measures Group for 2014 and BeyondNQF/PQRS

Measure TitleMeasureDeveloper

N/A/ N/A Optimizing Patient Exposure to Ioni zing Radiation: Utilization of a Standardized Nomenclature for Computed Tomography (CT) Imaging Description: Percentage of computed tomogr aphy (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 institutions computer systems AMAPCPI

N/A/ N/A Optimizing Patient Exposure to Ionizi ng Radiation: Count of Potential High Dose Radiation Imaging Studies: Computed Tomography (CT) and Cardiac Nuclear Medicine Studies: Percentage of Co mputed 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 AMAPCPI

N/A/ N/A Optimizing Patient Exposure to Ioni zing Radiation: Reporting to a Radiation Dose Index Registry: Percentage of total computed tomography (CT) studies performed for all patients, re gardless of age, th at are reported to a radiation dose index registry AND that include at a minimum selected data elements AMAPCPICMS-1600-P 448

N/A/ N/A Optimizing Patient 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 exte rnal entities on a secure, media free, reciprocally searchable basis with patient authorization for at least a 12-month period after the study AMAPCPI

N/A/ N/A Optimizing Patient Exposure to Ioni zing Radiation: Search for Prior Computed Tomography (CT) Studies Through a Secure, Authorized, Media-Free, Shared Archive: Percentage of final reports of computed tomography (CT) studies performed for al l patients, regardless of age, which document that a search for Digital Im aging and Communicati ons in Medicine (DICOM) format images was conducted fo r prior patient CT imaging studies completed at non-affiliated external entit ies within the past 12-months and are available through a secure, authorized, medi a free, shared archive prior to an imaging study being performed AMAPCPI

N/A/ N/A Optimizing Patient Exposure to Ioni zing Radiation: Appropriateness: Follow-up CT Imaging for Incidenta lly Detected Pulmonary Nodules According to Recommended Guidelines: Percentage of final reports for CT imaging studies of the thorax for pa tients aged 18 years and older with documented follow-up recommendations for incidentally detected pulmonary nodules (eg, follow-up CT imaging studi es needed or that no follow-up is needed) based at a minimum on nod ule size AND patient risk factors AMAPCPI

TABLE 55: Proposed General Surgery Measures Group for 2014 and BeyondNQF/PQRS Measure TitleMeasureDeveloper

0419/ 130 Documentation of Current Medications in the Medical Record: Percentage of specified visits for patients aged 18 years and older for which the eligible professional attests to documenting a list of current medications to the best of his/her knowledge and ability. This list must include ALL prescriptions, overthe-counters, herbals, and vitamin/mine ral/dietary (nutritional) supplements AND must contain the medications’ name, dos age, frequency and route of administration CMS/ QIP

0028/ 226 Preventive Care and Screening: Toba cco Use: Screening and Cessation Intervention: Percentage of patients 18 years an d older who were screened for tobacco use one or more times within 24 months AND who received cessation counseling intervention if id entified as a tobacco user AMAPCPICMS-1600-P 449

N/A/ N/A Ventral Hernia, Appendectomy, AV Fistula, Cholecystectomy, Thyroidectomy, Mastectomy +/- Lymphadenectomy or SLNB, Partial Mastectomy or Breast Biopsy/Lum pectomy +/- Lymphadenectomy or SLNB: Iatrogenic Injury to Adjacent Organ/Structure: (None provided by developer. Assumed description fo r specification provided. Requested Registry Reporting) Percentage of pa tients age 65 and older who had an iatrogenic injury documented in the op erative note, postoperative note, or progress note. Iatrogenic injury is an unplanned laceration, puncture, transection or cautery injury to an adjacent structure (e.g., sphincters, vasculature, nerve, other) that occu rs during the index procedure, whether recognized at the time of surgery or po st-operatively. Synonyms for the injury could include: hole, wound, perforation, tear, injury, lacera tion, cautery injury, damage, disruption, or defect ACS

N/A/ N/A Ventral Hernia, Appendectomy, AV Fistula, Cholecystectomy, Thyroidectomy, Mastectomy +/- Lymphadenectomy or SLNB, Partial Mastectomy or Breast Biopsy/Lum pectomy +/- Lymphadenectomy or SLNB: Unplanned Reoperation within the 30 Day Postoperative Period: (None provided by developer. Assumed de scription for specification provided. Requested Registry Reporting) Percenta ge of patients age 65 and older who had any unplanned return to the operating room for a surgical procedure, for any reason, within 30 days of the principa l operative procedure. The return to the OR may occur at any hospital or surgic al facility (i.e. your hospital or at an outside hospital). Note: This definition is not meant to capture patients who go back to the operating room within 30 days for a follow-up procedure based on the pathology results from the princi pal operative procedure or concurrent procedure. Examples: Exclude breast bi opsies which return for re-excisions; insertion of port-a-cath for chemotherapy ACS

N/A/ N/A Ventral Hernia, Appendectomy, AV Fistula, Cholecystectomy, Thyroidectomy, Mastectomy +/- Lymphadenectomy or SLNB, Partial Mastectomy or Breast Biopsy/Lum pectomy +/- Lymphadenectomy or SLNB: Unplanned Hospital Readmiss ion within 30 Days of Principal Procedure: (None provided by developer. Assumed description for specification provided. Requested Registry Reporting) Percenta ge of patients age 65 and older who a readmission (to th e same or another hospital) for any reason, within 30 days of the principal procedure. The readmission has to be classified as an “inpatient” stay by the readmitting hospital, or reported by the patient/family as such ACS

N/A/ N/A Ventral Hernia, Appendectomy, AV Fistula, Cholecystectomy, Thyroidectomy, Mastectomy +/- Lymphadenectomy or SLNB, Partial Mastectomy or Breast Biopsy/Lum pectomy +/- Lymphadenectomy or SLNB: Surgical Site Infection (SSI): (None provided by developer. Assumed description for specification provide d. Requested Registry Reporting) Percentage of patients age 65 and olde r who had a surgical site infection ACSCMS-1600-P 450

N/A/ N/A Patient-Centered Surgical Risk Assessment and Communication: The Percent of Patients who Underwent Non-Emergency Major Surgery Who Received Preoperative Risk Assessment for Procedure-Specific Postoperative Complications using a Data-Based, Patient-Specific Risk Calculator, and who also Received a Pers onal Discussion of Risks with the Surgeon: Percentage of patients who underwent a non-emergency major surgery who had their risks of postope rative complications assessed by their surgical team prior to surgery usin g a data-based, patient-specific risk calculator and who received personal discussion of t hose risks. A higher value for this measure corresponds to higher quality ACS

TABLE 56: Proposed Gastrointestinal Surgery Measures Group for 2014 and BeyondNQF/PQRS Measure TitleMeasureDeveloper

0419/ 130 Documentation of Current Medications in the Medical Record: Percentage of specified vi sits for patients aged 18 years and older for which the eligible professional attests to do cumenting a list of current medications to the best of his/her knowl edge and ability. This list must include ALL prescriptions, over-the-counters, he rbals, and vitamin/mineral/dietary (nutritional) supplements AND must contain the medications’ name, dosage, frequency and route of administration CMS/ QIP

0028/ 226 Preventive Care and Screening: Toba cco 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 AMAPCPI

N/A/ N/A Bariatric Laparoscopic or Open Roux-en Y Gastric Bypass, Bariatric Sleeve Gastrectomy, and Colectomy: Iatrogenic Injury to Adjacent Organ/Structure: (None provided by developer. Assumed description for specification provided. Requested Regi stry Reporting) Percentage of patients age 65 and older who had an iatrogenic injury documented in the operative note, postoperative note, or pr ogress note. Iatrogenic injury is an unplanned laceration, puncture, transection or cautery injury to an adjacent structure (e.g., sphincters, vasculature, nerve, othe r) that occurs during the index procedure, whether recognize d at the time of surgery or postoperatively. Synonyms for the inju ry could include: hole, wound, perforation, tear, injury, laceration, ca utery injury, damage, disruption, or defect ACSCMS-1600-P 451

N/A/ N/A Bariatric Laparoscopic or Open Roux-en Y Gastric Bypass, Bariatric Sleeve Gastrectomy, and Colectomy: Anastomotic Leak Intervention: (None provided by developer. Assu med description for specification provided. Requested Registry Reporting) Percentage of patients age 65 and older who had an intervention (via retu rn to operating room, interventional radiology, or interventional gastroente rology) for presence of leak of endoluminal contents (such as air, flui d, GI contents, or contrast material) through an anastomosis. The presence of an infection/abscess thought to be related to an anastomosis, even if the leak cannot be definitively identified as visualized during an operation, or by contrast extravas ation would also be considered an anastomotic leak ACS

N/A/ N/A Bariatric Laparoscopic or Open Roux-en Y Gastric Bypass, Bariatric Sleeve Gastrectomy, and Colectomy: Unplanned Reoperation within the 30 Day Postoperative Period: (None provided by developer. Assumed description for specification provide d. Requested Registry Reporting) Percentage of patients age 65 and ol der who had any unplanned return to the operating room for a surgical pro cedure, for any reason, within 30 days of the principal operative procedure. Th e return to the OR may occur at any hospital or surgical facility (i.e. your hospital or at an outside hospital). Note: This definition is not meant to capture patients who go back to the operating room within 30 days for a follow-up procedure based on the pathology results from the principal operative procedure or concurrentprocedure. Examples: Exclude breast biopsies which return for reexcisions; insertion of por t-a-cath for chemotherapy ACS

N/A/ N/A Bariatric Laparoscopic or Open Roux-en Y Gastric Bypass, Bariatric Sleeve Gastrectomy, and Colectomy: Unplanned Hospital Readmission within 30 Days of Principal Procedure: (None provided by developer. Assumed description for specifica tion provided. Requested Registry Reporting) Percentage of patients age 65 and older who a readmission (to the same or another hospital) for any reason, within 30 days of the principal procedure. The readmission has to be classified as an “inpatient” stay by the readmitting hospital, or reported by the patient/family as such ACS

N/A/ N/A Bariatric Laparoscopic or Open Roux-en Y Gastric Bypass, Bariatric Sleeve Gastrectomy, and Colectomy: Surgical Site Infection (SSI): (None provided by developer. Assu med description for specification provided. Requested Registry Reporting) Percentage of patients age 65 and older who had a surgi cal site infection ACS

N/A/ N/A Patient-Centered Surgical Risk Assessment and Communication: The Percent of Patients who Underwen t Non-Emergency Major Surgery Who Received Preoperative Risk Assessment for Procedure-Specific Postoperative Complications using a Data-Based, Patient-Specific Risk Calculator, and who also Received a P ersonal Discussion of Risks with the Surgeon: Percentage of patients who underwent a non-emergency major surgery who had their risks of postoperative compli cations assessed by their surgical team prior to surger y using a data-based, patient-specific risk calculator and who received pe rsonal discussion of those risks. A higher value for this measure corresponds to higher quality ACSCMS-1600-P 452

We seek public comment on these proposals. c. Proposed Reporting Mechanism Changes to PQRS Individual Measures for 2014 and Beyond

In addition to the measures and measures groups we are proposing to include or remove from the existing PQRS measure set, we propose to modify how existing PQRS measures can be reported. Specifically, we propose that the following measures would no longer be reportable through the cl aims-based reporting mechanism:

● PQRS #9 (NQF# 0105): Major Depre ssive Disorder (MDD): Antidepressant Medication during Acute Phase for Patients wi th MDD: Percentage of patients aged 18 years and older diagnosed with new episode of MDD and documented as treated with antidepressant medication during the entire 84-day (12-week) acute treatment phase.

Rationale : 2012 claims data indicates that a low threshold of eligible professionals reported this measure. This proposal is also supported because ther e are still a sufficient number of measures for these eligible professionals to report via claims.

● PQRS #64 (NQF# 0001): Asthma: Assessment of Asthma Control – Ambulatory Care Setting: Percentage of patients aged 5 through 50 years with a diagnosis of asthma who were evaluated at least once for asthma control (comprising asthma impairment and asthma risk). Rationale : 2012 claims data indicates that a low threshold of eligible profe ssionals reported this measure. This measure is contained within the asthma measures group.

● PQRS #53: Asthma: Pharmacologic Therapy for Persistent Asthma - Ambulatory Care Setting. Rationale : Changing PQRS measure #64 to a registry only

measure would affect this measure. There would be no way to use the MAV with this measure because it is part of the M AV cluster associated with PQRS #64.CMS-1600-P 453

● PQRS #65 (NQF# 0069): Appropriate Treatment for Child ren with Upper Respiratory Infection (URI): Pe rcentage of children aged 3 months through 18 years with a diagnosis of URI who were not prescribed or dispensed an antibiotic prescription on or within 3 days of the initial date of service. Rationale : 2012 claims data indicates that a low threshold of eligible professionals repor ted this measure. This proposal is also supported because there are still a sufficient amount of measures for these eligible professionals to report via claims.

● PQRS #66 (NQF# 0002): Appropriate Te sting for Children with Pharyngitis: Percentage of children aged 2 through 18 years with a diagnosis of pharyngitis, who were prescribed an antibiotic and who received a group A streptococcus (strep) test for the episode. A higher rate represents better perf ormance (that is, appr opriate testing).

Rationale : 2012 claims data indicates that a low threshold of eligible professionals reported this measure. This proposal is also supported because ther e are still a sufficient amount of measures for these eligible professionals to report via claims.

● PQRS #87 (NQF# 0398): Hepatitis C: HCV Ribonucleic Ac id (RNA) Testing at Week 12 of Treatment: Percentage of patie nts aged 18 years and older with a diagnosis of chronic hepatitis C who are receiving anti viral treatment for whom quantitative HCV RNA testing was performed at no greater than 12 weeks from the initiation of antiviral

treatment. Rationale : 2012 claims data indicates that a low threshold of eligible professionals reported this measure. This proposal is also supported because there are

still a sufficient amount of measures for these el igible professionals to report via claims.

● PQRS #89 (NQF# 0401): Hepatitis C: Counseling Regarding Risk of Alcohol Consumption: Percentage of patients aged 18 ye ars and older with a diagnosis of hepatitis

C who were counseled about th e risks of alcohol use at l east once within 12-months.CMS-1600-P 454

Rationale : 2012 claims data indicates that a low threshold of eligible professionals reported this measure. This proposal is also supported because ther e are still a sufficient

amount of measures for thes e eligible professionals to report via claims.

● PQRS #90 (NQF# 0394): Hepatitis C: Counseling Regarding Use of Contraception Prior to Antiviral Therapy: Pe rcentage of female patients aged 18 through 44 years and all men aged 18 years and older w ith a diagnosis of chronic Hepatitis C who are receiving antiviral treatment who were c ounseled regarding contraception prior to the

initiation of treatment. Rationale : 2012 claims data indicates that a low threshold of eligible professionals reported this measure. This proposal is also supported because

there are still a sufficient amount of measures for these eligible professionals to report via

claims

● PQRS #116 (NQF# 0058): Antibiotic Treatment for Adults with Acute

Bronchitis: Avoidance of Ina ppropriate Use: Percentage of adults aged 18 through 64 years with a diagnosis of acu te bronchitis who were not prescribed or dispensed an antibiotic prescription on or within 3 da ys of the initial date of service. Rationale : 2012

claims data indicates that a low threshold of eligible professionals reported this measure. This proposal is also supported because there are still a sufficient am ount of measures for these eligible profession als to report via claims.

● PQRS #126: DM: Diabetic Foot a nd Ankle Care, Peripheral NeuropathyNeurological Evaluation. Rationale : 2012 claims data indicates that a low threshold of eligible professionals reported this measure. This proposal is also supported because there

are still a sufficient amount of measures fo r these eligible professionals to report via

claims.

● PQRS #127 (NQF# 0416): Diabetes Mell itus: Diabetic Foot and Ankle Care,CMS-1600-P 455

Ulcer Prevention – Evaluation of Footwear: Pe rcentage of patients aged 18 years and older with a diagnosis of diabetes mellitus who were evaluated for proper footwear and sizing. Rationale : 2012 claims data indicates that a low threshold of eligible professionals reported this measure. This proposal is also supported because there are

still a sufficient amount of measures for these eligible professionals to report via claims.

● PQRS #176 (AQA Adopted): Rheumato id Arthritis (RA): Tuberculosis Screening: Percentage of patients aged 18 y ears and older with a diagnosis of RA who have documentation of a tuberculosis (TB) screening performed a nd results interpreted within 6 months prior to rece iving a first course of ther apy using a biologic diseasemodifying anti-rheumatic drug (DMARD). Rationale : 2012 claims data indicates that a low threshold of eligible professionals repor ted this measure. This proposal is also supported because there are still a sufficient amount of measures for these eligible professionals to report via claims.

● PQRS #177 (AQA Adopted): Rheuma toid Arthritis (RA): Periodic Assessment of Disease Activity: Percentage of patients aged 18 years and older with a diagnosis of RA who have an assessment and classification of diseas e activity w ithin 12

months. Rationale : 2012 claims data indicates that a low threshold of eligible professionals reported this measure. This proposal is also supported because there are

still a sufficient amount of measures for these eligible professionals to report via claims.

● PQRS #178 (AQA Adopted): Rheumatoid Arthritis (RA): Functional Status Assessment: Percentage of patients aged 18 y ears and older with a diagnosis of RA for whom a functional status assessment was pe rformed at least once within 12 months.

Rationale : 2012 claims data indicates that a low threshold of eligible professionals reported this measure. This proposal is also supported because ther e are still a sufficientCMS-1600-P 456

amount of measures for thes e eligible professionals to report via claims.

● PQRS #179 (AQA Adopted): Rheumato id Arthritis (RA): Assessment and Classification of Disease Prognos is: Percentage of patients ag ed 18 years and older with a diagnosis of RA who have an assessment and classification of diseas e prognosis at least

once within 12 months. Rationale : 2012 claims data indicates that a low threshold of eligible professionals reported this measure. This proposal is also supported because

there are still a sufficient amount of measures for these eligible professionals to report via

claims.

● PQRS #148 (NQF# 0322): Back Pain: Initia l Visit: 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. Rationale : We believe this measure (which is only reportable when reporting the entire Back Pain measures group) is mo re appropriately reported via registry.

● PQRS #149 (NQF# 0319): Back Pain: P hysical 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. Rationale : We believe this measure (which is only reportable when reporting the entire Back Pain measures group) is more appropriately reporte d via registry.

● PQRS #150 (NQF# 0314): Back Pain : Advice for Normal Activities: Percentage of patients aged 18 through 79 y ears with a diagnosis of back pain or undergoing back surgery who received advice for normal activities at th e initial visit to the clinician for the episode of back pain. Rationale : We believe this measure (which is only reportable when reporting the entire Back Pain measures group) is more appropriately reported via registryCMS-1600-P 457

● PQRS #151 (NQF# 0313): Back Pain: Advi ce Against Bed Rest: Percentage of patients aged 18 through 79 years with a di agnosis of back pain or undergoing back surgery who received advice agains t bed rest lasting four days or longer at the initial visit to the clinician for the episode of back pain. Rationale : We believe this measure (which is only reportable when reporting the entire Back Pain measures group) is more appropriately reported via registry. d. The Clinician Group (CG) Consumer A ssessment of Healthca re Providers and Systems (CAHPS) Survey Because we believe these patient surv eys are important tools for assessing beneficiary experience of care and outc omes, under our author ity under section 1848(m)(3)(C) of the Act to select the measur es for which a group practice must report, we previously proposed a new satisfactory repor ting criterion in this section to provide group practices comprised of 25 or more eligib le professionals the op tion to complete the CG CAHPS survey for purposes of satis fying the 2014 PQRS incentive and 2016 PQRS payment adjustment. Specifically, the survey measures that we propose to use for the PQRS program includes the following 12 summary survey measures:

● 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;CMS-1600-P 458

● Care Coordination;

● Between Visit Communication;

● Helping Your to Take Me dication as Directed; and

● Stewardship of Patient Resources. The first seven measures proposed above are the same ones used in the Medicare Shared Savings Programs. As stated previ ously, we believe it is important to align measures across programs to the extent possi ble. The remaining five measures proposed above address arreas of high importance to Medicare and are areas where patient experience can inform the quality of care re lated to care coordination and efficiency. Please note that the group practice would bear the cost of having this survey administered. We seek public comment on these proposed measures. 11. Statutory Requirements and Other Consider ations for the Select ion of PQRS Quality Measures for Meeting the Criteria for Satisfactory Participation in a Qualified Clinical Data Registry for 2014 and Beyond for I ndividual Eligible Professionals For the measures for which eligible pr ofessionals participating in a qualified clinical data registry must report, sect ion 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 da ta registry. Section 1848(m)(3)(E) of the Act, as added by section 601(b) of the American Tax Relief Act of 2012, provides some flexibility with regard to the types of measur es applicable to satisfactory participation in a qualified clini cal data registry, by specifying that with respect to measures used by a qualified clinic al data registry, se ctions 1890(b)(7) and 1890A(a) of the Act shall not apply, and measures endorsed by the entity with a contractCMS-1600-P 459

with the Secretary under section 1890(a) of th e Act may be used. We propose 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. We believe it is preferable for the qualified clinical data registries with flexibility in selecting measures since we believe these clinical data registries woul d know best what measures should be reported to achieve the goal of improving the quality of care furnished by their eligible prof essionals. Although we are proposing 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 are proposing the following re quirements for the measures that must be reported to CMS by a qualified c linical data registry for th e purpose of its individual eligible professionals meeting the criteria fo r satisfactory participation under the PQRS:

● The qualified clinical da ta registry must have at least 9 measures, covering at least 3 of the 6 National Quality Strategy domains, available for reporting. The 6 National Quality Strategy domains are as follows: ++ Person and Caregiver-Cente red Experience and Outcomes

. These are measures that reflect the potenti al to improve patient-centered care and the quality of care delivered to patients. They emphasize the im portance 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.CMS-1600-P 460

++ Patient Safety

. These are measures that reflect the safe delivery of clinical services in both hospital and ambulatory set tings and include proce sses 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 c linical and preventive services among health professionals in the ca re team and with patients, caregivers, and families in order 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 ha ve 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 er rors. These measures also impact and benefit a large number of patients and emphasi ze the use of evidence to best manage high priority conditions and determine appropr iate 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.

● The qualified clinical data registry must have at least 1 outcome measure available for reporting, which is a measure that assesses the resu lts of health care that are experienced by patients (that is, patients’ clin ical events; patients’ recovery and health status; patients’ experien ces in the health system; and efficiency/cost).CMS-1600-P 461

● The qualified clinical data registry may report on process measures, which are measures that focus on a process which l eads 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.

● The outcome and process measures re ported must contain denominator data. That is, the lower portion of a fraction used to calculate a rate, propor tion, or ratio. The

denominator must describe the population eligible (o r episodes of care) to be evaluated by the measure. This should indicate ag e, condition, setting, and timeframe (when applicable). For example, “Patients ag ed 18 through 75 years with a diagnosis of

diabetes.”

● The outcome and process measures re ported must contain numerator data. That is, the upper portion of a fraction used to calculate a rate, propor tion, or ratio. The numerator must detail the quality clinical ac tion expected that satis fies the condition(s)

and is the focus of the measurement for each patient, procedure, or other unit of measurement established by the denominator (t hat is, patients who re ceived a particular service or providers that comple ted a specific outcome/process).

● The qualified clinical da ta registry must provide denominator exceptions for the measures, where approriate. That is, th ose conditions that should remove a patient, procedure or unit of measurement from the de nominator of the performance rate only if

the numerator criteria are not met. Denomi nator 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.CMS-1600-P 462

Generic denominator exception reasons used in measures fall into three general categories: Medical, Patient, or System reasons.

● The qualified clinical da ta 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 me t. (For example, Patients with bilateral lower extremity amputations would be listed as a denominator exclusion for a measure requiring foot exams.)

● The qualified clinical da ta 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, numerat or, and when applicable, denominator exceptions and denominator ex clusions of the measure. We request comments on these proposals. 12. Proposals for PQRS Informal Review Section 414.90(j) provides that eligible professionals and group practices may request an informal review of the determina tion 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 elig ible 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 professiona l satisfactorily participated in a qualified clinical data registry, we are proposing to modify §414.90(j) to allow individual eligible professionals who attempt to satisfactorily par ticipate in a qualified clinical data registry the opportunity to request an informal revi ew. We are not proposing to make anyCMS-1600-P 463

changes to the informal review process itse lf; rather, we propose to make the existing informal review process availa ble to individual eligible pr ofessionals with regard to a determination that the individual eligible prof essional did not satisfact orily participate in a qualified clinical data registry. We seek public comment on this proposal. 13. Plan for the Future of PQRS for the 2017 PQRS Payment Adjustment and Beyond a. Future PQRS Reporting Periods Under §414.90(h)(1), the reporting period fo r the PQRS payment adjustment, for the payment adjustment year, is the 12-month period from January 1 through December 31 that falls 2 years prior to the year in wh ich the payment adjustment is applied. When we first proposed the reporting periods for the PQRS payment adjustment, we received many comments from stakeholders who oppos ed basing the PQRS payment adjustment year on a reporting period occurring two years prior to the payment adjustment year (77 FR 69176). Stakeholders requested that CMS establish reporting periods occurring closer to the year in which the payment adjust ment is applied. Although we understood the commenters’ concerns, we stat ed it was not operationally feasible to create a full calendar year reporting period for the PQRS payment adju stment any later than two years prior to the adjustment year and still avoid retroactive payments or the reprocessing of claims. Although it is still operationally infeasible to establish a 12 -month reporting period occurring any later than two y ears prior to the adjustment year for reporting via claims, we are seeking comment about this issue agai n. In particular, in future years, should CMS consider establishing a repor ting period that occurs closer to the adjustment year for certain PQRS reporting mechanisms, such as the registry, EHR, and GPRO web interface reporting mechanisms? Also, should the reportin g periods still be structured as 12-monthCMS-1600-P 464

reporting periods occurring in a calendar year or multiple years? What length of time should be used for the reporting period? For example, should the PQRS allow for shorter, quarterly reporting pe riods? We would consider such comments to the extent we address or revisit the repor ting period for the PQRS payment adjustment in future rulemaking. b. Plan for the Future of the PQRS GPRO The PQRS GPRO has undergone significant changes since it was first introduced

in 2010. Given stakeholder feedback with clai ms that constant changes to the GPRO has caused confusion for GPRO participants, we did not propose many changes to the GPRO for the 2014 PQRS incentive or 2016 PQRS paym ent adjustment. However, we continue to receive stakeholder feedback urging CMS to reconsider certain policies related to the GPRO, such as:

● The definition of a PQRS group practi ce that limits the pr actice to a single

TIN . A group practice in PQRS is currently defined at §414.90(b) as “a single Tax Identification Number (TIN) with 2 or more eligible professionals, as identified by their

individual National Provider Id entifier (NPI), who have reas signed their billing rights to the TIN.” Therefore, for group practices, CM S uses the TIN as the billing unit. Any PQRS incentive payments earned are paid to the TIN holder of record. Stakeholders believe that limiting the definition of a group practice to “a single TIN” causes operational challenges to group practices that ma y operate as one heal thcare entity but, due to business purposes, bill Medicare using multiple TINs. This definition has become increasingly problematic particularly as some CMS programs with quality reporting components allow group practices containing multiple TINs to participate in these programs as a single group practice. We understand thisCMS-1600-P 465

concern. Therefore, we seek comment on whether we should modify the current definition of group practice to account fo r multiple TINs (that is, change the identification unit(s) to rec ognize a group practice). In addi tion, if we allow groups with multiple TINs to participate in PQRS as a single group practice, we seek comment on what parameters we should put in place. For example, if we allow multiple TINs to participate in PQRS as a single group practice, should we place geograp hical restrictions? Should we require that groups wishing to pa rticipate as a single group practice provide

care for the same beneficiaries?

● Self-Nomination/ Registration Process . We currently require group practices to self-nominate for each program year the group practices wish to participate in PQRS using the GPRO. Stakeholders have comme nted that annual self-nomination is duplicative, particularly when no changes to a group practice’s composition have been

made. We therefore seek comment as to whethe r, in future years, we should move away from requiring group practices to self-nominat e/register for the GP RO each year. Once a group practice is approved to participate in PQRS as a GPRO, should we automatically assume that a group practice would participate in PQRS as a GPRO for future years until the group practice indicates otherwise?

● Satisfactory Reporting Criterion fo r Group Practices Using the GPRO web

interface. Currently, if the pool of assigned be neficiaries for a group practice using the GPRO web interface is less than the specifi ed reporting threshold (i.e., 411 assigned beneficiaries for group practices comprised of 100 or more eligible professionals), then the group practice is required to report on 100 percent of assigned beneficiaries for purposes of both the PQRS incentive and pa yment adjustment. Conceivably, a group practice could have as few as one benefici ary assigned to the gr oup practice and stillCMS-1600-P 466

qualify for the PQRS incentive or avoid the PQRS payment adjustment as long as the group practice successfully reports the measur es included in the web interface for that one beneficiary. As data collected from the GPRO web interface starts getting used to calculate performance benchmarks for the Value-based Payment Modifier and/or Physician Compare, we question whether perf ormance results from group practices with few assigned beneficiaries could skew the benc hmark calculations. We, therefore, invite

comment on whether we should establish minimum reporting thresholds for group practices using the GPRO web interface as well as seek comment on what the appropriate thresholds should be. Or, should we consider requiring group practices to be in existence prior to the start of the re porting period to use the GPRO web interface?

c. Future of Use of the Claims-based Reporting Mechanism in PQRS According to the 2011 PQRS and eRx E xperience Report, approximately 72 percent of eligible prof essionals (229,282 out of 320,422 eligible professionals) participating in PQRS in 2011 did so using the claims-based reporting mechanism. The claims-based reporting mechanism is the most widely used PQRS reporting mechanism. Unfortunately, the claims-based reporting m echanism is also the reporting mechanism that allows for the most errors in reporti ng. Unlike the registry and EHR-based reporting mechanisms, where the quality measures data is submitted at the end of the reporting period, eligible professionals mu st report quality measures da ta at the time they submit their claims for payment for services. Ther efore, registry and EHR users are at an advantage as they are able to analyze their quality data at the end of the year for any changes that may need to be made due to follow up care. In a ddition, it is burdensome for CMS to analyze quality measures data from the claims-based reporting mechanism because it takes several months to analyze all claims for which reporting G-codes areCMS-1600-P 467

submitted to CMS. For these reasons, we seek comment as to whether CMS should eliminate the claims-based reporting mechanism beginning w ith the reporting pe riod (calendar year 2017) for the 2019 PQRS payment adjustment. d. Future Submission Timelines for the Registry, EHR, GPRO Web Interface and Qualified Clinical Data Registry Reporting Mechanisms In the CY 2013 PFS final rule, we finalized the following deadlines for submitting quality measures data via claims, regist ry, EHR, and the GPRO web interface:

● For an eligible professional submitting PQRS quality measures data via claims, an eligible professional is re quired to submit no later than the last Friday of the second

month after the end of the reporting period, that is, pro cessed by February 28, 2014 for the reporting periods that end December 31, 2013 (77 FR 69178).

● For eligible professionals and group practices submitting quality measures data via registry and EHR, the registry or EHR is required to submit quality measures data no later than the last Friday of the February following the applicable reporting period (for example, February 28, 2014 for reporting periods occurring in 2013) (77 FR 69182).

● For group practices submitting quality measures data via the GPRO web interface, we stated we would provide group practices that are selected to participate in the GPRO using GPRO web interface repor ting option with access to the GPRO web interface by no later than the firs t quarter of the year following the end of the reporting period under which the group practice intends to report (77 FR 69187). For example, for group practices selected for the GPRO fo r the 2013 incentive using the GPRO web interface tool, group practices selected to pa rticipate in the GPRO would be provided with access to the GPRO web interface by no later than the first quarter of 2014 forCMS-1600-P 468

purposes of reporting for the applicable 2013 reporting period for the incentive. We have received feedback from elig ible professionals, group practices, and

vendors that the submission deadlines come too soon after the close of the reporting period. Vendors, in particular, find it difficult to meet the s ubmission deadlines in time to submit quality measures data on behalf of all their participating eligible professionals and group practices. While it is not technically feasible to allow fo r submission of quality measures data reported via claims any later th an the last Friday of the second month after the end of the respective re porting period, we are exploring alternative deadlines for quality measures data that is submitted via registry, EHR, the GPRO web interface, and the newly proposed qualified clinical data regi stry. Specifically, we are exploring ways to collect quality measures data on a quarterly basis, rather than allowing for submission of quality measures data only once following a respective reporting period. We seek public comment on allowing for quarterly submissi on of quality measures data as well as

other alternatives that would allow CMS with the time necessary to perform quality measures data analysis prior to the as sessment of PQRS payment adjustments. e. Integration of Clinical Quality Meas ures Reported Under the Hospital Inpatient Quality Reporting (IQR) Program We received feedback that, for certain hospital-based physicians who bill

Medicare Part B services and therefore are able to participate in PQRS, the measures CMS has adopted under the PQRS do not adequate ly capture the nature of their practice. These physicians believe that measures such as those available in the Hospital IQR Program are more relevant to the quality of care these physicians provide. Therefore, under Section I.9, we proposed to include measures avai lable under the Hospital IQR Program that have been retooled to be reported under the PQRS during the 12-monthCMS-1600-P 469

2014 PQRS incentive and 12-month 2016 PQRS payment adjustment reporting periods via the registry-based reporting mechanism. We seek comment on whether additional Hospital IQR measures should be retooled for use in the PQRS in the same manner. In addition, we seek comment on whether CMS should attribute the reporting periods and performance results from the hospital IQR program to individual eligib le professionals or group practices who elect to have their hospital’s performance sc ores attributed to them. f. Feedback Reports For eligible professionals reporting PQRS quality measures data via claims, CMS provides each eligible professional who s ubmits a valid reporting quality data code (QDC) two feedback reports each year that provides detailed inform ation on an eligible professional’s reporting performance. Th ese feedback reports only provide data on PQRS reporting performance. Given our effo rts to align with the Value-based Payment Modifier, we are exploring ways to merge the f eedback reports provided to participants in the PQRS and Value-based Payment Modifier so that an eligible professional would receive one, merged feedback report s howing reporting data for the PQRS and performance data for the Value-based Paym ent Modifier. We seek public comment on whether feedback reports for the PQRS a nd Value-based Payment Modifier should be merged.

I. Electronic Health Reco rd (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 us e of certified EHR technology (CEHRT). Section 1848(o)(2)(B)( iii) of the Act requires that in se lecting clinical quality measures (CQMs) for eligible professionals (EPs) to report under the EHR Incentive Program, andCMS-1600-P 470

in establishing the form and manner of repor ting, the Secretary shall seek to avoid redundant or duplicative reporting otherwise requ ired. As such, we have taken steps to establish alignments among various quality re porting and payment pr ograms that include the submission of CQMs. For CY 2012 and subsequent years, §495.8(a)(2)(ii) requires an EP to successfully report the clinical quality measur es selected by CMS to CMS or the states, as applicable, in the form and manner specif ied 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 In centive Program for CY 2014 and subsequent years that include one indivi dual reporting option that a ligns with the PQRS’s EHR reporting option (77 FR 54058) and two group repor ting options that a lign with the PQRS

GPRO and Medicare Shared Savings Program (MSSP) and Pioneer ACOs (77 FR 54076 to 54078). In this proposed rule, we are pr oposing two additional al igned options for EPs to report CQMs for the Medicare EHR Incen tive Program for CY 2014 and subsequent years with the intention of minimi zing the reporting burden on EPs. 1. Proposed Qualified Clinical Data Registry Reporting Option Section 1848(m)(7) of the Act (“Integr ation of Physician Quality Reporting”) requires the Secretary to devel op a plan to integrate report ing on quality measures under the PQRS with reporting requirements relate d to meaningful use under the EHR Incentive Program. In response to section 1848(m)(7) of the Act, the PQRS and EHR Incentive Program have, in particular, taken steps to align their respective quality measures reporting criteria. For example, in the CY 2013 PFS final rule with comment period (77 FR 69190), the PQRS adopted criteria for satisfactory reporting for the 2014 PQRS incentive that aligns with the criteria for meeting the CQM component of achievingCMS-1600-P 471

meaningful use under the Medicare EHR Incen tive Program in 2014. Specifically, under the PQRS, an individual EP will meet the criteria for satisfactory reporting for the 2014 PQRS incentive using a direct EHR or EHR data submission vendor product that is

CEHRT certified to the 2014 Edition certificat ion criteria if, during the 12-month 2014 PQRS incentive reporting period, th e EP reports 9 measures c overing at least 3 National Quality Strategy domains. If an eligible professional’s CEHRT does not contain patient data for at least 9 measures covering at leas t 3 domains, then the eligible professional must report the measures for which there is patient data (see Table 91, 77 FR 69194 through 69195).

As further described in section G of th is proposed rule, se ction 1848(m)(3)(D) of the Act, as amended and added by section 601(b ) of the American Taxpayer Relief Act of 2012, includes a provision that authorizes an additional standard for individual eligible professionals to meet the PQRS by satisfactoril y participating in a qualified clinical data registry. In section G of this proposed rule, we proposed criteria for eligible professionals to satisfactorily participate in a qualified clinical data registry for the 2014 PQRS incentive. For purposes of meeting the CQM reporting component of meaningful use for the Medicare EHR Incentive Program in 2014 and s ubsequent years, we propose to allow EPs to submit CQM information using qualified c linical data registri es, according to the proposed definition and requirements for qualifie d clinical data registries discussed in section IV.I. of this proposed rule. We ar e proposing this new option under the Medicare EHR Incentive Program beginning with the re porting periods in 2014 for the following reasons: (1) to minimize duplicative reporting as directed under section 1848(o)(2)(B)(iii) of the Act for EPs who seek to participate in both the Medicare EHRCMS-1600-P 472

Incentive Program and a qualified clinical data registry under the PQRS in 2014; (2) to further integrate reporting quality reporting options under the PQRS and the EHR Incentive Program as directed under secti on 1848(m)(7) of the Act; and (3) because the proposed criteria for the satisfact ory participation in a qualified clinical data registry for the 2014 PQRS incentive are similar to crite ria we finalized for meeting the CQM component of achieving meaningful use unde r the Medicare EHR Incentive Program for

2014. In the event that the criteria establishe d for satisfactory partic ipation in a qualified clinical data registry under PQ RS in the final rule are differe nt from the proposed criteria, we intend to adopt the criteria that are finalized for PQRS to the extent feasible for the Medicare EHR Incentive Program. In additi on to the criteria that are ultimately established for PQRS, we propose the following additional criteria that an EP who seeks to report CQMs for the Medicare EHR Incentiv e Program using a qualif ied 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 electroni c specifications esta blished 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 fo r at least 9 CQMs covering at least 3 domains, then the EP must report the CQMs for which there is patie nt 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 certificat ion criteria required for CQMs, including certification of the qualified clinical data regist ry itself for the functions it will fulfill (for example, calculation, electronic submission) . We note that these proposed additional criteria are already final policies for the CQ M reporting options that we established for EPs in the EHR Incentive Program Stage 2 final rule. We refer readers to that final ruleCMS-1600-P 473

for further explanation of the policies relate d to clinical quality measure reporting under the EHR Incentive Program (77 FR 54049-54089). The electronic spec ifications for the clinical quality meas ures can be found at http://www.cms.gov/Regulations-andGuidance/Legislation/EHRIncentivePrograms/eCQM_Library.html . We are proposing this qualified clinical data registry repor ting option only for those EPs who are beyond their first year of demonstrating meaningf ul 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) . The proposed qualified clinical data registry reporting option would not enable an EP to meet th e deadline to avoid a payment adjustment because these qualifie d 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. Theref ore, EPs who are first-time meaningful EHR users must report CQMs via attestati on as established in the EHR Incentive Program Stage 2 final rule (77 FR 54050). Th e 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 c linical data registry reporting option for purposes of the Medicare EHR Incentive Prog ram (77 FR 54049-54051).Please note that this may not satisfy requirements for ot her quality reporting programs that have established 12-month reporting periods, such as the PQRS. Under section 1848(o)(2 )(A)(iii) of the Act, EPs ar e required to use CEHRT to submit information on clinical quality measures for the EHR Incentive Program. The

2014 Edition certification criteria established by the Office of the National CoordinatorCMS-1600-P 474

for Health IT (ONC) set the requirements fo r 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. As EPs are required to use CEHRT under section 1848(o)(2)(A)(i ii) of the Act, we propose that for the Medicare EHR Incen tive 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 certifi ed for the functionality that it is intended to

fulfill and is a certified EHR Modul e that is part of the EP’s CEHRT. For example, if the registry would collect patient level data from EPs, calculate the CQMs, then submit to

CMS the calculated results on behalf of the EP in either an aggregate level Quality Reporting Document Architecture (QRDA) Ca tegory III file or patient level QRDA-I files, then the registry would 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”). We not e that EPs would still need to include a certified EHR Module as part of their CEHRT th at 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 clinic al 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 e xport” criteria listed at 45 CFR 170.314(c)(1). The certified EHR Module must be part of the EP’s CEHRT.

We intend to revisit the certification crit eria with ONC in the Stage 3 rulemaking for the purpose of developing a more flexible clinical data regist ry reporting option andCMS-1600-P 475

certification criteria for the EHR Incentive Pr ogram when Stage 3 begins. We welcome public comment and recommendations on a more fl exible clinical data registry reporting option for meeting the CQM reporting requi rement for MU and on the certification criteria that ONC could incorporat e for clinical data registries. 2. Proposed Group Reporting Option – Co mprehensive Primary Care Initiative The Comprehensive Primary Care (CPC) In itiative, under the authority of section 3021 of the Affordable Care Act, is a mu lti-payer initiative fo stering collaboration between public and private health care payers to strengthen primary care. Under this initiative, CMS will pay participating primar y care practices a care management fee to support enhanced, coordinated services. Simu ltaneously, participating commercial, State, and other federal insurance pl ans are also offering an enhanced payment to primary care practices that provide high -quality primary care. Th ere 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-CareInitiative/index.html

. CPC practice sites will submit 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 for the Medicare EHR Incentive Program beginning in CY 2014 for EPs who are part of a CPC practice s ite that successfully submits at least 9 electronically specified CQMs covering 3 domai ns. We propose 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 prac tice site successfully submits and meets theCMS-1600-P 476

reporting requirements of the CPC Initiative. We propose that only those EPs who are beyond their first year of demonstrating m eaningful use may use this proposed CPC group reporting option, for the reasons explaine d in the preceding section in regard to avoiding a payment adjustment under Medicare . We propose that EPs who successfully submit as part of a CPC practice site in acco rdance with the requirements established for the CPC Initiative and using CEHRT would satisfy their CQM reporting requirement for the Medicare EHR Incentive Program. The CPC practice sites must submit the CQM data in the form and manner requ ired by the CPC Initiative. If a CPC practice site fails the requirements established for the CPC Initiative, we note that the EPs who are part of the site would have the opportuni ty to report CQMs per the requirements established in the EHR Incentive Program Stage 2 final rule for EPs to report under the EHR Incen tive Program beginning in CY 2014 (77 FR 54049). We invite public comment on these proposals. 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 speci fied and updated routinely to account for issues such as changes in billing and diagnos is codes and changes in medical practices. The requirements specified in the EHR Incentiv e Program Stage 2 final rule for EPs to report under the EHR Incentive Program beginning in CY 2014 a llow for the reporting of different versions of the CQ Ms. However, it is not technically feasible for CMS to accept data that is reported according to the sp ecifications of the ol der versions of the CQMs, including versions that may be a llowed for reporting under the EHR IncentiveCMS-1600-P 477

Program. We stated in the EHR Incentive Progra m Stage 2 final rule that, consistent with section 1848(o)(2)(B)(ii) of the Act, in the event that th e 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 propose that EPs who seek to report CQMs electronically under the Medicare EH R Incentive Program must use the most recent version of the electronic specifica tions for the CQMs and have CEHRT that is

tested and certified to the most recent vers ion of the electronic specifications for the CQMs. For example, for the reporting pe riods in 2014, EPs who want to report CQM data electronically for purposes of satisfyi ng the quality measure re porting 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-andGuidance/Legislation/EHRIncentivePrograms/eCQM_Library.html ) and ensure that their

CEHRT has been tested and certified to th e 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 r ecent version of the electronic specifications (for example, if their CEHRT ha s not been certified for that particular version) would be allowed to report CQM data to CMS by attestation for the Medicare EHR Incentive Program. For further explanation of reporti ng 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.c ms.gov/hitech/login.action ). We invite public comment on these proposal s. Specifically, we invite comment on

whether there would be sufficient time for EHR technology develope rs to update their systems and timely distribute the updated CQM versions in a way that would enable EPsCMS-1600-P 478

to report on the updated versions. Additionall y, we invite comment on whether there are any data or logic dependencies in the eCQMs that EHR technology developers have experienced which, if not bu ilt in upfront and deployed be fore a reporting period, would result in inaccurate measures, if for ex ample, an EHR technology was upgraded in the middle of an EP’s reporting period to the ne west version of the CQMs (if we finalized our proposal to only accept the lasted published specification of an CQM).CMS-1600-P 479

J. Medicare Shared Savings Program Under section 1899 of the Act, CMS has es tablished a Medicare Shared Savings Program (Shared Savings Program) to fac ilitate coordination and cooperation among providers to improve the quality of car e for Medicare Fee-For-Service (FFS) beneficiaries and reduce the rate of growth in healthcare costs. Eligible groups of providers and suppliers, includ ing 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 Federal Register on November 2, 2011 (Medicare Shared Savings Program: Accountable Care Orga nizations Final Rule (76 FR 67802)). ACOs are required to completely and accu rately report on all quality performance measures for all quality measurement reporting periods in each performance year of their agreement period. There are currently 33 qual ity performance measures under the Shared Savings Program. For Shared Savings Pr ogram ACOs beginning their agreement period in April or July, 2012, there will be two repor ting periods in the first performance year, corresponding to calendar years 2012 and 2013. For ACOs beginning their agreement periods in 2013 or later, bot h the performance year and re porting period will correspond to the calendar year. Reporting on measures associated with a reporting period will generally be done in the spring of the follo wing calendar year. For example, an ACO will submit quality measures for the 2015 reporting period in the spring of 2016. 1. Medicare Shared Savings Program and Physician Quality Reporting System Payment Adjustment Section 1899(b)(3)(D) of the Act afford s the Secretary discretion to “* * * incorporate reporting requirements and incen tive payments related to the physicianCMS-1600-P 480

quality reporting ini tiative (PQRI), under section 1848, including such requirements and such payments related to electronic prescr ibing, electronic health records, and other

similar initiatives under section 1848 * * *” a nd permits the Secretary to “use alternative criteria than would otherwise apply [unde r section 1848 of the Act] for determining whether to make such payments.” Under this authority, we incorporated certain Physician Quality Reporting System (PQR S) 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 satisfa ctory 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 §425.504. Under section 1848(a)(8) of the Act, a pa yment adjustment will apply under the PQRS beginning in 2015 based on quality reporting during the applicable reporting period. Eligible professionals who are not sa tisfactory reporters wi ll be subject to a payment adjustment applied to the PFS amount for covered professional services furnished by the eligible prof essional during 2015. For eligib le 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 amo unts), in the CY 2013 PF S final rule with comment (77 FR 69372), we amended §425.504 to include the PQRS reporting requirements necessary for eligible profe ssionals in an ACO to avoid the 2015 PQRSCMS-1600-P 481

payment adjustment. Specifically, we required ACOs on behalf of eligible professionals that are ACO providers/suppliers to successf ully report one ACO GPRO measure in 2013 to avoid the payment adjustment in 2015. We also provided that ACO providers/suppliers that are eligible profe ssionals may only participate under their ACO participant TIN as a group practice under the PQRS GPRO for purposes of avoiding the payment adjustment in 2015. Thus, ACO providers/suppliers who are eligible professionals may not seek to avoid the paym ent adjustment by reporting either as an individual 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 loca tion and also bill Medicare under the TIN of an ACO participant at anot her practice location). As a result, ACO provider/suppliers who are eligible professionals that bill under a non-ACO part icipant TIN during the year could participate under the tradit ional PQRS as either indivi dual 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 EP s would have to do so to avoid the PQRS payment adjustment with respect to thos e claims because the regulation at §425.504 only applies to claims submitted by ACO providers/suppliers that are eligible professionals billing under an ACO participant TIN. If eligible profession als within an ACO meet the requirements for the PQRS payment adjustme nt established under the Shared Savings Program, only the claims billed through th e TIN of the ACO participant will avoid the payment adjustment in 2015. For the 2014 reporting period and subseque nt reporting periods (which would apply to the PQRS payment adjustment fo r 2016 and subsequent payment years), weCMS-1600-P 482

propose to align with the requirements fo r reporting under the traditional PQRS GPRO through the CMS web interface by amending §425.504 to require that ACOs on behalf of their ACO providers/suppliers who are eligible professionals satisfa ctorily report the 22 ACO GPRO measures during th e 2014 and subsequent repor ting periods to avoid the downward PQRS payment adjustment for 2016 and subsequent payment years. Additionally, we propose to continue the current requirement that ACO providers/suppliers who are e ligible professionals may only participate under their ACO participant TIN for purposes of the payment adjustment in 2016 and subsequent years. We believe that the proposal to m odify the requirements for ACOs to satisfactorily report the 22 ACO GPRO measur es to avoid the 2016 payment adjustments

would not increase burden on AC Os or on ACO providers/supp liers that are eligible professionals because ACOs must already repor t 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 note that these proposals would not affect the Shared Savings Program quality performance standard reporting requirement under which ACOs are current ly required to report on 33 quality performance measures, which include all 22 of the ACO GPRO quality measures. Additionally, ACOs are requi red to report certain meas ures using the GPRO web interface tool. Specifically, §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 §425.308(e), which provides that qualityCMS-1600-P 483

measures that ACOs report using the GPRO web interface will be reported by CMS on Physician Compare. Under §414.90(h)(3)(i), group pr actices may report data under the traditional PQRS GPRO through a CMS web interface. The Shared Savings Program regulations 425.504(a)(1) and (b)(1) and §425.308(e) specifica lly reference the us e of the GPRO web interface for quality reporting purposes. We propose 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 414.90(h)(3)(i) and will also allow for the flexibility to us e a similar web interface in the event that operational issues are encountered with the use of the GPRO web interface. We invite public comment on this proposal. 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 finaliz ed the following requirements with regard to establishing a performance benchmark for measures: (1) During the first performance year for an ACO, the quality performance sta ndard is set at the level of complete and accurate reporting; (2) during subsequent pe rformance 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 scal e for the measures; and (4) contingent upon data availability, performance benchmar ks are defined by CMS based on nationalCMS-1600-P 484

Medicare fee-for-service rates, national Medi care 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 perf ormance 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 incor porate actual ACO performance on quality measures into the quality benchmarks af ter seeking industry in put through rulemaking.

a. Data Sources Used to Establish Performance Benchmarks The regulation governing the data that CMS will use to estab lish the performance benchmarks for quality performance measures under the Shared Savings Program is set forth at §425.502(b)(2). This provision stat es 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 perf ormance on quality scores into the quality benchmark, we would do so only in future ru lemaking so that we could seek industry input. In addition, we noted that we exp ected 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 AC Os 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 propose to amend §425.502(b)(2) to permit CMS to use all availa ble and applicable national Medicare Advantage and Medicare FFS performance data to set the quality performanceCMS-1600-P 485

benchmarks. Specifically, in addition to us ing available national Medicare FFS rates, which include data reported through PQRS, and national MA quality measure rates, we propose to use data submitted by Shared Savi ngs Program and Pioneer ACOs in 2013 for the 2012 reporting period to set the perf ormance benchmarks for the 2014 reporting period. We propose to publish the quality be nchmarks based upon these data prior to the beginning of the 2014 reporting period through subr egulatory guidance. As stated in the Shared Savings Program final rule, we w ill 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 from the 2013 reporting period would be used in conjunc tion with other avai lable data to set benchmarks for the 2015 reporting period, and so on. We propose to re tain the option of using flat percentages when data are unavailable, inadequate or unreliable to set quality performance benchmarks. Further, we clarif y our intent to combine data derived from national Medicare Advantage a nd national Medicare FFS to set performance benchmarks when the measure specifications used unde r Medicare Advantage and FFS Medicare are the same. We propose to revise §425.502(b)(2)(i) to reflect this clarification. We seek comment on these proposals, and whether ther e are other data sources that should be considered in setting performance benchmarks. b. Ensuring Meaningful Differe nces in Performance Rates Data collected by CMS from the GPRO and Physician Group Practice Demonstration participants in 2012 coupled wi th previous CMS experience indicates that using actual data to calcu late quality performance ma y result in some measures’ performance rates being tightly clustered. In this case, quality scores for the measure may not reflect clinically meaningful differe nces between the performance rates achievedCMS-1600-P 486

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 30 th and 90 th percentiles. In such an instance, even though there is little di stinction 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 for the Shared Savings Program. For example, two separate ACOs at the 50 th percentile and the 90 th percentile may have only a few tenths of a percentage point difference in their actual performance, but under the Shared Savings Program scor ing 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 be nchmarks that are simple to understand and apply, even if the rates are clustered, as the data reflect achievable performance on quality measures. However, allowing clus tered performance rates for a measure may result in payment differences that are not be associated with c linically meaningful differences in patient care, as noted in the example above. Keeping these issues in mind, we propos e to develop a methodology to spread clustered performance on measures. The firs t step in developing that methodology is to identify when performance on a measure is cl ustered. Clustering coul d be defined as less than a certain spread between performance ra tes in an identified range, for example, less than 6.0 percentage points between the pe rformance rates associated with the 30 th and

90 th 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 performa nce rates of less than x percentage points between any two deciles, for example, le ss than a 1.0 percentage point differenceCMS-1600-P 487

between the 60 th and 70 th decile.

Once a clustered measure has been iden tified, the next step is to apply a methodology to spread or separate the perfor mance rates within the measure. It is important to establish a mean ingful performance rate, or starting point, around which to differentiate or spread the pe rformance. For example, sele cting a certain percentile or median value may represent one option for es tablishing 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 negati ve direction to increase the spread, for example, applying a fixed 1.0 pe rcentage point interval between scored deciles. For example, if the starting point is the 60 th percentile, and the performance rates

at the 60 th and 70 th 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 ra tes would be 77.15 and 78.15 at the 60 th and 70 th percentiles, respectively. In the alternative, we could take the sp read calculated from a subset (for example, ACO performance only) of the underlying performance data if we believe that data reported by AC Os 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 di stribution of Medicare Advantage and/or national fee-for-service, PQRS, and ACO data . The historical AC O distribution could then be applied to the Medicare Advantag e and/or national fee-for-service, PQRS, and ACO percentile distribution to establ ish the measure’s percentiles. We believe that a clinically meaningful a ssessment of ACO quality is important.

We also are interested in providing a pathway for ACOs ne w to quality reporting toCMS-1600-P 488

achieve the quality reporti ng standard, and an incentive for experienced ACOs to continue improving and performi ng at high levels. We are th erefore proposing to use a

standardized method for calcu lating benchmark rates when a measure’s performance rates are tightly clus tered. We propose that the app lication of a methodology to reduce measure clustering would only apply to qual ity measures whose performance rates are calculated as percentiles, th at is, the methodology would not apply to measures whose performance rates are calculated as ratios, fo r example, measures such as the two ACO Ambulatory Sensitive Conditions Admissi ons 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 th e health status of the patient population being measured. We propose to define a tightly clustered measure, including clinical process and outcome measures reported through the GPRO web interface and C AHPS measures, as one that demonstrates less than a 6.0 per centage point spread in performance rates

between the 30 th and 90 th percentiles. We believe using the 30 th and 90 th percentiles as the lower and upper bounds is reasonable be cause these bounds have been given some significance in earlier rulemaking; specifically, the Shared Savings Program rule sets the

ACO’s minimum attainment level at the 30 th percentile, below which the ACO achieves no points, and the ACO achieves full points for quality reporting at or above the 90 th percentile. Further, we propose to establish the starti ng point at the 60 th percentile, the midpoint between the 30 th and 90 th percentiles, and then apply a positive 1.0 fixed percentage point interval for each decile above the 60 th percentile and a negative 1.0 fixed percentage point interval for each decile below the 60 th percentile. We recognize that spreading tightly clustered performance measures wouldCMS-1600-P 489

decrease the lower bound necessary to meet the minimum attainment level for the measure, giving ACOs new to quality reporti ng a greater opportunity to meet the quality performance standard. At the same time, spreading tightly clustered performance rates would increase the upper bound necessary fo r achieving the maximum available quality points for the measure, giving already expe rienced ACOs an incentive to continue improving quality. Applying a 1.0 fixed percenta ge point interval achieves the goal of creating meaningful differences in performance. Further, 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 57 demonstrates the or iginal spread of a quality measure, based on all available data, which is co mpressed from a range of 75.83 at the 30 th percentile to 79.23 at the 90 th percentile, that is, a spread of less than 6.0 percentage points. When the proposed methodology is applied, the 60 th percentile (or 77.15 percent), serving as the starting point, remains uncha nged. The spread incr eases 6.0 percentage points from 74.15 at the 30 th percentile to 80.15 at the 90 th percentile. As demonstrated and explained above, this methodology improve s the distinction in performance between the minimum attainment level (30 th percentile) and the maximum attainment level (90 th percentile).. TABLE 57: Proposed Methodology to Reduce Clustered Performance Rates Percentile 30 th 40 th 50 th 60 th 70 th 80 th 90 th Original performance rates using all available data 75.83 76.21 76.76 77.15 77.65 78.21 79.23 Performance rates using methodology to reduce clustering 74.15 75.15 76.15 77.15 78.15 79.15 80.15

*Example is for illustration purpos es only and is not based on actual data We propose to amend §425.502(b) to reflect this methodology to reduce clustering. We are seeking comment on thes e proposals. Specifically, we are seekingCMS-1600-P 490

comment on whether or not a methodology should be applied to spread out clustered performance on measures. We are also s eeking comment on the proposal to define clustered performance on a measure as one in which the spread of performance rates

between the 30 th and 90 th percentiles is less than 6.0 per centage 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 th an 10.0 percentage points. We are seeking comment on whether there ar e alternative methodologies that should be considered to spread out clustered performan ce on measures. In a ddition, we are seeking

comment on whether measures that are calculated as ratios should be excluded from this methodology. We are also seeking comment on whether all available relevant data should be considered when developing the sp read 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. c. Scoring CAHPS Measures Within th e Patient Experience of Care Domain The preamble to the Shared Savings Program final rule (76 FR 67895-67900) outlines the total potential point s available per domain as demonstrated in Table 58. As indicated in Table 58, under th e final rule the Patient/Careg iver Experience Domain is weighted equally with other three quality domains at 25 percent and consists of 2 measures: a composite of six Clinicia n and Group (CG) CAHPS summary survey measures (1) Getting Timely Care, Appoint ments and Information, (2) How Well Your Doctors Communicate, (3) Patient’s Rating of Doctor, (4) Access to Specialists, (5) Health Promotion and Education, (6) Sh ared Decision Making) and a Health

Status/Functional Status measure. The si x measures included in the composite will transition to pay-for-performance starting in the second year of an ACO’s agreementCMS-1600-P 491

period. In contrast, the Health Status/Func tional Status measure will remain pay-forreporting throughout the ACO’s entire agreement period.

TABLE 58: Total Points for Each Domain within the Quality Performance Standard

Domain Total Individual Measures (Table F1) Total Measures for Scoring Purposes Total Potential Points Per Domain Domain Weight

Patient/Caregiver Experience 7 1 measure, with 6 survey module measures combined, plus 1 individual measure 4 25%

Care Coordination/ Patient Safety 6 6 measures, plus the EHR measure doubleweighted (4 points) 14 25%

Preventative Health 8 8 measures 16 25%

At Risk Population 12 7 measures, including 5 component diabetes composite measure and 2 component CAD composite measure 14 25%

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/Caregiv er Experience domain is the Health Status/Functional Status measure, which is a pay-for-reporting measure for all program years. However, 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-r eported outcomes and experiences. We believe that increasing the weight of the 6 measures that will become pay-forperformance 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 onCMS-1600-P 492

patient-reported outcomes and experiences is consistent with our goal to improve the quality of care furnished by ACOs over time. Therefore, we are proposing to modify th e point scoring for the Patient/Caregiver Experience domain as demonstrated in Tabl e 59. 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 note that this change would not affect the weighting of the domain itself in relationship to the other thr ee domains; it would remain 25 percent of the ACO’s total quality performance score.

TABLE 59: Modified Total Points for Each Domain within the Quality Performance Standard

Domain Total Individual Measures (Table F1) Total Measures for Scoring Purposes Total Potential Points Per Domain Domain Weight

Patient/Caregiver Experience 7 7 individual survey module measures 14 25% Care Coordination/ Patient Safety 6 6 measures, plus the EHR measure doubleweighted (4 points) 14 25%

Preventative Health 8 8 measures 16 25%

At Risk Population 12 7 measures, including 5 component diabetes composite measure and 2 component CAD composite measure 14 25%

Total 33 28 58 100%

We believe that giving equal weight to each of the Patient/Caregiver Experience measures modules is appropria te because it places greate r 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 furnishedCMS-1600-P 493

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 seek comment on our proposal to m odify the point scoring within the Patient/Caregiver Experience domain.CMS-1600-P 494

K. Value-Based Payment Modifier and Physician Feedback Program

1. Overview Section 1848(p) of the Act require s that we establish a value-based payment modifier and apply it to specific physicians and groups of physicians the Secretary determines appropriate starti ng 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 se ction 1848(k)(3)(B) of the Act. Section 1848(p)(4)(C) of the Act requir es the value-based payment m odifier to be budget neutral. In this proposed rule, we continue to pha se in implementation of the value-based payment modifier by applying it to small groups of physicians and by increasing the amount of payment at risk. We also propos e to refine the methodologies used in our approach to calculating the valu e-based payment modifier in order to better identify both high and low performers for upward and downward payment adjustments. 2. Governing Principles for Physician Va lue-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 pot ential to help transform Medicare from a passive payer to an active purch aser of higher quality, more efficient and more effective healthcare by providing upward payment ad justments under the PFS to high performing physicians (and groups of physicians) and downward adjustments for low performing physicians (and groups of physicians). We al so noted that Medicare is implementing value-based payment adjustments for other t ypes of services, including inpatient hospital services. Further, in implementing value-ba sed purchasing initiatives generally, we seek to recognize and reward high quality care and quality improvements, and to promoteCMS-1600-P 495

more efficient and effectiv e care through the us e of evidence-based measures, the reduction in administrative burden and dup lication, and less fragmented care.

In the CY 2013 PFS final rule with co mment 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 diffe rences in performance among physicians and physician groups, reflect the di versity 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 pr actice configurations. The choice of level should align with the requirements of other phys ician quality reporting programs.

● A focus on shared accountability . The value-based payment modifier can facilitate shared accountability by assessing performance at the gr oup 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 Physician Feedback reports should provide meaningful and actionable inform ation 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 gro ups of physicians with feedback reports on the quality and cost of care they furnish to their patients.CMS-1600-P 496

● 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 ab le to elect how the value-based payment modifier would apply to their payment unde r 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 phys ician 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 comme nt 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. We identify a group of physic ians as a single taxpayer identification number (TIN). For purposes of establishing group size only, we use the definition of an eligible professional as speci fied in section 1848(k) of th e Act. We apply the valuebased payment modifier to the Medicare paid amounts for the items and services billed

under the PFS at the TIN level so that benefici ary cost-sharing is not affected. We apply the value-based payment modifier to the items and services billed by physicians under the TIN, not to other eligible professionals that also may bill under the TIN. We identify groups of physicians subject to the value- based payment modifier for CY 2015 based on a query of Medicare’s Provider Enrollment, Chain, and Ownership System (PECOS) on October 15, 2013, and we remove any groups fr om this list if, based on a claims analysis, the group of physicians did not have 100 or more eligible professionals that submitted claims during the performance period (77 FR 69310). We established CY 2013 as the performance period for the value-based paymentCMS-1600-P 497

modifier that will be applied to pa yments during CY 2015 and CY 2014 as the performance period for the value-based payment modifier that will be applied to payments in CY 2016 (77 FR 69314). We also finalized that we will not apply the value-based payment modifier in CYs 2015 a nd 2016 to any group of physicians that is participating in the Medicare Shared Savings Program, the Pioneer ACO model, or the Comprehensive Primary Care Initiative or ot her similar Innovation Ce nter initiatives (77 FR 69313). From an operational perspective, we will apply this policy to any group of physicians in which one or more physician(s) participate(s) in one of these programs or initiatives during performance periods CY 2013 or CY 2014. We finalized policies to determine the amount of the value-based payment modifier for CY 2015 by categorizing groups of physicians with 100 or more eligible professionals into two categories. Category 1 includes groups of physicians 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. Category 2 includes groups that do

not fall within either of the two subcategories (a) or (b) of Category 1. Groups within Category 1 may elect to have their va lue-based payment modifier for CY 2015 calculated using the quality -tiering methodology, which coul d result in an upward, neutral, or downward adjustment amount. Fo r groups that make this election, we use the performance rates on the quality measur es reported through the PQRS reporting mechanism that the group selects for 2013 (that is, group practice reporting option (GPRO) web-interface, CMS-qua lified registry, or PQRS Ad ministrative Claims option) and the performance rates on three outcome me asures to calculate the group’s quality composite under the quality-tiering approac h. If a group in Category 1 that elects quality-tiering self-nominates for the GPRO web-interface or CMS-qualified registryCMS-1600-P 498

and does not meet the satisfact ory reporting criteria for th e PQRS incentive payment, we use the group’s performance on the Administ rative Claims option to calculate the group’s quality composite under the quality-tiering approach. The value-based payment modifier for groups of physicians in Categor y 1 that do not elect-quality tiering is 0.0 percent, meaning that these groups will not receive a payment adjustment under the value-based payment modifier for CY 2015. Category 2 includes groups that do not fall within either of the two subcategories (a) or (b ) of Category 1. For th e groups that are in Category 2, the value-based payment modifi er for the CY 2015 payment adjustment period is -1.0 percent. We also finalized the following policie s to calculate the value-based payment modifier using the quality-tiering approac h. The quality-tiering approach requires creation of quality and cost composites for each group of physicians subject to the valuebased payment modifier. The following brief summary describes the policies adopted in last year’s final rule w ith comment period (77 FR 69320 through 69326). To create the quality composite, we create a standardi zed score for each quality measure reported through the group’s selected PQRS reporting mechanism, as well as the group’s performance on three outcome measures (t wo composite measures of potentially preventable hospital admissions for acute and chronic conditions and a measure of allcause hospital readmissions). The standard ized score for each quality measure is calculated by dividing the difference betw een the group’s performance rate and the measure’s benchmark (the national mean of the measure’s performance rate from the previous year) by the measure’s standard de viation. The standard ized scores for each

measure are classified into one of six domain s based on the national pr iorities related to clinical care, patient expe rience, population/community health, patient safety, careCMS-1600-P 499

coordination, and efficiency established in the National Quality Strategy. Within each domain, we weight each measure’s standardi zed score equally to arrive at a domain score. The domains are then equally wei ghted to form a quality of care composite. When a domain does not contain quality meas ures (for example, when a group chooses a reporting mechanism that does not contain m easures in the domain), the remaining domains would be equally weighted to form the quality of care composite. Additionally, we finalized a policy to construct the co st composite using five measures of total per capita costs for beneficiaries attribut ed to the group practice. The five measures are total per capita costs (both Parts A and B) and tota l per capita costs for beneficiaries with four specific chronic conditions: chronic ob structive pulmonary disease (COPD), heart failure, coronary artery disease (CAD), and diabetes. We attribute beneficiaries to each group using a two-step process that examines whether the group furnished the plurality (that is, more than a ny other group) of primar y care services to the beneficiary. This attribution methodology is similar to the attr ibution rule we use for the Medicare Shared Savings Program and the PQRS GPRO web interface. We create a standardized score for each measure by dividing the difference between the group’s performance rate and the measure’s benchm ark (the national mean of the measure’s performance rate for the performance period) by the measure’s standard deviation. We then classify each measure’s standardized score into one of two domains: total per capita

costs for all attributed bene ficiaries (one measure) and total per capita costs for all

attributed beneficiaries with specific conditions (four meas ures). Within each cost domain, each measure is equa lly weighted. In those in stances in which we cannot calculate a particular cost measure because, for example, the number of cases is fewer than 20, we will weight the remaining cost measures in the domain equally. Similar toCMS-1600-P 500

the quality of care composite, each cost domai n is weighted equally to form the cost composite, unless one of the domains contains no measures, in which case the remaining domain will be weighted at 100 percent. Under the quality-tiering approach, each group’s quality and cost composites are classified into high, average, and low cat egories depending upon whether the composites

are one or more standard deviations above or below the mean. We compare the group’s quality of care composite classification w ith the cost composite classification to determine the value-based payment modifi er adjustment for the CY 2015 payment adjustment period according to the amounts in Table 60.

TABLE 60: 2015 Value Modifier Amount s for the Quality-Tiering Approach

Quality/cost Low cost Average cost High cost 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 +1.0 x if (1) reporting Physician Quality Reporting System quality measures through the GPRO web-interface or CM S-qualified registry, and (2) average beneficiary risk score is in the top 25 percent of all beneficiary risk scores. To ensure budget neutrality, we first aggregate the downward payment adjustments in Table 60 for those groups in Ca tegory 1 that have elected quality tiering with the -1.0 percent downward payment adjustments for groups of physicians subject to the value-based payment modifi er that fall within Categor y 2. Using the aggregate downward payment adjustment amount, we then calculate the upward payment adjustment factor (x). These calculations will be done after the performance period has ended. Accordingly, because the perfor mance period for the CY 2015 value-based payment modifier is CY 2013, these calcula tions will be performed after December 31,

2013. This scoring methodology also prov ides an additional upward payment adjustment of +1.0x to groups of physicians th at care for high-risk patients (as evidencedCMS-1600-P 501

by the average HCC risk score of the attribut ed beneficiary population) and submit data on PQRS quality measures through PQRS vi a the GPRO using the web-interface or CMS-qualified registry. We will increase the upward payment adjustment from +2.0x to +3.0x for groups of physicians classified as high quality/low cost and from +1.0x to +2.0x for groups of physicians that are either high quality/average cost or average quality/low cost if the group of physicians’ attributed beneficiary population has an average risk score that is in the top 25 pe rcent of the distributi on of beneficiary risk scores nationwide. This additional upwa rd payment adjustment (+1.0x for the CY 2015 payment adjustment period) will not apply to groups of physicians that select the PQRS Administrative Claims reporting mechanism. Finally, we provide an informal review process to enable a group of physicians to i nquire about the calcula tion of its value-based payment modifier. Since adopting these policies, the Institute of Medicine released a new report, “Interim Report of the Committee on Geographi c Variation in Health Care Spending and Promotion of High-Value Care: Preliminary Co mmittee Observations,” observing that to improve value, “payment reforms need to create incentives to encourage behavioral change at the locus of care (providers and patient).” 2 Our approach to implementing the value-based payment modifier is consistent with this vision be cause it ties a group practice’s payment to its actio ns by rewarding high performing groups of physicians and penalizing low-performing groups of physicians. On January 31, 2013, we submitted two cost me asures - the total per capita costs

for all attributed beneficiaries measure and the Medicare Spending per Beneficiary measure - to the National Quality Forum for endorsement. We have gained valuable

2 Institute of Medicine, “Interim Report of the Committee on Geographic Variation in Health Care Spending and Promotion of High-Value Health Care: Preliminary Committee Observations,” (2013), p.29.CMS-1600-P 502

feedback on a variety of issues (for example, attribution and risk adjustment) as we work with the National Quality Forum on the endor sement process for our cost measures. CMS is committed to refining our cost m easures through future rulemaking based on feedback we receive from NQF and other stakeholders. As discussed below in section K.5, we provided 2011 Quality and Resource Use Reports (QRURs) to 54 large group practices and to over 31,000 indivi dual physicians in nine states that practice in group of physicians with 25 or mo re eligible professionals. These reports contained performance inform ation on the quality of care furnished, and the cost of that care, to Medicare bene ficiaries by these physicians and groups of physicians. Overall findings and results from these reports confirm that we can develop reliable and valid quality a nd cost measures at the group and individual physician level on which to base the value-based payment m odifier. Moreover, group report recipients have found the reports informative and they have suggested ways to improve them to facilitate care coordination and quality impr ovement. We have adopted many of these suggestions in the QRUR reports that we plan to make available later this year. 4. Provisions of this Proposed RuleIn this proposed rule, we propose additions and refinements to the existing valuebased payment modifier policies. Th ese proposals continue our phased-in implementation of the value-based paymen t modifier by reinforcing our emphasis on quality measurement, alignment with the PQRS, physician choice, and shared accountability. Specifically, th is proposed rule include s the following proposals:

● To apply the value-based payment modi fier to groups of physicians with 10 or more eligible professionals in CY 2016.

● To make quality-tiering mandatory fo r groups within Category 1 for the CYCMS-1600-P 503

2016 value-based payment modifier, except that groups of physicians with between 10 and 99 eligible professionals w ould be subject only to any upward or neutral adjustment determined under the quality-tiering met hodology, and groups of physicians with 100 or more eligible professionals would be s ubject 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 qua lity reporting mechanisms for the valuebased payment modifier with those availa ble 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 benc hmarking methodology to account for the specialties of the physicians in the group. a. Group Size

In the CY 2013 PFS final rule with comme nt 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 th at it would be reasonable to focus on groups with 100 or more eligible pr ofessionals before expanding th e application of the valuebased 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 believe it is appropriate to lower the group size threshol d for CY 2016 payment adjustments, which will be based on performance during CY 2014. Table 61 shows the number of groups,CMS-1600-P 504

eligible professionals (EPs) and physicians in groups of various sizes based on an analysis of calendar year 2011 claims with a 90-day run-out period. We note that the

number of EPs includes othe r practitioners, such as phys ician assistants and nurse practitioners, in a ddition to physicians. TABLE 61: Eligible Professional/Physici an Group Size Distribution (2011 claims) Group

Size Number of Groups (TINs) Eligible Professional s Number of Physicians Percent of Physicians Cumulative Percentage 100+ EPs 1,132 311,094 215,936 25.7% 25.7% 50-99EPs 1,622 110,862 76,318 9.1% 34.8% 25-49 EPs 3,729 126,596 88,065 10.5% 45.3% 20-24 EPs 1,890 41,334 28,756 3.4% 48.7% 10-19 EPs 8,653 116,379 81,829 9.7% 58.4%

2-9 EPs 68,702 241,732 174.758 20.8% 79.2%

1 EP 222,097 222,097 175,115 20.8% 100.0% Total 307,825 1,170,094 840,777 100% We propose to apply the value-based paym ent modifier in CY 2016 to groups of physicians with 10 or more elig ible professionals. We estimate that this proposal would cause approximately 17,000 groups (TINs) and nearly 60 percent of physicians to be affected by the value-based payment modifi er in CY 2016. We believe this proposal continues 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 al l physicians in CY 2017. As discussed below in Section K.5, CMS conducted statistical re liability analyses on the PQRS quality measures and the cost measures contained in the 2010 and 2011 groups and individual Quality and Resource Use Reports (QRURs). These reports contained the same PQRS quality measures and cost measures that we will use for the value-based payment modifier. Both the qual ity and cost measures in the group reports were statistically reliable at a high level. Moreover, the average reliability score was high for 98 percent of the individually reported PQRS measures and all of the cost measuresCMS-1600-P 505

(with a case size of at least 20) included in the individual f eedback reports. Given these results, we believe that we can reliably a pply a value-based payment modifier to groups of physicians with 10 or more eligible prof essionals in CY 2016 and to smaller groups and to solo practitioners in future year s. Accordingly, we propose to revise the regulations at §414.1210 to reflect that th e CY 2016 value-based payment modifier would be applicable to physicians that ar e in groups with ten or more eligible professionals. We seek comments on this proposal. We propose to identify groups of physicians that would be subject to the valuebased payment modifier (for example, fo r 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 de scription 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 anot her date certain, however, we propose to perform the query within 10 days of the close of the PQRS group self-nomination/registration process during the relevant performance period year. For example, for the CY 2016 value-based payment modifier, within 10 days ofthe close of the PQRS group selfnomination/registration process that will occu r during the fall of CY 2014. We propose to revise the regulations at §414.1210(c) to reflect that id entification 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 analys is, the group of physicians did not have the required number of eligible professionals, as defined in §414.1210(a), that submitted claims during the performance period for the applicable calendar year payment adjustment period. We seek comment on this proposal.CMS-1600-P 506

b. Approach to Setting the Value-Based Pa yment Modifier Adjustment Based on PQRS Participation

In the CY 2013 PFS final rule with co mment period (77 FR 69311), we adopted a policy to categorize groups of physicians s ubject 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-nominat e 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 physic ians in Category 1 may elect to have their value-based payment modifier for CY 2015 calculated usi ng the quality-tiering methodology, which could result in an upwar d, neutral, or downward adjustment amount. The value-based paymen t modifier for groups of phys icians 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 valu e-based payment modifier for CY 2015 is - 1.0 percent. We propose to use a similar two-categor y approach for the CY 2016 value-based payment modifier based on a group of physicia ns’ participation in the PQRS but with different criteria for inclusion in Category 1. Category 2 would include those groups of physicians that are subject to the CY 2016 va lue-based payment modifier and do not fall within Category 1. Our proposal is 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 indivi dually. We established in the CY 2013 PFSCMS-1600-P 507

final rule with comment period that groups of physicians that wish to participate as a group in the PQRS during CY 2014 must self-n ominate and select one of three PQRS GPRO reporting mechanisms: GPRO web interface, qualified registry, or EHR (77 FR 69199 through 69200 (Table 93)). We also es tablished 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 through 69 202) and we have proposed to modify

these criteria as described in Table 27 of this proposed rule. In order to maintain alignment with the PQRS, for purposes of the CY 2016 value-based payment modifier, we propose 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 understand 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 prac tice. For example, a thoracic surgeon in a multi-specialty group practice may wish to report data on different quality measures than those on which a dermatologist or urologist in the same gr oup practice may wish to report data. In addition, eligible pr ofessionals in these groups of physicians may wish to use different reporting mechanisms to report da ta for PQRS, such as the claims-based reporting mechanism, EHRs, qualified registries, or the proposed qualified clinical data registry reporting mechanism. Theref ore, for the CY 2016 value-based payment modifier, we propose to include in Category 1 groups of physicians that do not self-CMS-1600-P 508

nominate to participate in the PQRS as a gr oup 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 i ndividuals for the CY 2016 PQRS payment adjustment, or in lieu of satisfactory re porting, satisfactorily pa rticipate in a PQRSqualified clinical data regist ry for the CY 2016 PQRS paymen t adjustment. The criteria for satisfactory reporting by individual eligib le professionals for the claims, qualified registry, and EHR reporting mechanisms for the CY 2016 PQRS payment adjustment

were established in the CY 2013 PFS fina l rule with comment period (77 FR 69194 through 69195 (Table 91), 69200-69202). We ar e proposing in Table 25 of this proposed rule the criteria for satisfactory participation in a qualified clinical da ta registry and other proposed changes to the criteria for sa tisfactory reporting for the CY 2016 PQRS payment adjustment. Another way to state this proposal is that a group of physicians subject to the CY 2016 value-based payment modi fier would be in Category 1 if at least 70 percent of the individual eligible professionals in th e group avoid the CY 2016 PQRS payment adjustment by any of the repo rting options availa ble under the PQRS. We are proposing a 70 percent threshold for three reasons. First, although we expect 100 percent of a group’s e ligible professionals to par ticipate in PQRS, we believe

that we will obtain a reliable in dicator of the group’s quality if at least 70 percent of the eligible professionals in the group meet the criteria to avoid the PQRS payment adjustment. We recognize that many individu al eligible professi onals may be reporting data on PQRS measures for the first time in CY 2014 and we do not seek to impose too high a burden on these groups that does not incr ease the reliability of the group’s quality performance data for purposes of the value- based payment modifier. Second, the vast majority of eligible professionals participate in the PQRS as indivi duals, not as membersCMS-1600-P 509

of a group practice. Third, based on an ex amination of 2011 PQRS data, at least 63 percent of groups of physicians (TINs) part icipating in the PQRS with fewer than 50 eligible professionals would meet the 70 pe rcent threshold already. At a 70 percent threshold, however, only 29 percent of groups of physicians participating in the PQRS of more than 100 eligible professionals have at least 70 percent of their eligible professionals meeting the criteria for satisfa ctory reporting in 2011. We believe that this

result is consistent with our policy to encourage group reporting by the very largest groups of physicians. Indeed, these large groups have several reporting mechanisms available under the PQRS GPRO including th e web interface, registries, and EHRs. Accordingly, we also propose to revise the regulation text at §414.1225, which was previously specific to the CY 2013 performa nce period and only referred to quality measures reported by groups of physicians rather than individual eligible professionals within a group. We seek comment on these proposals. For a group of physicians that would be subject to the CY 2016 value-based payment modifier to be included in Category 1, the criteria for sa tisfactory reporting (or the criteria for satisfactory part icipation, in the case of th e 70 percent option described above) would need to be met during the CY 2014 performance period for the PQRS CY 2016 payment adjustment. We note that any re porting periods that are established under the PQRS would continue to apply for purpos es of the PQRS. In the event that the

criteria that are finalized fo r the CY 2016 PQRS payment adjustment differ from what is proposed for the PQRS in this proposed rule, our intention is to al ign the criteria for inclusion in Category 1 to the extent possi ble with the criteria that are ultimately established for the CY 2016 PQRS payment adjustment. We propose to more fully phase-in th e quality-tiering methodology for calculatingCMS-1600-P 510

the value-based payment modifier for CY 2016 based on the number of eligible professionals in the group. We propose that groups in Category 1 would no longer have the option to elect quality tie ring for the CY 2016 value-base d payment modifier (as was the case for the CY 2015 value-based payment m odifier) and instead would be subject to mandatory quality tiering. We propose 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 el igible professionals would be subject only to upward or neutral adjustments derive d under the quality-tie ring methodology, while groups of physicians with 100 or more eligible professionals would be subject to upward, neutral, or downward adjustments deri ved under the quality-tiering methodology. In other words, we propose that groups of physic ians in Category 1 with between 10 and 99 eligible professionals would be held harm less from any downward adjustments derived from the quality-tiering methodology for the CY 2016 value-based payment modifier. We believe this proposed approach would rewa rd groups of physicians that provide highquality/low-cost care, reduce program complexity, and more fully engage groups of physicians in our plans to implement the va lue-based payment modifier. Accordingly, we propose to revise the re gulations at §414.1270 to reflec t the proposal to make the quality-tiering methodology mandato ry, with the exception noted above, for all groups of physicians subject to the va lue-based payment modifier in CY 2016 that fall within Category 1. We seek comment on this proposal. We are also revisi ng the regulations at §414.1270 to clarify that for the CY 2015 payment adjustment period a group may be determined under the quality-tiering methodol ogy to have poor performance based on low quality and high costs, low quality and av erage costs, or average quality and high

costs.CMS-1600-P 511

For groups of physicians with 100 or more eligible professionals, we believe it is appropriate to begin to phase in bo th the upward and the downward payment adjustments under the quality-tiering methodology for the CY 2016 value-based payment modifier. Based on 2011 claims, we estimate that there are approximately 1,100 groups of 100 or more eligible professional s. We believe that such large groups should already be focused on quality improvement and that they have ample ability to do so. These groups should have developed the internal means to track and improve the quality of care they furnish to Medicare FFS beneficiaries. For example, several large group practices that have participated in the PQRS GPRO have redesigned their electronic medical records systems to capture data to continually monitor their performance on those quality measures and pr ovide alerts at the point of care to physicians and practitioners to further faci litate provision of high quality care to

Medicare beneficiaries. Moreover under the quality-tiering methodology for calculating the value-based payment modifier as we es tablished in the CY 2013 PFS final rule with comment period and have updated in this pr oposed rule, groups of physicians that furnish high quality care will not have a downward adjustment, even if they furnish such care at high costs. Thus, we believe it is appropria te to apply both upward and downward adjustments under the quality-tie ring methodology to groups of physicians with 100 or more eligible professionals in 2016. We seek comments on our proposals and, in the alternative, whet her we should treat groups of physicians with 100 or more eligible professionals in the same manner as we propose to trea t groups of physicians with between 10 and 99 eligible professiona ls under the quality-tiering methodology as described previously. Accordingly, we propose to revise §414.1270 to reflect these proposals,CMS-1600-P 512

including our proposals regarding mandatory quality-tiering. We seek comment on these proposals. c. Payment Adjustment Amount Section 1848(p) of the Act does not speci fy 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 requir es the value-based payment m odifier be implemented in a budget neutral manner. Budget neutrality mean s that payments will increase for some groups of physicians based on high performan ce 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 resu lt of application of th e 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 qua lity/high cost and for groups of physicians in Category 2 (77 FR 69323-24). Although we re ceived comments suggesting that larger payment adjustments (both upward and downward) would be necessary to more strongly encourage quality improvements, we finalized our proposed adjustments as we believed they better aligned with our goal to gradually phase in the value-based payment modifier. However, we noted that as we gained experi ence with our value-based payment modifier methodologies, we would likely consider ways to increase the amount of payment at risk (77 FR 69324). Since last year, we have further c onsidered comments on ways to better encourage improvements in physician efficiency and quality while st ill gradually phasing in the value-based payment modifier. We agree with commenters on the value ofCMS-1600-P 513

gradually strengthening the incentives to improve performance by offering greater rewards for strong performance along with increased financial risk for poorer performance. As discussed below in sect ion K.5, CMS conducted statistical reliability analysis on the PQRS quality measures and the cost measures contained in the 2010 and 2011 groups and individual physician feedback reports. These reports contained the same PQRS quality measures and cost measures that we will use for the value-based payment modifier. The quality and cost measur es in the group reports were statistically reliable at a high level. Moreover, the averag e reliability score 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 feedback reports. Thus, we believe 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 propose to increase the downward ad justment 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 fa ll in Category 2. In addition, we propose 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 classifi ed as either low quality/average cost or average quality/high cost. We propose to revise §414.1270 and §414.1275(c) and (d) to reflect the proposed increase to a 2.0 percen t adjustment under the value-based payment modifier for the CY 2016 payment adjustment period. We are also making a technical correction to §414.1275(c) to clar ify the PQRS GPRO reporting mechanisms available inCMS-1600-P 514

CY 2013. Table 62 shows the proposed quality -tiering payment adjustment amounts for CY 2016 (based on CY 2014 performance). TABLE 62: 2016 Value-Based Payment Modifier Amounts -

CY 2016 Quality/cost Low cost Average cost High cost 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 Physicia n 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 fact or (“x”) would be determined after the performance period has ended based on th e aggregate amount of downward payment adjustments. We note that any funds deri ved from the application of the downward adjustments to groups of physicians with 100 or more eligible pr ofessionals and the downward 2.0 percent adjustment applied to those groups of physicians subject to the value-based payment modifier that fall in Ca tegory 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 benefici ary population). We seek comments on our proposal to increase th e downward value-based payment modifier to 2.0 percent for those groups of physicians wi th 10 or more eligible professionals that are in Category 2 and for groups of physicians with 100 or more e ligible professionals that are classified as low quality/high co st groups for the CY 2016 payment adjustment period.

d. Performance PeriodCMS-1600-P 515

In the CY 2013 PFS final rule with comme nt 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 th at is applied to items and services for which payment is made under the PFS during CY 2016. We received comments requesting us to close the gap between the e nd 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 incen tives for quality improvement. 3 We understand that many private sector plans start to provide payment adjustment within seven months of close of the performance period. 4 Because the payment adjustment periods for the value-based payment modifier are tied to the PFS, which is updated on an a nnual calendar year basis, options to close the one year gap between the close of the pe rformance period and the start of the payment adjustment period center around altering the start and end dates of the performance period, and not the payment adjustment period. As discussed previously in this proposed rule, one option could be to adjust the pe rformance period for quality data reported through the PQRS. In addition, we could calc ulate the total per capita cost measures on an April 1 through March 31 basis, thus closing the gap by three months. However, a byproduct of altering the performa nce periods is that the deadline for submitting quality information would have to oc cur at the end of the performance period. In addition, the review period during which grou ps of physicians will be able to review the calculation of the value-based payment modifier would be shortened to allow the

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-Sect or 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

.CMS-1600-P 516

necessary system changes to implement th e adjustment by the January 1 deadline for implementation of the annual PFS. We seek comment on the potential merits of altering our current performance periods. Though we appreciate the comments reques ting that we shorten the gap between the performance period and the payment ad justment period, we propose to use CY 2015 as the performance period for the value-base d payment modifier adjustments that will apply during CY 2017. We believe it is impor tant 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 valuebased payment modifier beginning not late r than January 1, 2017. Accordingly, we propose to add a new paragraph (c) to §414.1215 to indicate that the performance period is CY 2015 for value-based payment modi fier adjustments made in the CY 2017 payment adjustment period. We seek comment on this proposal. We also are striving to provide more tim ely feedback to stakeholders regarding their cost and quality of care th ey furnish to Medicare beneficiaries. We note that in CY 2013, we plan to provide physician feedback reports (Quality and Resource Use Reports (QRURs)) starting in mid-September, which is eight and one-half months from the close of the CY 2012 reporting period (that is, December 31, 2012) and five months from the close of the quality data submission period (April 15, 2013) for the GPRO web interface. These QRURs will be made available to all gr oups of 25 or more eligible professionals and will preview how the groups of physicians would fare under the value-based payment modifier policies, albeit on CY 2012 data, that we established in the CY 2013 final rule with comment period. Moreover, we anticipat e that these reports will contain actionable information regarding benefici aries attributed to the gr oup, thereby enabling physiciansCMS-1600-P 517

in the group to better coordina te care and improve the quality of care furnished. We also are in the process of enhancing our qual ity reporting and report dissemination infrastructure such that we expect to provi de QRURs in 2014 even closer to the end of the performance period. Despite these efforts, we expect there w ill always be a gap between the close of the performance period and the beginning of the payment adjustment period to account for various operational processes, albeit one th at we are striving to reduce. During this gap, we allow for a three-month claim run out so that physicians are evaluated on complete and accurate information. We standa rdize the amounts on these claims in order to calculate the cost measures. This proce ss takes one month. Conc urrent with these two processes, we obtain the data reported for quality measurement and calculate the PQRS measures – a process which takes at least six months. In addition, we then calculate each group’s cost and quality composites and impl ement the quality-tiering methodology. We then produce and verify the reports. These processes combined take approximately eight to nine months. We are striving to find ways to make these processes more efficient as we gain more experience producing these reports. e. Quality Measures

In the CY 2013 PFS final rule with co mment period (77 FR 69315), we aligned our policies for the value-based payment modi fier 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 us ed 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 toCMS-1600-P 518

report under the PQRS are us ed 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 physic ians subject to the value-based payment modifier: (1) a composite of rates of potenti ally preventable hospital admissions for heart failure, chronic obstructive pulmonary disease, and diabetes; (2) a composite rate of potentially preventable hospital admissions fo r dehydration, urinary tr act infections, and bacterial pneumonia, and (3) rates of an a ll-cause hospital readmissions measure (77 FR 69315). 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, but not sufficient, component of quality impr ovement. We also seek not to place an undue burden on physicians to report such data so that they can furnish care to

beneficiaries in an efficient manner. We propose to include, therefore, for purposes of the value-based payment modifier for CY 2016, all of the PQRS GPRO reporting mechanisms available to group practices fo r the PQRS reporting periods in CY 2014 and all of the PQRS reporting mechanisms availabl e to individual eligible professionals for the PQRS reporting periods in CY 2014. A ccordingly, we also propose to update our regulations at § 414.1220 to reflect this proposal. We note 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 (Tables 24 and 25). We believe that data submitted via qualified registries for this 6-month reporting period would be sufficiently reliable on whic h to base a group of physicians’ qualityCMS-1600-P 519

composite score under the value-based payment modifier because in order for us to use the data to calculate the score, we would re quire data for each quality measure on at least 20 beneficiaries, which is the reliability st andard for the value-based payment modifier (77 FR 69322-69323). Given this level of reli ability, we believe a six-month reporting period would be comparable to a 12-month re porting period for the purpose of evaluating the quality of care furnished by a group of phys icians subject to the value-based payment modifier. We seek comment on this proposal. We also propose to utilize all of the quality measures that are available to be reported under these various PQRS reporti ng mechanisms, including quality measures reported through qualified clinical data regi stries, 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. In additi on, we propose that groups of physicians with 25 or more eligible professionals will be able to elect to have included in their valuebased payment modifier for CY 2016 the pati ent experience of care measures collected through the PQRS CAHPS survey for CY 2014. These reporting mechanisms and the patient experience measures are described in Tables 24 through 27. We note that the

three outcome measures that we finalized in the CY 2013 PFS final rule with comment period and in §414.1230 – the two composites of rates of potentially preventable hospital admissions and the all-cause hospital readmi ssion measure – would continue to be included in the quality measures used for th e value-based payment modifier in CY 2016. Although we have received comments to re quire a core set of quality measures for the value-based payment modifier, we believ e it is premature to require reporting on limited set of measures by all physicians until physicians have had a chance to choose measures that are meaningful to their practic e. As we indicated previously, our primaryCMS-1600-P 520

focus is on measurement and alignment duri ng the phase-in of the value-based payment modifier, because we believe it is difficult to maintain high-quality care and improve quality and performance without measuremen t. Thus, it is important to provide physicians and groups of physicians flexibili ty on the data they report for quality

measures. For those groups of physicians subject to the value-based payment modifier in CY 2016 whose eligible professionals participate in the PQRS as individual s rather than as a group practice under the GRPO (that is, groups of physicians that are assessed under the 70 percent threshold), we propose 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 perfor mance rates of those e ligible professionals reporting the measure. If all of the eligible professionals in a gr oup of physicians subject to the CY 2016 value-based payment modifier satisfactorily participate in a PQRS qualified clinical data regi stry in CY 2014 and we are unable to receive quality performance data for those eligible profe ssionals for the reasons discussed above, for purposes of the value-based payment modifier , we propose to classify the group’s quality composite score as “average” under the qua lity-tiering methodology, because we would not have data to reliably indi cate whether the group should be classified as high or low quality under the quality-tiering methodology. A ccordingly, we also propose to add a new subsection to our regul ations at §414.1270 to reflect our proposals about how to assess quality performance for groups assessed under the 70 percent threshold. We seek comment on these proposals. We note that when the value-based paymen t modifier applies to all physicians and groups of physicians in CY 2017 based on pe rformance during CY 2015, we anticipateCMS-1600-P 521

continuing our policy to align with the PQRS group reporting for all groups of physicians of two or more eligible professionals, a nd we anticipate permitting physicians who are solo practitioners to use a ny of the PQRS reporting mechan isms 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 are not proposing to adopt this policy in this proposed rule, we seek comment on this appr oach to align the qua lity measures and reporting mechanisms used in the PQRS for purposes of the value-based payment

modifier. f. Inclusion of the Medicare Spending per Beneficiary Measure in the Value-Based Payment Modifier Cost Composite

In the CY 2013 PFS final rule with comment period (77 FR 69316), we established a policy to include five cost m easures in the value-based payment modifier cost composite. The five measures are tota l per capita costs (bot h Parts A and B) and total per capita costs for be neficiaries with four specifi c chronic conditions: chronic obstructive pulmonary disease (COPD), heart fa ilure, coronary artery disease (CAD), and diabetes. We stated that the value-based pa yment modifier should in corporate additional

measures that are consistent with the Na tional Quality Strategy and other CMS quality initiatives. As a step toward that goal, beginning with the CY 2016 value-based payment modifier, we propose to expand the cost compos ite to include an additional measure, the Medicare Spending per Beneficiary (MSPB) me asure (with one modification as discussed below). This section discusses the bac kground of the MSPB measure and our proposals to incorporate it into the value-based pa yment modifier beginning with the CY 2016 payment adjustment period and beyond. Background on the implementation of the MSPB measure for other CMS qualityCMS-1600-P 522

programs

. We finalized the MSPB measure for use in the Hospital IQR Program in the

FY 2012 IPPS final rule to further Medicare’s transformation from a system that rewards

volume of service to one that rewards effi cient, effective care and reduces delivery system fragmentation and to help address the critical issue of health care costs (76 FR 51618-27). We finalized the MSPB measure fo r inclusion in the Hospital VBP Program in the FY 2013 IPPS final rule as an important first step toward identifying value in healthcare. In that rule, we expressed our be lief that this measure provides an incentive for hospitals to build stronge r relationships with and bette r understand the providers and suppliers that furnish care for their patients before and after an acute care hospitalization (77 FR 53585). When viewed in light of othe r quality measures, as a part of the valuebased payment modifier measure set, we belie ve that the measure would enable us to align incentives and similarly recognize phys ician groups involved in the provision of high-quality care at a lower cost to Medicare. This measure also addresses physician care associated with acute inpatient hospitaliza tions and post-acute care. In its recentlyreleased “Interim Report of the Committee on Geographic Variation in Health Care Spending and Promotion of High-Value Care: Preliminary Committee Observations,” the Institute of Medicine (IOM) observed that , “Geographic variati on in total Medicare spending is strongly influenced by th e utilization of post-acute care.” 1 Medicare spending post-hospital discharg e is a significant source of va riation in the MSPB measure rates, with spending unrelated to readmissions being the largest s ource of variation in those post-discharge Medicare payments. As part of the value-based-payment modifier measure set, the MSPB measure would rec ognize and enable CMS to assess groups of physicians’ performance relating to post-acute care spending, which is a “major source of unexplained variation in Medicare spending.” 1CMS-1600-P 523

We propose that this measure would be adde d to the total per ca pita costs for all

attributed beneficiaries domain of the valu e-based payment modifier . Thus, there would be two measures in the total per capita costs for all attributed beneficiaries domain – the total per capita costs measure and the MSPB measure – each weighted equally in the domain. We considered placing this measure in the total per capita costs for all attributed beneficiaries with specific conditions domain; however, we are not proposing to do so

because the MSPB measure is similar to th e total per capita costs measure (because it includes all costs incurred by a be neficiary), albeit one that is related to the totality of services furnished surrounding an inpatient hos pitalization, and thus belongs in the total per capita costs for all attributed beneficiar ies domain. Moreover, we intend to propose in future rulemaking to replace the four meas ures 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-b ased costs derived from our recent and ongoing work with many specialty societies. 5 We solicit comments on these potential changes to the condition-specific cost measur es 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. We currently use the MSPB measure in two other CMS quality initiatives, the Hospital Inpatient Quality Reporting (IQR) and Hospital Value-Based Purchasing (VBP) Programs. We believe that its inclusion in the value-based payment modifier will help to align performance incentives acro ss the delivery system. By focusing on the cost of care and encouraging avoidance of unnecessary serv ices, the measure also addresses one of the National Quality Strategy aims of better care : care that is affordable. This measure

5 Our recent activities relating to developing Medicar e-specific episodes using the CMS Episode grouper and development of other episode costs are discussed in the Physician Feedback Program section below.CMS-1600-P 524

has been submitted to the National Quality Forum for endorsement, and it was supported by the Measures Application Partnership for in clusion in both the Hospital IQR and VBP Programs.

Construction of the MSPB measure

. The MSPB measure used for the Hospital IQR and VBP Programs is constructed of se rvices furnished surrounding hospitalizations (“index admissions”). The measure includes a ll Medicare Part A and Part B payments during an MSPB episode. An MSPB episode spans from 3 days prior to an index admission at a subsection (d) hospital 6 through 30 days post discharge with certain

exclusions. Certain hospitalizations at s ubsection (d) hospitals do not represent index

admissions for the MSPB measure. Admissions that result in a transfer from one acute hospital to another, episodes that occur fewer than 30 days before the end of the performance period, or episodes during which th e beneficiary is not enrolled in both Part

A and Part B Medicare do not c ount as index admissions. Costs for each episode are risk adjusted for age and severity of illness, a nd the included payments are standardized to remove differences attributable to geogra phic payment adjustments and other payment factors. The payment standardization is th e same methodology used for the existing total per capita cost measures included in the value-based payment modifier. To calculate a hospital’s MSPB amount, 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 multip lied by the national average MSPB episode cost to give the hospital’s MSPB amount. Because the Hospital IQR and VBP Programs apply to subsection (d) hospitals, we attribut e a MSPB index admission to the hospital at

6 Section 1886(d)(1)(B) of the Social Security Act define s such hospitals as those in the 50 States and the District of Columbia other than psychiatric hospitals, rehabilitation hospitals, hospitals whose inpatients are predominantly under 18 years old, hospitals whose average inpatient length of stay exceeds 25 days, and hospitals involved extensively in treatment for, or research on, cancer.CMS-1600-P 525

which an index admission occurs, and we cal culate the MSPB amount at the hospital

level. After determining an individual hospita l’s MSPB amount, we divide it by the

national median MSPB amount to calculate a ra tio. This ratio is then converted to a percentage which is the MSPB measure rate that we report publicly on Hospital Compare under the Hospital IQR Program and use to gene rate a measure score for the Efficiency domain under the Hospital VBP Program. In the context of the value-based payment modifier, we propose a slightly revised calculatio n. We propose not to convert the MSPB amount to a ratio as is done to compute a hospital’s MSPB measure, but rather use the MSPB amount as the measure’s performance rate. We refer readers to the FY 2012 IPPS/LTCH PPS final rule (76 FR 51618 through 51627) for a detailed description of the MSPB measure that is used in the Inpa tient Quality Reporting program and the HVBP program. Additional information on the measure, including a detailed specification document (entitled “MSPB Measure Information Form”) and the payment standardization methodology (ent itled “CMS Price Standardiz ation”) can be found in the “Measure Methodology” section at http://qualitynet.org/dcs/ ContentServer?c=Page&pagename=QnetPublic%2FPage%2FQn

etTier3&cid=1228772053996

. We seek comment on our pro posals 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 al so propose to revise the re gulations at §414.1235 to include the Medicare Spending per Beneficiary measure inthe set of cost measures for the valuebased payment modifier and §414.1260(b)(1)(i) to include the Medicare Spending per Beneficiary measure in the total per capita co sts for all attributed beneficiaries domain.CMS-1600-P 526

As stated previously, all of our proposals related to th e MSPB measure would apply beginning with the CY 2016 value-based payment modifier.

Attribution of the MSPB measure to physician groups . Unlike the Hospital IQR and VBP Programs, in which we attribute th e MSPB index admission to the hospital at which the index admission occurred, we need to develop a method to attribute the MSPB episode to groups of physicians to include the measure in the value-based-payment modifier. We propose to attribute an MSPB episode to a group of physicians subject to the value-based payment modifier (as identi fied 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 i npatient hospitalization that is an index admission for the MSPB measure 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 believe that attribution of the MSPB episode to all groups of physicians from which an eligible professional submits a Pa rt 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. Based on CY 2011 claims data, the proposed approach would enable approximately 11,419 groups of physicians with at least 10 eligible prof essionals to have an MSPB measure score included in their cost composite. 7 Our proposed approach incentivizes hospitals and physicians to furnish efficient, effective ca re during a hospitalization and to coordinate post-discharge care to avoid unnecessary servi ces and preventable readmissions. Further, we believe that this attribution approach fo sters shared accountability between hospitals

7 We note that, based on 2011 claims, many of these 11,419 groups would only have the MSPB measure included in the cost composite because the physicians in the groups do not prov ide primary care services and thus do not have attributed beneficiaries for the five annual total per capita cost measures.CMS-1600-P 527

and physicians for the care they furnish to Medicare beneficiaries who are hospitalized. We propose to add a new paragraph (b) to §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 in patient hospitalization that is an index admission for the MSPB measure during th e performance period for the applicable calendar year payment adjustment period. Gr oups of physicians would have a Medicare Spending per Beneficiary measure score incl uded in their cost composite based on the proposed attribution methodology for the M SPB. We welcome public comment on our proposal. We also considered attributing the M SPB episode to physician groups from which an eligible professional in th e group billed a part B claim fo r a service rendered at any time during the Medicare Spending per Beneficiar y episode (that is, from 3 days prior to an index admission through 30 days post-discha rge). This attribution approach would place an even stronger emphasis on shared a ccountability for care provided to Medicare beneficiaries who are hospitalized, both duri ng and after their hosp italization. Based on 2011 claims data, we estimate that attri bution to any physician group from which a eligible professional billed a part B claim at any time during the episode would enable an additional 3,017 groups of physicians with 10 or more eligible professi onals 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 hospitalizati on. We welcome public comment on the

alternative attributi on approach under which we would at tribute an MSPB episode to a physician group if any eligible professional in the group billed a Part B service during theCMS-1600-P 528

3 days prior to an index admission th rough 30 days post hospital discharge. In addition to the proposed attribution method above, we considered several other

methods to attribute the MSPB measure to physician groups. For example, the MSPB episode could be attributed solely to the group of physicians that prov ided the plurality of

Part B services billed either: (1) during the entire MSPB epis ode (that is three days prior to hospital admission through 30 days post discharge); or (2 ) during the index hospitalization only. By “plura lity” of services, we mean the highest total dollar amount paid by Medicare to any group of physicians w ho provided Part B services during a given portion of an episode (either the full episode or the hospitalization only). The group of physicians need not have provided the majority of the services paid by Medicare during a given portion of an episode, but rather to have provided services for which Medicare paid more than it did to any other group of physicia ns during that portion of an episode. This method is a single attribution approach unlik e 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 mi nimum of 20 MSPB episodes required. Our analyses revealed that 7, 799 TINs (out of approximate ly 17,000 TINs (see Table 61)) would be eligible to receive an MSPB measur e rate, if MSPB episodes were attributed to the group of physicians that received the plur ality of Medicare Part B payments during the entire MSPB episode. This represents a 46% decrease from the 11,419 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, as we proposed above. Our analysis also showed th at 7,582 TINs would be eligible to receiveCMS-1600-P 529

an MSPB measure rate, if MSPB episodes we re attributed to the physician group that billed the plurality of Medicare Part B payments during the index admission. This represents a 34% decrease fr om the 14,436 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.

We considered these attribution methods because they represent methods to identify groups of physicians that were “m ost responsible” for the Part B Medicare payments made during the episode. We ar e not proposing these methods, because we believe our proposed multiple attribution approach better incentivizes a team approach to accountability for Medicare bene ficiaries’ care during a hosp italization. We believe our proposed attribution approach is further suppor ted by the higher number of TINs that will

be able to receive an MSPB measure rate under that methodology. We seek comment, however, on these two single al ternative 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 hospitalization only. In addition, we considered a hybrid attri bution method: attribute MSPB episodes to all TINs from which an eligible professi onal provided services re presenting at least 35 percent of the total Medicare Part B payments made either: 1) dur ing the entire MSPB episode (that is three days prior to hospita l admission through 30 days post discharge); or 2) during the index hospitalization only. This alternative could result in multiple attribution, if two eligible professionals fr om different TINs each provided services representing at least 35 per cent of the Part B Medicare payments during one of the episode portions described above (either th e full episode or during the index admissionCMS-1600-P 530

only). The rationale for this attribution a pproach is that it en sures that a group of physicians had responsibility for a significant po rtion of the Medicare beneficiary’s care during a given portion of the MSPB episode. We are not proposing this alternative, because we believe that our proposed attri bution approach better incentivizes a team approach to accountability fo r Medicare beneficiaries’ care during and after a hospitalization. We welcome public comment on this alternative at tribution approach based on provision of services representi ng at least 35 percent of Medicare Part B payments made either during the entire MSPB episode or during th e index hospitalization only. Reliability standard for the Medicare Spending per Beneficiary measure for the value-based payment modifier. We propose that a group of physicians would have to be attributed a minimum of 20 MSPB episodes dur ing the performance period to have their performance on this measure included in the value-based payment modifier cost composite. Table 63 shows the MSPB measure’ s reliability at vari ous 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. In this context, reliability is defined as the extent to which variation in the measure’s performance rate is

due to various in the cost of services fu rnished by groups of physicians rather than random variation due to the sample of cases observed. Potential reliability values range from zero to one, where one (highest possible re liability) signifies that all variation in the

measure’s rates is the result of variation in the difference is performance across groups of physicians. Generally, reliabili ties in the 0.40-0.70 range are often considered moderate and values greater than 0.70 high.CMS-1600-P 531

TABLE 63: Reliability of Medicare Spending per Beneficiary Measure for all TINs with at Least One Eligib le Professional (May 2011- December 2011) MSPB Episodes Attributed Number of TINs Percent of TINs Mean risk-adjusted standardized cost per MSPB episode Average Reliability 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 appl y the value-based payment modifier to all physicians and groups of phys icians. With a minimum of 10 cases, the measure is still very reliable, as illustrated in the Table 63. We are proposing 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 note that this reliability standard we are proposing is th e 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 welcome public comment on our proposed minimum of 20 episodes for incl usion of the Medicare Spending per Beneficiary measure in the cost composite for the value-based pa yment modifier and on the alternative 10 episode minimum that we considered. g. Refinements to the Cost Measure Composite Methodology

In the CY 2013 PFS final rule with comment period (77 FR 69322), weCMS-1600-P 532

established a policy to create a cost compos ite for each group of physicians subject to the value-based payment modifier that incl udes five payment-standardized and riskadjusted cost measures. To calculate the each group’s cost measures, we first attribute beneficiaries to the group of physicians. We attribute beneficiar ies using a two-step attribution methodology that is used for th e Medicare Shared Savings Program and the PQRS GPRO and that focuse s 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 beneficiarie s or are attributed fewer than 20 beneficiaries and, thus, we

are unable to calculate reliabl e cost measures for those gr oups of physicians (77 FR 69323). Given this development, we propose th at, to the extent that we are unable to

attribute a sufficient number of beneficiar ies to a group of physicians subject to the value-based payment modifier and thus are una ble to calculate any of the cost measures with at least 20 cases, the gr oup of physicians’ cost composite score would be classified as “average” under the quality-tiering me thodology. We believe this policy is reasonable because we would have insufficient information on which to classify the group of physicians’ costs as “high” or “l ow” under the qualit y-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. Accordin gly, we propose to add a new paragraph at §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 seek comment on this proposal. Once we calculate the cost measures for each group of physicians subject to the value-based payment modifier, we creat e the cost composite by calculating aCMS-1600-P 533

standardized score for each cost measure a nd then placing the measur es 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 fo r attributed benefici aries with specific

conditions domain. This standardized score is re ferred 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 benchm ark (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. For example, for CY 2015, the cost measures of groups of 100 or mo re eligible professionals (EPs) will be compared to the cost measures of other groups of 100 or more EPs. We also noted that we would consider the effects of this policy over the next several years as we implement this program and may consider changes to these policies through future rulemaking. Using 2011 claims data, we have since ex amined the distribution of the overall total per capita cost measure among all groups of physicians with one or more eligible professionals to determine whether comparis ons 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 exampl e, within a physician specialty).CMS-1600-P 534

For certain physician specialties, the type s of services furnished typically have higher than average or lower than average co sts, and thus can affect the group’s cost measures. For example, medical and other t ypes of oncologists tend to treat relatively costly beneficiaries and bill for expensive Part B drugs, which can increase mean total per capita costs for oncologists as a whol e. By contrast, dermatologists and ophthalmologists, for example, perform relativ ely low cost procedures in an outpatient setting and, thus, their total per capita cost measures are low. Moreover, to the extent that physicians in groups of physicians work toge ther to provide services to the same beneficiaries, groups of physicians with a la rge proportion of high or low-cost specialists can affect the level of the gr oup’s cost measures. Although the cost data are adjusted to account for the relative risk of patients, the e ffects of these adjustments do not fully offset this result at the physicia n and physician group level. To address this issue beginning with th e CY 2016 value-based payment modifier,

we considered two methods that account for the group practice’s spec ialty composition so that our quality-tiering me thodology 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 wh ich 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 computi ng the standardized score for each cost measure. This method enables us to develop comparable benc hmarks for the risk-adjusted cost measures against which to evaluate groups of physicians of smaller size who often have fewer orCMS-1600-P 535

single specialty composition. More specifically , we would adjust th e 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 “nati onal specialty-specific e xpected costs”). To do so, we would 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 would calculate th e average cost of beneficiaries attributed to groups of physic ians with that specialty, weighted by the number of EPs in each group. Step 2: Calculate the “specialty-adj usted expected cost” for each group of physicians by weighting the national specia lty-specific expected costs by the group’s specialty composition of Part B payments. Th at 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 gr oup, where the weights are each specialty’s pro portion 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 “s pecialty-adjusted total pe r 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 th e specialty adjustment to the standardized score with an example. Assume for simplic ity that only two TINs and two specialtiesCMS-1600-P 536

exist: TIN 1 and TIN 2, and Specialty A and Sp ecialty B. For this example, assume that the total per capita costs and specialty shares are as shown in Table 64. TABLE 64: Example of Calculating Specialty-Adjusted Total Per Capita Cost: Assumptions

TIN RiskAdjusted Per Capita

Cost Number of Attributed Beneficiaries Number of EPs in TIN by Specialty Type A or B Specialty Share of EPs in TIN Specialty Share of Part B 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 specialt y-specific expected cost for a specialty across all TINs, we first calculate the numerato r, which is the product of each TIN’s total per capita cost times its wei ght (the number of attribut ed beneficiaries times that specialty’s share of the TIN’s EPs times the numb er of EPs of that specialty in that TIN),

summed across all TINs. This sum is divi ded 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-speci fic 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 e xpected 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 th e specialty-adjusted expected cost for each group (TIN), we would multiply the above national specialt y-specific expected costs by each group’s proportion of specialty-specific Part B paymen ts. For each TIN, we compute the productCMS-1600-P 537

of the TIN’s proportion of specialty-speci fic Part B payments, summed across all specialty types of the TIN. In our example, the specialty-a djusted 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 to tal per capita cost by the speci alty-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 aver age per capita cost is $9,714, we can compute the specialty-adjusted total per capita co st for each TIN, as shown in Table 65. TABLE 65: Example of Calculating Specialty-Adjusted Total Per Capita Cost: Calculations COLUMN A B C D

TIN Total Per Capita Cost SpecialtyAdjusted Expected Cost National Average Per Capita Cost SpecialtyAdjusted Total Per 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 st andardized (Z-) score. As can be seen, the specialty-adjusted total per cap ita cost for use in the st andardized score is $12,502 for TIN 1 and $8,514 for TIN 2. To illustrate the impact of the special ty adjustment methodology, we examined the distribution, by specialty, of the overall sp ecialty-adjusted total annual per capita costCMS-1600-P 538

measure based on 2011 claims for group of physicians with 1 or more eligible professionals. Table 66 includes the percenta ge of physicians in each specialty that practice in groups of 1 or more eligible pr ofessionals with 20 or more attributed beneficiaries and that, based only on this one measure, woul d be classified into low, average, and high cost groups. Table 66 does not represent all of the physicians within that specialty, rather only t hose that practice in groups of physicians with at least 20

attributed beneficiaries. TABLE 66: Percentage of Physicians Practicing in Groups with 1 or More Eligible Professionals, with at Least 20 Be neficiaries, Classified by Cost Percentage of Eligible Professionals in Groups (TINs) Classified as Specialty Low Cost Aver age Cost High Cost Addiction medicine 4.7% 94.1% 1.2% Allergy/immunology 5.3% 92.4% 2.3% Anesthesiology 1.6% 93.5% 4.9% Cardiac Electrophysiology 1.9% 95.7% 2.4% Cardiac surgery 0.5% 92.9% 6.6% Cardiology 4.4% 92.2% 3.3% Chiropractic 3.1% 88.7% 8.2% Colorectal surgery 3.1% 89.2% 7.6% Critical care (intensivists) 1.7% 91.9% 6.4% Dermatology 30.6% 68.0% 1.4% Diagnostic radiology 0.7% 92.7% 6.6% Emergency medicine 3.7% 89.1% 7.2% Endocrinology 9.2% 89.1% 1.7% Family practice 1.3% 91.7% 7.0% Gastroenterology 4.4% 93.3% 2.2% General practice 5.7% 84.8% 9.5% General surgery 1.6% 90.1% 8.3% Geriatric medicine 1.5% 83.8% 14.7% Geriatric Psychiatry 0.0% 82.5% 17.5% Gynecologist/oncologist 1.7% 88.5% 9.8% Hand surgery 3.1% 95.6% 1.3% Hematology 0.7% 89.1% 10.2% Hematology/oncology 1.0% 87.3% 11.8%CMS-1600-P 539

Hospice and Palliative Care 0.3% 87.9% 11.8% Infectious disease 2.5% 90.6% 6.9% Internal medicine 1.3% 87.4% 11.3% Interventional Pain Management 2.9% 89.7% 7.4% Interventional radiology 0.7% 93.0% 6.2% Maxillofacial surgery 0.9% 94.7% 4.4% Medical oncology 0.5% 83.4% 16.1% Nephrology 7.6% 89.3% 3.0% Neurology 5.0% 92.4% 2.6% Neuropsychiatry 4.0% 90.7% 5.3% Neurosurgery 1.4% 83.7% 14.9% Nuclear medicine 2.2% 90.5% 7.3% Obstetrics/gynecology 7.7% 89.0% 3.3% Ophthalmology 17.7% 80.9% 1.5% Oral surgery (dentists only) 1.5% 92.4% 6.1% Orthopedic surgery 3.1% 91.5% 5.5% Osteopathic manipulative medicine 5.7% 85.8% 8.5% Otolaryngology 13.4% 84.3% 2.3% Pain Management 1.5% 86.0% 12.6% Pathology 2.4% 91.2% 6.4% Pediatric medicine 1.2% 92.6% 6.2% Peripheral vascular disease 0.0% 94.4% 5.6% Physical medicine and rehabilitation 2.1% 87.9% 9.9% Plastic and Reconstructive surgery 4.2% 90.4% 5.4% Podiatry 2.2% 91.3% 6.5% Preventive medicine 3.0% 91.3% 5.6% Psychiatry 5.0% 88.8% 6.2% Pulmonary disease 3.3% 92.0% 4.7% Radiation oncology 4.4% 83.5% 12.1% Rheumatology 3.9% 93.5% 2.6% Single or Multispecialty clinic or group practice 5.9% 85.1% 9.1% Sports Medicine 2.6% 94.8% 2.6% Surgical oncology 1.6% 82.5% 16.0% Thoracic surgery 0.1% 92.3% 7.6% Urology 3.9% 93.2% 2.9% Vascular surgery 0.3% 93.7% 6.0%

Under this methodology, we would perform this specialty adjustment prior to computing the standardized score for all six cost measures include d in the value-basedCMS-1600-P 540

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-sp ecific total per capita cost measures is identical to the total per capita cost measur e 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 co st” is replaced with “per episode cost.” Thus, each cost measure will have its own set of specialty-specific expected costs. The second method, “comparability peer gr ouping,” constructs peer groups for each physician group practice by identifying group practices with the nearest comparable specialty mix. 8 After doing so, we would then calculate a benchmark for the peer group and then use the benchmark to calculate the gr oup’s standardized score for that measure. Under this approach, two group practices would be considered to have the same specialty mix if the share of physicians of each specia lty is within a defined range for both group practices. For the purposes of computing peer groups, group practi ces also could be stratified by size, as measured by number of eligible prof essionals billing under the group practice’s TIN. A group practice’s peer group, however, would include a minimum number of peers (that is, group practices with similar specialty mixes) to ensure a reliable comparison. If there were fewer than the designated number of other group practices with the group practice’s same specialty mi x in the group practice’s size category, group practices would be added to the peer group ba sed on the next level of comparability in order to obtain the minimum number of gr oup practices. Group practices that had a specialty mix more comparable to the practic e’s own mix would receiv e greater weight in

8 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 Financia l Comparisons Across Hospitals. April 2009. HSR: Health Services Research 44:2, Part I: 577-592.CMS-1600-P 541

the peer group. Among the iden tified peers sharing the same specialty mix, those with

the most cases would receiv e the greatest weight. We tested this method, based on 2011 claims, using a sample of 870 group practices of 25 or more EPs. The results showed that the compar ability peer grouping approach reduced the average differen ce between the group’s performance and benchmark rate compared to the difference between the group’s performance and benchmark as computed based on the met hodology we established in the CY 2013 PFS final rule with comment period and which doe s not consider the sp ecialty composition of the group of physicians. Moreover, furthe r analysis showed that this methodology consistently ranked groups of physicians. In other words, groups of physicians in the top

and bottom 5 th percentiles were consistent using this approach. On balance, we believe that the firs t 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 believe this methodology allows us to apply the value-based payment modifier to sm aller size groups and solo practitioners. This methodology creates one national benchmar k 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. As discussed in the CY 2013 PFS final rule with comment period, we believe national be nchmarks are appropriate for the valuebased payment modifier (77 FR 69322). Alt hough the calculations discussed above may be very detailed, they are tr ansparent 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, comparab ility peer grouping, requires us toCMS-1600-P 542

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, whic h may make it more difficult for groups of physicians to understand how their costs are benchmarked. Notwithstanding these downsides, the comparability peer grouping method treats each group of physicians as a whole, rather than as a sum of its parts as in the specialty benchmarking method, and thus may have more acceptabili ty among physicians. Moreove r, treating the group of physicians as a whole also reinforces the sh ared accountability aspect of the value-based payment modifier. Given these considerations, we propose to use the first me thod, the specialty benchmarking method, to create the standardi zed score for each group’s cost measures beginning with the CY 2016 value-based payment modifier. Accordingly, we propose to amend our regulations at §414.1255 to include this policy in our cost composite methodology. We seek comment on our propos als, including comments on ways to

streamline or enhance the calculation mechan ics and to make the specialty adjustments more transparent and easily understood. We also seek comment on the alternative method, the comparability peer grouping met hod. We propose to identify the specialty for each EP based on the specialty that is liste d 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 athttp://www.cms.gov/Medicare/Provider-Enrollment-andCertification/MedicareProviderSupEnroll/Taxonomy.html Regardless of the method chosen, we will co ntinue to monitor the effects of this policy over the next several years as we implement this program and may considerCMS-1600-P 543

changes to these policies through future rulemaking. 5. Physician Feedback Program Section 1848(n) of the Act requires us to provide confidential reports to physicians that measure the resources i nvolved 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 furn ished to Medicare FFS beneficiaries. In CY 2012, we disseminated both group and individual QRURs, based on CY 2011 performance, to a wider audience than the CY 2010 reports. These reports contained improvements and enhancements suggested by the recipients of the CY 2010 reports to provide meaningful and actionable information for quality im provement. In addition, in May 2013, we provided supplemental QRURs to the 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 2011 Physician Group Feedback Reports Based on CY 2011 Data and

Disseminated in CY 2012. In December 2012, we produced and dist ributed QRURs to each of the 54 medical group practices that chose to partic ipate in the CY 2011 GPRO under the PQRS. Each report provided information on 30 quality measures and five resource use (cost)

measures for Medicare FFS be neficiaries treated by the medical groups in CY 2011. For each of the five cost measures, we standardized the input costs to adjust for differences in Medicare payments geographi cally and various Medicare payment policies such as

Indirect Graduate Medical Education a nd Disproportionate Share Hospital add-on payments. We also risk adjusted the cost measures based on the unique mix of patientsCMS-1600-P 544

attributed to the physician or group of physicia ns. Costs for benefici aries with high risk factors (such as a history of chronic diseases, disability, or increased age) are adjusted downward, and costs for beneficiaries with low risk factors are adjusted upward. More information on the payment standardization and risk adjustment techniques is available athttp://www.cms.gov/Medicare/Medicare-Fee-for-ServicePayment/PhysicianFeedbackProgram/d ownloads/2011_group_detail_methodology.pdf

. To participate in the PQRS GPRO in CY 2011, a group practice had to be a single provider entity, as identified by its TIN, with at least 200 eligible professionals. Fiftyfour groups, encompassing 37,745 eligible prof essionals, participated in the 2011 PQRS GPRO. On average the group contained the following type of medi cal professionals: Primary care physicians (22 pe rcent); medical speci alists (22 percent); surgeons (16 percent); emergency medicine physicians (4 percent); other physicians (13 percent); and other medical professionals (23 percent). For each of the 54 GPRO practices, we at tributed a Medicare FFS beneficiary to the group if eligible professiona ls in the group billed for at least two of the beneficiary’s eligible office visits or other outpatient evaluation and management (E&M) services provided in CY 2011 and the group practice had the plural ity of CY 2011 E&M allowed charges for that beneficiary. The average beneficiary population a ttributed to a group practice was 12,764 beneficiaries, with th e smallest group practice attributed 808 beneficiaries and the largest attributed 33,907 be neficiaries. Highlights of major findings from these 2011 QRURs are as follows:

● The mean group practice performance rate on each PQRS quality measures was equal to, or better than the individual physician reported performance rate for 13 of 22 comparable quality measures (60 percent) , but lower for the other 9 measures.CMS-1600-P 545

● Although there is a positive correlati on (0.59), risk-adjusted total per capita costs for each group are fairly dispersed at any given level of risk (Table 67). TABLE 67: Relationship Between Risk -Adjusted Total Per Capita Costs and Average HCC Risk Score for the 54 GPRO Group Practices, CY 2011

$8,000 $9,000 $10,000 $11,000 $12,000 $13,000 $14,000 $15,000 $16,000 $17,000

0.95 1.15 1.35 1.55 1.75RIsk -Adjusted Per Capita Cost

Average Risk Score for Beneficiaries Attributed to the GPRO Group

● We also constructed a quality com posite score for each of the 54 groups by combining the 26 clinical quality measures , the chronic conditions ACSC composite 9 and acute conditions ACSC composite, and the tw o hospital discharge measures. Table 68 displays the relationship between the compos ite quality score for each group practice and the total payment-standardized risk-adjusted per capita cost measure. Although there is a negative correlation (-0.53), tota l per capita costs are fairly di spersed at any given level of quality.

9 The chronic conditions composite was constructed as the sum of the numerators for diabetes, COPD, and heart failure ACSC measures divided by the sum of their corresponding denominators.CMS-1600-P 546

TABLE 68: Quality of Care Compared to Cost, CY 2011

$6,000 $8,000 $10,000 $12,000 $14,000 $16,000 $18,000

-2.5 -2.0 -1.5 -1.0 -0.5 0.0 0.5 1.0 1.5Risk-Adjusted Per Capita Costs

Quality Score

The performance rates for the 54 groups on the quality of care and cost measures were statistically reliable at a high level across the vast majority of the measures. More information about findings from these reports is available at http://www.cms.hhs.gov/physicianfeedbackprogram.html

. b. Individual Physician Feedback Reports Based on CY 2011 Data and Disseminated in

CY 2012. In December 2012, we provided indivi dual 2011 Quality and Resource Use Reports to over 94,000 physicians affiliated with medical group practices of 25 or more eligible professionals (that is, these group pr actices include physicians and other medical staff such as nurse practitioners and physic ian assistants). The physician groups were based in 9 states: California; Illinois; Iowa; Kansas; Michigan; Minnesota; Missouri; Nebraska; and Wisconsin. Over the 4- month period during which reports were available, 31,518 individual reports were downloaded. The QRURs contained performance on PQ RS measures for physicians who participated in the CY 2011 program. They also contained performance information onCMS-1600-P 547

28 quality indicators for preventive care, medication management, and eight separate condition categories, such as chronic obstruc tive pulmonary disease (COPD) and cancer. We calculated rates for these measures using CY 2010 and CY 2011 Medicare administrative claims. Of these 28 measures, 14 measures will be included in the PQRS Administrative Claims reporting mechanism available for groups of physicians and

individual EPs in CY 2013. The QRURs also provided measures of phys ician resource use. These measures were payment-standardized a nd risk-adjusted total Parts A and B per capita costs for beneficiaries treated by the physician. Paymen t standardization adjusts for differences in Medicare payment rates to co mpare service use within or across geographic regions. Risk adjustment accounts for differences in costs among physician that result from variation in patient mix. We included five measures of cost in the QRURs: total per capita costs for all beneficiarie s attributed to the physician an d total per capita costs for

attributed beneficiaries with one of four chronic conditions (diabetes, heart failure, COPD, or coronary artery disease (CAD)). For the cost measures, we attribute beneficiaries to physicians based on each phys ician’s degree of involvement with the beneficiary. The three categorie s of attribution are directe d, influenced, and contributed, which are based on the percentage of each beneficiary’s evaluation and management services or total professional costs. More information about the methodologies used in the CY 2011 Individual QRURs is available at http://www.cms.hhs.gov/physicianfeedbackprogram

. The following is a summary of the highlights from these reports:

● Among high-risk Medicare beneficiar ies, visiting a primary care physician during the year was associated with lower costs, but having a physician who is moreCMS-1600-P 548

involved in one’s care (that is , the physician directed or in fluenced care) is associated with the lowest costs, on aver age. For this analysis a phys ician directed or influenced care if the physician billed for 35 percent or more of the patient’s office or other outpatient E&M visits or for 20 percent or more of the patient’s tota l professional costs.

● The average reliability score was high (greater than 0.70) for 98 percent (125) of the 128 PQRS measures reported by physicians in the nine states with a case size of at least 20. A total of 109 of the 128 measures ( 85 percent) had average reliabilities greater than 0.90. These reliability scores were subs tantially higher than for the 14 measures that are included in the CY 2013 PQRS Admi nistrative Claims reporting mechanism. Reliability scores range from zero to one and measure the extent to which the performance of one physician can be conf idently distinguished from another.

● The performance rate for at least 25 percent of physicians was significantly

different from the mean for 5 of the 10 most reported PQRS measures in the 9 states. However, none of the 14 Administrative Claims-based measures had performance rates that were significantly different from the mean for at least 25 percent of physicians. These results suggest statistica lly significant variation across physicians is more likely to be detected using the most common self-repo rted PQRS quality measures rather than the

Administrative Claims measures.

● Across the 9 states, the average of the total per capita cost (paymentstandardized and risk-adjusted) among physicians was $18,735. Among total per capita

costs for beneficiaries with the four chroni c condition, total per capita costs for heart failure were highest ($34,545), follo wed by COPD ($32,946), CAD ($25,906), and diabetes ($25,016).

● Across the 9 states, the average reliability for physicians’ total per capita costsCMS-1600-P 549

was very high at 0.97, when a physician had at least 20 cases. The av erage reliability of the total per capita co st measure (among physicians with 20+ cases) for directed patients was 0.85, for influenced patients was 0.71, and for contributed patients was 0.97. These results demonstrate that for the typical phys ician profiled with a minimum case size of 20 the overall per capita cost measure is reliable. More information about the aggregate findings from these reports is also available athttp://www.cms.gov/Medicare/Medicare-Fee-for-ServicePayment/PhysicianFeedbackProgram/ReportTemplate.html. c. Episode Costs and the Supplemental QRURs Section 1848(n)(9)(A)(ii ) of the Act, as added by s ection 3003 of the Affordable Care Act, requires CMS to develop a Medi care 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 sp ecific 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 claims data into episodes. We have developed a CMS prototype episode grouper that, for a limited number of conditions, classifies episodes into three categories: chronic; acute; and procedural. To illustrate how the CMS Episode Grouper works, in June 2013 we developed supplemental QRURs and made them availabl e to the 54 large group practices that we had provided group QRURs in December 2012. The CY 2011 Supplemental Episode Grouper QRURs included the following five major episodes along with seven episode sub-types that further stratified the episode:

● Pneumonia (acute condition). ++ With (inpatient) hospital stay.CMS-1600-P 550

++ Without hospital stay.

● Acute Myocardial Infarction (AMI) (acute condition). ++ Without Percutaneous Coronary Inte rventions (PCI) or Coronary Artery Bypass Graft (CABG).

++ With PCI.

++ With CABG.

● Coronary Artery Disease (CAD) (chronic condition).

++ Without AMI.

++ With AMI.

● CABG (without AMI) (procedural).

● PCI (without AMI) (procedural). The Supplemental QRURs assign, or attribute, responsibility for the patient’s care for each episode to a medical practice group. Episode assignment to medical practice groups for the Supplemental QRURs was base d on one or more of the following three methods, depending upon the episode type:

● The performance of specific procedures.

● The plurality (35 percent) of episode EP fee schedule (PFS) costs billed.

● The plurality or shared majority (35 percent) of E&M visits.

Each of these methods relies on different criteria to attribute episodes to groups. We used the first method when a single proce dure, such as a surgery, triggers, or begins, an episode of care. In this case, the gr oup performing the surgery is assumed to be responsible for the care. We used this me thod to attribute PCI and CABG episode types to group practices. The latter two methods attribute the epis ode based on EPs’ relative billing madeCMS-1600-P 551

during the episode. Attribution using PFS cost s assumes that certain types of EPs who are paid higher amounts during the episode are likely to have inter acted most with the patient and directed the patie nt’s care. The PFS cost attribution method excludes costs from laboratories and ambulances, as well as other settings to reduce the likelihood that non-clinicians, are attributed th e episode. Use of E&M visit attribution assumes that EPs who most frequently visit the beneficiary during the episode ar e likely to have substantial responsibility for the services rendered dur ing the episode. The chronic CAD episode type used only E&M visits for attribution, while the acute AMI and pneumonia episodes

used both PFS costs and E&M visits. More information about the group attribution methodologies is available at: www.cms.gov\physicianfeedbackprogram. To control for patient case-mix, the CMS Episode Grouper applied a riskadjustment methodology. The risk-adjustm ent methodology calculated each episode’s expected cost based on three factors: patient health status; demographics; and beneficiary type. Using these factors, the risk-adjustmen t model calculated the predicted cost of an episode using information available at the start of the episode. 10 The use of such a prospective risk model avoids allowing provide rs to influence their risk-adjusted costs by changing their treatment pattern s during the episode. The ri sk-adjusted cost amount was defined to be equal to the av erage episode cost nationally plus the difference between the episode cost level and the predicted cost leve l derived from the risk -adjustment model. All cost figures used in the risk-adjus tment model are payment-standardized. To make the Supplemental QRURs more actionable for medical groups for quality improvement and care coordina tion, the Supplemental QRURs identify a suggested individual provider within the gr oup who is likely to be directing the care

10 CAD episodes are risk-adjusted each quarter, and the da ta used for risk adjustment is updated with each new quarter.CMS-1600-P 552

during the episode. This individual is desi gnated as the “Suggested Lead Eligible Professional (EP)” of the episode. In addition the Supplemental QRURs contained summary information about each episode type , comparisons to national benchmarks, as well as specific information describing each episode attributed to the group of physicians. More information about the Supplemental QRURs is available athttp://www.cms.gov/Medicare/Medicare-Fee-for-ServicePayment/PhysicianFeedbackProgram/Epi sode-Costs-and-Medicare-EpisodeGrouper.html. We view these Supplemental QRURs as the beginning of an extended process of incorporating episode costs into the QRURs. We intend to develop the CMS Episode Grouper (based in the CMS’Center for Me dicare and Medicaid Innovation) and to

broaden the number of cond itions that could be addre ssed by episode grouping. The feedback that CMS expects from the 54 medi cal practice groups report recipients will inform next steps. d. Future Plans for the Physician Feedback Reports In September, 2013, we plan to provide the QRURs at the TIN level to all groups of physicians with 25 or more eligible prof essionals. The QRURs will be based on CY 2012 performance data. We anticipate that there will be approximately 6,750 reports (including 1,235 groups of 100 or more EPs) covering approximately 440,000 physicians. These reports will include a “first look” at the value-based payment modifier methodologies using the group’s PQRS measures, ou tcome measures, and cost

measures. The reports also incorporate many valuable suggestions we have received from specialty societies and professional societ ies on ways to make these reports moreCMS-1600-P 553

meaningful and actionable. In particular, the reports will co ntain details regarding: (1) Beneficiaries attributed to the group pract ice (for example, beneficiary identifying information, information regarding services furnished by the group to the beneficiary, risk score percentile, last hospital admission, and chronic conditions); (2) Physicians and non-physician eligible professionals b illing under the group ’s TIN; and (3) Hospitalizations for attributed beneficiaries to help each group manage its patients and potentially reduce hospital admissions (inc luding, for example, (a) beneficiary identifying information, (b) hospital admission data such as data of admission, admitting hospital, principal diagnosis, and (c) discha rge disposition information). We plan to provide this additional info rmation to support the group’s quality improvement and care coordination efforts. As part of its review of these detailed repor ts, each group will also be able to compare the data in the repor ts with its own records (for example, professionals billing under the group’s TIN) to verify the information in the CMS reports. We note that these reports are developed following a 90-day claim run-out, meaning that claims for services furnished during CY 2012 are included in the reports if the claim was paid by March 31, 2013. We will continue to develop and refi ne 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, speci alty societies, profe ssional associations,

and others. We have worked with several specialty societies repr esenting physicians in anesthesiology, cardiology, cardiothoracic su rgery, emergency medicine, neurosurgery, pathology, and radiology to devel op episode costs or other cost or utilization metrics to include in the annual QRURs. We believe thes e efforts could be productive as we use the QRURs to not only describe how the value-ba sed payment modifier would apply to theCMS-1600-P 554

group of physicians, but to provide these groups with utilization and ot her statistics that can be used for quality impr ovement and care coordination.

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 co ntain performance on the quality and cost measures used to score the composites and additional information to help physicians coordinate care and improve th e quality of care furnished. We continue to look at ways to st reamline the QRURs supporting the PQRS and the physician value-based payment modifier programs in order to create one unified format for quality assessment to incr ease their utility in future years. L. Updating Existing Standards for E-Prescribing under Medicare Part D 1. Background a. Legislative History Section 101 of the Medicare Prescripti on 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 comp ly with the e-prescribing standards that are adopted under this authority. There is no requirement that prescribers or dispensers implement e-prescribing. However, pres cribers and dispensers who electronically transmit prescription and certain other info rmation for covered drugs prescribed forCMS-1600-P 555

Medicare Part D eligible bene ficiaries, directly or through an intermediary, are required to comply with any applicable standards that are in effect.

For a further discussion of the statutor y basis for this proposed rule and the statutory requirements at section 1860D-4(e) of the Act, please refer to section I. (Background) of the E-Prescr ibing and the Prescription Dr ug Program proposed rule, published February 4, 2005 (70 FR 6256). b. Regulatory History (1) Foundation and Final Standards

CMS utilized several rounds of rulema king to adopt standards for the eprescribing program. Its first rule, wh ich was published on November 7, 2005 (70 FR 67568), adopted three standards that were co llectively 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 refe rred to as the NCPDP Formul ary and Benefit 1.0) was a subject of the calendar year (CY) 2013 Physician Fee Sche dule (PFS) final rule with comment period (77 FR 68892 at 69 329) and is the subject of th is proposed rule. 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 “f oundation” and “final”

standards. (2) Updating e-Pres cribing Standards As noted previously, transaction standard s are periodically up dated to take new knowledge, technology and other considerations into account. As CMS adopted specific versions of the standards when it adopte d the foundation and final e-prescribingCMS-1600-P 556

standards, there was a need to establish a process 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 processe s in its November 7, 2005 final rule (70 FR 67579). The discussion noted that the rulemaking pr ocess will generally be used to retire, replace or adopt a new e-pres cribing standard, but it also provided for a simplified “updating process” when a standard coul d be updated with a newer “backwardcompatible” 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 comme nt 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-pr escribing program, but it has not yet been used to update the adopted NCPDP Formular y and Benefit Standard. We proposed to update the NCPDP Formulary and Benefit 1.0 st andard for the first time in the CY 2013 PFS proposed rule (77 FR 44722), but we did no t ultimately finalize those proposals. Specifically, we proposed to recognize NCPD P Formulary and Benefit Standard 3.0 as a backward compatible version of NCPDP Fo rmulary and Benefits 1.0 effective 60 days from the publication of the final rule, a nd sought comment on when we should retire NCPDP Formulary and Benefits 1.0 as we ll as when we should adopt NCPDP Formulary and Benefits 3.0 as the official Part D e-prescribing standard As was noted inCMS-1600-P 557

that rule, while recognition of backward compatible versions can be done in an interim

final rule in which we waive notice and comme nt rulemaking, other Part D e-prescribing proposals that were bein g made at that time required full notice and comment rulemaking, so, as we didn’t wish to publish two e-prescribing rule s contemporaneously, we elected to forgo our usual use of our simplified updating process for backward compatible standards (in which we waive not ice 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 fi nal rule with comment period (77 FR 68892), we were persuaded by 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, includi ng recognitions of NCPDP Formulary and Benefit 3.0 as a backward compatible standard, until closer to that July 1, 201 4 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 Be nefit 1.0, we believe that it is now appropriate to re-propose the recognition of NCPDP Formulary and Benefits 3.0 as a backward compatible version of Formular y and Benefits 1.0 effective 60 days after publication of a final rule until June 30, 2014, and, as discussed below, to propose the

retirement of NCPDP Formul ary and Benefits 1.0, effec tive July 1, 2014, and to proposeCMS-1600-P 558

the adoption of NCPDP Formulary and Benefits 3.0 as the official Part D e-prescribing standard effective July 1, 2014. As was di scussed previously, wh ile the recognition of backward compatible standards can be done in an interim final rule in which we waive notice and comment rulemaking, in light of ot her Part D e-prescr ibing proposals being made in this rule that require full notice and comment rulemaking, we will forgo use of the simplified updating method for backward co mpatible standards (in which we waive notice and comment rulemaking and go straight to final) in favor of putting all of the proposals through a single not ice and comment rulemaking. Also, as was seen in our prior proposal to recognize backward compatibility using full notice and comment in place of the back ward compatible methodology, we must also propose to require users of 3.0 to support user s who are still using NCPDP Formulary and

Benefit 1.0 until such time as that version is o fficially retired as a Part D e-prescribing

standard and NCPDP Formular y and Benefit 3.0 is adopted as the official Part D eprescribing 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 formular y and benefit information to prescribers via point-of-care (POC) systems. These include:

● General formulary data (for exampl e, 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 prio r authorization); andCMS-1600-P 559

● 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 di scussion of the chan ges to that were made to the NCPDP Formulary and Bene fit 1.0 as it was updated to the NCPDP Formulary and Benefit 3.0. As noted above, having come within r oughly a year of the anticipated date upon which NCPDP will cease supporting NCPDP Form ulary and Benefit 1.0, we believe that it is now appropriate to re-p ropose the retirement of NC PDP Formulary and Benefits 1.0, effective July 1, 2014, and to propose the adop tion of NCPDP Formulary and Benefits 3.0 as the official Part D e-prescr ibing standard, e ffective July 1, 2014. To effectuate these proposals, we propose to revise §423.160(b)(5). We propose to place the existing material in a ne w paragraph (b)(5)(i), which would provide the formulary and benefit standard for Part D e-prescribing until [60 days after publication of the final rule]. We then propose to create a second new paragraph ((b)(5)(ii)) to recognize NCPD P Formulary and Benefit 3.0. as a backward compatible version of the official Part D e-prescribi ng standard (NCPDP Formulary and Benefit 1.0), effective [60 days after pub lication of the final rule] through June 30, 2014. Furthermore, we propose to create a thir d new paragraph ((b)(5)(iii)) to reflect the retirement of NCPDP Formulary and Benefit 1.0 and the a doption of NCPDP Formulary and Benefit

3.0 as the official Part D e-prescribing standard, effective July 1, 2014. Finally, we propose to make conforming changes to §423.1 60(b)(1). We seek comment on these proposals.CMS-1600-P 560

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 advisa bility of expanding cove rage for chiropractic

services under Medicare. Curre nt Medicare coverage for chir opractic services is limited to treatment by means of manual manipulati on 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 demons tration expanded Medicare coverage to include: “(A) care for neuromusculoskel etal conditions typical among eligible beneficiaries; and (B) diagnos tic and other services that a chiropractor is legally authorized to perform by the state or jurisdic tion in which such treatment is provided.” The demonstration was conducted in four geogr aphically diverse sites, two rural and two urban regions, with each type including a H ealth Professional Shortage Area (HPSA).

The two urban sites were 26 counties in Il linois and Scott County, Iowa, and 17 counties in Virginia. The two rural sites were th e 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 ma ndates 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 th e Medicare program if the demonstration projects under this sectio n 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, respectivel y), 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 hi gher than those that

would occur in the absence of the demonstration. We stated that BN would be assessedCMS-1600-P 561

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 diagnos es 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 chir opractor claims because the costs of the expanded chiropractor services may have an impact on other Medica re costs for other

services.

In the CY 2010 PFS final rule with comme nt 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 th e “All Neuromusculoskeletal Analysis,” which compared the total Medicare costs of all beneficiaries who received services for a

neuromusculoskeletal condition in the demons tration areas with those of beneficiaries with similar characteristics from similar geog raphic areas that did not participate in the demonstration, the total eff ect of the demonstration on Medicare spending was $114 million higher costs for beneficiaries in area s that participated in the demonstration. In the “Chiropractic User Analysis,” which co mpared the Medicare costs of beneficiaries who used expanded chiropractic services to tr eat a neuromusculoskeletal condition in the demonstration areas, with those of beneficiar ies with similar characteristics who used chiropractic services as was currently covered by Medicare to treat a neuromusculoskeletal condition from similar ge ographic areas that di d 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 fo cus on users of chiropractic services ratherCMS-1600-P 562

than all Medicare beneficiarie s with neuromusculoskeletal conditions, as the latter included those who did not use chiropractic se rvices and who may not have become users of chiropractic services ev en 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 demonstrati on. 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 ru le (74 FR 61927), because the costs of this demonstration were higher than expected and we did not anticip ate a reduction to the PFS of greater than 2 percent per year, we finalized a policy to recoup $50 million in expenditures from this dem onstration over a 5-year peri od, from CYs 2010 through 2014 (74 FR 61927). Specifically, we are recouping $10 million for each such year through adjustments to the chiropract ic 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 negativ e impact on chiropractic practices. For the CY 2013 PFS, our Office of the Ac tuary (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 becau se of the change in the PFS update, OACT now estimates CY 2013 chiropractic expend itures to be approximately $580 million. Because of the change in projected chiroprac tic expenditures, we now expect to recoup approximately $11.6 million from the 2 percent payment reduction for chiropractic CPTCMS-1600-P 563

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 expe nditures based on previous year’s data. While OACT’s projections have included the st atutory reductions to physician payments, the statute was amended in each year to avoi d these reductions. As a result, Medicare expenditures for chiropractic services during the recoupmen t were higher than the OACT projections. Chiropractic serv ices expenditures during the re coupment 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 se rvices 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 pe rcentage 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 $480 million based on Medicare spending for chiropractic services for the most recent available year and reflecting an approximate 25 percent reduction to physician payments

scheduled to take effect unde r current law. CMS plans to recoup the remaining funds, approximately $5.6 million, and will reduce ch iropractic CPT codes (CPT codes 98940, 98941, and 98942) by the appropriate percentage, which by our preliminary estimates is one percent which takes into account the approximately 25 pe rcent reduction in physician payments scheduled to occur in 2014 as provi ded under current law. If the statute isCMS-1600-P 564

amended to avoid the physician payment reduction, we will reduce the recoupment percentage as appropriate to ensure th e recoupment does not exceed $50 million. For instance, if the statute is amended to pr ovide for a zero percent PFS update, we would reduce the recoupment percentage to approxima tely 0.7 percent. We will reflect this reduction only in the payment files used by th e Medicare contractors to process Medicare claims rather than through adjusting the R VUs. Avoiding an adjustment to the RVUs preserves the integrity of the PFS, particul arly since many private payers also base payment on the RVUs. Therefore, as finalized in the CY 2010 PFS regulation and reite rated in the CYs 2011 through 2013 PFS regulations, we ar e implementing this methodology and recouping excess expenditures under the chiropr actic 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 demonstr ation. We intend for CY 2014 to be the last year of this required recoupment.CMS-1600-P 565

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 collecti on 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 auto mated collection techniques. We are soliciting public comment on each of these issues for the following

sections of this document that contain information collection requirements (ICRs):

1. ICRs Regarding Medical Services Coverage Decisions that Relate to Health Care Technology (§405.211) The burden associated with the requ irements under § 405.211 is the time and effort it would take a study sponsor that is requesting Medicare coverage of an FDAapproved IDE to prepare the following as elec tronic documents: (1) a copy of the FDA IDE approval letter; (2) a c opy of the IDE study protocol; (3) a copy of IRB approval letter(s); and (4) the ClinicalTrails.gov id entifier. CMS reviews these documents to

determine whether it should cover cert ain costs in an IDE trial or study. Each IDE trial sponsor will have to prepar e these documents once. If the sponsorCMS-1600-P 566

requests a second review, the documents will have to be sent again. We estimate that this may happen 5-8 percent of the time. Sin ce the IDE rule was passed in September 1995 through 2012, there have been 4,000 IDE applic ations, averaging 222 per year. Adding another 8 percent brings the total esti mate of about 240 requests per year. The study sponsors do not have to create new documents. Rather they will be required to send us copies of information they have sent to the FDA and that the FDA has sent to them. Accordingly, we estimate that it will take 1 hour for an executive administrative assistant in a medical device company to prepare: (1) a copy of the FDA IDE approval letter; (2) a c opy of the IDE study protocol; (3) a copy of IRB approval letter(s); and 94) the ClinicalTrails.gov identifier, for electronic submission. We estimate that for 240 requests per year , that the total estimated cost to the public is $7,821 annually. In deriving these figures, we used the Bureau of Labor Statistics May 2012 estimate of $24.14 + 35 perc ent in fringe benefits for estimated hourly wage of $32.59 for an executive admi nistrative assistant (occupation code 43- 6011).

2. ICRs Regarding the Physician Qual ity Reporting System (PQRS) (§414.90) We are making certain revisions to §414.90, primarily to include our proposals for the qualified clinical data re gistry option. All of the re quirements and burden estimates are currently approved by OMB under OCN 093 8-1059, and are not subject to additional OMB review under the authority of the Pa perwork Reduction Act of 1995 (44 U.S.C. 3501 et seq. ). We are revising §414.90(b), (c), and (e) to indicate our proposals for the qualified clinical data registry option. While the sections contain information collection requirements regarding the input process and the endorsement of c onsensus-based qualityCMS-1600-P 567

measures, this rule would not revise any of the information collection requirements or burden estimates that are associated with those provisions. The preamble of this proposed rule discusses the background of the PQRS, provides information about the measures a nd reporting mechanisms that would be available to eligible profe ssionals and group practices who choose to participate in 2014, and provides the proposed criteria for sati sfactory reporting 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. a. Participation in the 2013 and 2014 PQRS

In the CY 2013 PFS final rule with co mment period, we provided estimates related to the impact of th e requirements we finalized fo r the PQRS for 2014. Since we are proposing additional proposals, this section modifies the impact statement provided in the CY 2013 PFS final rule with comment peri od 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 Tr ends (hereinafter “the PQRS Reporting Experience”). This report contains the latest data we have gathered on PQRS participation. The PQRS Repor ting Experience is available at http://www.cms.gov/Medicare/Quality -Initiatives-Patient-AssessmentInstruments/PQRS/index.html?redirect=/PQRS/ . According to the 2011 Reporting Experience Report, over 1 million professionals we re 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% of the professionals eligible to participate) . The average incentiveCMS-1600-P 568

earned for PQRS in 2011 per each individually-participating eligible professional was $1,059. As we noted in our impact statement la st year, we expect that, due to the implementation of payment adjustments begi nning in 2015, particip ation in the PQRS would rise incrementally to approxim ately 300,000 eligible professionals and 400,000 eligible professionals in 2013 and 2014, resp ectively. We believe our estimate of 400,000 eligible professionals participating in PQRS in 2014 is accurate. With respect to the estimated amount of incentives earned, for 2014, eligible professionals can earn a 0.5 percent incentiv e (i.e., 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 dur ing the reporting period) for satisfactory reporting, a reduction of 1.0 percent from 2011. 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 pa rticipate in the PQRS in 2014, the PQRS will distribute 2014 incentives to approximately (27% of 1 million e ligible professionals) 270,000 eligible professionals. At $1,059 per eligible professional, the PQRS would distribute approximately $286million in incen tive payments in 2014. We believe these incentive payments will help offset the co st eligible professionals may undertake for participating in the PQRS for the applicable year.

We note that the total burden associated w ith participating in the PQRS is the time

and effort associated with indi cating intent to participate in the PQRS, if applicable, and submitting PQRS quality measures data. When establishing these burden estimates, we assume the following:CMS-1600-P 569

• The proposals for reporting for the PQRS for the 2014 incentive and 2016 payment adjustment would be established as propos ed in this CY 2014 Medicare PFS proposed

rule.

• For an eligible professional or group pr actice using the claims , qualified registry, qualified clinical data regist ry, or EHR-based reporting mechanisms, we assume that the eligible professional or group practi ce would attempt to report PQRS quality

measures data with the intention of earni ng the 2014 PQRS incentiv e. Therefore, an eligible professional or group prac tice would report on 9 measures.

• With respect to labor costs, we believ e that a billing clerk will handle the administrative duties associated with part icipating, 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 cost estimates that woul d change if our proposals are finalized. b. Burden Estimate on Participation in the CYs 2013 and 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 reportin g quality measures data. Therefore, these burden estimates for individual eligible profe ssionals participating in PQRS are based on the reporting mechanis m the individual eligible profe ssional chooses. However, we believe a new eligible professional or group practice would spend 5 hours—whichCMS-1600-P 570

includes 2 hours to review PQ RS measures list, review th e 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 mech anism for incorpora ting reporting of the

selected measures into their office work flow s. Therefore, we believe that the initial administrative costs associated with partic ipating in PQRS woul d be approximately $80 ($16/hour x 5 hours). c. Burden Estimate on Participation in the 2013 and 2014 PQRS via the Claims-based Reporting Mechanism – Individu al Eligible Professionals Historically, the claims-based reporti ng 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 prof essionals) 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 participa ting individually or in a group practice, would participate in PQRS by CY 2014 (77 FR 69338). We believe this estimate should be further modified to reflect a lower part icipation estimate in 2014 due to the following proposals:

• We are proposing to eliminate the option to report measures groups via claims for the 2014 PQRS incentive.

• We are proposing to increase the number of measures that an eligible professional must report to meet the criteria for satis factory reporting for th e 2014 PQRS incentive from 3 measures to 9, but lower the reporting threshold to 50%.

• We are proposing to remove the claims-based reporting mechanism as an option for reporting certain individu al quality measures. Based on these proposals, we estimate that approximately 230,000 eligibleCMS-1600-P 571

professionals (that is, the same number of e ligible professionals w ho participated in the PQRS using the claims-based reporting mech anism in 2011) will participate in the PQRS using the claims-based reporting mechanism. Therefore, we estimate that approximately 58 percent of the eligible professionals par ticipating 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 ga ther 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 additi onal (optional) line items on the existing

HIPAA transaction 837-P and/or CMS Fo rm 1500 (OCN 0938-0999). Based on our experience with Physician Voluntary Repor ting Program (PVRP), we continue to estimate that the time needed to perform all the steps necessary to report each measure via claims would range from 0.25 minutes to 12 minutes, depending on the complexity of the measure. Therefore, the time spen t reporting 9 measures would range from 2.25 minutes to 108 minutes. Using an average la bor cost of $40/hour, we estimated that the time cost of reporting for an eligible pr ofessional 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 repo rting mechanism, we established that an eligible professional would need to report on 50 percent of the e ligible professional’s applicable cases. The actual number of cas es on which eligible professional reports would vary depending on the number of the el igible professional’s applicable cases. However, in prior years, when the reporti ng threshold was 80 percent for claims-based reporting, we found that the median number of reporting cases for each measure was 9.CMS-1600-P 572

Since we reduced 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 mechan ism would range from ($1.50/per reported case x 6 reported cases) $9.00 to ($72.00/re ported case x 6 reported cases) $432. d. Burden Estimate on PQRS Participati on in CY 2014 via the Qualified Registry, Qualified Clinical Data Registr y, or EHR Reporting Mechanisms We noted previously that we estimate a significant reducti on in the number of eligible professionals using the claims-b ased reporting mechanism to report PQRS quality measures data in 2014. Specifica lly, we estimate that approximately 230,000 eligible professionals will participate in the PQRS using the claims-based reporting mechanism in 2014. Therefore, we estimat e that the remainder of the eligible professionals (170,000) will participate in PQ RS using either the qualified registry, qualified clinical data regist ry, EHR (using either a direct EHR or EHR data submission vendor), or the GPRO web in terface reporting mechanisms. With respect to participation in a qualifi ed registry or qualified clinical data registry, we are combining our estimates for the number of eligib le 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 th at, at least for this initial year, many of the registries that become qualified clinical da ta registries will al so be existing qualified registries. As such, we anticipate there will be little to no additional registries that will submit quality measures data to the PQRS for purposes of the 2014 PQRS incentive and 2016 PQRS payment adjustment.CMS-1600-P 573

In 2011, approximately 50,215 (or 16 percent) of the 320,422 eligible professionals participating in PQRS used the registry-bas ed reporting mechanism. We believe the number of eligible professionals and group practices usi ng a qualified registry or qualified clinical data re gistry would remain the same, as eligible professionals use registries for functions other than PQRS a nd therefore would obtain a qualified registry or qualified clinical data re gistry solely for PQRS reporti ng by CY 2014. Please note that this estimate would include participants c hoosing the newly proposed 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%) of the 320,422 eligible professionals participating in PQRS used the EHR-based reporting mechan ism. We believe the number of eligible professionals and group practices using th e EHR-based reporting mechanism would increase as eligible professionals become more familiar with EHR products and more eligible professionals participate in program s encouraging use of an EHR, such as the EHR Incentive Program. In particular, we believe eligible pr ofessionals and group practices would transition fr om using the claims-based to the EHR-based reporting mechanisms. We estimate that approximatel y 50,000 eligible professionals (which is the same estimate as we are providing for elig ible professionals who use the qualified registry or qualified clinical data regi stry-based reporting mechanisms), whether participating as an individual or part of a group practice, would use the EHR-based reporting mechanism in CY 2014. With respect to an eligible profession al or group practice who participated in PQRS via a qualified registry, qualified clinical data regi stry, direct EHR product, orCMS-1600-P 574

EHR data submission vendor’s product, we be lieve there would be little to no burden associated for an eligible professional to report PQRS quality measures data to CMS, because the selected reporting mechanism su bmitted the quality measures data for the eligible professional. While we noted that there may be start-up costs associated with purchasing a qualified registr y, direct EHR product, or EH R data submission vendor, we believe that an eligible professional or group practice would not purchase a qualified registry, qualified clinical da ta registry, direct EHR produc t, or EHR data submission vendor product solely for the purpose of reporting PQRS quality measures. Therefore,

we have not included the cost of purchasing a qualified registr y, direct EHR, or EHR data submission vendor product in our burden estimates. e. Burden Estimate on PQRS Participation in CY 2014 – Group Practices Please note that with the exception of th e estimates associated with a group selfnominating to participate in the PQRS under the GPRO, this section only contains our estimates for group practices who participate in the PQRS under the GPRO via the GPRO web interface reporting mechanis m. We note that the burden associated with reporting quality measures for group practices using th e qualified registry or EHR-based reporting

mechanisms are included in the estimates we provided for the qualified registry or EHRbased reporting mechanisms above. Accordi ng to the PQRS and eRx Experience report, of the 101 practices participating in the GPRO , 54 of these practices participated using the GPRO web interface (formerl y the GPRO tool). We estimate that because we are proposing to apply the value-based payment modi fier to all group practices of 10 or more eligible professionals, we estimate that a pproximately 30% of su ch group practices, or about 5,100 group practices, will participate in the PQRS und er the GPRO for purposes of the 2014 PQRS incentive and the 2016 paymen t adjustment. In addition, we estimateCMS-1600-P 575

that of the 5,100 group practices that are expected to self-nom inate to participate in the PQRS under the GPRO, approximately 70,000 elig ible professionals (i.e. the remainder of the eligible professionals not particip ating in PQRS using the claims, qualified registry, qualified clinical data registry, or EHR-base d reporting mechanisms), representing about 30% 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, we noted that we proposed that eligible profe ssionals choosing to participat e as part of a group practice

under the GPRO would need to indicate their in tent to participate in PQRS as a GPRO. The total burden for group practices who submit PQRS quality measures data via the

GPRO web-interface would be the time and effo rt associated with submitting this data. To submit quality measures data for PQRS , a group practice would need to (1) be selected to participate in th e PQRS GPRO and (2) report quality measures data. With respect to the administrative duties for being se lected to participate in PQRS as a GPRO, we believe it would take approximately 6 hours – including 2 hours to decide to participate in 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 PQRS GPRO for the applicable year. Theref ore, we estimate that the cost of undergoing the GPRO selection process w ould be ($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 dataCMS-1600-P 576

submission methods, we estimate the burden a ssociated with a gr oup practice completing the data collection interface would be approxi mately 79 hours. Therefore, we estimate that the report cost for a group practice to submit PQRS quality measures data for an applicable year would be ($40/hour x 79 hours) $3,160. In addition to the GPRO web interface, pl ease note that we have proposed a new reporting mechanism that would be available to group practices comprised of 25+ eligible professionals: the certified survey vendor. W ith 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. While there may be start-up costs associated with purc hasing a certified survey ve ndor, we believe that a group practice would not purchase a ce rtified 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. f. Burden Estimate on PQRS Vendor Participation in CY 2014 Aside from the burden of eligible prof essionals and group practices participating in PQRS, we believe that entities that wish to become qualified clinical data registries

would incur costs associated with participating in PQRS. However, we believe that the burden associated with participating in PQRS for these entities woul d be very similar to the burden associated with existing qualifie d registries participating in PQRS. Based on the number of registries that ha ve self-nominated to become a qualified PQRS registry in prior program years, we estimated that approximately 50 additional registries would self-nominate to be consid ered a qualified regist ry for PQRS. With respect to qualified registries and qualified clinic al data registries, the total burden forCMS-1600-P 577

qualified registries and qualified clinical data registries who submitted PQRS quality

measures data would be the time and effort associated with submitting this data. To submit quality measures data for the proposed PQRS program years, a registry would need to (1) become qualified for the applicable year and (2) report qua lity measures data on behalf of its eligible profe ssionals. With respect to admini strative duties related to the qualification process, we estimated that it would take a total of 10 hours – including 1 hour to complete the self-nomination statem ent, 2 hours to interview with CMS, 2 hours to calculate numerators, denominators, and m easure results for each measure the registry wished to report using a CMS-provided meas ure flow, and 5 hours to complete an XML submission – to become qualified to report PQ RS quality measures data. Therefore, we estimate that it would cost a registry approximately ($16.00/hour x 10 hours) $160 to become qualified to submit PQRS quality m easures 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 calcula ting 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 registri es already perform these functions for its eligible professionals irrespective of particip ating in PQRS. Theref ore, we believe there

is little to no additional burden associated with reporting PQRS quality measures data. Whether there is any additional reporting burden would vary with each registry, depending on the registry’s level of savvy with submitting quality measures data for PQRS.CMS-1600-P 578

For CY 2014, we are proposing a new PQRS option that includes a new reporting mechanism – the qualified clinical data registr y. In this proposed rule, we set forth the requirements for a vendor to become qualifie d to become a qualified clinical data registry. Under the proposed requirement s, we note that a vendor can be both a traditional qualified registry a nd qualified clinical data regi stry under the PQRS. Indeed, as we noted previously, we be lieve that many of the entities that will seek to become qualified clinical data registri es will be similar to the existing qualified registries. In addition, at least initially, we propose that the process fo r becoming a qualified clinical data registry would be similar to the process for becoming a qualified registry. Therefore, we do not believe this new repor ting mechanism will impact our registry

estimates. h. Summary of Burden Estimates on Participation in the 2013 and 2014 PQRS - Eligible Professionals and Vendors

TABLE 69: Estimated Costs for Reporting PQRS Quality Measures Data for Eligible Professionals Hours Cases Number of Measures Hourly Rate Cost Per Respondent Number of 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 N/A 1

Individual EP: EHR N/A 1 N/A N/A Minimal 50,000 N/A 1 Group Practice:SelfNomination 6.0 1 N/A $16 $96 5,100 $489,60 0

Group 79 1 N/A $40 $3,160 340 $1,074,4CMS-1600-P 579

Practice: Reporting 00

1 We believe that eligible professionals who choose to repor t quality measures data to PQ RS using a registry, an EHR, or an EHR data submission vendor are already doing so fo r other purposes. Therefore, there would be little to no burden associated with reporting the quality data to CMS under PQRS. TABLE 70: Estimated Costs to Regi stries to Participate in PQRS Hours Hourly Rate Cost Number of Respondents Total CostRegistry: SelfNomination 10 $16 $160 50 $8,000

3. The Medicare EHR Incentive Program The Medicare EHR Incentive Program pr ovides incentive payments to eligible professionals, eligible hospitals, and CAHs th at demonstrate meaningf ul use of certified EHR technology. We believe any burden or impact associated with our proposals regarding the EHR Incentive Program is alre ady absorbed by the currently approved (OCN 0938-1158) burden and impact estimate s provided the EHR Incentive Program. Consequently, the proposed requirements (and burden) are not subjec t to additional OMB review under the authority of the Paperwor k Reduction Act of 1995 (44 U.S.C. 3501 et

seq. ).

4. Submission of PRA-Related Comments If you comment on these information colle ction and recordkeeping requirements, please do either of the following: 1. Submit your comments electronically as specified in the ADDRESSES section of this proposed rule; or 2. Submit your comments to the Office of Information and Regulatory Affairs, Office of Management and Budget,

Attention: CMS Desk Officer, [CMS-1590-FC] Fax: (202) 395-6974; or Email: OIRA_submission@omb.eop.gov

.CMS-1600-P 580

V. Response to Comments Because of the large number of public comments we normally receive on Federal Register documents, we are not able to acknowle dge 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.CMS-1600-P 581

VI. Regulatory Impact Analysis

A. Statement of Need This proposed rule is necessary to make payment and policy changes under the Medicare PFS and to make required statutory changes und er the Affordable Care Act (Pub. L. 111–148),

the Middle Class Tax Relief and Job Creati on Act of 2012 (Pub. L. 112-96), the American Taxpayer Relief Act (ATRA) of 2013 (Pub. L. 112-240), and other statutory changes. This proposed rule also is necessary to make ch anges 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 (Septemb er 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 (Mar ch 22, 1995; Pub. L. 104-4), Executive Order 13132 on Federalism (August 4, 1999) and the Congre ssional 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 imp acts, and equity). A regulatory impact analysis (RIA) must be prepared for major rules with economically si gnificant effects ($100 million or more in any 1 year). We estimate, as discussed below in this section, that the PFS provi sions included in this proposed rule will redistribute more than $100 million in 1 year. Therefore, we estimate that this rulemaking is “economically significant” as m easured by the $100 million threshold, and hence also a major rule under the Congressional Review Act. Accordingly, we have prepared a RIACMS-1600-P 582

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 a nd most other providers and supplie rs 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 website at http://www.sb a.gov/content/small-business-si ze-standards# (refer to the 620000 series)). Individuals and states are not in cluded in the definition of a small entity. The RFA requires that we analyze regulator y options for small businesses and other entities. We prepare a regulatory flexibility analys is unless we certify that a rule would not have a significant economic impact on a substantial nu mber of small entities. The analysis must include a justification concerning the reason actio n is being taken, the kinds and number of small entities the rule affects, and an explanation of any meaningful op tions 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 ba sed 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 entit ies, the analysis and discussion provided in this secti on as well as elsewhere in this proposed rule is intended to comply with the RFA requirements. In addition, section 1102(b) of th e 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 s ection 603 of the RFA. For purposes of sectionCMS-1600-P 583

1102(b) of the Act, we define a small rural hosp ital as a hospital that is located outside of a Metropolitan Statistical Area for Medicare payment regulations a nd 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 proposed ru le 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 gove rnments 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 proposed rule will impose no mandates on stat e, local, or tribal governments or on the private sector. Executive Order 13132 establishes certain requirem ents that an agency must meet when it promulgates a proposed rule (and subsequent fi nal rule) that imposes substantial direct requirement costs on state and local governme nts, preempts state law, or otherwise has Federalism implications. Since this regulati on does not impose any costs on state or local governments, the requirements of Ex ecutive Order 13132 are not applicable. We have prepared the following analysis, whic h together with the information provided in the rest of this preamble, meets all assessm ent requirements. The analysis explains the rationale for and purposes of this proposed rule ; details the costs and benefits of the rule; analyzes alternatives; and presents the measur es we would use to minimize the burden on small

entities. As indicated elsewher e in this proposed rule, we are proposing to implement a variety of changes to our regulations, payments, or paym ent policies to ensure that our payment systems reflect changes in medical practice and the relativ e value of services, and to implement statutoryCMS-1600-P 584

provisions. We provide information for each of the policy changes in the relevant sections of this proposed rule. We are unaware of any rele vant Federal rules that duplicate, overlap, or conflict with this proposed rule. The relevant sections of this proposed rule cont ain 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 increase s 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 th ese changes. If this threshold is exceeded, we make adjustments to preserve budget neutrality. Our estimates of changes in Medicare reve nues for PFS services compare payment rates for CY 2013 with proposed payment rates for CY 2014 using CY 2012 Medi care utilization as the basis for the comparison. The payment impact s reflect averages for each specialty based on Medicare utilization. The paym ent 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 pati ents and specialties may receive substantial

Medicare revenues for services that are not paid under the PFS. For instance, independent laboratories receive approximate ly 83 percent of their Medica re revenues from clinical laboratory services that ar e 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 updat e to the PFS conversion factor is calculated based on a statutory formula that measures actual versus allowed or “target” expenditures, andCMS-1600-P 585

applies a sustainable growth rate (SGR) calcula tion intended to control growth in aggregate Medicare expenditures for physicia ns’ services. This update met hodology is typically referred to as the “SGR” methodology, although the SGR is only one component of the formula. Medicare PFS payments for services are no t withheld if the percentage increase in actual expenditures exceeds the SGR. Rather, the PFS update, as spec ified in section 1848(d)(4) of the Act, is adjusted to eventually bring actua l expenditures back in line with targets. If act ual expenditures exceed allowed expenditures, the update is reduce d. If actual expenditures are less than allowed expenditures, the update is increased. By la w, 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. While th e Congress has provided te mporary 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 Medicar e 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 physic ian update for CY 2014 on our website athttp://www.cms.gov/Medicare/Medicare-Fee-for-ServicePayment/SustainableGRatesConFact/index.htm l?redirect=/SustainableGRatesConFact/

. Tables 71 and 72 show the payment impact on PFS services. 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 diffe rent from those shown in Tables 71 (CY 2014 PFS Proposed Rule Estimated Impact on Total Allowed Charges by Specialty ) and 72 (CY 2014 PFS Proposed Rule Estimated Impact on Total Allowed Charges by Specialty by Selected Proposal). The following is an explanation of the in formation represented in Table 71:CMS-1600-P 586

• Column A (Specialty) : The Medicare specialty code as reflected in our physician/supplier enro llment 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 incl ude coinsurance and de ductibles (which are the financial responsibility of the benefici ary). These amounts have been summed across all services furnished by physicians, practiti oners, 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 change s in the work and malpractice RVUs, including the impact of chan ges due to potentially 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.

• Column E (Combined Impact) : This column shows the estimated CY 2014 combined impact on total allowed charges of all the changes in the previous columns.CMS-1600-P 587

TABLE 71: CY 2014 PFS Proposed Rule Estimated Impact on Total Allowed Charges by Specialty* (A) Specialty (B)

Allowed Charges

(mil) (C) Impact of Work and MP

RVU Changes (D) Impact of PE RVU Changes (E) Combined

Impact

TOTAL $86,995 2% -2% 0% 01-ALLERGY/IMMUNOLOGY $213 1% -4% -3% 02-ANESTHESIOLOGY $1,862 4% -1% 3% 03-CARDIAC SURGERY $355 3% -1% 2% 04-CARDIOLOGY $6,425 2% 0% 2% 05-COLON AND RECTAL SURGERY $158 2% -2% 0% 06-CRITICAL CARE $273 3% -1% 2% 07-DERMATOLOGY $3,113 2% -4% -2% 08-EMERGENCY MEDICINE $2,929 3% 0% 3% 09-ENDOCRINOLOGY $447 2% -2% 0% 10-FAMILY PRACTICE $6,358 2% -1% 1% 11-GASTROENTEROLOGY $1,901 3% -2% 1% 12-GENERAL PRACTICE $528 2% -2% 0% 13-GENERAL SURGERY $2,236 3% -2% 1% 14-GERIATRICS $231 3% -1% 2% 15-HAND SURGERY $151 2% -2% 0% 16-HEMATOLOGY/ONCOLOGY $1,890 2% -3% -1% 17-INFECTIOUS DISEASE $635 3% -1% 2% 18-INTERNAL MEDICINE $11,416 3% -2% 1% 19-INTERVENTIONAL PAIN MGMT $640 2% -3% -1% 20-INTERVENTIONAL RADIOLOGY $219 2% -6% -4% 21-MULTISPECIALTY CLINIC/OTHER PHY $79 2% -2% 0% 22-NEPHROLOGY $2,123 3% -2% 1% 23-NEUROLOGY $1,498 2% -4% -2% 24-NEUROSURGERY $712 2% -1% 1% 25-NUCLEAR MEDICINE $51 2% -1% 1% 27-OBSTETRICS/GYNECOLOGY $688 2% -2% 0% 28-OPHTHALMOLOGY $5,592 2% -2% 0% 29-ORTHOPEDIC SURGERY $3,683 2% -2% 0%CMS-1600-P 588

(A) Specialty (B)

Allowed Charges

(mil) (C) Impact of Work and MP

RVU Changes (D) Impact of PE RVU Changes (E) Combined

Impact

30-OTOLARNGOLOGY $1,128 2% -4% -2% 31-PATHOLOGY $1,134 3% -8% -5% 32-PEDIATRICS $63 3% -3% 0% 33-PHYSICAL MEDICINE $999 3% -3% 0% 34-PLASTIC SURGERY $367 2% -2% 0% 35-PSYCHIATRY $1,165 3% -1% 2% 36-PULMONARY DISEASE $1,775 3% -2% 1% 37-RADIATION ONCOLOGY $1,783 1% -6% -5% 38-RADIOLOGY $4,635 2% -3% -1% 39-RHEUMATOLOGY $551 2% -5% -3% 40-THORACIC SURGERY $332 3% -1% 2% 41-UROLOGY $1,858 2% -4% -2% 42-VASCULAR SURGERY $925 2% -4% -2% 43-AUDIOLOGIST $56 2% -1% 1% 44-CHIROPRACTOR $722 3% -1% 2% 45-CLINICAL PSYCHOLOGIST $579 4% -1% 3% 46-CLINICAL SOCIAL WORKER $408 4% -1% 3% 47-DIAGNOSTIC TES TING FACILITY $779 0% -7% -7% 48-INDEPENDENT LABORATORY** $812 1% -27% -26% 49-NURSE ANES / ANES ASST $1,055 4% 0% 4% 50-NURSE PRACTITIONER $1,937 3% -2% 1% 51-OPTOMETRY $1,106 2% -2% 0% 52-ORAL/MAXILLOFACIAL SURGERY $44 2% -4% -2% 53-PHYSICAL/OCCUPATIONAL THERAPY $2,797 2% -1% 1% 54-PHYSICIAN ASSISTANT $1,405 3% -2% 1% 55-PODIATRY $1,975 2% -2% 0% 56-PORTABLE X-RAY SUPPLIER $110 1% -2% -1% 57-RADIATION THERAPY CENTERS $62 0% -13% -13% 98-OTHER $25 3% -2% 1% *Table 71 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. **PFS Payments only, which account for ~17% of Independent Laboratory payments from Medicare.CMS-1600-P 589

Table 72 shows the estimated impact of se lected policy proposals on total allowed charges, by specialty. The following is an ex planation of the information represented in

Table 72:

• Column A (Specialty) : The Medicare specialty code as reflected in our physician/supplier enro llment 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 a nd include coinsurance and deductibles (which are the financial res ponsibility 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 2012 Claims data , 90 Percent Equipment Utilization Assumption, Ultrasound Changes, and Other Minor Changes) : This column shows the estimated CY 2014 impact on total allowe d charges of the changes in the RVUs due to the 90 percent equipment utilizati on assumption discussed in section II.A.2.f. of this proposed rule, ultrasound changes di scussed in section II. A.5, the use of CY 2012 claims data to model payment rates, and all other proposals that result in minimal redistribution of payments under the PFS.

• Column D (Impact of OPPS/ASC cap) : This column shows the estimated CY 2014 impact on total allowed charges of the ch anges in the RVUs resulting from our proposed policy discussed in section II.A.4. of this proposed rule.CMS-1600-P 590

• Column E (Impact of MEI Revision): This column shows the estimated CY 2014 combined impact on total allowed charges of the changes in the RVUs resulting from our proposed policy to adjust the RVUs to match the proposed revised MEI weights.

• Column F (Cumulative Impact): This column shows the estimated CY 2014 combined impact on total allowed charges of all the proposed changes in the previous

columns. TABLE 72: CY 2014 PFS Proposed Rule Estimated Impact on Total Allowed Charges by Specialty by Selected Proposal* (A) Specialty (B)

Allowed Charges

(mil) (C) Impact of 2012 Claims

Data, 90% Utilization Assumption, Ultrasound

Changes, and Other

Minor Changes (D) Impact of OPD/ ASC Cap (E) Impact of MEI Revisi

on (F) Total(Cumulative) Impact

TOTAL $86,995 0% 0% 0% 0% 01-ALLERGY/IMMUNOLOGY $213 -1% 0% -2% -3% 02-ANESTHESIOLOGY $1,862 0% 0% 3% 3% 03-CARDIAC SURGERY $355 0% 0% 2% 2% 04-CARDIOLOGY $6,425 2% 0% 0% 2% 05-COLON AND RECTAL SURGERY $158 0% 0% 0% 0% 06-CRITICAL CARE $273 0% 0% 2% 2% 07-DERMATOLOGY $3,113 0% 0% -2% -2% 08-EMERGENCY MEDICINE $2,929 0% 0% 3% 3% 09-ENDOCRINOLOGY $447 -1% 1% 0% 0% 10-FAMILY PRACTICE $6,358 0% 1% 0% 1% 11-GASTROENTEROLOGY $1,901 0% 0% 1% 1% 12-GENERAL PRACTICE $528 0% 0% 0% 0% 13-GENERAL SURGERY $2,236 0% 0% 1% 1% 14-GERIATRICS $231 0% 1% 1% 2% 15-HAND SURGERY $151 -1% 1% 0% 0% 16-HEMATOLOGY/ONCOLOGY $1,890 -1% 1% -1% -1% 17-INFECTIOUS DISEASE $635 0% 0% 2% 2% 18-INTERNAL MEDICINE $11,416 0% 1% 0% 1% 19-INTERVENTIONAL PAIN MGMT $640 -1% 0% 0% -1%CMS-1600-P 591

(A) Specialty (B)

Allowed Charges

(mil) (C) Impact of 2012 Claims

Data, 90% Utilization Assumption, Ultrasound

Changes, and Other

Minor Changes (D) Impact of OPD/ ASC Cap (E) Impact of MEI Revisi

on (F) Total(Cumulative) Impact

20-INTERVENTIONAL RADIOLOGY $219 -1% -2% -1% -4% 21-MULTISPECIALTY CLINIC/OTHER PHY $79 -1% 0% 1% 0% 22-NEPHROLOGY $2,123 0% 0% 1% 1% 23-NEUROLOGY $1,498 0% -1% -1% -2% 24-NEUROSURGERY $712 0% 0% 1% 1% 25-NUCLEAR MEDICINE $51 0% 1% 0% 1% 27-OBSTETRICS/GYNECOL OGY $688 0% 0% 0% 0% 28-OPHTHALMOLOGY $5,592 0% 1% -1% 0% 29-ORTHOPEDIC SURGERY $3,683 -1% 1% 0% 0% 30-OTOLARNGOLOGY $1,128 -1% 0% -1% -2% 31-PATHOLOGY $1,134 1% -6% 0% -5% 32-PEDIATRICS $63 0% 0% 0% 0% 33-PHYSICAL MEDICINE $999 -1% 1% 0% 0% 34-PLASTIC SURGERY $367 0% 1% -1% 0% 35-PSYCHIATRY $1,165 0% 0% 2% 2% 36-PULMONARY DISEASE $1,775 0% 1% 0% 1% 37-RADIATION ONCOLOGY $1,783 1% -4% -2% -5% 38-RADIOLOGY $4,635 -1% 0% 0% -1% 39-RHEUMATOLOGY $551 -3% 1% -1% -3% 40-THORACIC SURGERY $332 0% 0% 2% 2% 41-UROLOGY $1,858 -1% 0% -1% -2% 42-VASCULAR SURGERY $925 1% -3% 0% -2% 43-AUDIOLOGIST $56 0% 1% 0% 1% 44-CHIROPRACTOR $722 1% 1% 0% 2% 45-CLINICAL PSYCHOLOGIST $579 0% 0% 3% 3% 46-CLINICAL SOCIAL WORKER $408 0% 0% 3% 3% 47-DIAGNOSTIC TESTI NG FACILITY $779 -4% 0% -3% -7% 48-INDEPENDENT LABORATORY** $812 1% -25% -2% -26% 49-NURSE ANES / ANES ASST $1,055 0% 0% 4% 4% 50-NURSE PRACTITIONER $1,937 0% 1% 0% 1% 51-OPTOMETRY $1,106 0% 1% -1% 0% 52-ORAL/MAXILLOFACIAL SURGERY $44 0% -1% -1% -2% 53-PHYSICAL/OCCUPATIONAL THERAPY $2,797 0% 1% 0% 1% 54-PHYSICIAN ASSISTANT $1,405 0% 1% 0% 1%CMS-1600-P 592

(A) Specialty (B)

Allowed Charges

(mil) (C) Impact of 2012 Claims

Data, 90% Utilization Assumption, Ultrasound

Changes, and Other

Minor Changes (D) Impact of OPD/ ASC Cap (E) Impact of MEI Revisi

on (F) Total(Cumulative) Impact

55-PODIATRY $1,975 -1% 1% 0% 0% 56-PORTABLE X-RAY SUPPLIER $110 1% 1% -3% -1% 57-RADIATION THERAPY CENTERS $62 0% -8% -5% -13% 98-OTHER $25 0% 1% 0% 1% *Table 72 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. **PFS Payments only, which account for ~17% of Independent Laboratory payments. 2. CY 2014 PFS Impact Discussion a. Changes in RVUs The most widespread specialty impacts of th e RVU changes are generally related to two major factors. The first factor, as discussed in section II.A.4. of this proposed rule, is our proposal to cap the payments for cer tain nonfacility services at the fa cility rate plus the lower of the OPPS or ASC payment. The second factor, as discussed in section II.D., is our proposal to revise the Medicare Economic Index (MEI) and adjust the RVUs to match the new weights for work, PE, and MP. In addition, a number of other changes cont ribute to the impacts shown in Table 71. These include a statutory change that requires us to use a 90 percent equi pment utilization rate rather than the previously used 75 percent fo r expensive diagnostic imaging equipment as

discussed in section II.A.2.f of this proposed rule, proposals to update direct practice expense inputs, as discussed in section II.A.5. of this pr oposed rule and proposals to adjust time for some services, as discussed in secti on II.B.3.c. of this proposed rule.CMS-1600-P 593

Table 72 shows the same information as provide d in Table 71, but ra ther than isolating the policy impact on physician work, practice expe nse, and malpractice separately, Table 72 shows the impact of varied propos ed policies on total RVUs. b. Combined Impact Column E of Table 71 and column F of Table 72 display the estimated CY 2014 combined impact on total allowed charges by speci alty of all the proposed RVU changes. These impacts range from an increase of 3 percent for c linical social workers, clinical psychologists, nurse anesthetists, and emergency medicine, to a decrease of 26 pe rcent for independent laboratories. Again, these impacts are estimated prior to the application of the negative CY 2014 conversion factor (CF) update applic able under the current statute. Table 73 (Impact of Proposed Rule on CY 2014 Payment for Selected Procedures (Based on the March 2013 Preliminary Physician Update)) 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 select ed these procedures from among the most commonly furnished by a broad spectrum of physicia n specialties. The cha nge in both facility rates and the nonfacility rates ar e shown. For an explanation of facility and nonfacility PE, we refer readers to Addendum A of this proposed rule.CMS-1600-P 594TABLE 73: Impact of Proposed Ruleon CY 2014 Payment for Selected Procedures (Based on the March 2013 PreliminaryPhysician Update)*FacilityNon-Facility

CPT/ HCPCS 1 MODShort Descriptor CY 2013 2 CY 2014 3 (pre update) % Change (pre update) CY 2014 4 (post update) % Change (post update) CY 2013 2 CY 2014 3 (pre update) % Change (pre update) CY 2014 4 (post update) % Change (post update)11721 Debride nail 6 or more $24.50 $25.32 3%$19.04 -22% $44.91 $45.29 1% $34.06 -24%17000 Destruct premalg lesion $57.16 $57.42 0% $43.18 -24% $83.36 $81.67 -2% $61.42 -26%27130 Total hip arthroplasty $1,454.48 $1,481.54 2% $1,114.10-23% NA NA NA NA NA27244 Treat thigh fracture $1,242.18 $1,262.91 2% $949.69 -24% NA NA NA NA NA27447 Total knee arthroplasty $1,552.81 $1,582.11 2% $1,189.73-23% NA NA NA NA NA33533 Cabg arterial single $1,906.31 $1,944.12 2% $1,461.95-23% NA NA NA NA NA35301 Rechanneling of artery $1,096.22 $1,112.04 1% $836.24 -24% NA NA NA NA NA43239 Upper gi endoscopybiopsy$174.54 $177.26 2% $133.29 -24% $359.28 $347.74 -3% $261.49 -27%66821 After cataract lasersurgery$325.26 $323.84 0% $243.52 -25% $344.99 $342.39 -1% $257.47 -25%66984 Cataract surg w/iol 1stage$667.87 $673.00 1% $506.09 -24% NA NA NA NA NA67210 Treatment of retinallesion$520.55 $523.21 1% $393.45 -24% $538.92 $540.69 0% $406.59 -25%71010 Chest x-ray 1 viewfrontalNA NA NA NA NA $23.82 $23.90 0% $17.97 -25%71010 26 Chest x-ray 1 viewfrontal$8.85 $9.27 5% $6.97 -21% $8.85 $9.27 5% $6.97 -21%77056 Mammogram bothbreastsNA NA NA NA NA $114.66 $114.49 0% $86.09 -25%77056 26 Mammogram bothbreasts$42.19 $43.87 4% $32.99 -22% $42.19 $43.87 4% $32.99 -22%CMS-1600-P 595FacilityNon-Facility

CPT/ HCPCS 1 MODShort Descriptor CY 2013 2 CY 2014 3 (pre update) % Change (pre update) CY 2014 4 (post update) % Change (post update) CY 2013 2 CY 2014 3 (pre update) % Change (pre update) CY 2014 4 (post update) % Change (post update)77057 Mammogram screening NA NA NA NA NA $81.66 $81.32 0% $61.15 -25%77057 26 Mammogram screening $34.02 $35.31 4% $26.55 -22% $34.02 $35.31 4% $26.55 -22%77427 Radiation txmanagement x5$178.28 $185.46 4% $139.46 -22% $178.28 $185.46 4% $139.46 -22%88305 26 Tissue exam bypathologist$36.74 $38.16 4% $28.70 -22% $36.74 $38.16 4% $28.70 -22%90935 Hemodialysis oneevaluation$71.11 $73.47 3% $55.25 -22% NA NA NA NA NA92012 Eye exam establishpatient$53.08 $54.92 3% $41.30 -22% $87.44 $86.67 -1% $65.17 -25%92014 Eye exam&tx estab pt1/>vst$80.29 $82.74 3% $62.22 -23% $126.23 $125.90 0% $94.67 -25%93000 ElectrocardiogramcompleteNA NA NA NA NA $18.37 $18.19 -1% $13.68 -26%93010 Electrocardiogramreport$8.17 $8.56 5% $6.44 -21% $8.17 $8.56 5% $6.44 -21%93015 Cardiovascular stresstestNA NA NA NA NA $79.61 $77.75 -2% $58.47 -27%93307 26 Tte w/o dopplercomplete$44.23 $46.01 4% $34.60 -22% $44.23 $46.01 4% $34.60 -22%93458 26 L hrt artery/ventricleangio$315.73 $324.55 3% $244.06 -23% $315.73 $324.55 3% $244.06 -23%98941 Chiropract manj 3-4regions$30.62 $31.39 2% $23.60 -23% $36.40 $37.45 3% $28.16 -23%99203 Office/outpatient visitnew$75.19 $77.75 3% $58.47 -22% $108.19 $108.42 0% $81.53 -25%99213 Office/outpatient visitest$49.67 $51.71 4% $38.89 -22% $72.81 $72.76 0% $54.71 -25%99214 Office/outpatient visit $76.55 $79.18 3% $59.54 -22% $106.83 $107.35 0% $80.73 -24%CMS-1600-P 596FacilityNon-Facility

CPT/ HCPCS 1 MODShort Descriptor CY 2013 2 CY 2014 3 (pre update) % Change (pre update) CY 2014 4 (post update) % Change (post update) CY 2013 2 CY 2014 3 (pre update) % Change (pre update) CY 2014 4 (post update) % Change (post update)est99222 Initial hospital care $134.73 $138.38 3% $104.06 -23% NA NA NA NA NA99223 Initial hospital care $198.01 $203.65 3% $153.14 -23% NA NA NA NA NA99231 Subsequent hospitalcare$38.11 $39.23 3% $29.50 -23% NA NA NA NA NA99232 Subsequent hospitalcare$70.09 $72.40 3% $54.44 -22% NA NA NA NA NA99233 Subsequent hospitalcare$101.05 $104.14 3% $78.31 -22% NA NA NA NA NA99236 Observ/hosp same date $212.30 $218.63 3% $164.41 -23% NA NA NA NA NA99239 Hospital discharge day $104.79 $107.35 2% $80.73 -23% NA NA NA NA NA99283 Emergency dept visit $59.88 $61.70 3% $46.40 -23% NA NA NA NA NA99284 Emergency dept visit $114.66 $118.05 3% $88.77 -23% NA NA NA NA NA99291 Critical care first hour $217.75 $223.26 3% $167.89 -23% $272.18 $273.91 1% $205.98 -24%99292 Critical care addl 30min$109.55 $112.70 3% $84.75 -23% $120.78 $123.05 2% $92.53 -23%99348 Home visit est patient NA NA NA NA NA $82.34 $84.53 3% $63.56 -23%99350 Home visit est patient NA NA NA NA NA $173.52 $177.61 2% $133.56 -23%G0008 Immunization admin NA NA NA NA NA $25.86 $24.97 -3% $18.77 -27%1CPT codes and descriptions are copyright 2012 American Medical Association. All Rights Reserved. Applicable FARS/DFARS apply.2Payments based on the 2013 conversion factor of 34.0230.3Payments based on the 2013 conversion factor of 34.0230, adjusted to 35.6653 to include the budget neutrality adjustment.4Payments based on the estimated 2014 conversion factor of 25.7109 adjusted to 26.8199 to include a budgetneutrality adjustment.CMS-1600-P 597

D. Effect of Proposed Changes to Medi care Telehealth Se rvices Under the PFS

As discussed in section II.E .3 of this proposed rule, we are proposing to refine our definition of rural as it applies to HPSAs elig ible for telehealth services as well as add transitional care management services to the list of Medicare telehealth services. While we expect these changes to increase acce ss to care in rural areas, based on recent

utilization of current Medicare telehealth services, including services similar to transitional care management, we estimat e no significant impact on PFS expenditures from the proposed additions. E. Geographic Practice Cost Indices (GPCIs) Based upon statutory requirements we ar e proposing to update the GPCIs for each Medicare payment locality. The proposed GP CIs incorporate the use of updated data and cost share weights as discusse d in II.E. The Act requires th at updated GPCIs be phased in over two years. Addendum D s hows the estimated effects of the revised GPCIs on area GAFs for the transition year (CY 2014) and th e fully implemented year (CY 2015). The GAFs reflect the use of the updated underlying GPCI data, and the proposed 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. While we do not actually use the GAFs in computing the fee sche dule payment for a specific service, they are useful in comparing overall areas co sts and payments. The actual geographic adjustment to payment for any actual service w ill be different from the GAF to the extent that the proportions of work, PE and malp ractice expense RVUs for the service differ

from those of the GAF. The most significant changes occur in 22 payment localities where the fullyCMS-1600-P 598

implemented (CY 2015) GAF moves up by more than 1 percent (11 payment localities) or down by more than 2 percent (11 paymen t localities). The impacts on the proposed GPCIs are primarily attributed to the expiration of the 1.000 work GPCI floor. The use of updated underlying GPCI data and cost shar e weights has a minimal impact on locality GAFs. The total impact of the GPCI revi sions is shown in the 2015 GPCI values of

Addendum E. We note that the proposed CY 2014 physician work GPCIs and summarized geographic adjustment factors (GAFs) publ ished in Addenda D and E reflect the elimination of the 1.0 work GPCI floor provi ded in section 1848 (e)(1 )(E) of the Act, which is set to expire prior to th e implementation of the CY 2014 PFS. F. Other Provisions of the Proposed Regulation 1. Rebasing and Revising Medicare Economic Index The preliminary estimate of the proposed changes to the MEI for CY 2014 is a 0.1 percent decrease. This is based on an es timated 0.8 percent increase for CY 2014 under the current MEI compared to a 0.7 percen t increase for CY 2014 under the proposed

revised MEI.” 2. Coverage of Items and Services furnis hed in FDA-Approved Investigational Device Exemption (IDE) Clinical Trials We are proposing a transparent centraliz ed review process that would be more efficient by reducing the burde n for stakeholders. Once th e IDE coverage process is centralized, there will be a si ngle entity making the IDE coverage decision. This also eliminates duplicative reviews by Medica re local contractors and the numerous applications sent to contr actors by stakeholders requesti ng IDE coverage. We believeCMS-1600-P 599

that a centralized review pro cess will not significantly reduce the number of IDE devices currently covered. Therefore, this rule will not result in an extra burden to the public. 3. Ultrasound Screening for Abdominal Aortic Aneurysms

As discussed in section III.B. of this proposed rule, section 1861(s)(2)(AA) of the Act, with implementing regulations at §410.19, authorizes Medicare coverage of ultrasound screening for abdominal aortic aneurysms (“AAA screening”). We are proposing to modify §410.19 to allow cove rage of one-time AAA screening without receiving a referral as part of the IPPE, for be neficiaries 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 im pact 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 proposed rule, sections 1861(s)(2)(R) and 1861(pp)(1) of the Act, and implementi ng regulations at 42 CFR 410.37 authorize Medicare coverage of screen ing FOBT. We are proposing to modify §410.37(b) to allow attending physicians, physician assistants , nurse practitioners, and clinical nurse specialists to furnish orders for screening FO BTs. While 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 im pact of this change is unknown for CY 2014.

5. Ambulance Fee Schedule As discussed in section III.D. of this pr oposed rule, section 604(a) through (c) of the ATRA require the extension of cer tain add-on payments for ground ambulanceCMS-1600-P 600

services and the extension of certain ru ral area designations for purposes of air ambulance payment. In addition, as discussed in section III.D. of this proposed rule, 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 pr ovisions of section 1834(l) of the Act shall be reduced by 10 pe rcent for ambulance services furnished on or after October 1, 2013, consisting of non-emer gency basic life support (BLS) services involving transport of an indi vidual with end-stage renal disease for renal dialysis services (as described in s ection 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 pe rcent rate decrease discussed above are enacted through legislation that is self-implementing. We are proposing to amend the regulation text at §414.610 only to conform the regulations to these self-implementing statutory requirements. As a result, we ar e not making any policy proposals associated with these legislative provisions and there is no associated regulatory impact 6. Clinical Laboratory Fee Schedule We are proposing to add language to the Code of Federal Regulations to codify authority provided by statute and to es tablish 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 proposing a defi nition for the term technological changes. Adjustments made under the new process c ould both increase fee schedule amounts and provide for reductions in existing amounts. We cannot estimate a net impact at this time. 7. Liability for Overpayments to or on Beha lf of Individuals in cluding Payments toCMS-1600-P 601

Providers or Other Persons

As discussed in section III.M. of this proposed rule, we are proposing to change the timing of the triggering event for the “w ithout fault” and “against equity and good conscience” presumptions. 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 website because we are not collecting any information for the Physician Compare website. 9. Physician Payment, Efficiency, and Quality Improvements – Physician Quality Reporting System (PQRS)

In the CY 2013 PFS final rule with co mment period, we provided estimates related to the impact of th e requirements we finalized fo r 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 Tr ends (hereinafter “the PQRS Reporting Experience”). This report contains the latest data we have gathered on PQRS participation. The PQRS Repor ting Experience is available at http://www.cms.gov/Medicare/Quality -Initiatives-Patient-AssessmentInstruments/PQRS/index.html?redirect=/PQRS/ . According to the 2011 Reporting Experience Report, over 1 million professionals we re 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 (orCMS-1600-P 602

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 la st year, we expect that, due to the implementation of payment adjustments begi nning in 2015, particip ation in the PQRS would rise incrementally to approxim ately 300,000 eligible professionals and 400,000 eligible professionals in 2013 and 2014, resp ectively. We believe our estimate of 400,000 eligible professionals participating in PQRS in 2014 is accurate. With respect to the estimate amount of incentives earned, for 2014, eligible professionals can earn a 0.5 percent incen tive (that is, a bonus payment equal to 0.5 percent of the total allowed Part B charges for covered pr ofessional serv ices under the PFS furnished by the eligible professional duri ng the reporting period) for satisfactory reporting, a reduction of 1.0 percent from 2011. 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 pa rticipate in the PQRS in 2014, the PQRS will distribute 2014 incentives to approxima tely (27 percent of 1 million eligible professionals) 270,000 eligible professionals. At $1,059 per eligible professional, the PQRS would distribute approximately $286 m illion in incentive payments in 2014. We believe these incentive payments will help o ffset the cost eligible professionals may undertake for participating in the PQRS for the applicable year.

We note that the total burden associated w ith participating in the PQRS is the time

and effort associated with indi cating intent to participate in the PQRS, if applicable, and submitting PQRS quality measures data. When establishing these burden estimates, we assume the following:CMS-1600-P 603

• The proposals for reporting for the PQRS for the 2014 incentive and 2016 payment adjustment would be established as propos ed in this CY 2014 Medicare PFS proposed

rule.

• For an eligible professional or group pr actice using the claims, registry, or EHRbased 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. Therefore, an eligible professionals or group practice would report on 9 measures.

• With respect to labor costs, we believ e that a billing clerk will handle the administrative duties associated with part icipating, 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 wish es 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 reportin g quality measures data. Therefore, these burden estimates for individual eligible profe ssionals participating in the PQRS are based on the reporting mechanism the individual elig ible 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 va rious reporting options, and select a reporting option and measures on which to report and 3 hours to review the measure specifications and develop a mech anism for incorpora ting reporting of theCMS-1600-P 604

selected measures into their office work flow s. Therefore, we believe that the initial administrative costs associated with particip ating in the PQRS would be approximately $80 ($16/hour x 5 hours). With respect to an eligible professional who participat es in the PQRS via claims, the eligible professional must gather the required inform ation, select the appropriate quality data codes (QDCs), and include the appropriate QDCs on the claims they submit for payment. The PQRS collects QDCs as a dditional (optional) line items on the existing

HIPAA transaction 837-P and/or CMS Fo rm 1500 (OCN: 0938-0999). Based on our experience with Physician Voluntary Repor ting Program (PVRP), we continue to estimate that the time needed to perform a ll 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 spen t reporting 9 measures would range from 2.25 minutes to 108 minutes. Using an average la bor cost of $40/hour, we estimate that time cost of reporting for an eligible profe ssional via claims would range from $1.50 (2.25 minutes or 0.0375 hours x $40/hour) to $72.00 (1 08 minutes or 1.8 hours x $40/hour) per reported case. With respect to how many cas es an eligible prof essional would report when using the claims-based reporting mech anism, we proposed that an eligible professional would need to report on 50 percent of the eligible profe ssional’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 threshol d was 80 percent, we found that the median number of reporting cases for each measure wa s 9. Since we are proposing to reduce the reporting threshold to 50 percent, we estimat e that the average number of reporting casesCMS-1600-P 605

for each measure would be reduced to 6. Base d on these estimates, we estimate that the total cost of reporting for an eligible pr ofessional choosing the claims-based reporting mechanism would range from ($1.50/per re ported case x 6 reported cases) $9.00 to ($72.00/reported case x 6 reported cases) $432. With respect to an eligib le professional or group pract ice who participates in the PQRS via a qualified registry, direct EHR product, EHR data submission vendor product, or qualified clinical da ta 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 mechanis m submits the quality measures data for the eligible professional. While we note that there may be start-up costs associated with purchasing a qualified registr y, direct EHR product, EHR data submission vendor, or qualified clinical data registr y, we believe that an eligible professional or group practice would not purchase a qualifie d registry, direct EHR product, EHR data submission vendor product, or qualified clinical data registry sole ly for the purpose of reporting PQRS quality measures. Therefore, we ha ve not included the cost of purchasing a qualified registry, direct EHR, EHR data submission vendor pr oduct, or qualified clinical data registry in our burden estimates. Unlike eligible professionals who choose to report individually, we note 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 gr oup 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) beCMS-1600-P 606

selected to participate in th e 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 approximate ly 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 estimate that the cost of undergoing the GPRO selection process w ould 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 da ta (that is, completed the data collection interface). Based on burden estimates for th e PGP demonstration, which uses the same data submission methods, we estimate the bu rden associated with a group practice completing the data collection interface would be approximately 79 hours. Therefore, we estimate that the report cost for a group practice to submit PQRS quality measures data for the proposed reporting options in an appl icable year would be ($40/hour x 79 hours) $3,160. Aside from the burden of eligible prof essionals and group practices participating in the PQRS, we believe that ve ndors 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 th at we have proposed requirements for a new reporting mechanism in this CY 2014 PFS propos ed rule – the qualif ied clinical data registry. For purpose of these burden estimates , we believe that, at least in its initial stage, vendors of a qualified cl inical data registry would ha ve burden estimates similar to traditional registries, as we believe many of the vendors seeking to become qualified as aCMS-1600-P 607

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 PQ RS 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 regist ry 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 administrati ve duties related to th e qualification process for both traditional registries and clinical data registries, we estimate 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 num erators, 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 estimate 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 reporti ng of quality measures data, we believe the burden associated with reporting is the time and effo rt 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 littl e to no additional burden associated with reporting PQRS quality measures data. Whethe r there is any additional reporting burdenCMS-1600-P 608

will vary with each registry, depending on th e 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 Qua lity Measures Data would be the time and effort associated with submitting this data. To submit quality measures data for the proposed program years under the PQRS, a di rect EHR product or EHR data submission vendor would need to report quality measures data on behalf of its eligible professionals. Please note that we are not proposing to c ontinue to require direct EHR products and EHR data submission vendors to become qua lified to submit PQRS quality measures

data. In addition to the GPRO web interface, pl ease note that we have proposed a new reporting mechanism that would be available to group practices comprised of 25+ eligible professionals: the certified survey vendor. W ith 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. While there may be start-up costs associated with purc hasing a certified survey ve ndor, we believe that a group practice would not purchase a ce rtified 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.CMS-1600-P 609

TABLE 74: Estimated Costs for Reporting PQRS Quality Measures Data per Eligible Professional

Estimated Hours Estimated Cases Number of Measures Hourly Rate Total Cost Individual Eligible Professional (EP): Preparation 5.0 1 N/A $16 $80

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 MinimalGroup Practice: SelfNomination 6.0 1 N/A $16 $96 Group Practice: Reporting 79 1 N/A $40 $3,160 TABLE 75: Estimated Costs per Vendo r 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 proposed rule merely propose alternative methods to report CQMs to meet the CQM component of achieving meaningful use for the EHR Incentive Program in 2014. We belie ve any impacts these proposals would have are absorbed in the impacts discu ssion published in the EHR Incentive Program final rule published on September 4, 2012. 11. Medicare Shared Savings Program Please note that the requirements for pa rticipating 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 NovemberCMS-1600-P 610

2, 2011 (76 FR 67962). The proposals for the Medicare Shared Savings Program set forth in the CY 2014 MPFS proposed rule expand the incorporation of reporting requirements and incentive payments rela ted 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 repo rt PQRS separately to avoid the payment adjustment, this reduces the quality reporti ng burden for ACO partic ipants participating in the Shared Savings Program. There is no impact for the additional proposals related to requirements for setting benchmarks or fo r scoring the CAHPS measure modules. 12. Physician Value-Based Payment Modifier and the Physician Feedback Reporting Program The changes to the Physician Feedback Progr am in section III.K. of this proposed rule would not impact CY 2014 physician paym ents under the Physician Fee Schedule. We anticipate that as we approach implemen tation 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 Pa rt D and Identification This section of the proposed rule impose s no new requirements because use of the official Part D e-prescree ning 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 proposed rule, we are continuing theCMS-1600-P 611

recoupment of the $50 million in expenditures fr om this demonstration in order to satisfy the BN requirement in section 651(f)(1)(B) of the MMA. We initiate d 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 ye ar’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 re sult, Medicare expenditures for chiropractic services during the recoupment were highe r 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 milli on 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 m illion in 2013. A 2 percent recoupment percentage for chiropractic services woul d 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 c odes 98940, 98941, and 98942) by the appropriate percentage, which by our preliminary estimates is one percent if the approximately 25 percent reduction in physi cian payments takes effect in 2014. If the statute is amended to avoid the physician payment reduction, we will reduce the recoupment percentage as appropriate to ensure the recoupment does not exceed $50 million. For instance, if theCMS-1600-P 612

statute is amended to provide for a zero percent PFS update, we would reduce the recoupment percentage to approximately 0.7 percent.

G. Alternatives Considered This proposed rule contains a range of policies, including some provisions related to specific statutory provisions. The pr eceding preamble provides descriptions of the statutory provisions that are addressed, identi fies those policies when discretion has been exercised, presents rationale for our final pol icies and, where relevant , alternatives that

were considered. H. Impact on Beneficiaries There are a number of changes in this pr oposed rule that would have an effect on beneficiaries. In general, we believe that many of the proposed changes, including the refinements of the PQRS with its focus on measuring, submitting, and analyzing quality data; establishing the basis for the value-ba sed payment modifier to adjust physician payment beginning in CY 2015; improved accur acy in payment through revisions to the inputs used to calculate payments under the PFS and the capping certain nonfacility services at the facility rate plus the lowe r of the OPPS or ASC ra te; 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 proposed polic y changes could result in a change in beneficiary liability as relates to coinsuran ce (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 73, the CY 2013 national payment amount in the nonfacility sett ing for CPT code 99203 (Office/ outpatient visit, new) isCMS-1600-P 613

$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 pr oposed rule, using the current (CY 2013) CF of 34.0376, adjusted to 35.6652 to include budget neutrality, th e CY 2014 national payment amount in the nonfacility setting fo r CPT code 99203, as shown in Table 73, is $113.15, which means that, in CY 2014, the proposed beneficiary coinsurance for this service would be $22.63. I. Accounting Statement As required by OMB Circul ar A-4 (available at http://www.whitehouse.gov/om b/circulars/a004/a-4.pdf ), in Table 76 (Accounting Statement), we have prepared an acc ounting statement showing the estimated expenditures associated with this proposed rule. 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.CMS-1600-P 614

TABLE 76: Accounting Statement: Cla ssification of Estimated Expenditures CATEGORY TRANSFERS CY 2014 Annualized Monetized Tran sfers Estimated decrease in expenditures of $19.6 billion for PFS conversion factor update. From Whom To Whom? Federal Government to physicians, other p ractitioners and providers and suppliers who receive p ayment under Medicare. CY 2014 Annualized Monetized Transfers Estim ated increase in payment of $286 million. From Whom To Whom? Federal Government to eligible professionals who satisfactorily participate in the Physician Quality Reporting System (PQRS). CY 2014 Annualized Monetized Transfers Estimat ed decrease in expe nditures of $50 million for liability for overpayments to or on behalf of individuals including payments to providers or other p ersons. From Whom To Whom? Federal Government to physicians, other p ractitioners and providers and suppliers who receive p ayment under Medicare. TABLE 77: Accounting Statement: Classi fication of Estimated Costs, Transfer, and Savings Category Transfer CY 2014 Annualized Monetized

Transfers of beneficiary cost coinsurance. $29 million

From Whom to Whom? Benefici aries to Federal Government Category Cost CY 2014 Annualized Monetized Cost to eligible professionals of Participating in the PQRS Program $66.6 million

J. Conclusion The analysis in the previous sections, together with the remainder of this preamble, provides an initial “Regulatory Flex ibility Analysis.” The previous analysis, together with the preceding portion of th is preamble, provides a Regulatory Impact Analysis.CMS-1600-P 615

In accordance with the provisions of Executive Order 12866, this regulation was reviewed by the Office of Management and Budget.CMS-1600-P

List of Subjects

42 CFR Part 405 Administrative practice and pr ocedure, Health facilities, Health professions, Kidney diseases, Medical devices, Medi care, Reporting and recordkeepi ng requirements, Rural areas, Xrays. 42 CFR Part 410 Health facilities, Health pr ofessions, Kidney diseases, Labor atories, 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 pr ocedure, Health facilities, Health professions, Kidney diseases, Medicare, Reporting a nd recordkeeping requirements.

42 CFR Part 423 Administrative practice and pr ocedure, Emergency medical se rvices, Health facilities, Health maintenance organizations (HMO), Health professionals, Medicare, Penalties, Privacy, Reporting and recordkeeping requirements.

42 CFR Part 425 Administrative practice and pro cedure, Health facilities, H ealth professions, Medicare, Reporting and recordkeeping requirements.CMS-1600-P

For the reasons set forth in the preamble, the Centers for Medicar e & Medicaid Services propose to amend 42 CFR chapters IV as set forth below:

PART 405--FEDERAL HEALTH INSU RANCE FOR THE AG ED AND DISABLED 1. The authority citation for part 40 5 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). 2. Section 405.201 is amended by adding paragr aph (a)(3) and revising paragraph (b) to

read as follows: §405.201 Scope of subpart and definitions. (a) * * * (3) CMS identifies criteria for coverage of items and services furn ished 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 establishe d (that is, initial questions of sa fety and effectiveness have not been resolved) and the FDA is unsure whether the device type can be safe and effective. Category B (Nonexperime ntal/investigational) device refers to a device for which the incremental risk is the primary risk in ques tion (that is, initial que stions of safety and effectiveness of that device type have been resolv ed), or it is known that the device type can be safe and effective because, for example, othe r manufacturers have obtained FDA approval for that device type.CMS-1600-P

ClinicalTrials.gov refers to the National Institutes of Health’s National Library of Medicine’s online registry and results database of publicly an d privately supported clinical studies of human participan ts conducted around the world.

Contractors refers to Medicare Administrative Contra ctors and other enti ties that contract with CMS to review and adjudicate clai ms for Medicare items and services. IDE stands for investigational device exemption . An FDA-approved IDE application permits a device, which would otherwise be subj ect 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 and 813.

Pivotal studies or trials refer to clinical investigations designed to collect definitive evidence of the safety and effectiveness of a de vice for a specified intende d use, typically in a statistically justified number of subjects. It ma y or may not be preceded by an early and/or a traditional feasibility study.

Routine care items and services refer to items and services that are otherwise generally

available to Medicare beneficiarie s (that is, there exists a benef it category, it is not statutorily excluded, and there is not a nati onal noncoverage decision) that are furnished in either the experimental or the control arms of a clinical trial and that woul d be otherwise furnished even if the beneficiary were not enro lled in a clinical trial. Superiority studies or trials refers to studies or trials that are intended to demonstrate at some prespecified level of confiden ce that the effect of an investigational treatment is superior to that of an active control by more than a prespecified margin. 3. Section 405.207 is amended by revising paragraph (b)(2) to read as follows: § 405.207 Services related to a non-covered device. * * * * * (b) * * *CMS-1600-P

(2) Routine care items and services related to experimental/investig ational (Category A) devices as defined in § 405.201(b); and furn ished in conjunction with an FDA-approved

clinical trial that meet the IDE study standards in § 405.212.

* * * * * 4. Section 405.211 is revise d to read as follows: §405.211 Coverage of items and services in FDA approved IDE studies. (a) Requirements . CMS review includes the following items and supporting materials as

needed: (1) The FDA approval letter. (2) IDE study protocol. (3) IRB approval letter. (4) ClinicalTria l.gov identifier. (b) Coverage of routine care items and services for Category A devices . Medicare may

cover routine care items and se rvices furnished in any FDA-approved Category A IDE study if the criteria in §405.212(a)(1) through (13) are met. Medicar e covers routine care items and services furnished in any FDA-approved Catego ry A IDE study if the cr iteria in §405.212(a) and (b) are met. (c) Coverage of Category B ID E devices and routine care. Medicare may cover a Category B IDE device and routine care items a nd services furnished in any FDA-approved Category B IDE study if the crite ria in §405.212(a)(1) through (13) are met. Medicare covers a Category B IDE device and routine care items a nd services furnished in any FDA-approved Category B IDE study if the criteri a in §405.212(a) and (c) are met. (d) Coverage of Category A routine servic es and Category B IDE devices and routine care that do not wholly fall under §405.212 (b) or (c) . If an IDE device is furnished in an FDAapproved IDE study that does not wholly fall und er §405.212(b) or (c), CMS considers whetherCMS-1600-P

the study’s attainment of the cr iteria in §405.212 (a) are sufficient to mitigate the failure to meet §405.212(b) or (c). (e) Notification . All CMS-approved IDE studies will be posted on the CMS coverage website and published in the Federal Register.

5. Section 405.212 is adde d to read as follows: § 405.212 IDE study criteria. (a) All category A and B IDE studies must conform to the following criteria for Medicare coverage under §405.211: (1) The principal purpos e of the study is to test whethe r the item or service meaningfully improves health outcomes of patients who are re presented by the Medicare-enrolled subjects. (2) The rationale for the study is well suppor ted by available scientific and medical information, or it is intended to clarify or esta blish the health outcomes of interventions already

in common clinical use. (3) The study results are not anticipated to unjustifiably duplicat e existing knowledge. (4) The study design is methodologically appr opriate and the antic ipated number of enrolled subjects is adequate to answer the research questi on(s) being asked in the study. (5) The study is sponsored by an organizati on or individual capa ble 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 ar e conducted according to approp riate standards of scientific integrity set by the International Committee of Medical Journal Editors. (8) The study has a written protocol that clear ly demonstrates adhere nce to the standards

listed here as Medica re requirements.CMS-1600-P

(9) Where appropriate, the clinical research study is not designed to exclusively test toxicity or disease pathophysiology in healthy in dividuals. Trials of all medical technologies measuring therapeutic outcomes as one of the obj ectives may be exempt from this standard only if the disease or condition being studied is life threat ening as defined in 21 CFR 312.81(a) and the patient has no other viable treatment options. (10) The study is registered on the Clinical Trials.gov website and/ or the Registry of Patient Registries (RoPR) by the pr incipal sponsor/investigator prior to the enrollment of the first study subject. (11) The study protocol specifi es the method and timing of pub lic release of results on all pre-specified outcomes, includi ng 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 publis hed in a peer reviewed j ournal, 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 ou tcomes must be made pu blic no later than three (3) years after the end of data collection. (12) The study protocol explicitly discu sses subpopulations affected by the item or service under investigation, partic ularly traditionally underrepresented groups in clinical studies,

how the inclusion and exclusion cr iteria effect enrollment of these populations, and a plan for the retention and reporting of said popul ations in the study. If the inclus ion 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 explicit ly discusses how the results ar e or are not expected to be generalizable to subsections of the Medicare population to infe r whether Medicare patients mayCMS-1600-P

benefit from the intervention. Se parate discussions in the protocol may be necessary for populations eligible for Medicare due to age, disability or Medicaid eligibility. (b) Medicare covers routine care items and services in an FDA-approved Category A IDE study that meets the requirements in paragr aph (a) of this secti on and the study is the following: (1) A pivotal study. (2) A superiority study design. (c) Medicare covers the IDE device and r outine care items and services in an FDAapproved Category B IDE study that meets the require ments in paragraph (a) of this section and the study is the following: (1) A pivotal study. (2) A superiority study design. 6. Section 405.350 is amended by revising paragraph (c) to read as follows: §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 sectio n, a provider of services or other person shall, in the absence of evidence to the cont rary, 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 i ndividual that such amount had been paid. 7. Section 405.355 is amended by revising pa ragraph (b) to read as follows: §405.355 Waiver of adjustment or recovery.

* * * * *CMS-1600-P

(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 w ithout fault shall be deemed to be against equity and good conscience if the incorrect payment was made fo r items and services that are not payable under section 1862(a)(1) or (a)(9) of the Act and if the determinatio n 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. 8. Section 405.2413 is amended by— A. Redesignating paragraphs (a)(4) and (5) as paragraphs (a)(5) and (6), respectively. B. Adding new paragraph (a)(4). C. Revising newly redesi gnated paragraph (a)(5).

The revision and addition reads as follows: §405.2413 Services and supplies incident to a physician's services. (a) * * * (4) Services and supplies must be furnished in accordance with a pplicable State law; (5) Furnished under the direct s upervision of a physician; and

* * * * * 9. Section 405.2415 is amended by— A. Redesignating paragraphs (a)(4) and (5) as paragraphs (a)(5) and (6), respectively. B. Adding new paragraph (a)(4). C. Revising newly redesi gnated paragraph (a)(5). D. Revising paragraph (b).

The revision and addition reads as follows: §405.2415 Services and supplies incident to nur se practitioner and physician assistantCMS-1600-P

services. (a) * * * (4) Services and supplies must be furnished in accordance with a pplicable 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 supervis ion 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 unde r the written policies governi ng the rural health clinic.

* * * * * 10. Section 405.2452 is amended by— A. Redesignating paragraphs (a)(4) and (5) as paragraphs (a)(5) and (6), respectively. B. Adding new paragraph (a)(4). C. Revising newly redesi gnated paragraph (a)(5). D. Revising paragraph (b).

The revision and addition reads as follows: §405.2452 Services and supplies incident to clinical psychologist and c linical social worker

services. (a) * * * (4) Services and supplies must be furnished in accordance with a pplicable State law; (5) Furnished under the direct supervision of a clinical psychologist, clinical social worker or physician; and

* * * * * (b) The direct supervis ion requirement in paragraph (a)(5) of this section is met only ifCMS-1600-P

the clinical psychologist or clinical social wo rker is permitted to supervise such services under the written policies governing the Federally qualified health center. PART 410—SUPPLEMENTARY MEDICAL INSURANCE (SMI) BENEFITS 11. 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). §410.19 [Amended] 12. In §410.19(a) amend the definition of “elig ible beneficiary” by removing paragraph (1) and redesignating paragraphs (2) and (3) as paragraphs (1) and (2), respectively. 13. Section 410.26 is amended by— A. Revising paragraph (a)(1). B. Redesignating paragraph (b)(7) and (8) as paragraph (b)(8) a nd (9), respectively. C. Adding new paragraph (b)(7).

The revision and addition reads as follows: §410.26 Services and supplies incident to a physici an’s professional services: Conditions. (a) * * * (1)Auxiliary personnel means any individual who is ac ting under the supervision of a physician (or other practitioner), regardless of whether the individual is an employee, leased employee, or independent contractor of the physic ian (or other practitioner) or of the same entity that employs or contracts with the physician (or other practitioner) a nd meets any applicable requirements to provide the serv ices, including licensure, impo sed by the State in which the services are being furnished.

* * * * * (b) * * *CMS-1600-P

(7) Services and supplies must be furnished in accordance with applicable State law.

* * * * * 14. Section 410.37 is amended by revising pa ragraph (b) to read as follows: §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 wri ting by the beneficiary’s attending physician, physician assistant, nurse practitioner, or clin ical nurse specialist.

* * * * * 15. Section 410.59 is amended by— A. Adding paragraph (e)(1)(iv). B. Revising paragraph (e)(2)(iv). C. Adding paragraph (e)(2)(v).

The revision and additions reads as follows: §410.59 Outpatient occupational therapy services: Conditions.

* * * * * (e) * * * (1) * * * (iv) Outpatient occupational therapy serv ices furnished by a CAH directly or under arrangements shall be counted towards the annua l limitation on incurred expenses as if such services were paid under sect ion 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; andCMS-1600-P

(v) Outpatient occupational therapy servic es furnished by a CAH directly or under arrangements.

* * * * * 16. Section 410.60 is amended by— A. Adding paragraph (e)(1)(iv). B. Revising paragraph (e)(2)(v). C. Adding paragraph (e)(2)(vi). D. In paragraph (e)(3), removing the phrase “or CAH” .

The additions and revision read as follows: §410.60 Outpatient physical therapy services: Conditions.

* * * * * (e)* * * (1)* * * (iv) Outpatient physical therapy services furnished by a CAH directly or under arrangements shall be counted towards the annua l limitation on incurred expenses as if such services were paid under sect ion 1834(k)(1)(b) of the Act. (2) * * * (v) Outpatient physical therapy and speech-l anguage 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-l anguage pathology services furnished by a CAH directly or under arrangements.

* * * * * 17. Section 410.71 is amended by revising pa ragraph (a)(2) to read as follows:CMS-1600-P

§410.71 Clinical psychologist services and se rvices and supplies incident to clinical psychologist services. (a) * * * (2) Medicare Part B covers services and supplie s incident to the services of a clinical psychologist if the requir ements of §410.26 are met.

* * * * * 18. Section 410.74 is amended by revising pa ragraph (b) to read as follows: §410.74 Physician assistants’ services.

* * * * * (b) Services and supplies furnished incide nt to a physician assistant’s services. Medicare Part B covers services and supp lies incident to the services of a physician assistant if the requirements of §410.26 are met.

* * * * * 19. Section 410.75 is amended by revising paragraph (d) to read as follows: §410.75 Nurse practitioners’ services.

* * * * * (d) Services and supplies incident to a nurse practitioners’ services . Medicare Part B covers services and supplies incide nt to the services of a nurse pr actitioner if the requirements of §410.26 are met.

* * * * * 20. Section 410.76 is amended by revising para graph (d) to read as follows: §410.76 Clinical nurse sp ecialists’ services.

* * * * * (d) Services and supplies furnished incident to clinical nurse specialists’ services

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Medicare Part B covers services a nd supplies incident to the services of a clinical nurse specialist if the requirements of §410.26 are met.

* * * * * 21. Section 410.77 is amended by revising pa ragraph (c) to read as follows: §410.77 Certified nurse-midwives’ services: Qualifications and conditions.

* * * * * (c) Incident to services: Basic rule. Medicare Part B cove rs services and supplies

incident to the services of a certified nurse-midwife if the requirements of §410.26 are met.

* * * * * 22. Section 410.78 is amending by revising paragraph (b) introductory text and paragraph (b)(4) to read as follows: §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 nurs ing facility care services (not including the Federally-mandated periodic visits under §483.40(c) of this chap ter and with the limitation of one telehealth visit every 30 days by the patient’s admitting physician or nonphysician practitioner), professional consultations, ps ychiatric diagnostic interview examination, neurobehavioral status exam, individual psyc hotherapy, 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 kidne y disease education services, i ndividual and group diabetes self-management training services (except for one hour of “hands on” services to be furnished inCMS-1600-P

the initial year training period to ensure effective injection training), individual and group health

and behavior assessment and intervention serv ices, smoking cessation services, alcohol and/or

substance abuse and brief in tervention services, screeni ng and behavioral counseling interventions in primary care to reduce alcoho l misuse, screening for depression in adults, screening for sexually transmitted infections (S TIs) and high intensity behavioral counseling (HIBC) to prevent STIs, intensive behavioral therapy for cardiovascular disease, behavioral counseling for obesity, and transitional care ma nagement services furnished by an interactive telecommunications system if th e following conditions are met:

* * * * * (4) Originating sites must be: (i) Located in a health professional shortage area (as defined unde r section 332(a)(1)(A)

of the Public Health Service Act (42 U.S.C. 254e(a)(1)(A)) th at is either outside of a Metropolitan Statistical Area (M SA) as of December 31st of th e preceding calendar year or

within a rural census tract of an MSA as determ ined 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 tele medicine demonstration project that has been approved by, or receive funding from, the Secret ary as of December 31, 2000 regardless of its geographic location.

* * * * *

PART 411—EXCLUSIONS FROM MEDICARE AND LIMITATIONS ON MEDICARE

PAYMENTCMS-1600-P

23. 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). 24. Section 411.15 is amended by revising pa ragraph (o)(2) to read as follows: §411.15 Particular services excluded from coverage.

* * * * * (o)* * * (2) Furnished in accordance with the CMS criteria established in §405.211(b).

* * * * *

PART 414-PAYMENT FOR PART B MEDI CAL AND OTHER HEALTH SERVICES 25. The authority citation for part 414 continues to read as follows: Authority: Secs. 1102, 1871, and 1881(b)(l) of the So cial Security Act (42 U.S.C. 1302, 1395hh, and 1395rr(b)(l)). 26. Section 414.65 is amended by revising paragraph (a)(1) to read as follows: §414.65 Payment for telehealth services. (a) * * * (1) The Medicare payment amount for office or other outpatient visits, subsequent hospital care services (with the limitation of one telehealth visi t every 3 days by the patient’s admitting physician or practitioner), subsequent nu rsing facility care serv ices (with the limitation of one telehealth visit every 30 days by the patient’s admitting physician or nonphysician practitioner), professional consultations, ps ychiatric diagnostic interview examination, neurobehavioral status exam, individual psyc hotherapy, 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 therapyCMS-1600-P

services, individual and group kidne y disease education services, i ndividual 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, screeni ng 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 vi a an interactive telecommunications system is equal to the current fee schedule amount appli cable for the service of the physician or practitioner. (i) Emergency department or initia l inpatient telehealth consultations

. The Medicare payment amount for emergency department or initia l inpatient telehealth consultations furnished

via an interactive tel ecommunications system is equal to the current fee schedule amount applicable to initial ho spital care provided by a phys ician 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.

* * * * * 27. Section 414.90 is amended by— A. Amending paragraph (b) to--

1. Revise the definition of “Administrative claims”. 2. Add the definition of “Certified survey vendor”.CMS-1600-P

3. Revise the definiti on of “Measures group”. 4. Add the definition of “Qualifie d clinical data registry”. B. Adding paragraphs (c)(5), (e)(2), and (f)(4). C. Revising the paragraph headings to para graphs (f) introductory text, (g) introductory text, and (h) introductory text. D. Revising paragraphs (g)(3 ) introductory text. E. Redesignating paragraph (g)(3)(v) as (g)(3)(vi). F. Adding new paragraph (g)(3)(v). G. Revising paragraph (h)(3) introductory text. H. Adding paragraph (h)(3)(vi). I. Revising paragraph (j).

The revisions and additions read as follows: §414.90 Physician Quality Reporting System.

* * * * * (b) * * *

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 determ ine which measures an eligible professional or group practice reports. Certified survey vendor means a vendor that is certifie d by CMS for a particular program year to transmit survey measures data to CMS.

* * * * * Measures group means a subset of six or more Physician Quality Reporting System measures that have a particular clinical condition or focus in common. The denominatorCMS-1600-P

definition and coding of the measures group identifies the condition or focus that is shared across the measures within a particular measures group.

* * * * * 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 do 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 satisfactor ily 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) Provide timely feedbac k, at least quarterly 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 indi vidual eligible prof essional’s satisfactory participation in the clinical quality data registry. (iii) Possess benchmarking capacity that measures the quality of care an eligible professional provides with other eligible professionals performing the same or similar functions.

* * * * * (c) * * * (5) The Secretary shall 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 prof essional is satisfactor ily participating, as determined by the Secretary, in a qualified clinical data registry (as defined in paragraph (b) of this section).CMS-1600-P

(i) For purposes of this pa ragraph, the reporting period fo r the 2014 PQRS incentive is the 12–month period from January 1 through December 31 of such program year. (ii) [Reserved].

* * * * * (e) * * * (2) The Secretary shall 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 prof essional is satisfactor ily participating, as determined by the Secretary, in a qualified clinical data registry (as defined in paragraph (b) of this section). (i) For purposes of this pa ragraph, 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. (ii) [Reserved]. (f) Use of consensus-based quality measures for sa tisfactory reporting . ***

* * * * * (4) These criteria do not apply to measures re ported by qualified clinic al data registries for purposes of satisf actory participation.

* * * * * (g) Satisfactory reporting require ments for the incentive payments . ***

* * * * * (3) Reporting mechanisms for group practices . With the exception of a group practice (as defined in paragraph (b) of this section) who wishes to participate in the Physician Quality Reporting System using the certified survey ve ndor mechanism (as specified in paragraphCMS-1600-P

(g)(3)(v) of this section), a group practice must report info rmation on Physician Quality Reporting System quality measures identifie d by CMS in one of the following manners:

* * * * * (v) Certified survey vendors . For 2014 and subsequent years, reporting CAHPS survey measures to CMS using a vendor that is certif ied 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 reporting mechanism in order to meet the criteria for satisfactory reporting for the incentive payments. (h) Satisfactory reporting for the payment adjustments. ***

* * * * *

(3) Reporting mechanisms for group practices. With the exception of a group practice (as defined in paragraph (b) of this section) who wishes to participate in the Physician Quality Reporting System using the certified survey ve ndor mechanism (as specified in paragraph (g)(3)(v) of this section), a group practice participating in the Physician Quality Reporting System must report information on Physician Quality Reporting System quality measures identified by CMS in one of the following manners:

* * * * * (vi) Certified Survey Vendors. For 2014 a nd subsequent years, reporting CAHPS survey measures to CMS using a vendor that is certif ied 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 reporting mechanism in order to meet the criteria for satisfactory reporting for the payment adjustment.

* * * * * (j) Informal review . Eligible professionals (or in th e case of group practices defined inCMS-1600-P

paragraph (b) of this section) may seek an inform al review of the determination that an eligible professional (or in the case of group practices defi ned in paragraph (b) of this section) did not satisfactorily submit data on quality measures under the Physician Quality Reporting System or an eligible professional did not sa tisfactorily participate in a qualifie d clinical data registry under the Physician Quality Reporting System.

* * * * *

28. Section 414.511 is added to s ubpart G to read as follows: §414.511 Adjustments to the Clinical Laborato ry Fee Schedule based on Technological Changes. (a) CMS may make adjustments to the as CM S determines are justified by technological changes. (b) Technological changes are changes to the tools, machines, supplies, labor, instruments, skills, techniques, and devices by wh ich laboratory tests are produced and used. (c) CMS will propose and finalize any ad justments to the fee schedules as CMS determines are justified by technological changes in the Federal Register

. 29. Section 414.610 is amended by— A. Revising paragraphs (c)(1)(ii) and (c)(5)(ii). B. Adding paragraph (c)(8). C. Revising paragraph (h).

The revisions and addition read as follows: §414.610 Basis of payment.

* * * * * (c)* * * (1)* * *CMS-1600-P

(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 app licable 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 app licable under this section.

* * * * * (5) * * * (ii) For services furnished during th e period July 1, 2004 through December 31, 2013, the payment amount for the ground ambulance base rate is increased by 22.6 pe rcent 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 th e rural areas in the lowest quar tile of population compared to the average cost per trip for the ru ral areas in the highest quartil e 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 nonemergency basic life support (BLS) services involving transport of an individual with end-stage renal disease for renal dialysis services (as de scribed in section 1881(b)(14)(B)) furnished other than on an emergency basis by a provider of servi ces 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 fo r payment for air ambulance services . Any area that was designated as a rural area for purposes of ma king payments under the ambulance fee schedule forCMS-1600-P

air ambulance services furnished on December 3 1, 2006, must be treated as a rural area for purposes of making payments under the ambulan ce fee schedule for ai r ambulance services furnished during the period Ju ly 1, 2008 through June 30, 2013. 30. Section 414.1210 is amended by revising paragraphs (a) and (c) to read as follows: § 414.1210 Application of the value-based payment modifier. (a) The value-based payment modifier is applicable: (1) For the CY 2015 payment adjustment peri od, to physicians in groups with 100 or more eligible professionals based on th e performance period de scribed at § 414.1215(a). (2) For the CY 2016 payment adjustment peri od, to physicians in groups with 10 or more eligible professionals based on th e performance period de scribed at § 414.1215(b).

* * * * * (c) Group size determination. The list of groups of phys icians subject to the valuebased payment modifier for the CY 2015 paymen t 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 cl ose of the PQRS group registration process during the applicable performance period described at § 414.1215. Groups of physicians are removed from the PECOS-generated list if, based on a cl aims analysis, the group of physicians did not have the required number of eligible profe ssionals, as defined in §414.1210(a), that submitted claims during the performance period for the ap plicable calendar year payment adjustment period. 31. Section 414.1215 is amended by adding pa ragraph (c) to read as follows: § 414.1215 Performance and payment adjustment periods for the value-based payment

modifier.CMS-1600-P

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

32. Section 414.1220 is revised to read as follows: § 414.1220 Reporting mechanisms for the value-based payment modifier. Groups of physicians subject to the value-base d 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 repor ting mechanisms for which they are eligible.

33. Section 414.1225 is revised to read as follows: § 414.1225 Alignment of Physician Quality Re porting 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 Qualit y Reporting System in a given calendar year are used to calculate the value-ba sed payment modifier for the applicable payment adjustment period, as defined in §414.1215, to th e extent a group of physicians or individual eligible professionals within such group submits data on such measures.

34. Section 414.1235 is revised to read as follows: § 414.1235 Cost measures. (a) Included measures . Beginning with the CY 2016 pa yment 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 m easures identified in paragraphs (a)(1) through (5) of this section are included for th e value-based payment modifier for the CY 2015 payment adjustment period): (1) Total per capita costs for all attributed beneficiaries.CMS-1600-P

(2) Total per capita costs for all attrib uted beneficiaries with diabetes. (3) Total per capita costs for all attributed be neficiaries with coronary artery disease. (4) Total per capita costs for all attribut ed 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 ma de 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 fo r ESRD status) is used to adjust standardized payments for the measures listed at paragraphs (a)(1) throug h (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.

35. Section 414.1240 is revised to read as follows: § 414.1240 Attribution for quality of care and cost measures. (a) Beneficiaries are attribut ed to groups of physicians subject to the value-based payment modifier using a method generally c onsistent with the method of assignment of

beneficiaries under § 425.402 of this chapter, for measures other than the Medicare Spending per Beneficiary measure. (b) For the Medicare Spe nding per Beneficiary (MSPB) measure, a MSPB episode is attributed to a group of physicians subject to the value-based paym ent modifier if any eligibleCMS-1600-P

professional in the group submits a Medicare Pa rt B claim under the group’s TIN for a service rendered during an inpatient hospi talization that is an index admission for the MSPB measure during the applicable performance period described at § 414.1215.

36. Section 414.1255 is revised to read as follows: § 414.1255 Benchmarks for cost measures. (a) For the CY 2015 payment adjustment peri od, 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 calcul ating the national benchmark, gr oups of physicians’ performance rates are weighted by the number of beneficiaries used to ca lculate 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 pa yment 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 eligib le professionals of each specialty in the group,

and the number of beneficiarie s attributed to the group. (c) The national specialty-speci fic expected costs referenced in paragraph (b) of this section are derived by calculating, for each specialt y, the average cost of be neficiaries attributed to groups of physicians that include that specialty. 37. Section 414.1260 is amended by revising pa ragraph (b)(1)(i) to read as follows: § 414.1260 Composite scores.

* * * * * (b) * * *CMS-1600-P

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

* * * * *

38. Section 414.1270 is revised to read as follows: § 414.1270 Determination and calculation of Va lue-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 th e 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 opti on for CY 2013 as defined in §414.90(h). (A) Such adjustment will be -1.0 percent. (B) [Reserved]. (ii) Such group elects that its value-ba sed 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 §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 subjec t to the value-based payment modifier if such group either: (i) Self-nominates for the PQRS GPRO a nd reports at least one measure; or (ii) Elects the PQRS admini strative claims option for CY 2013 as defined in §414.90(h).CMS-1600-P

(3) Upward payment adjustments . If a group of physicians subject to the value-based payment modifier elects that the value-based pa yment modifier be calc ulated using a qualitytiering approach, upward payment adjustments are determined based on the projected aggregate amount of downward payment adjustments determ ined under paragraph (a )(1) of this section and applied as specified in §414.1275(c)(1). (b) For the CY 2016 paymen t 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, duri ng the applicable performance period as defined in §414.1215, the following apply: (i) Such group does not self-nominate for th e PQRS GPRO and meet the criteria as a group to avoid the PQRS payment adjustment for CY 2016 as specified by CMS; and (ii) Seventy percent of the elig ible professionals in such grou p do not meet the criteria as individuals to avoid the PQRS payment adju stment for CY 2016 as specified by CMS. (2) For a group of physicians comprised of 100 or more eligible profe ssionals that is not included in paragraph (b)(1) of th is section, the value-based paym ent modifier adjustment will be equal to the amount determined under §414.1275(c)(2). (3) For a group of physicians comprised of be tween 10 and 99 eligible professionals that is not included in paragraph (b)(1 ) of this section, the value-ba sed payment modifier adjustment will be equal to the amount determined under §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 av erage quality/high cost. (4) If all of the elig ible professionals in a group of phys icians 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 qualityCMS-1600-P

performance data for those eligible professiona ls under that reporting mechanism, the quality composite score for such group will be classified as “average” under §414.1275(b)(1). (5) A group of physicians subject to the valu e-based payment modifier will receive a cost composite score that is classified as “average” under §414.1275(b)(2) if such group does

not have at least one cost measure in its cost composite with at least 20 cases. 39. Section 414.1275 is amended by revising paragraphs (a) a nd (c) and (d) introductory

text to read as follows:

The revisions and additions read as follows: § 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 comp arison of the composite of quality of care measures and a composite of cost measures.

* * * * * (c)(1) The following value-based payment m odifier percentages apply to the CY 2015 payment adjustment period: CY 2015 Value-Based Payment Modifier Amo unts for the Quality-Tiering Approach

Quality/cost Low cost Average cost High cost 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 addi tional +1.0x if (1) reporting Physician Quality Reporting System quality measures through the GP RO 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 modi fier percentages a pply to the CY 2016 payment adjustment period: CY 2016 Value-Based Payment Modifier Amounts for the Quality-Tiering Approach Quality/cost Low cost Average cost High cost High quality +2.0x* +1.0x* +0.0%CMS-1600-P

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 be neficiary risk scores.

(d) Groups of physicians subject to the valu e-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 nati onwide and for the CY 2015 paymen t adjustment period elect the quality-tiering approach or for the CY 2016 pa yment adjustment period are subject to the quality-tiering approach, receive a greater upward payment adjustment as follows:

* * * * *

PART 423--VOLUNTARY MEDICARE PRESCRIPTION DRUG BENEFIT 40. The authority citation for part 423 continues to read as follows: Authority : Sections 1102, 1106, 1860D-1 throu gh 1860D-42, and 1871 of the Social Security Act (42 U.S.C. 1302, 1306, 1395w-101 through 1395w-152, and 1395hh). 41. Section 423.160 is amended by— A. Revising paragraphs (b)(1)(i) through (iii). B. Adding paragraphs (b)(1)(iv), (b)( 5)(i) through (iii), and (c)(1)(vi).

The revisions and additions read as follows: §423.160 Standards for electronic prescribing.

* * * * * (b) * * * (i) Prior to April 1, 2009, the standards spec ified in paragraphs (b)(2)(i), (b)(3)-(b)(4), (b)(5)(i), and (b)(6) (ii) On or after April 1, 2009, to [59 days after publication of the final rule], 2013, the standards specified in paragra phs (b)(2)(ii), (b)(3) through (b )(4), (b)(5)(i) and (b)(6).CMS-1600-P

(iii) From [60 days after publication of th e final rule] until June 30, 2014 the standards specified in paragraphs (b)(2)(ii), (b )(3) and (4), (b)(5)(ii), and (b)(6) (iv) From July 1, 2014, the standards specifi ed in paragraphs (b )(2)(ii), (b)(3) through (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, Implementa tion 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, Implementa tion Guide, Version 1, Release 0 (Version 1.0), October 2005 (incorporated by refe rence in paragraph (c)(1)(ii) of this section), or The National Council for Prescription Drug Programs Formular y and Benefits Standard, Implementation Guide, Version 3, Release 0 (Version 3.0), Janua ry 2011(incorporated by reference in paragraph (c)(1)(vi) of this section) for transmitting formul ary and benefits information between prescribers and Medicare Part D sponsors. (iii) Formulary and benefits. The Nati onal Council for Prescription Drug Programs Formulary and Benefits Standard, Implementa tion Guide, Version 3, Release 0 (Version 3.0), January 2011 (incorporated 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) * * *CMS-1600-P

(vi) The National Council for Prescripti on Drug Programs Formulary and Benefits Standard, Implementation Guide, Version 3, Re lease 0 (Version 3.0), published January 2011.

* * * * *

PART 425—MEDICARE SHARED SAVINGS PROGRAM 42. 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). 43. Section 425.308 is amended by revising pa ragraph (e) to read as follows: §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 th at report under the Physician Quality Reporting System. 44. Section 425.502 is amended by revising pa ragraph (b)(2) to read as follows: §425.502 Calculating the ACO quality performance score.

* * * * * (b) * * * (2)(i) CMS will define the quality benchmarks using Medicare Advantage and fee-forservice Medicare data. When data are unavailable, inadequate, or unrelia ble to set the quality benchmarks, CMS will set the benchmarks using flat percentages. (ii) CMS will reduce performance rate clusteri ng in tightly clustered quality measures. (A) A tightly clustered measure is defined as a measure where there is less than a 6.0 percentage point spread between the 30 th and 90 th deciles.CMS-1600-P

(B) For tightly clustered measures, CMS will apply a 1.0 fixed percentage point spread between each deciles, using the 60 th percentile as th e starting point. (C) CMS does not apply the methodology in this paragraph (b)(2)(ii) to measures scored

as ratios.

* * * * * 45. Section 425.504 is amended by: A. Revising the section heading. B. Revising paragraphs (a )(1), (b) headi ng, and (b)(1). C. Adding paragraphs (c) and (d).

The revisions and additions read as follows: §425.504 Incorporating reporting requirements rel ated to the Physician Quality Reporting System Incentive and Payment Adjustment. (a) * * * (1) ACOs, on behalf of their ACO provider/suppl iers who are eligible professionals, must submit the measures determined under §425.500 usi ng a CMS web interface, to qualify on behalf of their eligible professionals for the Physic ian 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 provider/suppliers who are eligible professionals, must submit one of the ACO GPRO measures determined under §425.500 us ing a CMS web interface, to satisfactorily report on behalf of their elig ible professionals for purposes of the 2015 Physician Quality Reporting System payment adjustment under the Shared Savings Program.

* * * * *CMS-1600-P

(c) Physician Quality Reporting System payment adjustment for 2016 and subsequent

years. (1) ACOs, on behalf of their ACO provider/suppl iers who are eligible professionals, must

submit one of the ACO GPRO measures determ ined under §425.500 using a CMS web interface, to satisfactorily report on behalf of their elig ible professionals for purposes of the Physician Quality Reporting System payment adjustment under the Shared Savings Program for 2016 and subsequent years. (2)(i) ACO providers/suppliers that are elig ible professionals with in 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 pa yment adjustment under the Shared Savings Program for 2016 and subsequent years. (ii) ACOs, on behalf of its ACO provider/suppl iers who are eligible professionals, must satisfactorily report all of the ACO GPRO measures dete rmined under §425.500 using a CMS web interface for purposes of the Physician Qu ality Reporting System payment adjustment under the Shared Savings Program fo r 2016 and subsequent years. (3) If an ACO, on behalf of its ACO provide rs/suppliers who are e ligible professionals, does not satisfactorily report for purposes of th e Physician Quality Reporting System payment adjustment for 2016 and subsequent years, each ACO supplier/provider who is an eligible professional, will receive a payment adjustment, as described in §414.90(e). (4) ACO participant TINs and individual ACO providers/suppliers billing through an ACO participant TIN who are eligible profession als cannot satisfactorily report for purposes of a Physician Quality Reporting System payment ad justment outside of the Medicare Shared Savings Program for 2016 a nd subsequent years.CMS-1600-P

(5) For eligible professionals subject to the Physician Qu ality 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 applicab le percent of the Medicare Part B Physician Fee

Schedule amount that would otherw ise apply to such services unde r section 1848 of the Act, as described in §414.90(e). (d) The reporting period for a year is the ca lendar 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 Prog ram No. 93.773, Medicare--Hospital Insurance; and Program No. 93.774, Medicare--Supplemen tary Medical Insurance Program)

Dated: June 20, 2013.

_______________________________ Marilyn Tavenner,

Administrator , Centers for Medicare & Medicaid Services

.

Approved: June 26, 2013

__________________________________ Kathleen Sebelius,CMS-1600-P

Secretary , Department of Health and Human Services

.

BILLING CODE 4120-01-P

<FRDOC> [FR Doc. 2013–16547 F iled 7–8–13; 4:15 pm] <BILCOD>BILLING CODE 4120–01–P

[FR Doc. 2013-16547 Filed 07/08/2013 at 4:15 pm; Publication Date: 07/19/2013]