This document is scheduled to be published in the

Federal Register on 07/19/2013 and available online at

http://federalregister.gov/a/2013-16547, and on FDsys.gov

<PRORULE> 

<PREAMB> 

DEPARTMENT OF HEALTH AND HUMAN SERVICES 

Centers for Medicare & Medicaid Services 

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

[CMS-1600-P] 

RIN 0938-AR56 

Medicare Program; Revisions to Payment Policies under the Physician Fee 

Schedule, Clinical Laboratory Fee Schedule & Other Revisions to Part B for CY 

2014. 

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

ACTION: Proposed rule. 

SUMMARY: This major proposed rule addresses changes to the physician fee schedule 

and other Medicare Part B payment policies to ensure that our payment systems are 

updated to reflect changes in medical practice and the relative value of services, as well 

as changes in the statute. 

DATES: Comment date: To be assured consideration, comments must be received at 

one of the addresses provided below, no later than 5 p.m. on [OFR—insert date 60 days 

after the date of filing for public inspection at OFR.] 

ADDRESSES: In commenting, please refer to file code CMS-1600-P. Because of staff 

and resource limitations, we cannot accept comments by facsimile (FAX) transmission. 

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

ways listed): 
CMS-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 comments to be received before the close 

of the comment period. 

3. By express or overnight mail. You may send written comments to the 

following address ONLY: 

 Centers for Medicare & Medicaid Services, 

 Department of Health and Human Services, 

 Attention: CMS-1600-P, 

 Mail Stop C4-26-05, 

 7500 Security Boulevard, 

Baltimore, MD 21244-1850. 

4. By hand or courier. If you prefer, you may deliver (by hand or courier) your 

written comments before the close of the comment period to either of the following 

addresses: 

a. For delivery in Washington, DC-- 
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 Hubert H. Humphrey Building is not readily 

available to persons without Federal government identification, commenters are 

encouraged to leave their comments in the CMS drop slots located in the main lobby of 

the building. A stamp-in clock is available for persons wishing to retain a proof of filing 

by stamping in and retaining an extra copy of the comments being filed.) 

b. For delivery in Baltimore, MD-- 

 Centers for Medicare & Medicaid Services, 

Department of Health and Human Services, 

7500 Security Boulevard, 

Baltimore, MD 21244-1850. 

If you intend to deliver your comments to the Baltimore address, please call 

telephone number (410) 786-7195 in advance to schedule your arrival with one of our 

staff members. 

 Comments mailed to the addresses indicated as appropriate for hand or courier 

delivery may be delayed and received after the comment period. 

FOR FURTHER INFORMATION CONTACT: 

Chava Sheffield, (410) 786-2298, for issues related to practice expense 

methodology and impacts. 
CMS-1600-P 4 

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

and telehealth services. 

Joanna Baldwin, (410) 786-7205), for issues 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 geographic practice cost 

indices. 

Simone Dennis, (410) 786-8409, for issues related to therapy caps. 

Darlene Fleischmann, (410) 786-2357, for issues related to “incident to” services 

Corinne Axelrod, (410) 786-5620), for issues related 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 suppliers and handling of 

incorrect payments. 

Rosemarie Hakim, (410) 786-3934, for issues related to coverage of items and 

services furnished in FDA-approved investigational 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 related 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 issues 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 viewing by the public, including any personally 

identifiable or confidential business information that is included in a comment. We post 

all comments received before the close of the comment period on the following Web site 

as soon as possible after they have been received: http://www.regulations.gov. Follow 

the search instructions on that Web site to view public comments. 

 Comments received timely will also be available for public inspection as they are 

received, generally beginning approximately 3 weeks after publication of a document, at 
CMS-1600-P 6 

the headquarters of the Centers for Medicare & Medicaid Services, 7500 Security 

Boulevard, Baltimore, Maryland 21244, Monday through Friday of each week from 8:30 

a.m. to 4 p.m. To schedule an appointment to view public comments, phone 

1-800-743-3951. 

Table of Contents 

I. Executive Summary and Background 

A. Executive Summary 

B. Background 

II. Provisions of the 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 Validating the RVUs of Potentially 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 Services 
CMS-1600-P 7 

III. Other Provisions of the Proposed Regulations 

A. Medicare Coverage of Items and Services in FDA Investigational Device 

Exemption Clinical Studies--Revision of Medicare Coverage 

B. Ultrasound Screening for Abdominal Aortic Aneurysms 

C. Colorectal Cancer Screening: Modification to Coverage of Screening Fecal 

Occult Blood Tests 

D. Ambulance Fee Schedule 

E. Proposals Regarding the Clinical Laboratory Fee Schedule 

F. Liability for Overpayments to or on Behalf of Individuals including Payments 

to Providers or Other Persons 

G. Physician Compare Website 

H. Physician Payment, Efficiency, and Quality Improvements – Physician 

Quality Reporting System 

I. Electronic Health Record (EHR) Incentive Program 

J. Medicare Shared Savings Program 

K. Value-Based Payment Modifier and Physician Feedback Program 

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

M. Discussion of Budget Neutrality for the Chiropractic Services Demonstration 

IV. Collection of Information Requirements 

V. Response to Comments 

VI. Regulatory Impact Analysis 

Regulatory Text 

Acronyms 
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 In addition, because of the many organizations and terms to which we refer by 

acronym in this proposed rule, we are listing these acronyms and their corresponding 

terms in alphabetical order below: 

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 Job Creation Act of 2012 (Pub. L. 112-96) 

MedPAC Medicare Payment Advisory Commission 

MEI Medicare Economic Index 
CMS-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 Patients 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, Medicaid, 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 Cut Continuation Act (Pub. L. 112-78) 
CMS-1600-P 10 

VBP Value-based purchasing 

Addenda Available Only Through the Internet on the CMS Web Site 

 The PFS Addenda along with other supporting 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 chronological list of PFS 

Federal Register and other related documents. For the CY 2014 PFS proposed rule, 

refer to item CMS–1600–P. Readers who experience 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 descriptions are copyright 2012 

American Medical Association. All Rights Reserved. CPT is a registered trademark of 

the American Medical Association (AMA). Applicable Federal Acquisition Regulations 

(FAR) and Defense Federal Acquisition Regulations (DFAR) apply. 

I. Executive Summary and Background 

A. Executive Summary 

1. Purpose 

 This major proposed rule would revise payment polices under the Medicare 

Physician Fee Schedule (PFS) and make other policy changes related to Medicare Part B 

payment. These changes would be applicable to services furnished in CY 2014. 

2. Summary of the Major Provisions 

The Social Security Act (Act) requires us to establish payments under the PFS 
CMS-1600-P 11 

based on national uniform relative value units (RVUs) that account for the relative 

resources used in furnishing a service. The Act requires that RVUs be established for 

three categories of resources: work, practice expense (PE); and malpractice (MP) 

expense; and that we establish by regulation each year payment amounts for all 

physicians’ services, incorporating geographic adjustments to reflect the variations in the 

costs of furnishing services in different geographic areas. In this major proposed rule, we 

propose RVUs for CY 2014 for the PFS and other Medicare Part B payment policies to 

ensure that our payment systems are updated to reflect changes in medical practice and 

the relative value of services, as well as changes in the statute. In addition, this 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 Physician 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 Record (EHR) Incentive Program. 

 ++ Medicare Shared Savings Program. 

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

● Physician Value-Based Payment Modifier and the Physician Feedback 

Reporting Program. 

3. Summary of Costs and Benefits 

The Act requires that annual adjustments 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 million, we must make adjustments to preserve 

budget neutrality. These adjustments can affect the distribution of Medicare expenditures 

across specialties. In addition, several proposed changes would affect the specialty 

distribution of Medicare expenditures. For most specialties the projected impacts are a 

small percentage change in Medicare payments under the PFS. For a few specialties a 

larger impact is projected. Diagnostic Testing Facilities, Independent Laboratory, 

Pathology, Radiation Oncology, and 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' Services.” The system relies on national 

relative values that are established for work, PE, and MP, which are then adjusted for 

geographic cost variations. These values are multiplied by a conversion factor (CF) to 

convert the RVUs into payment rates. The concepts and methodology underlying the 

PFS were enacted as part of the Omnibus Budget Reconciliation Act of 1989 (OBRA 

’89) (Pub. L. 101-239, enacted on December 19, 1989), and the Omnibus Budget 

Reconciliation Act of 1990 (OBRA ’90 (Pub. L. 101-508, enacted on November 5, 1990). 
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 rule, unless otherwise noted, the term 

“practitioner” is used to describe both physicians and nonphysician practitioners who are 

permitted to bill Medicare under the PFS for services furnished to Medicare beneficiaries. 

1. Development of the Relative Values 

a. Work RVUs 

The physician work RVUs established for the implementation of the fee schedule 

in January 1992 were developed with extensive input from the physician community. A 

research team at the Harvard School of Public Health developed the original physician 

work RVUs for most codes under a cooperative agreement with the Department of Health 

and Human Services (HHS). In constructing the code-specific vignettes used in 

determining the original physician work RVUs, Harvard worked with panels of experts, 

both inside and outside the federal government, and obtained input from numerous 

physician specialty groups. 

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

of recommendations received from the American Medical Association/Specialty Society 

Relative Value Update Committee (AMA RUC). 

b. Practice Expense RVUs 

Initially, only the work RVUs were resource-based, and the PE and MP RVUs 

were based on average allowable charges. Section 121 of the Social Security Act 

Amendments of 1994 (Pub. L. 103-432, enacted on October 31, 1994), amended section 

1848(c)(2)(C)(ii) of the Act and required us to develop resource-based PE RVUs for each 

physicians’ service beginning in 1998. We were required to consider general categories 
CMS-1600-P 14 

of expenses (such as office rent and wages 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 implementation of the resource-based PE RVU 

system until January 1, 1999. In addition, section 4505(b) of the BBA provided for a 

4-year transition period from the charge-based PE RVUs to the resource-based PE RVUs. 

We established the resource-based PE RVUs for each physicians’ service in a 

final rule, published November 2, 1998 (63 FR 58814), effective for services furnished in 

CY 1999. Based on the requirement to transition to a resource-based system for PE over 

a 4-year period, payment rates were not fully based upon resource-based PE RVUs until 

CY 2002. This resource-based system was based on two significant sources of actual PE 

data: the Clinical Practice Expert Panel (CPEP) data and the AMA’s Socioeconomic 

Monitoring System (SMS) data. (These data sources are described in greater detail in the 

CY 2012 final rule with comment period (76 FR 73033).) 

Separate PE RVUs are established for services furnished in facility settings, such 

as a hospital outpatient department (HOPD) or an ambulatory surgical center (ASC), and 

in non-facility settings, such as a physician’s office. The nonfacility RVUs reflect all of 

the direct and indirect PEs involved in furnishing a service described by a particular 

HCPCS code. The difference, if any, in these PE RVUs generally results in a higher 

payment in the nonfacility setting because in the facility settings some costs are borne by 

the facility. Medicare’s payment to the facility (such as the OPPS payment to the HOPD) 

would reflect costs typically incurred by the facility. Thus, payment associated with those 

facility resources is not made under the PFS. 
CMS-1600-P 15 

Section 212 of the Balanced Budget Refinement Act of 1999 (BBRA) 

(Pub. L. 106-113, enacted on November 29, 1999) directed the Secretary of Health and 

Human Services (the Secretary) to establish a process under which we accept and use, to 

the maximum extent practicable and consistent with sound data practices, data collected 

or developed by entities and organizations to supplement the data we normally collect in 

determining the PE component. On May 3, 2000, we published the interim final rule 

(65 FR 25664) that set forth the criteria for the submission of these supplemental PE 

survey data. The criteria were modified in response to comments received, and published 

in the Federal Register (65 FR 65376) as part of a November 1, 2000 final rule. The 

PFS final rules published in 2001 and 2003, respectively, (66 FR 55246 and 68 FR 

63196) extended the period during which we would accept these supplemental data 

through March 1, 2005. 

In the CY 2007 PFS final rule with comment period (71 FR 69624), we revised 

the methodology for calculating direct PE RVUs from the top-down to the bottom-up 

methodology beginning in CY 2007. We adopted a 4-year transition to the new PE 

RVUs. This transition was completed for CY 2010. In the CY 2010 PFS final rule with 

comment period, we updated the practice expense per hour (PE/HR) data that are used in 

the calculation of PE RVUs for most specialties (74 FR 61749). In CY 2010, we began a 

4-year transition to the new PE RVUs using the updated PE/HR data, which was 

completed for CY 2013. 

c. Malpractice RVUs 

Section 4505(f) of the BBA amended section 1848(c) of the Act to require that we 

implement resource-based MP RVUs for services furnished on or after CY 2000. The 

resource-based MP RVUs were implemented in the PFS final rule with comment period 
CMS-1600-P 16 

published November 2, 1999 (64 FR 59380). The MP RVUs are based on malpractice 

insurance premium data collected from commercial and physician-owned insurers from 

all the states, the District of Columbia, and Puerto Rico. 

d. Refinements to the RVUs 

Section 1848(c)(2)(B)(i) of the Act requires that we review all RVUs no less often 

than every 5 years. Prior to CY 2013, we conducted periodic reviews of work RVUs and 

PE RVUs independently. We completed Five-Year Reviews of Work RVUs that were 

effective for calendar years 1997, 2002, 2007, and 2012. 

While refinements to the direct PE inputs initially relied heavily on input from the 

AMA RUC Practice Expense Advisory Committee (PEAC), the shifts to the bottom-up 

PE methodology in CY 2007 and to the use of the updated PE/HR data in CY 2010 have 

resulted in significant refinements to the PE RVUs in recent years. 

In the CY 2012 PFS final rule with comment period (76 FR 73057), we finalized 

a proposal to consolidate reviews of work and PE RVUs under section 1848(c)(2)(B) of 

the Act and reviews of potentially misvalued codes under section 1848(c)(2)(K) of the 

Act into one annual process. 

With regard to MP RVUs, we completed Five-Year Reviews of MP that were 

effective in CY 2005 and CY 2010. 

In addition to the Five-Year Reviews, beginning for CY 2009, CMS and the 

AMA RUC have identified and reviewed a number of potentially misvalued codes on an 

annual basis based on various identification screens. This annual review of work and PE 

RVUs for potentially misvalued codes was supplemented by the amendments to section 

1848 of the Act, as enacted by section 3134 of the Affordable Care Act, which requires 

the agency to periodically identify, review and adjust values for potentially misvalued 
CMS-1600-P 17 

codes with an emphasis on seven specific categories (see section II.B.2. of this proposed 

rule). 

e. Application of Budget Neutrality 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 RVUs would cause expenditures for 

the year to change by more than $20 million, we make adjustments to ensure that 

expenditures do not increase or decrease by more than $20 million. 

2. Calculation of Payments Based on RVUs 

To calculate the payment for each physicians’ service, the components of the fee 

schedule (work, PE, and MP RVUs) are adjusted by geographic practice cost indices 

(GPCIs) to reflect the variations in the costs of furnishing the services. The GPCIs reflect 

the relative costs of physician work, PE, and MP in an area compared to the national 

average costs for each component. (See section II.E.2 of this proposed rule for more 

information about GPCIs.) 

RVUs are converted to dollar amounts through the application of a CF, which is 

calculated based on a statutory formula by CMS's Office of the Actuary (OACT). The 

CF for a given year is calculated using (a) the productivity-adjusted increase in the 

Medicare Economic Index (MEI) and (b) the Update Adjustment Factor (UAF), which is 

calculated by taking into account the Medicare Sustainable Growth Rate (SGR), an 

annual growth rate intended to control growth in aggregate Medicare expenditures for 

physicians’ services, and the allowed and actual expenditures for physicians’ services. 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 schedule area can be expressed as: 

Payment = [(RVU work x GPCI work) + (RVU PE x GPCI PE) + (RVU MP x 

GPCI MP)] x CF. 

3. Separate Fee Schedule Methodology for Anesthesia Services 

Section 1848(b)(2)(B) of the Act specifies that the fee schedule amounts for 

anesthesia services are to be based on a uniform relative value guide, with appropriate 

adjustment of an anesthesia conversion factor, in a manner to assure that fee schedule 

amounts for anesthesia services are consistent with those for other services of comparable 

value. Therefore, there is a separate fee schedule methodology for anesthesia services. 

Specifically, we establish a separate conversion factor for anesthesia services and we 

utilize the uniform relative value guide, or base units, as well as time units, to calculate 

the fee schedule amounts for anesthesia services. Since anesthesia services are not 

valued using RVUs, a separate methodology for locality adjustments is also necessary. 

This involves an adjustment to the national anesthesia CF for each payment locality. 

4. Most Recent Changes to the Fee Schedule 

The CY 2013 PFS final rule with comment period (77 FR 68892) implemented 

changes to the PFS and other Medicare Part B payment policies. It also finalized many 

of the CY 2012 interim RVUs and established interim RVUs for new and revised codes 

for CY 2013 to ensure that our payment system is updated to reflect changes in medical 

practice, coding changes, and the relative values of services. It also implemented 

certain statutory provisions including provisions of the Affordable Care Act (Pub. L. 

111–148) and the Middle Class Tax Relief and Jobs Creation Act (MCTRJCA) (Pub. L. 

112-96), including claims-based data reporting requirements for therapy services. 
CMS-1600-P 19 

In the CY 2013 PFS final rule with comment period, we announced the following 

for CY 2013: the total PFS update of -26.5 percent; the initial estimate for the 

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 addition, the ATRA extended and added several 

provisions affecting Medicare services furnished in CY 2013, including: 

● Section 602 – extending the 1.0 floor on the work geographic practice cost 

index through CY 2013; 

● Section 603 – extending the exceptions process for outpatient therapy caps 

through CY 2013, extending the application of the cap and manual medical review 

threshold to services furnished in the hospital outpatient department (OPD) through CY 

2013, and requiring the counting of a proxy amount for therapy services furnished in a 

Critical Access Hospital (CAH) toward the cap and threshold during CY 2013. 

In addition to the changes effective for CY 2013, section 635 of ATRA revised the 

equipment utilization rate assumption for advanced imaging services furnished on or after 

January 1, 2014. 

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 later 
CMS-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 the resources used in furnishing a service 

that reflects the general categories of physician and practitioner expenses, such as office 

rent and personnel wages, but excluding malpractice expenses, as specified in section 

1848(c)(1)(B) of the Act. Section 121 of the Social Security Amendments of 1994 

(Pub. L. 103-432), enacted on October 31, 1994, amended section 1848(c)(2)(C)(ii) of 

the Act to require us to develop a methodology for a resource-based system for 

determining PE RVUs for each physician’s service. We develop PE RVUs by looking at 

the direct and indirect physician practice resources involved in furnishing each service. 

Direct expense categories include clinical labor, medical supplies, and medical 

equipment. Indirect expenses include administrative labor, office expense, and all other 

expenses. The sections that follow provide more detailed information about the 

methodology for translating the resources involved in furnishing each service into 

service-specific PE RVUs. In addition, we note that section 1848(c)(2)(B)(ii)(II) of the 

Act provides that adjustments in RVUs for a year may not cause total PFS payments to 

differ by more than $20 million from what they would have otherwise been if the 

adjustments were not made. Therefore, if revisions to the RVUs cause expenditures to 

change by more than $20 million, we make adjustments to ensure that expenditures do 

not increase or decrease by more than $20 million. 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 specific service by adding the costs of the direct 

resources (that is, the clinical staff, equipment, and supplies) typically involved with furnishing 

that service. The costs of the resources are calculated using the refined direct PE inputs assigned 

to each CPT code in our PE database, which are based on our review of recommendations 

received from the AMA RUC. For a detailed explanation of the direct PE methodology, 

including examples, we refer readers to the Five-Year Review of Work Relative Value Units 

Under the PFS and Proposed Changes to the Practice Expense Methodology proposed notice 

(71 FR 37242) and the CY 2007 PFS final rule with comment period (71 FR 69629). 

b. Indirect Practice Expense per Hour Data 

 We use survey data on indirect PEs incurred per hour worked in developing the indirect 

portion of the PE RVUs. Prior to CY 2010, we primarily used the practice expense per hour 

(PE/HR) by specialty that was obtained from the AMA’s Socioeconomic Monitoring Surveys 

(SMS). The AMA administered a new survey in CY 2007 and CY 2008, the Physician Practice 

Expense Information Survey (PPIS). The PPIS is a multispecialty, nationally representative, PE 

survey of both physicians and nonphysician practitioners (NPPs) paid under the PFS using a 

survey instrument and methods highly consistent with those used for the SMS and the 

supplemental surveys. The PPIS gathered information from 3,656 respondents across 51 

physician specialty and health care professional groups. We believe the PPIS is the most 

comprehensive source of PE survey information available. We used the PPIS data to update the 

PE/HR data for the CY 2010 PFS for almost all of the Medicare-recognized specialties that 

participated in the survey. 
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 survey. Furthermore, as we explained in the 

CY 2010 PFS final rule with comment period (74 FR 61751), because of the magnitude of 

payment reductions for some specialties resulting from the use of the PPIS data, we transitioned 

its use over a 4-year period (75 percent old/25 percent new for CY 2010, 50 percent 

old/50 percent new for CY 2011, 25 percent old /75 percent new for CY 2012, and 100 percent 

new for CY 2013) from the previous PE RVUs to the PE RVUs developed using the new PPIS 

data. As provided in the CY 2010 PFS final rule with comment period (74 FR 61751), the 

transition to the PPIS data was complete 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 requires us to use the medical oncology 

supplemental survey data submitted in 2003 for oncology drug administration services. 

Therefore, the PE/HR for medical oncology, hematology, and hematology/oncology reflects the 

continued use of these 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 Diagnostic Imaging Services (NCQDIS), representing independent 

diagnostic testing facilities (IDTFs), were blended with supplementary survey data from the 

American College of Radiology (ACR) and implemented for payments in CY 2007. Neither 

IDTFs, nor independent labs, participated in the PPIS. Therefore, we continue to use the PE/HR 

that was developed from their supplemental survey data. 

Consistent with our past practice, the previous indirect PE/HR values from the 
CMS-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 reproductive endocrinology and spine surgery since 

these specialties currently are not separately recognized by Medicare, nor do we have a method 

to blend the PPIS data with Medicare-recognized specialty data. 

We do not use the PPIS data for sleep medicine since there is not a full year of Medicare 

utilization data for that specialty given the specialty code was only available beginning in 

October 1, 2012. We anticipate using the PPIS data to create PE/HR for sleep medicine for CY 

2015 when we will have a full year of data to make the calculations. 

Previously, we established PE/HR values for various specialties without SMS or 

supplemental survey data by crosswalking them to other similar specialties to estimate a proxy 

PE/HR. For specialties that were part of the PPIS for which we previously used a crosswalked 

PE/HR, we instead used the PPIS-based PE/HR. We continue previous crosswalks for 

specialties that did not participate in the PPIS. However, beginning in CY 2010 we changed the 

PE/HR crosswalk for portable x-ray suppliers from radiology to IDTF, a more appropriate 

crosswalk because these specialties are more similar to each other with respect to physician time. 

 For registered dietician services, the resource-based PE RVUs have been calculated in 

accordance with the final policy that crosswalks the specialty to the “All Physicians” PE/HR 

data, as adopted in the CY 2010 PFS final rule with comment period (74 FR 61752) and 

discussed in more detail in the CY 2011 PFS final rule with comment period (75 FR 73183). 

c. Allocation of PE to Services 

To establish PE RVUs for specific services, it is necessary to establish the direct 

and indirect PE associated with each service. 
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 relationship between the sum of the direct cost 

resources (that is, the clinical staff, equipment, and supplies) typically involved with 

furnishing each of the services. The costs of these resources are calculated from the 

refined direct PE inputs in our PE database. For example, if one service has a direct cost 

sum of $400 from our PE database and another service has a direct cost sum of $200, the 

direct portion of the PE RVUs of the first service would be twice as much as the direct 

portion of the PE RVUs for the second service. 

(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 direct costs specifically associated with a code 

and the greater of either the clinical labor costs or the physician work RVUs. We also 

incorporated the survey data described earlier in the PE/HR discussion. The general 

approach to developing the indirect portion of the PE RVUs is described as follows: 

• For a given service, we use the direct portion of the PE RVUs calculated as 

previously described and the average percentage that direct costs represent of total costs 

(based on survey data) across the specialties that furnish the service to determine an 

initial indirect allocator. In other words, the initial indirect allocator is calculated so that 

the direct costs equal the average percentage of direct costs of those specialties furnishing 

the service. For example, if the direct portion of the PE RVUs for a given service is 2.00 

and direct costs, on average, represented 25 percent of total costs for the specialties that 
CMS-1600-P 26 

furnished the service, the initial indirect allocator would be calculated so that it equals 75 

percent of the total PE RVUs. Thus, in this example the initial indirect allocator would 

equal 6.00, resulting in a total PE RVUs of 8.00 (2.00 is 25 percent of 8.00 and 6.00 is 75 

percent of 8.00). 

• Next, we add the greater of the work RVUs or clinical labor portion of the 

direct portion of the PE RVUs to this initial indirect allocator. In our example, if this 

service had work RVUs of 4.00 and the clinical labor portion of the direct PE RVUs was 

1.50, we would add 4.00 (since the 4.00 work RVUs are greater than the 1.50 clinical 

labor portion) to the initial indirect allocator of 6.00 to get an indirect allocator of 10.00. 

In the absence of any further use of the survey data, the relative relationship between the 

indirect cost portions of the PE RVUs for any two services would be determined by the 

relative relationship between these indirect cost allocators. For example, if one service 

had an indirect cost allocator of 10.00 and another service had an indirect cost allocator 

of 5.00, the indirect portion of the PE RVUs of the first service would be twice as great as 

the indirect portion of the PE RVUs for the second service. 

• Next, we incorporate the specialty-specific indirect PE/HR data into the 

calculation. In our example, if based on the survey data, the average indirect cost of the 

specialties furnishing the first service with an allocator of 10.00 was half of the average 

indirect cost of the specialties furnishing the second service with an indirect allocator of 

5.00, the indirect portion of the PE RVUs of the first service would be equal to that of the 

second service. 

d. Facility and Nonfacility Costs 

For procedures that can be furnished in a physician’s office, as well as in a 
CMS-1600-P 27 

hospital or facility setting, we establish two PE RVUs: facility and nonfacility. The 

methodology for calculating PE RVUs is the same for both the facility and nonfacility 

RVUs, but is applied independently to yield two separate PE RVUs. Because in 

calculating the PE RVUs for services furnished in a facility, we do not include resources 

that would generally not be provided by physicians when furnishing the service in a 

facility, the facility PE RVUs are generally lower than the nonfacility PE RVUs. 

Medicare makes a separate payment to the facility for its costs of furnishing a service. 

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

Diagnostic services are generally comprised of two components: a professional 

component (PC); and a technical component (TC). The PC and TC may be furnished 

independently or by different providers, or they may be furnished together as a “global” 

service. When services have PC and TC components that can be billed separately, the 

payment for the global service equals the sum of the payment for the TC and PC. This is 

a result of using a weighted average of the ratio of indirect to direct costs across all the 

specialties that furnish the global service, TCs, and PCs; that is, we apply the same 

weighted average indirect percentage factor to allocate indirect expenses to the global 

service, PCs, and TCs for a service. (The direct PE RVUs for the TC and PC sum to the 

global under the bottom-up methodology.) 

f. PE RVU Methodology 

For a more detailed description of the PE RVU methodology, we refer readers to 

the CY 2010 PFS final rule with comment period (74 FR 61745 through 61746). 

(1) Setup File 

First, we create a setup file for the PE methodology. The setup file contains the 
CMS-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 aggregate PE (aggregate direct and indirect) RVUs, the CF, and the 

average direct PE percentage from the survey data. 

Step 3: Calculate the aggregate pool of direct costs. This is the sum of the 

product of the direct costs for each service from Step 1 and the utilization data for that 

service. 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 Step 3 calculate a direct PE scaling 

adjustment so that the aggregate direct cost pool does not exceed the current aggregate 

direct cost pool and apply it to the direct costs from Step 1 for each service. 

Step 5: Convert the results of Step 4 to an RVU scale for each service. To do 

this, divide the results of Step 4 by the CF. Note that the actual value of the CF used in 

this calculation does not influence the final direct cost PE RVUs, as long as the same CF 

is used in Step 2 and Step 5. Different CFs will result in different direct PE scaling 

factors, but this has no effect on the final direct cost PE RVUs since changes in the CFs 

and changes in the associated direct scaling factors offset one another. 
CMS-1600-P 29 

(3) Create the Indirect Cost PE RVUs 

Create indirect allocators. 

Step 6: Based on the survey data, calculate direct and indirect PE percentages for 

each physician specialty. 

Step 7: Calculate direct and indirect PE percentages at the service level by taking 

a weighted average of the results of Step 6 for the specialties that furnish the service. 

Note that for services with TCs and PCs, the direct and indirect percentages for a given 

service do not vary by the PC, TC, and global service. 

Step 8: Calculate the service level allocators for the indirect PEs based on 

the percentages calculated in Step 7. The indirect PEs are allocated based on the three 

components: the direct PE RVUs; the clinical PE RVUs; and the work RVUs. 

For most services the indirect allocator is: indirect percentage * (direct PE 

RVUs/direct percentage) + work RVUs. 

There are two situations where this formula is modified: 

• If the service is a global service (that is, a service with global, professional, and 

technical components), then the indirect allocator is: indirect percentage (direct 

PE RVUs/direct percentage) + clinical PE RVUs + work RVUs. 

• If the clinical labor PE RVUs exceed the work RVUs (and the service is not a 

global service), then the indirect allocator is: indirect percentage (direct 

PE RVUs/direct percentage) + clinical PE RVUs. 

(Note: For global services, the indirect allocator is based on both the work RVUs and the 

clinical labor PE RVUs. We do this to recognize that, for the PC service, indirect PEs 

will be allocated using the work RVUs, and for the TC service, indirect PEs will be 
CMS-1600-P 30 

allocated using the direct PE RVUs and the clinical labor PE RVUs. This also allows the 

global component RVUs to equal the sum of the PC and TC RVUs.) 

For presentation purposes in the examples in Table 5, the formulas were divided 

into two parts for each service. 

• The first part does not vary by service and is the indirect percentage (direct PE 

RVUs/direct percentage). 

• The second part is either the work RVU, clinical labor PE RVU, or both 

depending on whether the service is a global service and whether the clinical PE RVUs 

exceed the work RVUs (as described earlier in this step). 

Apply a scaling adjustment to the indirect allocators. 

Step 9: Calculate the current aggregate pool of indirect PE RVUs by multiplying 

the current aggregate pool of PE RVUs by the average indirect PE percentage from the 

survey data. 

Step 10: Calculate an aggregate pool of indirect PE RVUs for all PFS services by 

adding the product of the indirect PE allocators for a service from Step 8 and the 

utilization data for that service. For CY 2014, we adjusted the indirect cost pool to match 

the new PE share of the MEI, as discussed 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 indirect allocation does not exceed the available 

aggregate indirect PE RVUs and apply it to indirect allocators calculated in Step 8. 

Calculate the indirect practice cost index. 

Step 12: Using the results of Step 11, calculate aggregate pools of 

specialty-specific adjusted indirect PE allocators for all PFS services for a specialty by 
CMS-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 for the specialty, the physician time for the 

service, and the specialty's utilization for the service across all services furnished by the 

specialty. 

Step 14: Using the results of Step 12 and Step 13, calculate the specialty-specific 

indirect PE scaling factors. 

Step 15: Using the results of Step 14, calculate an indirect practice cost index at 

the specialty level by dividing each specialty-specific indirect scaling factor by the 

average indirect scaling factor for the entire PFS. 

Step 16: Calculate the indirect practice cost index at the service level to ensure 

the capture of all indirect costs. Calculate a weighted average of the practice cost index 

values for the specialties that furnish the service. (Note: For services with TCs and PCs, 

we calculate the indirect practice cost index across the global service, PCs, and TCs. 

Under this method, the indirect practice cost index for a given service (for example, 

echocardiogram) does not vary by the PC, TC, and global service.) 

Step 17: Apply the service level indirect practice cost index calculated in Step 16 

to the service level adjusted indirect allocators calculated in Step 11 to get the indirect PE 

RVUs. 

(4) Calculate the Final PE RVUs 

Step 18: Add the direct PE RVUs from Step 6 to the indirect PE RVUs from 
CMS-1600-P 32 

Step 17 and apply the final PE budget neutrality (BN) adjustment and the MEI revision 

adjustment. 

The final PE BN adjustment is calculated by comparing the results of Step 18 to 

the current pool of PE RVUs (prior to the 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 certain specialties are excluded from the PE 

RVU calculation for ratesetting purposes, but all specialties are included for purposes of 

calculating the final BN adjustment. (See “Specialties excluded from ratesetting 

calculation” later in this section.) 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 codes 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 percentage of the PFS and low-volume specialties, from the 

calculation. These specialties are included for the purposes of calculating the BN 

adjustment. They are displayed in Table 1. 
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., private ambulance companies, funeral homes, 

etc. 

60 Public health or welfare agencies 

61 Voluntary health or charitable agencies 

73 Mass immunization roster biller 

74 Radiation therapy centers 

87 All other suppliers (e.g., drug and department stores) 

88 Unknown supplier/provider specialty 

89 Certified clinical nurse specialist 

95 Competitive Acquisition Program (CAP) Vendor 

96 Optician 

97 Physician assistant 

A0 Hospital 

A1 SNF 

A2 Intermediate care nursing facility 

A3 Nursing facility, other 

A4 HHA 

A5 Pharmacy 

A6 Medical supply company with respiratory therapist 

A7 Department store 

1 Supplier of oxygen and/or oxygen related equipment 

2 Pedorthic personnel 

3 Medical supply company with pedorthic personnel 

● Crosswalk certain low volume physician specialties: Crosswalk the utilization 

of certain specialties with relatively low PFS utilization to the associated specialties. 

• Physical therapy utilization: Crosswalk the utilization associated with all 
CMS-1600-P 34 

physical therapy services to the specialty of physical therapy. 

• Identify professional and technical services not identified under the usual TC 

and 26 modifiers: Flag the services that are PC and TC services, but do not use TC and 

26 modifiers (for example, electrocardiograms). This flag associates the PC and TC with 

the associated global code for use in creating the indirect PE RVUs. For example, the 

professional service, CPT code 93010 (Electrocardiogram, routine ECG with at least 12 

leads; interpretation and report only), is associated with the global service, CPT code 

93000 (Electrocardiogram, routine ECG with at least 12 leads; with interpretation and 

report). 

• Payment modifiers: Payment modifiers are accounted for in the creation of the file 

consistent with current payment policy as implemented in claims processing. For example, 

services billed with the assistant at surgery modifier are paid 16 percent of the PFS amount for 

that service; therefore, the utilization file is modified to only account for 16 percent of any 

service that contains the assistant at surgery modifier. Similarly, for those services to which 

volume adjustments are made to account for the payment modifiers, time adjustments are applied 

as well. For time adjustments to surgical services, the intraoperative portion in the physician 

time file is used; where it is not present, the intraoperative percentage from the payment files 

used by contractors to process Medicare claims is used instead. Where neither is available, we 

use the payment adjustment ratio to adjust the time accordingly. Table 2 details the manner in 

which the modifiers are applied. 

TABLE 2: Application of Payment Modifiers to Utilization Files

Modifier Description Volume Adjustment Time Adjustment 

80,81,82 Assistant at Surgery 16% Intraoperative 

portion 
CMS-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 rules and multiple procedure payment reductions 

(MPPR). We note that section 1848(c)(2)(B)(v) of the Act exempts certain reduced payments 

for multiple imaging procedures and multiple therapy services from the BN calculation under 

section 1848(c)(2)(B)(ii)(II) of the Act. These MPPRs are not included in the development of 

the RVUs. 

For anesthesia services, we do not apply adjustments to volume since the average 

allowed charge is used when simulating RVUs, and therefore, includes all adjustments. 

A time adjustment of 33 percent is made only for medical direction of two to four cases 

since that is the only situation where time units are duplicative. 
CMS-1600-P 36 

● Work RVUs: The setup file contains the work RVUs from this proposed 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 year if usage were continuous (that is, 

usage = 1); generally 150,000 minutes. 

usage = variable, see discussion below. 

price = price of the particular piece of equipment. 

life of equipment = useful life of the particular piece of equipment. 

maintenance = factor for maintenance; 0.05. 

interest rate = variable, see discussion below. 

Usage: We currently use an equipment utilization rate assumption of 50 percent for most 

equipment, with the exception of expensive diagnostic imaging equipment. For expensive 

diagnostic imaging equipment, which is equipment priced at over $1 million (for example, 

computed tomography (CT) and magnetic resonance imaging (MRI) scanners), we use an 

equipment utilization rate assumption of 75 percent. Section 1848(b)(4)(C) of the Act, as 

modified by section 635 of the America Taxpayer Relief Act of 2012 (Pub. L. 112-240, enacted 

on January 2, 2013) (ATRA), requires that for fee schedules established for CY 2014 and 

subsequent years, in the methodology for determining PE RVUs for expensive diagnostic 

imaging equipment, the Secretary shall use a 90 percent assumption. The provision also requires 
CMS-1600-P 37 

that the reduced expenditures attributable to this change in the utilization rate for CY 2014 and 

subsequent years shall not be taken into account when applying the BN limitation on annual 

adjustments described in section 1848(c)(2)(B)(ii)(II) of the Act. We are applying the 90 percent 

utilization rate assumption in CY 2014 to all of the services to which the 75 percent equipment 

utilization rate assumption applied in CY 2013. These services are listed in a file called “CY 

2014 CPT Codes Subject to 90 Percent Usage Rate,” available on the CMS 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 dye 
CMS-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 lwr 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), we 
CMS-1600-P 39 

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

The interest rate was based on the Small Business Administration (SBA) maximum 

interest rates for different categories of loan size (equipment cost) and maturity (useful 

life). The interest rates are listed in Table 4. See 77 FR 68902 for a thorough discussion 

of this issue. 

TABLE 4: SBA Maximum Interest Rates 

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 40 

TABLE 5: Calculation of PE RVUs under Methodology for Selected Codes 

 Step Source Formula 99213 

Office visit, 

est Nonfacility 

33533 

CABG, 

arterial, 

single 

Facility 

71020 

Chest xray Nonfacility 

71020-TC 

Chest xray Nonfacility 

(1) Labor cost (Lab) 

Step 1 AMA 13.32 77.52 5.74 5.74 

(2) Supply cost (Sup) 

Step 1 AMA 2.98 0.00 3.39 3.39 

(3) Equipment cost (Eqp) 

Step 1 AMA 0.17 0.58 7.24 7.24 

(4) Direct cost (Dir) 

Step 1 =(1)+(2)+(3) 16.48 78.10 16.38 16.38 

(5) Direct adjustment (Dir. Adj.) 

Steps 2-4 See 

footnote* 

 0.5427 0.5427 0.5427 0.5427 

(6) Adjusted Labor 

Steps 2-4 =Labor * 

Dir Adj 

=(1)*(5) 7.23 42.07 3.11 3.11 

(7) Adjusted Supplies 

Steps 2-4 =Eqp * Dir 

Adj 

=(2)*(5) 1.62 0.00 1.84 1.84 

(8) Adjusted Equipment 

Steps 2-4 =Sup * Dir 

Adj 

=(3)*(5) 0.09 0.32 3.93 3.93 

(9) Adjusted Direct 

Steps 2-4 =(6)+(7)+(8) 8.94 42.39 8.89 8.89 

(10) Conversion Factor (CF) 

Step 5 PFS 34.0230 34.0230 34.0230 34.0230 

(11) Adj. labor cost converted 

Step 5 =(Lab * 

Dir Adj)/CF 

=(6)/(10) 0.21 1.24 0.09 0.09 
CMS-1600-P 41 

(12) Adj. supply cost converted 

Step 5 =(Sup * 

Dir Adj)/CF 

=(7)/(10) 0.05 0.00 0.05 0.05 

(13) Adj. equipment cost converted 

Step 5 =(Eqp * 

Dir Adj)/CF 

=(8)/(10) 0.00 0.01 0.12 0.12 

(14) Adj. direct cost converted 

Step 5 =(11)+(12)+(13) 0.26 1.25 0.26 0.26 

(15) Work RVU 

Setup File 

PFS 0.97 33.75 0.22 0.00 

(16) Dir_pct 

Steps 6,7 Surveys 0.31 0.18 0.31 0.31 

(17) Ind_pct 

Steps 6,7 Surveys 0.69 0.82 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) ((

(19) Ind. Alloc.(1st part) 

Step 8 See 18 0.79 5.87 0.64 0.64 

(20) Ind. Alloc. Formula (2nd part) 

Step 8 See Step 8 (15) (15) (15+11) (11) 

(21) Ind. Alloc.(2nd part) 

Step 8 See 20 0.97 33.75 0.31 0.09 

(22) Indirect Allocator (1st + 2nd) 

Step 8 =(19)+(21) 1.76 39.62 0.95 0.73 

(23) Indirect Adjustment (Ind. Adj.) 

Steps 9-11 

See Footnote** 

 0.3826 0.3826 0.3826 0.3826 
CMS-1600-P 42 

(24) Adjusted Indirect Allocator 

Steps 9-11 

=Ind Alloc * Ind Adj 

 0.67 15.16 0.36 0.28 

(25) Ind. Practice Cost Index (IPCI) 

Steps 12-16 

 1.08 0.77 0.93 0.93 

(26) Adjusted Indirect 

Step 17 = Adj.Ind 

Alloc * PCI 

=(24)*(25) 0.73 11.60 0.34 0.26 

(27) PreCap PE RVU 

Step 18 =(Adj Dir 

+ Adj Ind) * Other Adj 

=((14)+(26)) * Other Adj)*** 

0.98 12.78 0.61 0.53 

(28) OPPS/ASC Cap Adj 

Step 19 PFS 1.016 1.016 1.016 1.016 

(29) Final PE RVU 

Step 19 PE RVU * 

OPPS/ASC Cap Adj 

(27)*(28) 1.00 12.99 0.62 0.54 

Note: 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 in the equipment utilization rate for certain services and the MEI revisioNote: 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 revisions related to direct PE 

inputs for specific services. The proposed revisions are included in the proposed rule CY 2014 

direct PE database, which is available on the CMS 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 period, we established interim final direct 

PE inputs based on acceptance, with refinement, of recommendations submitted by the AMA 

RUC. Although we generally address public comments on the prior year’s interim final direct 

PE inputs in the following year’s final rule with comment period, several commenters raised an 

issue regarding anomalous supply items 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, solvent, and formalin disposal cost,” and 

“courier transportation costs.” In the CY 2013 PFS final rule with comment period, we 

explained that neither the specimen and supply disposal nor courier costs for transporting 

specimens are appropriately considered disposable medical supplies. Instead, we stated these 

costs are incorporated into the PE RVUs for these services through the indirect PE allocation. 

We also noted that the current direct PE inputs for these and similar services across the PFS do 

not include these kinds of costs as disposable supplies. 
CMS-1600-P 44 

Several commenters noted that, contrary to our assertion in the final rule with comment 

period, there are a few items incorporated in the direct PE input database as “supplies” that are 

no more disposable supplies than the new items recommended by the AMA RUC for the surgical 

pathology codes. These commenters identified seven supply inputs in particular that they believe 

are analogous to the items that we did not accept in establishing CY 2013 interim final direct PE 

inputs. These items and their associated HCPCS codes are listed in Table 6. 

TABLE 6: Items Identified by Commenters 

CMS Supply 

Code

Item Description Associated CPT Codes

SK106 device shipping cost 93271, 93229, 93268 

SK112 Federal Express cost (average across all 

zones) 

64650, 88363, 64653 

SK113 communication, wireless 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 categorization of all costs. Within the PE methodology, 

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

indirect costs. For six of the items contained in Table 6, we agree with the commenters that the 

items should not be considered disposable supplies. We believe that these items are more 

appropriately categorized as indirect PE costs, which are reflected in the allocation of indirect PE 

RVUs rather than direct PE. Therefore, we are proposing to remove the following six items from 
CMS-1600-P 45 

the direct PE input database for CY 2014: “device shipping cost” (SK106); “Federal Express 

cost (average across all zones)” (SK112); “communication, wireless per service” (SK113); “fee, 

usage, cycletron/accelerator, gammaknife, Lincac SRS System” (SK107); “fee, image analysis” 

(SK110); and “fee, licensing, computer, psychology” (SK111). The CY 2014 proposed direct 

PE input database and Addendum B of this proposed rule reflect these proposed revisions. 

In the case of the supply item called “bag system, 1000ml (for angiography waste fluids)” 

(SD140), we do not agree with the commenters that this item is analogous to the specimen 

disposal costs recommended for the surgical pathology codes. This supply input represents only 

the costs of the disposable material items associated with the removal of waste fluids that 

typically result from a particular procedure. In contrast, the item recommended by the AMA 

RUC for surgical pathology consisted of an amortized portion of a specimen disposal contract 

that includes costs for resources such as labor and transportation. Furthermore, we do not 

believe that the specimen disposal contract is attributable to individual procedures within the 

established PE methodology. We believe that a disposable supply is one that is attributable, in 

its entirety, to an individual patient for a particular service. An amortized portion of a specimen 

disposal contract does not meet these criteria. Accordingly, as stated in the CY 2013 final rule 

with comment period, we did not accept the AMA RUC recommendation to create a new supply 

item related to specimen disposal costs. We believe that many physician offices and other 

nonfacility settings where Medicare beneficiaries receive services incur costs related to waste 

management or other service contracts, but none of these costs are currently incorporated into the 

PE methodology as disposable supplies. Instead, these costs are appropriately categorized as 

indirect costs 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 attributable to individual 
CMS-1600-P 46 

services may be appropriately categorized as disposable supplies, but that specimen disposal 

costs related to an allocated portion of service contracts that cannot be attributed to individual 

services should not be incorporated into the direct PE input database as disposable supplies. 

Moreover, because do not agree with commenters that the “bag system, 1000ml (for 

angiography waste fluids)” (SD140) is analogous to a specimen disposal contract for the reasons 

state above, we continue to believe that SD140 is a direct expense. Accordingly, we are not 

removing SD140 from the direct PE input database. Additionally, we anticipate responding to 

these and other aspects of the comments 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 several discrepancies that 

we believe should be addressed for CY 2014. In the following paragraphs, we identify the nature 

of these discrepancies, the affected codes, and the refinements 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). Upon reviewing these items we believe that the 

codes should include the items at the quantities listed in Table 7. 

TABLE 7: Supply Items and Quantities 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 1.0 
CMS-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 for CPT code 51710 and the related code 51705 

(Change of cystostomy tube; simple), we also noted that the direct PE input database includes an 

anomalous 0.5 minutes of clinical labor time in the post-service period. We believe that this 

small portion of clinical labor time is the result of a rounding error in our data and should be 

removed from the direct PE input database. 

During our review of the data, we noted an invalid supply code (SM037) that appears in 

the direct PE input database for CPT codes 88312 and 88313. Upon review of the code, we 

believe that the supply item called “wipes, lens cleaning (per wipe) (Kimwipe)” (SM027) should 

be included in the code instead of the invalid code. The CY 2014 proposed direct PE input 

database reflects these proposed revisions. 

Additionally, we conducted a routine review of the codes valued in the nonfacility setting 

for which moderate sedation is inherent in the procedure. Consistent with the standard moderate 

sedation package finalized in the CY 2012 PFS final rule with comment period (76 FR 73043), 

we have made minor adjustments to the nurse time and equipment time of 18 of these codes. 

These codes appear in Table 8, and the CY 2014 proposed direct PE input database reflects the 

proposed refined inputs for moderation sedation. 

TABLE 8: Codes with Minor Adjustments to Moderate Sedation Inputs 
CMS-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 from the 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 recommended pre-service clinical labor minutes 

in the facility setting of 30 minutes or fewer for these 48 codes. We reviewed the AMA RUC’s 

recommendation and agree that the recommended reductions would be appropriate to maintain 

relativity with other 000 day global codes. Therefore, we propose to amend the pre-service 
CMS-1600-P 49 

clinical labor minutes for the codes listed in Table 9, consistent with the AMA RUC 

recommendation. The proposed CY 2014 direct PE input database reflects this proposal. 

TABLE 9: 000-Day Global Codes with Proposed 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 30 
CMS-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 price associated with the equipment item called 

“laser, diode, for patient positioning (Probe)” (ER040) in the direct PE input database is $7,678 

instead of $18,160 as listed in the CY 2013 PFS final rule with comment period (77 FR 68922). 

The CY 2014 proposed direct PE input database reflects the updated price for the equipment 

item. 

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

Since 2001, Medicare has used HCPCS G-codes, in addition to the CPT codes, for 

stereotactic radiosurgery (SRS) to distinguish robotic and non-robotic methods of delivery.. 

Based on our review of the current SRS technology, it is our understanding that most services 

currently furnished with linac-based SRS technology, including services currently billed using 

the non-robotic codes, incorporate some type of robotic feature. Therefore, we believe that it is 

no longer necessary to continue to distinguish robotic versus non-robotic linac-based SRS 

through the HCPCS G-codes. For purposes of the hospital outpatient prospective payment 

system (OPPS), CMS is proposing to replace the existing four SRS HCPCS G-codes G0173 

(Linear accelerator based stereotactic radiosurgery, complete course of therapy in one session), 

G0251(Linear accelerator based stereotactic radiosurgery, delivery including collimator changes 

and custom plugging, fractionated treatment, all lesions, per session, maximum five sessions per 

course of treatment), G0339 (Image-guided robotic linear accelerator-based stereotactic 

radiosurgery, complete course of therapy in one session or first session of fractionated 

treatment), and G0340 (Image-guided robotic linear accelerator-based stereotactic radiosurgery, 

delivery including collimator changes and custom plugging, fractionated treatment, all lesions, 

per session, second through fifth sessions, maximum five sessions per course of treatment), with 

the SRS CPT codes 77372 (Radiation treatment delivery, stereotactic radiosurgery (SRS), 

complete course of treatment of cranial lesion(s) consisting of 1 session; linear accelerator based) 

and 77373 (Stereotactic body radiation therapy, treatment delivery, per fraction to 1 or more 

lesions, including image guidance, entire course not to exceed 5 fractions) that do not distinguish 

between robotic and non-robotic methods of delivery. We refer readers to section II.C.3 of the 

CY 2014 OPPS proposed rule for more discussion of that proposal. We also refer readers to the 
CMS-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 nonfacility 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 currently paid in the nonfacility setting 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 eliminating the contractor-priced G-codes and using 

the existing CPT code for PFS payment of services 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 reported 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-priced G-codes for PFS 

payment. We are seeking comment from the public and stakeholders, including the AMA RUC, 

regarding whether or not the direct PE inputs for CPT codes 77372 and 77373 would continue to 

accurately estimate the resources used in furnishing typical SRS delivery were there no coding 

distinction between robotic and non-robotic methods of delivery. 

3. Using OPPS and ASC Rates in Developing PE RVUs 

As we explain in section II.A.2.d of this proposed rule, we typically establish two PE 

RVUs for procedures that can be furnished in either a nonfacility setting, like a physician’s 

office, or facility setting, like a hospital. The nonfacility RVUs reflect all of the direct and 

indirect practice expenses of providing a particular service when the entire service is furnished in 
CMS-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 service is furnished in a facility. 

When services are furnished in the facility setting, such as a hospital outpatient 

department (OPD) or an ambulatory surgical center (ASC), the total Medicare payment (made to 

the facility and the professional combined) typically exceeds the Medicare payment made for 

the same service when furnished in the physician office or other nonfacility setting. We believe 

that this payment difference generally reflects the greater costs that facilities incur than those 

incurred by practitioners furnishing services in offices and other non-facility settings. For 

example, hospitals incur higher overhead costs because they maintain the capability to furnish 

services 24 hours a day and 7 days per week, furnish services to higher acuity patients than those 

who receive services in physician offices, and have additional legal obligations such as 

complying with the Emergency Medical Treatment 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 services, the total Medicare payment when the 

service is furnished in the physician office setting exceeds the total Medicare payment when the 

service is furnished in an 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 part based on the data provided. 

Currently, we have little means to validate whether the information is accurate or reflects typical 

resource costs. Furthermore, in the case of certain direct costs, like the price of high-cost 

disposable supplies and expensive capital equipment, even voluntary information has been very 

difficult to obtain. In some cases the PE RVUs are based upon single price quotes or one paid 

invoice. We have addressed these issues extensively in previous rulemaking (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 costs may distort the resources used to develop nonfacility PE RVUs 

used in calculating PFS payment rates for individual services. 

In addition to the accuracy issues with some of the physician PE resource inputs, the data 

used in the PFS PE methodology can often be outdated. As we have previously noted (77 FR 

68921) there is no practical means for CMS or stakeholders to engage in a complete 

simultaneous review of the input resource costs for all HCPCS codes paid under the PFS on an 

annual or even regular basis. Thus, the information used to estimate PE resource costs for PFS 

services is not routinely updated. Instead, we strive to maintain relativity by reviewing the work 

RVUs, physician time, and direct PE inputs for a code 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 for 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 expensive items, outdated price inputs can result in 

significant overestimation of resource costs. 

Such inaccurate resource input costs may distort the nonfacility PE RVUs used to 
CMS-1600-P 55 

calculate PFS payment rates for individual services. As we have previously noted, OPPS 

payment rates are based on auditable hospital data and are updated annually. Given the 

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 more accurate OPPS data. On these bases, we are 

proposing a change in the PE methodology beginning in CY 2014 and subsequent years. To 

improve the accuracy of PFS nonfacility payment rates for each calendar year, we are proposing 

to use the current year OPPS or ASC rates as a point of comparison in establishing PE RVUs for 

services under the PFS. In setting PFS rates, we would compare the PFS payment rate for a 

service furnished in an office setting to the total Medicare payment to practitioners and facilities 

for the same service when furnished in a hospital outpatient setting. For 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 RVUs 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 nonfacility PE RVUs for a code 

would result in a higher payment than the corresponding OPPS or ASC payment rate and PFS 

facility PE RVUs (when applicable) for the same code, we would reduce the nonfacility PE RVU 

rate so that the total nonfacility payment does not exceed the total Medicare payment made for 

the service in the facility setting. To maintain the greatest consistency and transparency possible, 

we are proposing to use the current year PFS conversion factor, as reflected in Figure B1. 

Similarly, we are proposing to use current year OPPS or ASC rates in the comparison. 
CMS-1600-P 56 

For services with no work RVUs, we are proposing to compare the total nonfacility PFS 

payment to the OPPS payment rates directly since no PFS payment is made for these services 

when furnished in the facility setting. 

 We are proposing to exempt the following services from this policy: 

Services Without Separate OPPS Payment rates: We are proposing to exclude services without 

separately payable OPPS rates from this methodical change since there would be no OPPS rate 

to which we could compare the PFS nonfacility PE RVUs. We note that there would also be no 

ASC rate for these services since ASCs are only approved to furnish a subset of OPPS services. 

Codes Subject to the DRA Imaging Cap: We are proposing to exclude 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, nuclear medicine, MRI, CT, and fluoroscopy 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 total 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 “office-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 additional information regarding this payment 

policy. 

Codes Paid in the Facility at Nonfacility PFS Rates: To avoid issues of circularity, we are also 

proposing to exclude services that are paid in the facility setting at nonfacility payment rates. 

This would include certain professional-only services where the resource costs for practitioners 

are assumed to be similar in both settings. 

Codes with PE RVUs Developed Outside the PE Methodology: We are also proposing to 

exclude services with PE RVUs established 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 stakeholders have previously suggested that the 

direct costs (for example, clinical labor, disposable supplies and medical equipment) involved in 

furnishing a service are similar in both the nonfacility and facility settings. Others have 
CMS-1600-P 58 

suggested that facilities, like hospitals, have greater purchasing power for medical equipment and 

disposable supplies so that the direct costs for a facility to furnish a service can be lower than 

costs for a physician practice furnishing the same service. This proposed policy does not assume 

that the direct costs to furnish a service in the nonfacility setting are always lower than in the 

facility setting. Medicare payment methodologies, including both OPPS and the PFS PE 

methodology, incorporate both direct and indirect costs (administrative labor, office expenses, 

and all other expenses). 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 office and facility settings are comparable. 

We believe this proposal provides a reliable means for Medicare to set upper payment 

limits for office-based procedures based on relatively more reliable cost information available for 

the same procedures when furnished in a facility setting where the cost structure would be 

expected to be somewhat, if not significantly, higher than the office setting. We believe that the 

current basis for estimating the resource costs involved in furnishing a PFS service is 

significantly encumbered by our current inability to obtain accurate information regarding supply 

and equipment prices, as well as procedure time assumptions. We believe that this policy will 

mitigate the negative impact of these difficulties on both the appropriate relativity of PFS 

services and overall Medicare spending. A wide range of stakeholders and public commenters 

have pointed to the nonfacility setting as the most cost-effective location for services. Given the 

significantly higher cost structure of facilities (as discussed above) we believe that this 

presumption is accurate. In its March 2012 report to Congress, MedPAC recommended that 

Medicare should seek to pay similar amounts for similar services across payment settings, taking 

into account differences in the definitions of services and patient severity. (MedPAC March 2012 
CMS-1600-P 59 

Report to Congress, page 46) We believe that the proposed change to our PFS PE methodology 

will more appropriately reflect resource 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 described in the direct PE input database and whether 

the ultrasound equipment listed for specific procedure codes is clinically necessary. 

In response, the AMA RUC recommended creating several new equipment inputs in 

addition to the revision of current equipment inputs for ultrasound services. The AMA RUC also 

forwarded pricing information for new and existing equipment items from certain medical 

specialty societies that represent the practitioners who furnish these services. In the following 

paragraphs, we summarize the AMA RUC recommendations, address our review of the provided 

information, and describe 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 equipment items to the equipment packages called 

“room, ultrasound, general” (EL015) and “room, ultrasound, vascular” (EL016). The AMA 

RUC also recommended creating a similar direct PE input equipment package called “room, 

ultrasound, cardiovascular.” In considering these recommendations, we identified a series of 

new concerns regarding the makeup of these equipment packages and because there are several 

different ways to handle these concerns, we are seeking public comment from additional 
CMS-1600-P 60 

stakeholders prior to proposing to implement any of these recommended 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 furnishing every service in that room. When 

equipment items beyond those included in a “room” are typically used in furnishing a particular 

procedure, the additional equipment items for that procedure are separately reflected in the direct 

PE input database in addition to the “room” rather than being included in the room. When 

handled in this way, the room includes only those inputs that are common to all services 

furnished in that room type, and thus the direct PE inputs are appropriate for the typical case of 

each particular service. When additional equipment items are involved in furnishing a particular 

service, they are included as an individual PE input only for that particular service. 

In contrast, the equipment items currently included in the “room, ultrasound, general” 

are: the ultrasound system, five different transducers, two probe starter kits, two printers, a table, 

and various other items. We do not believe that it is likely that all of these items would be 

typically used in furnishing each service. For example, we do not believe that the typical 

ultrasound study would require the use of five different ultrasound transducers. However, the 

costs of all of these items are incorporated into the resource inputs for every service for which 

the ultrasound room is a direct PE input, regardless of whether each of those items is typically 

used in furnishing the particular service. This increases the resource cost for every service that 

uses the room regardless of whether or not each of the individual items is typically used in 
CMS-1600-P 61 

furnishing a particular procedure. 

Instead of incorporating the AMA RUC’s recommendation 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 ultrasound “rooms” in the context of 

maintaining appropriate relativity with other services across the PFS. We seek comment from 

stakeholders, including the AMA RUC, on the items included in the ultrasound rooms, especially 

as compared to the items included in other equipment “rooms.” We believe that it would be 

appropriate to consider these comments in future rulemaking. Specifically we seek comment on 

whether equipment packages called “rooms” should include all of the items that might be 

included in an actual room, just the items typically used for every service in such a room, or all 

of the items typically used in typical services furnished in the room. We 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 considering comments on this broader issue. 

We also believe that consideration of the broader issue will help determine whether it would be 

appropriate to create a “room, ultrasound, cardiovascular,” and if so, what items would be 

included in this equipment package. 

 In addition to the concerns regarding the contents of the ultrasound “room” packages, we 

are also concerned about the pricing information submitted through the AMA RUC to support its 

recommendation to add equipment to the ultrasound room packages. The highest-price item 

used in pricing the existing equipment input called “room, ultrasound, general” (EL015), is a 

“GE Logic 9 ultrasound system,” currently priced at $220,000. As part of 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 pricing 
CMS-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 example, 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-ultrasound-business-uj8mn79-190533061.html 

At this time, are unsure how to best reconcile the information disclosed by the 

manufacturer to the press and the prices submitted by the medical specialty society for use in 

updating the direct PE input prices. We believe discrepancies, such as these, exemplify the 

potential problem with updating prices for particular items based solely on price quotes or 

information other than copies of paid invoices. However, copies of paid invoices must also be 

evaluated carefully. The information presented in the article regarding the price for hand-held 

ultrasound devices raises questions about the adequacy of paid invoices, too, in determining 

appropriate input costs. The direct PE input described in the database as “ultrasound unit, 

portable” (EQ250) is currently priced at $29,999 based on a submitted invoice, while the article 

cites that GE sells a portable unit for as low as $7,900. We are seeking comment on the 

appropriate price to use as the typical cost for portable ultrasound units. 

 Additionally, we are not proposing 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, ultrasound, 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 recommended that a new 

direct PE input, "ultrasound unit, portable, breast procedures," be created for breast procedures 

that are performed in a surgeon's office and where ultrasound imaging is included in the code 

descriptor. These services are described by CPT codes 19105 (Ablation, cryosurgical, of 

fibroadenoma, including ultrasound guidance, each fibroadenoma), 19296 (Placement of 

radiotherapy afterloading expandable catheter (single or multichannel) into the breast for 

interstitial radioelement application following partial mastectomy, includes imaging guidance; on 

date separate from partial mastectomy), and 19298 (Placement of radiotherapy afterloading 

brachytherapy catheters (multiple tube and button type) into the breast for interstitial 

radioelement application following (at the time of or subsequent to) partial mastectomy, includes 

imaging guidance). We are creating this input. The pricing information submitted for this item is 

a paid invoice and two price quotes. As we have previously stated, we believe that copies of 

paid invoices are more likely to reflect actual resource costs associated with equipment and 

supply items than quotes or other information. Therefore, we are proposing a price of $33,930, 

which reflects the price displayed on the submitted copy of the paid invoice. We are not using 

the quotes as we do not believe that quotes provide reliable information about the prices that are 

actually paid for medical equipment. 

 Endoscopic Ultrasound Processor. The AMA RUC recommended creating a new direct 

PE input called “endoscopic ultrasound processor,” for use in furnishing the service described by 

CPT code 31620 (Endobronchial ultrasound (EBUS) during bronchoscopic diagnostic or 

therapeutic intervention(s) (List separately in addition to code for primary procedure[s])). We 

are creating this equipment item to use as an input in the proposed direct PE input database. The 
CMS-1600-P 64 

price associated with the “endoscopic ultrasound processor” will be $59,925, which reflects the 

price documented on the copy of the paid invoice submitted with the recommendation. 

 Bronchofibervideoscope. The AMA RUC recommended creating a new direct PE input 

called “Bronchofibervideoscope,” for use in furnishing the service described by CPT code 31620 

(Endobronchial ultrasound (EBUS) during bronchoscopic diagnostic or therapeutic 

intervention(s) (List separately in addition to code for primary procedure[s])). We are creating 

this new equipment item to use as an input in the proposed direct PE input database. However, 

this item has no price associated with it in the proposed direct PE input database because we did 

not receive any information that would allow us to price the item accurately. Consequently, we 

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 paid 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 Recommendations for Particular Services 

The AMA RUC made recommendations regarding the typical ultrasound items used in 

furnishing particular services. In general, the AMA RUC recommended that the existing 

equipment items accurately described the typical equipment used in furnishing particular 

services. However, for some CPT codes the AMA RUC recommended changing the associated 

equipment inputs that appear in the direct PE input database. Based on our review of these 

recommendations, we have generally agreed with the AMA RUC regarding these recommended 
CMS-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 ultrasound 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 from the recommendations of the AMA RUC. 

 For a series of cardiovascular services that include ultrasound technology, the AMA RUC 

recommended removing certain equipment items and replacing those items with a new item 

called “room, ultrasound, cardiovascular.” As we described in the preceding paragraphs, we are 

not proposing to create the “room, ultrasound, cardiovascular” and therefore 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 same kinds of items as the currently existing 

“room, ultrasound, vascular” (EL016). We agree with the AMA RUC’s suggestion that the 

existing equipment inputs for the relevant services listed in Table 10 do not reflect typical 

resource costs of furnishing the services. We believe that, pending our further consideration of 

the ultrasound “room” equipment packages, it would be appropriate to use the existing “room, 

ultrasound, vascular” (EL016) as a proxy for resource costs for these services Therefore, the 

proposed direct PE input database reflects this proposed change. 

In the case of CPT code 76942 (Ultrasonic guidance for needle placement (eg, biopsy, 

aspiration, injection, localization device), imaging supervision and interpretation), we agree with 

the AMA RUC’s recommendation to replace the current equipment input of the “room, 

ultrasound, general” (EL015) with “ultrasound unit, portable” (EQ250). We note that this 

service is typically reported with other codes that describe the needle placement procedures and 

that the recommended change in equipment from a room to a portable device reflects a change in 

the typical kinds of procedures reported with this image guidance service. Given this change, we 
CMS-1600-P 66 

believe that it is appropriate to reconsider the procedure time assumption currently used in 

establishing the direct PE inputs for this code is 45 minutes, which we believe is inaccurate. We 

reviewed the services reported with CPT code 76942 to identify the most common procedures 

furnished with this image guidance. The code most frequently reported with CPT code 76942 is 

CPT 20610 (Arthrocentesis, aspiration and/or injection; major joint or bursa (eg, shoulder, hip, 

knee joint, subacromial bursa). The assumed procedure time for this service is five minutes. 

The vast majority of other procedures frequently 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 associated with the code, we are also proposing to 

change the procedure time assumption used in establishing direct PE inputs for the service from 

45 to 10 minutes, based on our analysis of 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 minutes. 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 Changes 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 

processor 
CMS-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, vascular 
CMS-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, vascular 
CMS-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, vascular 
CMS-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, integration of those practices as a 

department of the hospital, and the resultant increase in the furnishing of physicians’ services in 

a hospital outpatient setting (for example, see Ostrom, Carol M. “Why you might pay twice for 

one visit to a doctor,” Seattle Times. November 3, 2012, and O’Malley, Ann, Amelia M. Bond, 

and Robert Berenson. Rising hospital employment of physicians: better quality, higher costs?

Issue Brief No. 136, Center for Studying Health System Change. August 2011). When a 

Medicare beneficiary receives outpatient services in a hospital, Medicare generally pays more in 
CMS-1600-P 71 

total than when the beneficiary receives those same services in a freestanding clinic or physician 

office. As more physician practices become hospital-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 Medicare payment and beneficiary cost-sharing 

when physician offices become hospital outpatient departments, and has recommended that 

Medicare pay selected hospital outpatient services at physician fee schedule rates (MedPAC 

March 2012 Report to Congress). 

The total l payment (including both Medicare program payment and beneficiary costsharing) generally is higher when outpatient services are furnished 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 under 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 (administrative labor, office expense, and all other expenses) 

typically involved in furnishing the service. Under section 1833(t) of the 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 resource costs (labor and 

capital) involved in furnishing those hospital services. In general, we expect hospitals to have 

higher overall resource requirements than physician offices because hospitals are required to 

meet conditions of participation, to maintain standby capacity for emergency situations, and to 

be available to address a wide variety of complex medical needs in a community. When services 
CMS-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 payment rate but then also pays the 

hospital under the OPPS for the facility resources required to furnish the service. The 

beneficiary pays coinsurance for both the 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, hospitals frequently treat the practice locations 

as off-campus provider-based departments of the hospital and bill Medicare for services 

furnished at those locations under the OPPS (for further information on the provider-based 

regulations at §413.65, see http://www.gpo.gov/fdsys/pkg/CFR-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 gathering information on the frequency, type, and payment 

for services furnished in off-campus provider-based departments of the hospital. 

To better understand the growing trend toward hospital acquisition of physician offices 

and subsequent treatment of those locations as off-campus provider-based outpatient 

departments, we are considering collecting information that would allow us to analyze the 

frequency, type, and payment for services furnished in off-campus provider-based hospital 

departments. We have considered several potential methods. Claims-based approaches could 

include (1) creating a new place of service code for off-campus departments of a provider under 

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 Outpatient” and “23 Emergency Room-Hospital” when 

physician services are furnished in an off-campus provider-based department, or (2) creating a 

HCPCS modifier that could be reported with every code for services furnished in an off-campus 
CMS-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 charges for their provider-based departments as 

outpatient service cost centers on the Medicare hospital cost report, form 2552-10. We note that 

some hospitals already break out these costs voluntarily or because of cost reporting 

requirements for the 340B Drug Discount program but this practice is not consistent or 

standardized. We welcome public comment on the best means for collecting information on the 

frequency, type, and payment for services furnished 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 Secretary to determine relative values for 

physicians' services based on three components: work; PE; and malpractice. Section 

1848(c)(1)(A) of the Act defines the work component to include “the portion of the resources 

used in furnishing the service that reflects physician time and intensity in furnishing the service.” 

In addition, section 1848(c)(2)(C)(i) of the Act specifies that “the Secretary shall determine a 

number of work relative value units (RVUs) for the service based on the relative resources 

incorporating physician time and intensity required in furnishing the service.” Section 

1848(c)(1)(B) of the Act defines the PE component as “the portion of the resources used in 

furnishing the service that reflects the general categories of expenses (such as office rent and 

wages of personnel, but excluding malpractice expenses) comprising practice expenses.” (See 

section I.A.2. for more detail on the PE component.) Section 1848(c)(1)(C) of the Act defines 

the malpractice component as “the portion of the resources used in furnishing the service that 

reflects malpractice expenses in furnishing the service.” Sections 1848 (c)(2)(C)(ii) and (iii) of 

the Act specify that PE and malpractice expense RVUs shall be determined based on the relative 

PE/malpractice expense resources involved in furnishing the service. 

Section 1848(c)(2)(B) of the Act directs the Secretary to conduct a periodic review, not 

less often than every 5 years, of the RVUs established under the PFS. Section 3134(a) of the 

Affordable Care Act added a new section 1848(c)(2)(K) to the Act, which requires the Secretary 

to periodically identify potentially misvalued services using certain criteria and to review and 

make appropriate adjustments to the relative values for those services. Section 3134(a) of the 

Affordable Care Act also added a new section 1848(c)(2)(L) to the Act which, requires the 

Secretary to develop a process to validate the RVUs of certain potentially misvalued codes under 
CMS-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 proposed rule, each year we develop and propose 

appropriate adjustments to the RVUs, taking into account the recommendations provided by the 

American Medical Association/Specialty Society Relative Value Scale Update Committee 

(AMA RUC), the Medicare Payment Advisory Commission (MedPAC), and others. For many 

years, the AMA RUC has provided us with recommendations on the appropriate relative values 

for new, revised, and potentially misvalued PFS services. We review these recommendations on 

a code-by-code basis and consider these recommendations in conjunction with analyses of other 

data, such as claims data, to inform the decision-making process as authorized by the law. We 

may also consider analyses of physician time, work RVUs, or direct PE inputs using other data 

sources, such as Department of Veteran Affairs (VA), National Surgical Quality Improvement 

Program (NSQIP), the Society for Thoracic Surgeons (STS) National Database, and the 

Physician Quality Reporting Initiative (PQRI) databases. In addition to considering the most 

recently available data, we also assess the results of physician surveys and specialty 

recommendations submitted to us by the AMA RUC. We conduct a clinical review to assess the 

appropriate RVUs in the context of contemporary medical practice. We note that section 

1848(c)(2)(A)(ii) of the Act authorizes the use of extrapolation and other techniques to determine 

the RVUs for physicians' services for which specific data are not available in addition to taking 

into account the results of consultations with organizations representing physicians. In 

accordance with section 1848(c) of the Act, we determine appropriate adjustments to the RVUs, 

explain the basis of these adjustments, and respond to public comments in the PFS proposed and 

final rules. 

2. Identifying, Reviewing, and Validating the RVUs of Potentially Misvalued Services 
CMS-1600-P 76 

a. Background 

In its March 2006 Report to the Congress, MedPAC noted that “misvalued services can 

distort the price signals for physicians' services as well as for other health care services that 

physicians order, such as hospital services.'' In that same report MedPAC postulated that 

physicians' services under the PFS can become misvalued over time. MedPAC stated, “when a 

new service is added to the physician fee schedule, it may be assigned a relatively high value 

because of the time, technical skill, and psychological stress that are often required to furnish 

that service. Over time, the work required for certain services would be expected to decline as 

physicians become more familiar with the service and more efficient in furnishing it.'' We 

believe services can also become overvalued when PEs decline. This can happen when the costs 

of equipment and supplies fall, or when equipment is used more frequently than is estimated in 

the PE methodology, reducing its cost per use. Likewise, services can become undervalued 

when physician work increases or PEs rise. In the ensuing years since MedPAC's 2006 report, 

additional groups of potentially misvalued services have been identified by the Congress, CMS, 

MedPAC, the AMA RUC, and other stakeholders. 

In recent years, CMS and the AMA RUC have taken increasingly significant steps to 

identify and address potentially misvalued codes. As MedPAC noted in its March 2009 Report 

to Congress, in the intervening years since MedPAC made the initial recommendations, “CMS 

and the AMA RUC have taken several steps to improve the review process.'' Most recently, 

section 1848(c)(2)(K)(ii) of the Act (as added by section 3134(a) of the Affordable Care Act) 

directed the Secretary to specifically examine, as determined appropriate, potentially misvalued 

services in the following seven categories: 

● Codes and families of codes for which there has been the fastest growth; 

● Codes and families of codes that have experienced substantial changes in PEs; 
CMS-1600-P 77 

● Codes that are recently established for new technologies or services; 

● Multiple codes that are frequently billed in conjunction with furnishing a single 

service; 

● Codes with low relative values, particularly those that are often billed multiple times 

for a single treatment; 

● Codes which have not been subject to review since the implementation of the RBRVS 

(the so-called `Harvard-valued codes'); and 

● Other codes determined to be appropriate by the Secretary. 

Section 1848(c)(2)(K)(iii) of the Act also specifies that the Secretary may use existing 

processes to receive recommendations on the review and appropriate adjustment of potentially 

misvalued services. In addition, the Secretary may conduct surveys, other data collection 

activities, studies, or other analyses, as the Secretary determines to be appropriate, to facilitate 

the review and appropriate adjustment of potentially misvalued services. This section also 

authorizes the use of analytic contractors to identify and analyze potentially misvalued codes, 

conduct surveys or collect data, and make recommendations on the review and appropriate 

adjustment of potentially misvalued services. Additionally, this section provides that the 

Secretary may coordinate the review and adjustment of any RVU with the periodic review 

described in section 1848(c)(2)(B) of the Act. Finally, section 1848(c)(2)(K)(iii)(V) of the Act 

specifies that the Secretary may make appropriate coding revisions (including using existing 

processes for consideration of coding changes) that may include consolidation of individual 

services into bundled codes for payment under the physician fee schedule. 

b. Progress in Identifying and Reviewing Potentially Misvalued Codes 

To fulfill our statutory mandate, we have identified and reviewed numerous potentially 

misvalued codes in all seven of the categories specified in section 1848(c)(2)(K)(ii) of the Act, 
CMS-1600-P 78 

and we plan to continue our work examining potentially misvalued codes in these areas over the 

upcoming years. In the current process, we identify potentially misvalued codes for review, and 

request recommendations from the AMA RUC and other public commenters on revised work 

RVUs and direct PE inputs for those codes. The AMA RUC, through its own processes, also 

identifies potentially misvalued codes for review. Through our public nomination process for 

potentially misvalued codes established in the CY 2012 PFS final rule with comment period, 

other individuals and stakeholder groups submit nominations for review of potentially misvalued 

codes as well. 

Since CY 2009, as a part of the annual potentially misvalued code review and Five-Year 

Review process, we have reviewed more than 1,000 potentially misvalued codes to refine work 

RVUs and direct PE inputs. We have adopted appropriate work RVUs and direct PE inputs for 

these services as a result of these reviews. A more detailed discussion of the extensive prior 

reviews of potentially misvalued codes is included in the CY 2012 PFS final rule with comment 

period (76 FR 73052 through 73055). In the CY 2012 PFS proposed rule, we proposed to 

identify and review potentially misvalued codes in the category of “Other codes determined to be 

appropriate by the Secretary,'' referring to a list of the highest PFS expenditure services, by 

specialty, that had not been recently reviewed (76 FR 73059 through 73068). 

In the CY 2012 final rule with comment period, we finalized our policy to consolidate the 

review of physician work and PE at the same time (76 FR 73055 through 73958), and established 

a process for the annual public nomination of potentially misvalued services. 

One of the priority categories for review of potentially misvalued codes is services that 

have not been subject to review since the implementation of the PFS (the so-called “Harvardvalued codes”). In the CY 2009 PFS proposed rule, we requested that the AMA RUC engage in 

an ongoing effort to review the remaining Harvard-valued codes, focusing first on the high-
CMS-1600-P 79 

volume, low intensity codes (73 FR 38589). For the Fourth Five-Year Review (76 FR 32410), 

we requested that the AMA RUC review services that have not been reviewed since the original 

implementation of the PFS with annual utilization greater than 30,000 (Harvard-valued—

Utilization > 30,000). In the CY 2013 final rule with comment period, we identify for review the 

potentially misvalued codes for Harvard-valued services with annual allowed charges that total at 

least $10,000,000 (Harvard-valued—Allowed charges ≥$10,000,000). 

In addition to the Harvard-valued codes, in the same rule we finalized for review a list of 

potentially misvalued codes that have stand-alone PE (codes with physician work and no listed 

physician time and codes with no physician work and have listed physician time). 

c. Validating RVUs of Potentially Misvalued Codes 

In addition to identifying and reviewing potentially misvalued codes, section 3134(a) of 

the Affordable Care Act added section 1848(c)(2)(L) of the Act, which specifies that the 

Secretary shall establish a formal process to validate RVUs under the PFS. The validation 

process may include validation of work elements (such as time, mental effort and professional 

judgment, technical skill and physical effort, and stress due to risk) involved with furnishing a 

service and may include validation of the pre-, post-, and intra-service components of work. The 

Secretary is directed, as part of the validation, to validate a sampling of the work RVUs of codes 

identified through any of the seven categories of potentially misvalued codes specified by section 

1848(c)(2)(K)(ii) of the Act. Furthermore, the Secretary may conduct the validation using 

methods similar to those used to review potentially misvalued codes, including conducting 

surveys, other data collection activities, studies, or other analyses as the Secretary determines to 

be appropriate to facilitate the validation of RVUs of services. 

In the CY 2011 PFS proposed rule (75 FR 40068) and CY 2012 PFS proposed rule (76 

FR 42790), we solicited public comments on possible approaches, methodologies, and data 
CMS-1600-P 80 

sources that we should consider for a validation process. A summary of the comments along 

with our responses are included in the CY 2011 PFS final rule with comment period (75 FR 

73217) and the CY 2012 PFS final rule with comment period (73054 through 73055). 

 We have entered into two contracts with outside entities to develop validation models for 

RVUs. During a 2-year project, the RAND Corporation will use available data to build a 

validation model to predict work RVUs and the individual components of work RVUs, time and 

intensity. The model design will be informed by the statistical methodologies and approach used 

to develop the initial work RVUs and to identify potentially misvalued procedures under current 

CMS and AMA RUC processes. RAND will use a representative set of CMS-provided codes to 

test the model. RAND will consult with a technical expert panel on model design issues and the 

test results. 

 The second contract is with the Urban Institute. Given the central role of time in 

establishing work RVUs and the concerns that have been raised about the current time values, a 

key focus of the project is collecting data from several practices for services selected by the 

contractor. The data will be used to develop time estimates. Urban Institute will use a variety of 

approaches to develop objective time estimates, depending on the type of service, which will be 

a very resource-intensive part of the project. Objective time estimates will be compared to the 

current time values used in the fee schedule. The project team will then convene groups of 

physicians from a range of specialties to review the new time data and their potential 

implications for work and the ratio of work to time. 

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 period, we finalized a process for the public 

to nominate potentially misvalued codes (76 FR 73058). The public and stakeholders may 
CMS-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 documentation for codes nominated for the annual 

review of potentially misvalued codes may include the following: 

● Documentation in the peer reviewed medical literature or other reliable data that there 

have been changes in physician work due to one or more of the following: technique; knowledge 

and technology; patient population; site-of-service; length of hospital stay; and physician time. 

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

codes. 

● Evidence that technology has changed physician work, that is, diffusion of technology. 

● Analysis of other data on time and effort measures, such as operating room logs or 

national and other representative databases. 

● Evidence that incorrect assumptions were made in the previous valuation of the 

service, such as a misleading vignette, survey, or flawed crosswalk assumptions in a previous 

evaluation. 

● Prices for certain high cost supplies or other direct PE inputs that are used to determine 

PE RVUs are inaccurate and do not reflect current information. 

● Analyses of physician time, work RVU, or direct PE inputs using other data sources 

(for example, Department of Veteran Affairs (VA) National Surgical Quality Improvement 

Program (NSQIP), the Society for Thoracic Surgeons (STS) National Database, and the 

Physician Quality Reporting System (PQRS) databases). 

● National surveys of physician time and intensity from professional and management 

societies and organizations, such as hospital associations. 
CMS-1600-P 82 

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

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

documentation and assess whether the nominated codes appear to be potentially misvalued codes 

appropriate for review under the annual process. In the following year’s PFS proposed rule, we 

publish the list of nominated codes and indicate whether we are proposing each nominated code 

as a potentially misvalued code. 

We did not receive publicly nominated potentially misvalued codes for inclusion in this 

proposed rule. We look forward to receiving new 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 Identified Potentially Misvalued Codes 

 After publishing the CY final rule with comment period, we began considering additional 

ways to broaden participation in the process of identifying potentially misvalued codes. We 

solicited the input of Medicare contractor medical directors (CMDs) in developing a list of 

potentially misvalued codes. CMDs offer a unique perspective on the Medicare program. 

Medicare Administrative Contractors administer the Medicare program in their assigned 

geographic area and each has at least one CMD that serves as its director. As a group, CMDs 

represent a variety of medical specialties, which makes them a diverse group of physicians 

capable of providing opinions across the vast scope of services covered under the PFS. 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. CMDs spend a significant amount of time 

communicating directly with providers and the health care industry discussing more than just the 

broad aspects of the Medicare program but also engaging in and facilitating specific discussions 
CMS-1600-P 83 

around individual services. Through their development of evidence-based local coverage 

determinations (LCDs), CMDs also have experience 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 misvalued. 

TABLE 11: Codes Identified in Consultation 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, mapping, color coding of specimens, microscopic 

examination of specimens by the surgeon, and histopathologic preparation, head, neck, hands, 

feet genitalia, or any location with surgery directly involving muscle, cartilage, bone, tendon, 

major nerves, or vessels; first stage, up to 5 tissue blocks) and 17313 (Mohs micrographic 

technique, including removal of all gross tumor, surgical excision of tissue specimens, mapping, 

color coding of specimens, microscopic examination of specimens by the surgeon, and 

histpathologic preparation including routine stains(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 fracture, uncomplicated, each), 22305 (Closed 

treatment of vertebral process fracture(s)) and 27193 (Closed treatment of pelvic ring fracture, 

dislocation, diastasis or subluxation, without manipulation) is proposed for review. We are 

considering the appropriateness of having a 90-day global surgical package 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 performed 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; initial 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 the service was originally valued when it was 

used primarily in premature neonates; but the service is now being furnished to adults with 

severe influenza, pneumonia and respiratory distress syndrome. We are concerned that, while 

the code currently includes 523 minutes of total physician time with 133 minutes of intraservice 

time, physicians are not typically furnishing the service over that entire time interval; rather, 

hospital-employed pump technicians are furnishing much of the work. 

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 radical with or without nerve sparing with 

bilateral pelvic lymphadenectomy, including external iliac, hypogastric, and obturator nodes) and 

55866 (Laparoscopy, surgical prostatectomy, retropubic radial, including nerve sparing, includes 

robotic assistance when performed) we are proposing as potentially misvalued because the RVUs 
CMS-1600-P 85 

for the laparoscopic procedure are higher than for the open procedure and, in general, a 

laparascopic procedure would not require greater 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 staff with supervision as opposed to 

being furnished by the physician. We are concerned that the current valuation 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, localization device), imaging supervision and 

interpretation) as a potentially misvalued code because of the high frequency with which it is 

billed with CPT code 20610 (Arthrocentesis aspiration and/or injection; major joint or bursa (for 

example, shoulder, hip, knee joint, subacromial bursa) in the CMD’s geographic region. The 

CMD noted that some providers within the contractor’s geographic 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 ultrasound 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 (for example, CPT code 20610). The proposed changes relating to CPT code 

76942 are addressed in detail in section II.A.4.b.3. of this proposed rule. We believe that the 

discrepancy in procedure times and the resulting potentially inaccurate payment raises a 

fundamental concern regarding the incentive to furnish ultrasound guidance. However, we 

believe this concern spans more than just an individual code for ultrasound guidance. 

Accordingly, we have proposed additional ultrasound guidance codes as potentially misvalued in 
CMS-1600-P 86 

Table 12. We are seeking public comment on including these codes as potentially misvalued 

codes. We are also seeking public comment on any 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 Surgical Package, Measuring 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 part of a global surgical package. Commenters 

provided a variety of suggestions including setting the all surgical services to a 0-day global 

period, requiring all E/M services to be separately billed, validating the global surgical packages 

with the hospital Diagnosis-Related Group length of stay data, and setting documentation 

standards for post-operative E/M services that could be audited. In addition to receiving the 

broader comments on measuring post-operative work, we also received a comment from the 

AMA RUC noting that the hospital and discharge day management services 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 AMA 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 physician time file in the CY 2014 PFS 

proposed rule. We noted in the CY 2013 final rule with comment period that if time had been 
CMS-1600-P 87 

removed from the physician time file inadvertently, it would not have affected the physician 

work RVUs or direct PE inputs for these services. It would have a small impact on the indirect 

allocation of PE at the specialty level, which we would review when we explore this potential 

time file change. 

 After extensive review, we believe that the data were deleted from the time file due to 

an inadvertent error as noted by the AMA RUC. 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 inadvertent error, would have been present in the 

time file. 

TABLE 13: Proposed Physician Time Changes 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 1 397 372 
CMS-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 1 378 456 
CMS-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 1 793 741 
CMS-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 codes 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 Medicare payment (the combined payment to the 

facility and the professional) when the service is furnished in a facility, either a hospital 

outpatient department or an ASC. 

 For services furnished in a facility setting we would generally expect the combined 

payment to the facility and the practitioner to exceed the PFS payment made to the professional 

when the service is furnished in the nonfacility setting. This payment differential is expected 

because it reflects the greater costs we would expect to be incurred by facilities relative to 

physicians furnishing services in offices and other non-facility settings. These greater costs are 
CMS-1600-P 91 

due to higher overhead resulting from differences in regulatory requirements and for facilities, 

such as hospitals, maintaining the capacity to furnish services 24 hours per day and 7 days per 

week. However, when we analyzed such payments, we identified nearly 300 codes that would 

result in greater Medicare payment in the nonfacility setting than in the facility setting. We 

believe these anomalous site-of-service payment differentials are the result of inaccurate 

resource input data used to establish rates under the PFS. 

 In this proposed rule, we are proposing to address these misvalued codes. Specifically, 

we are proposing to refine the PE methodology to limit the nonfacility PE RVUs for individual 

codes so that the total nonfacility PFS payment amount would not exceed the total combined 

payment under the PFS and the OPPS (or the ASC payment system) when the service is 

furnished in the facility setting. We believe this is an efficient way to address these significant 

anomalies within the PE methodology and more appropriately value these services.. We discuss 

this proposal in more detail in section II.A.4.b.3. 
CMS-1600-P 92 

4. The Multiple Procedure Payment Reduction Policy 

Medicare has long employed multiple procedure payment reduction (MPPR) policies to 

adjust payment to more appropriately reflect reduced resources involved with furnishing services 

that are frequently furnished together. Under these policies, we reduce payment for the second 

and subsequent services within the same MPPR category furnished in the same session or same 

day. These payment reductions reflect efficiencies that typically occur in either the PE or 

professional work or both when services are furnished together. With the exception of a few 

codes that are always reported with another code, the PFS values services independently to 

recognize relative resources involved when the service is the only one furnished in a session. 

Although some of our MPPR policies precede the Affordable Care Act, MPPRs can address the 

fourth category of potentially misvalued codes identified in section 1848(c)(2)(K) of the Act, as 

added by the Affordable Care Act, which is “multiple codes that are frequently billed in 

conjunction with furnishing a single service” (see 75 FR 73216). We are not proposing any new 

MPPRs in this proposed rule, but the following sections describe the history of MPPRs and the 

services currently covered by MPPRs. 

a. Background 

Medicare has a longstanding policy to reduce payment by 50 percent for the second and 

subsequent surgical procedures furnished to the same beneficiary by a single physician, or 

physicians in the same group practice, on the same day, largely based on the presence of 

efficiencies in the PE and pre- and post-surgical physician work. Effective January 1, 1995, the 

MPPR policy, with this same percentage reduction, was extended to nuclear medicine diagnostic 

procedures (CPT codes 78306, 78320, 78802, 78803, 78806, and 78807). In the CY 1995 PFS 

final rule with comment period (59 FR 63410), we indicated that we would consider applying the 

policy to other diagnostic tests in the future. 
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 furnished on contiguous areas of the body in a single 

session (70 FR 70261). This MPPR policy recognizes that for the second and subsequent 

imaging procedures furnished in the same session, there are some efficiencies in clinical labor, 

supplies, and equipment time. In particular, certain clinical labor activities and supplies are not 

duplicated for subsequent imaging services in the same session and, because equipment time and 

indirect costs are allocated based on clinical labor time, we also reduced those accordingly. 

The imaging MPPR policy originally applied to computed tomography (CT) and 

computed tomographic angiography (CTA), magnetic resonance imaging (MRI) and magnetic 

resonance angiography (MRA), and ultrasound services within 11 families of codes based on 

imaging modality and body region, and only applied to procedures furnished in a single session 

involving contiguous body areas within a family of codes. Additionally, this MPPR policy 

originally applied to TC-only services and to the TC of global services, but not to professional 

component (PC) services. 

There have been several revisions to this policy since it was originally adopted. Under 

the current imaging MPPR policy, full payment is made for the TC of the highest paid procedure, 

and payment for the TC is reduced by 50 percent for each additional procedure subject to this 

MPPR policy. We originally planned to phase in the imaging MPPR policy over a 2-year period, 

with a 25 percent reduction in CY 2006 and a 50 percent reduction in CY 2007 (70 FR 70263). 

However, section 5102(b) of the Deficit Reduction Act of 2005 (DRA) (Pub. L. 109–171, 

enacted on December 20, 2006) amended the statute to place a cap on the PFS payment amount 

for most imaging procedures at the amount paid under the hospital outpatient prospective 

payment system (OPPS). In view of this new OPPS payment cap, we decided in the CY 2006 
CMS-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 attributable to the imaging MPPR policy from the PFS 

budget neutrality provision. Effective July 1, 2010, section 1848(b)(4)(C) of the Act increased 

the MPPR on the TC of imaging services under the policy established in the CY 2006 PFS final 

rule with comment period from 25 to 50 percent. Section 1848(c)(2)(B)(v)(IV) of the Act 

exempted the reduced expenditures attributable to this further change from the PFS budget 

neutrality provision. 

In the July 2009 U.S. Government Accountability Office (GAO) report entitled, Medicare 

Physician Payments: Fees Could Better Reflect Efficiencies Achieved when Services are 

Provided Together, the GAO recommended that we take further steps to ensure that fees for 

services paid under the PFS reflect efficiencies that occur when services are furnished by the 

same physician to the same beneficiary on the same day. The GAO report recommended the 

following: (1) expanding the existing imaging MPPR policy for certain services to the PC to 

reflect efficiencies in physician work for certain imaging services; and (2) expanding the MPPR 

to reflect PE efficiencies that occur when certain nonsurgical, nonimaging services are furnished 

together. The GAO report also encouraged us to focus on service pairs that have the most impact 

on Medicare spending. 

In its March 2010 report, MedPAC noted its concerns about mispricing of services under 

the PFS. MedPAC indicated that it would explore whether expanding the unit of payment 

through packaging or bundling would improve payment accuracy and encourage more efficient 

use of services. In the CY 2009 and CY 2010 PFS proposed rules (73 FR 38586 and 

74 FR 33554, respectively), we stated that we planned to analyze nonsurgical services commonly 

furnished together (for example, 60 to 75 percent of the time) to assess whether an expansion of 
CMS-1600-P 95 

the MPPR policy could be warranted. MedPAC encouraged us to consider duplicative physician 

work, as well as PE, in any expansion of the MPPR policy. 

Section 1848(c)(2)(K) of the Act specifies that the Secretary shall identify potentially 

misvalued codes by examining multiple codes that are frequently billed in conjunction with 

furnishing a single service, and review and make appropriate adjustments to their relative values. 

As a first step in applying this provision, in the CY 2010 final rule with comment period, we 

implemented a limited expansion of the imaging MPPR policy to additional combinations of 

imaging services. 

 Effective January 1, 2011, the imaging MPPR applies regardless of code family; that is, 

the policy applies to multiple imaging services furnished within the same family of codes or 

across families. This policy is consistent with the standard PFS MPPR policy for surgical 

procedures that does not group procedures by body region. The current imaging MPPR policy 

applies to CT and CTA, MRI and MRA, and ultrasound procedures furnished to the same 

beneficiary in the same session, regardless of the imaging modality, and is not limited to 

contiguous body areas. 

As we noted in the CY 2011 PFS final rule with comment period (75 FR 73228), 

although section 1848(c)(2)(B)(v)(VI) of the Act specifies that reduced expenditures attributable 

to the increase in the imaging MPPR from 25 to 50 percent (effective for fee schedules 

established beginning with 2010 and for services furnished on or after July 1, 2010) are excluded 

from the PFS budget neutrality adjustment, it does not apply to reduced expenditures attributable 

to our policy change regarding additional code combinations across code families 

(noncontiguous body areas) that are subject to budget neutrality under the PFS. The complete 

list of codes subject to the CY 2011 MPPR policy for diagnostic imaging services is included in 

Addendum F. 
CMS-1600-P 96 

As a further step in applying the provisions of section 1848(c)(2)(K) of the Act, on 

January 1, 2011, we implemented an MPPR for therapy services. The MPPR applies to 

separately payable “always therapy” services, that is, services that are only paid by Medicare 

when furnished under a therapy plan of care. As we explained in the CY 2011 PFS final rule 

with comment period (75 FR 73232), the therapy MPPR does not apply to contractor-priced 

codes, bundled codes, or add-on codes. 

This MPPR for therapy services was first proposed in the CY 2011 proposed rule 

(75 FR 44075) as a 50 percent payment reduction to the PE component of the second and 

subsequent therapy services for multiple “always therapy” services furnished to a single 

beneficiary in a single day. It applies to services furnished by an individual or group practice or 

“incident to” a physician’s service. However, in response to public comments, in the CY 2011 

PFS final rule with comment period (75 FR 73232), we adopted a 25 percent payment reduction 

to the PE component of the second and subsequent therapy services for multiple “always 

therapy” services furnished to a single beneficiary in a single day. 

Subsequent to publication of the CY 2011 PFS final rule with comment period, section 3 

of the Physician Payment and Therapy Relief Act of 2010 (PPTRA) (Pub. L. 111-286) revised 

the payment reduction percentage from 25 percent to 20 percent for therapy services for which 

payment is made under a fee schedule under section 1848 of the Act (which are services 

furnished in office settings, or non-institutional services). The payment reduction percentage 

remained at 25 percent for therapy services furnished in institutional settings. Section 4 of the 

PPTRA exempted the reduced expenditures attributable to the therapy MPPR policy from the 

PFS budget neutrality provision. Section 633 of the ATRA revised the reduction to 50 percent of 

the PE component for all settings, effective April 1, 2013. Therefore, full payment is made for 

the service or unit with the highest PE and payment for the PE component for the second and 
CMS-1600-P 97 

subsequent procedures or additional units of the same service is reduced by 50 percent for both 

institutional and non-institutional services, 

This MPPR policy applies to multiple units of the same therapy service, as well as to 

multiple different “always therapy” services, when furnished to the same beneficiary on the same 

day. The MPPR applies when multiple therapy services are billed on the same date of service for 

one beneficiary by the same practitioner or facility under the same National Provider Identifier 

(NPI), regardless of whether the services are furnished in one therapy discipline or multiple 

disciplines, including physical therapy, occupational therapy, or speech-language pathology. 

The MPPR policy applies in all settings where outpatient therapy services are paid under 

Part B. This includes both services that are furnished in the office setting and paid under the 

PFS, as well as institutional services that are furnished by outpatient hospitals, home health 

agencies, comprehensive outpatient rehabilitation facilities (CORFs), and other entities that are 

paid for outpatient therapy services at rates based on the PFS. 

In its June 2011 Report to Congress, MedPAC highlighted continued growth in ancillary 

services subject to the in-office ancillary services exception. The in-office ancillary exception to 

the general prohibition under section 1877 of the Act as amended by the Ethics in Patient 

Referrals Act, also known as the Stark law, allows physicians to refer Medicare beneficiaries for 

designated health services, including imaging, radiation therapy, home health care, durable 

medical equipment, clinical laboratory tests, and physical therapy, to entities with which they 

have a financial relationship under specific conditions. 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 regarding 
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potentially misvalued codes that result from “multiple codes that are frequently billed in 

conjunction with furnishing a single service,” in the CY 2012 final rule (76 FR 73071), we 

expanded the MPPR to the PC of Advanced Imaging Services (CT, MRI, and Ultrasound), that 

is, the same list of codes to which the MPPR on the TC of advanced imaging already applied. 

Thus, this MPPR policy now applies to the PC and the TC of certain diagnostic imaging codes. 

Specifically, we expanded the payment reduction currently applied to the TC to apply also to the 

PC of the second and subsequent advanced imaging services furnished by the same physician (or 

by two or more physicians in the same group practice) to the same beneficiary in the same 

session on the same day. However, in response to public comments, in the CY 2012 PFS final 

rule with comment period, we adopted a 25 percent payment reduction to the PC component of 

the second and subsequent imaging services. 

Under this policy, full payment is made for the PC of the highest paid advanced imaging 

service, and payment is reduced by 25 percent for the PC for each additional advanced imaging 

service furnished to the same beneficiary in the same session. This policy was based on the 

expected efficiencies in furnishing multiple services in the same session due to duplication of 

physician work, primarily in the pre- and post-service periods, but with some efficiencies in the 

intraservice period. 

This policy is consistent with the statutory requirement for the Secretary to identify, 

review, and adjust the relative values of potentially misvalued services under the PFS as 

specified by section 1848(c)(2)(K) of the Act. This policy is also consistent with our 

longstanding policies on surgical and nuclear medicine diagnostic procedures, under which we 

apply a 50 percent payment reduction to second and subsequent procedures. Furthermore, it was 

responsive to continued concerns about significant growth in imaging spending, and to MedPAC 

(March 2010 and June 2011) and GAO (July 2009) recommendations regarding the expansion of 
CMS-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 tests. Although we proposed a 25 percent 

reduction for both diagnostic cardiovascular and ophthalmology services, we adopted a 20 

percent reduction for ophthalmology services in the final rule with comment period (77 FR 

68941) in response to public comments. For diagnostic cardiovascular services, full payment is 

made for the procedure with the highest TC payment, and payment is reduced by 25 percent for 

the TC for each additional procedure furnished to the same patient on the same day. For 

diagnostic ophthalmology services, full payment is made for the procedure with the highest TC 

payment, and payment is reduced by 20 percent for the TC for each additional procedure 

furnished to the same patient on the same day. 

Although we are not proposing any new MPPR policies for CY 2014, we continue to 

look at expanding the MPPR based on efficiencies when multiple procedures are furnished 

together. Any specific proposals would be presented in future rulemaking and subject to further 

public comment.” 

 The complete list of services subject to the MPPRs on diagnostic imaging services, 

therapy services, diagnostic cardiovascular services and diagnostic ophthalmology services is 

shown in Addenda F 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, using weighted specialty-specific malpractice 

expense percentages and 1991 average allowed charges. Malpractice RVUs for new 

codes after 1991 were extrapolated from similar existing codes or as a percentage of the 

corresponding work RVU. Section 4505(f) of the BBA, which amended section 1848(c) 

of the Act, required us to implement resource-based malpractice RVUs for services 

furnished beginning in 2000. Therefore, initial implementation of resource-based 

malpractice RVUs occurred in 2000. 

The statute also requires that we review and, if necessary, adjust RVUs no less 

often than every 5 years. The first review and update of resource-based malpractice 

RVUs was addressed in the CY 2005 PFS final rule with comment period (69 FR 66263). 

Minor modifications to the methodology were addressed in the CY 2006 PFS final rule 

with comment period (70 FR 70153). In the CY 2010 PFS final rule with comment 

period, we implemented the second review and update of malpractice RVUs. For a 

discussion of the second review and update of malpractice RVUs, see the CY 2010 PFS 

proposed rule (74 FR 33537) and final rule with comment period (74 FR 61758). 

As explained in the CY 2011 PFS final rule with comment period (75 FR 73208), 

malpractice RVUs for new and revised codes effective before the next five-year review 

of malpractice RVUs (for example, effective CY 2011 through CY 2014, assuming that 

the next review of malpractice RVUs occurs for CY 2015) are determined either by a 

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

differences in work RVUs between the new/revised code and the source code. For the 
CMS-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 factor for the new/revised code and source code 

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

attributable to the variation in work between the two services. 

For CY 2014, we will continue our current approach for determining malpractice 

RVUs for new/revised codes. We will publish 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 malpractice 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 section 1842(b)(3) of 

the Act, which states that prevailing charge levels beginning after June 30, 1973 may not 

exceed the level from the previous year except to the extent that the Secretary finds, on 

the basis of appropriate economic index data, that such higher level is justified by yearto-year economic changes. Beginning July 1, 1975, and continuing through today, the 

MEI has met this requirement by reflecting the weighted-average annual price change for 

various inputs involved in furnishing physicians’ services. The MEI is a fixed-weight 

input price index, with an adjustment for the change in economy-wide, private nonfarm 

business multifactor productivity. This index is comprised of two broad categories: (1) 

physicians’ own time; and (2) physicians’ practice expense (PE). 

The current form of the MEI was described in the November 25, 1992 Federal 

Register (57 FR 55896) and was based in part on the recommendations of a 

Congressionally-mandated meeting of experts held in March 1987. Since that time, the 

MEI has been updated or revised on four instances. First, the MEI was rebased in 1998 

(63 FR 58845), which moved the cost structure of the index from 1992 data to 1996 data. 

Second, the methodology for the productivity adjustment was revised in the CY 2003 

PFS final rule with comment period (67 FR 80019) to reflect the percentage change in the 

10-year moving average of economy-wide private nonfarm business multifactor 

productivity. Third, the MEI was rebased in 2003 (68 FR 63239), which moved the cost 

structure of the index from 1996 data to 2000 data. Fourth, the MEI was rebased in 2011 

(75 FR 73262), which moved the cost structure of the index from 2000 data to 2006 data. 
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 price proxies used in the input price index. For 

CY 2014, we are proposing to revise the MEI 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 weights, since these are the most recently 

available, relevant, and complete data we have available to develop these weights. In the 

following sections of this proposed rule, we detail our proposals regarding 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 aspects of the MEI, including the inputs, input weights, pricemeasurement proxies, and productivity adjustment. 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 considered 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, which 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 and 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 final 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-depth research is required to implement 

several of the recommendations. 

For CY 2014, we are proposing to implement 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 proposing to rebase the MEI 

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

data to maintain the MEI. After acknowledging 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 cost categories and their respective weights. 

Some of the possible data sources the MEI TAP suggested we consider are: 

• The Medical Group Management Association’s (MGMA) Cost Survey 

• The Bureau of the Census Services Annual Survey (SAS) 

• Pending feasibility, a CMS survey, possibly conducted jointly with the 

American Medical Association, that focuses exclusively on physician expenses as they 

relate to the MEI. The Panel notes that the lead time to conceive, develop, fund, and 

administer such a survey would likely be considerable. 

• Alternatively, and again pending feasibility, CMS could obtain more 
CMS-1600-P 105 

robust data by means of detailed formal cost reports based on a methodologically sound 

sample of physician practices. Whether the 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 revised in the CY 2011 PFS final rule with 

comment period (75 FR 73262 – 73275). The current base year for the MEI is 2006, 

which means that the cost weights in the index reflect physicians’ expenses in 2006. The 

details of the methodology used to determine the 2006 cost shares were provided in the 

CY 2011 PFS proposed rule and finalized in the CY 2011 PFS final rule with comment 

period (75 FR 40087 and 75 FR 73262, respectively). 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 compensation to physician compensation. 

● Revise the physician wage and benefit split so that the cost weights are more in 

line with the definitions of the price proxies used for each category. 

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

● Create a new cost category called “All Other Professional Services” that 

includes expenses covered in the current MEI categories: “All Other Services” and 

“Other Professional Expenses.” The proposed “All Other Professional Services” 
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category would be further disaggregated into appropriate occupational subcategories. 

● Create an aggregate cost category called “Miscellaneous Office Expenses” that 

would include the expenses for “Rubber and Plastics,” “Chemicals,” “All Other 

Products,” and “Paper.” 

(2) Revise price proxies: 

● Revise the price proxy for physician wages and salaries from the Average 

Hourly Earnings (AHE) for the Total Private Nonfarm Economy for Production and 

Nonsupervisory Workers to the ECI for Wages and Salaries, Professional and Related 

Occupations, Private Industry. 

● Revise the price proxy for physician benefits from the ECI for Benefits for the 

Total Private Industry to the ECI for Benefits, Professional and Related Occupations, 

Private Industry. 

● Use the ECI for Wages and Salaries and the ECI for Benefits of Hospital, 

Civilian workers (private industry) as the price proxies for the new category of nonphysician health-related workers. 

● Use ECIs to proxy the Professional Services occupational subcategories that 

reflect the type of professional services purchased by physicians’ offices. 

● Revise the price proxy for the fixed capital category from the CPI for Owners’ 

Equivalent Rent of Residences to the PPI for Lessors of Nonresidential Buildings 

(NAICS 53112). 

d. Revising Expense Categories in the MEI 

The MEI is used as part of the Sustainable Growth Rate (SGR) methodology to 

update the PFS and represents the price component of that update. The proposed expense 

categories in the MEI, along with their respective weights, are primarily derived from 
CMS-1600-P 107 

data collected in the 2006 AMA Physician Practice Information Survey (PPIS) for selfemployed physicians representing 42 medical specialties and selected self-employed nonMedical Doctor (non-MD) specialties. Data for non-MD specialties were collected 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) specialties 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 individual is legally authorized to perform means the following: 

(1) A doctor of medicine or osteopathy; (2) a doctor of dental surgery or of dental 

medicine; (3) a doctor of podiatric medicine; (4) a doctor of optometry; or (5) a 

chiropractor. For a complete definition, please see section 1861(r) of the Act. We 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 medicine 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 final 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 rationale 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 exclusive and exhaustive cost categories and 
CMS-1600-P 108 

weights that make up the proposed revised MEI 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 weight in the current MEI. 

This occurs because of the proposed reclassification of expenses for non-physician 

clinical staff that can bill independently from non-physician compensation to physician 

compensation. This change lowers the PE cost weight by 2.600 percent as well, all of 

which comes from a lower weight for non-physician compensation. The remaining MEI 

cost weights are unchanged. 

The proposed revised MEI includes four new detailed cost categories and two 

new sub-aggregate cost categories. The proposed 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-aggregate categories are: 

● Non-health, non-physician wages. 

● Miscellaneous office expenses. 

The proposed revised MEI excludes two sub-aggregate categories that were 

included in the current 2006-based MEI. The sub-aggregate categories 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 Weights 
CMS-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 Equipment 
CMS-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 for mean physician net income (physician 

compensation) for self-employed physicians and for the selected self-employed 

specialties referenced previously in this rule. Expenses for employed physician 

compensation are combined with expenses for self-employed physician compensation to 

obtain an aggregate Physician Compensation cost weight. Based on this methodology, 

the Physician Compensation cost weight in the current MEI is 48.266 percent. 

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-physician clinical staff 

that can bill Medicare independently 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 assistants, and other clinical personnel, captured 

these expenses under non-physician compensation. Additionally, prior AMA surveys 
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captured these expenses as non-physician compensation costs. 

The Panel reviewed this methodology and Recommendation 3.2 was that: 

“OACT evaluate the appropriate classification of the expenses associated with 

non-physician clinical staff who can bill Medicare independently. Among the factors 

OACT should consider are: 

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

Medicare PFS and whether these definitions 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 under the Medicare PFS (that is, is the 

treatment of this input under the PE RVU methodology consistent with that under the 

MEI); 

● Whether there is any evidence these staff 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 services that are similar to those furnished 

by physicians. 

● If billing independently, these practitioners would be paid at a percentage of 

the physicians’ services or in certain cases at the same rate as physicians. 

● The expenses related to the work components for the RVUs would include 

work from clinical staff that can bill independently. Therefore, it would improve 

consistency with the RVU payments to include these expenses as physician compensation 
CMS-1600-P 112 

in the MEI. 

The effect of moving the expenses related to clinical staff that can bill 

independently is to increase the physician compensation cost share by 2.600 percentage 

points and reduces non-physician compensation costs by the same amount. The 

physician compensation cost share for the proposed revised MEI is 50.866 percent 

compared to the physician compensation cost share of 48.266 percent in the current MEI. 

Within the physician compensation cost weight, the MEI includes a separate 

weight for wages and salaries and a separate weight for benefits. Under the current 2006-

based MEI, the ratio for wages and salaries, and benefits was calculated using data from 

the PPIS. Self-employed physician wages and salaries accounted for 92.3 percent of 

physician earnings while physician benefits accounted 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, respectively. 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 percent and a physician 

benefits cost weight of 4.386 percent, 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-based 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, OACT should consider estimating the proportion 

of the Physician Wages and Salaries cost weight associated with physicians’ retirement 
CMS-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 other benefits such as physician retirement, 

paid leave, and payroll taxes were likely included in physician wages and salaries. 

By definition, the price proxy used for physician benefits, which is an 

Employment Cost Index (ECI) concept, includes retirement savings. Thus, using the 

AMA PPIS data produces a definitional inconsistency between the cost weight and the 

price proxy. Therefore, we propose to use the data on wages and salaries, and employee 

benefits from the SOI for Offices of Physicians and Dentists for partnerships and 

corporations for both self-employed and employed physicians. From the SOI data, 

benefit expenses were estimated by summing the partnership data for retirement plans 

and employee benefit programs with corporation data for pension, profit-sharing plans 

and employee benefit programs. For 2006, the split between wages and salaries, and 

benefits was 85.8 percent and 14.2 percent, respectively. Retirement/pension plans 

account for about 60 percent of total benefits. The SOI data do not classify paid leave 

and supplemental pay as a benefit. 

Combining the impact of classifying compensation for non-physicians that can 
CMS-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 share 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 categories for practice expenses is the same as 

finalized in the CY 2011 PFS final rule with comment period (75 FR 73264-73267), 

except where noted below. 

(a) Non-physician Employee Compensation 

The cost weight for Non-physician Employee Compensation was developed using 

the 2006 AMA PPIS mean expenses for these costs. 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 category. Moving the expenses related to the 

clinical staff that can bill independently out of non-physician compensation costs 

decreases the share by 2.600 percentage points. The non-physician compensation cost 

share for the proposed revised MEI is 16.553 percent compared to the current physician 

compensation cost share of 19.153 percent. 

We are proposing to use the same method as finalized in the CY 2011 PFS final 

rule to split the non-physician compensation between wages and benefits. For reference, 

we use 2006 BLS Employer Costs for Employee Compensation (ECEC) data for the 
CMS-1600-P 115 

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

Health Care and Social Assistance indicate that wages and benefits are 71.8 percent and 

28.2 percent of compensation, respectively. The non-physician wage and benefit cost 

shares for the proposed revised MEI are 11.885 percent and 4.668 percent, 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 disaggregated the non-physician wages into 

four occupational subcategories, the details of this method can be found in 75 FR 73264-

73265. The MEI TAP Recommendation 4.4 stated: 

“The Panel recommends the disaggregation of the Non-Physician Compensation 

costs to include an additional category for health-related workers. This disaggregation 

would allow for health-related workers to be separated from non-health-related workers. 

CMS should rely directly on PPIS data to estimate the health-related non-physician 

compensation cost weights. The non-health, non-physician wages should be further 

disaggregated based on the Current Population Survey and Occupational Employment 

Statistics data.” 

We propose to implement this recommendation using expenses reported on the 

AMA PPIS for non-physician, non-health-related workers. The survey question asks for 

the expenses for: “non-clinical personnel involved primarily in administrative, secretarial 

or clerical activities (Including transcriptionists, medical records personnel, receptionists, 

schedulers and billing staff, coding staff, information technology staff, and custodial 

personnel).” The non-physician, non-health-related wage cost share for the proposed 

revised MEI is 7.249 percent. 

For wage costs of non-physician, health-related workers, the survey question asks 
CMS-1600-P 116 

for the expenses for: “other clinical staff, including RNs, LPNs, physicists, lab 

technicians, x-ray technicians, medical assistants, and other clinical personnel who 

cannot independently bill.” The non-physician, health-related wage cost share for the 

proposed revised MEI is 4.636 percent. Together the non-health and 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 subcategories. The methodology is 

similar to that finalized in the CY 2011 PFS final rule with comment period (75 FR 

73264), in that we are proposing to use 2006 Current Population Survey (CPS) data and 

2006 BLS Occupational Employment Statistics (OES) data to develop cost weights for 

wages for non-physician, non-health-related occupational groups. We determined total 

annual earnings for offices of physicians using employment data from the CPS and mean 

annual earnings from the OES. To arrive at a distribution for these separate occupational 

categories (Professional & Related (P&R) workers, Managers, Clerical workers, and 

Service workers), we determined annual earnings for each using the Standard 

Occupational Classification (SOC) system. We then determined the overall share of the 

total for each. The occupational 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 Nonphysician 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 compensation 
CMS-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 previously included mainly in the Professional 

and Technical and Service Categories. These 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 categorized as Other Practice Expenses. 

In the current 2006-based MEI we had classified other PEs in one of the following 

subcategories: Office Expenses; Drugs and Supplies; and All Other Professional 

Expenses. For CY 2014, we are proposing to disaggregate these expenses in a way 

consistent with the MEI TAP’s recommendations, as detailed below. 

We rely on the 2006 AMA PPIS data to determine the cost share for Other 

Practice Expenses. These expenses are the total of office expenses, medical supplies, 

medical equipment, Professional Liability Insurance (PLI), and all other professional 

expenses. 

For the proposed revised 2006-based MEI, we propose to disaggregate Other 

Practice Expenses into 15 detailed subcategories as shown in Table 16. 
CMS-1600-P 118 

TABLE 16: Revised Cost Categories 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 the same method as finalized in the CY 2011 

PFS final rule with comment period to estimate the cost shares. In particular, the cost 

shares for the following categories are derived directly from expense data reported on the 

2006 AMA PPIS: PLI; Medical Equipment; and Medical Supplies. In each case, the cost 

shares remain the same as in the current MEI. Additionally, we continue to use the 

Bureau of Economic Analysis (BEA) 2002–Benchmark I/O data aged to 2006 to 

determine the cost weights for other expenses not collected directly from the AMA PPIS. 

The BEA 2002-Benchmark I/O data can be accessed at the following link: 

http://www.bea.gov/industry/io_benchmark.htm#2002data

The derivation of the cost weight for each of the detailed categories under Other 

Practice Expenses is provided below. 
CMS-1600-P 119 

● Utilities: The Utilities cost weight includes expenses 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 expenses that were stand-alone categories in the current 2006-

based MEI. During the CY 2011 PFS proposed rule comment period, several 

commenters expressed confusion as to the relevance of these categories to their practice 

costs. The MEI TAP discussed the degree of granularity needed in both the calculation 

and reporting of the MEI. The MEI TAP concluded that it might be prudent to collapse 

some of the non-labor PE categories with other categories for presentation purposes. 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 details and calculations associated 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 paper, chemicals, rubber and plastics, and all 

other products remain the same for the proposed revised MEI as in the current MEI.” 

● Telephone: The telephone cost weight includes expenses classified in the 

telecommunications (accounting for the majority 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 postal service expenses. The cost 

weight for Postage is 0.898 percent in the proposed 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 percent, which is the sum of the 

current MEI weight for All Other Services (3.581 percent) and All Other Professional 

Expenses (4.513 percent), 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 entitled Professional Services that should 

consist of the All Other Services cost category (and its respective weight) and the Other 

Professional Expenses cost category (and its respective weight). The Panel further 

recommends that this category be disaggregated into appropriate occupational categories 

consistent with the relevant price proxies.” 

We propose to combine the "Other Professional Expenses" and “All Other 

Services” cost weights of the 2006-based MEI and further disaggregate the 8.095 percent 

of expenses into more detail based on the BEA I-O data, allowing for specific cost 

weights for services such as contract billing services, accounting, and legal services. We 

considered various levels of aggregation; however, in considering the level of 

aggregation, the available corresponding price proxies must be considered. Given the 

price proxies that are available from the ECI, we propose to disaggregate these expenses 

into three categories: 

● NAICS 54 (Professional, Scientific, and Technical Services): The 
CMS-1600-P 121 

Professional, Scientific, and Technical Services sector comprises establishments that 

specialize in performing professional, scientific, and technical activities for others. These 

activities require a high degree of expertise and training. The establishments in this 

sector specialize according to expertise and provide these services to clients in a variety 

of industries, including but not limited to: legal advice and representation; accounting, 

and payroll services; computer services; management consulting services; and 

advertising services and have a 2.592 percent weight. 

● NAICS 56 (Administrative and Support and Waste Management and 

Remediation Services): The Administrative and Support and Waste Management and 

Remediation Services sector comprises establishments performing routine support 

activities for the day-to-day operations of other organizations. The establishments in this 

sector specialize in one or more of these support activities and provide these services to 

clients in a variety of industries including but not limited to: office administration; 

temporary help services; security services; cleaning and janitorial services; and trash 

collection services. These services have a 3.052 percent weight. 

● All Other Services, a residual category of these expenses: The residual All 

Other Services cost category is mostly comprised of expenses associated with service 

occupations, including but not limited to: lab and blood specimen transport; catering and 

food services; collection company services; and dry cleaning services and have a 2.451 

percent weight. 

++ Fixed Capital: The Fixed Capital cost weight includes expenses for building 

leases and depreciation. The cost weight for Fixed Capital is 8.957 percent in the 

proposed revised MEI, the same cost share as in the current MEI. 

++ Moveable Capital: The Moveable Capital cost weight includes expenses for 
CMS-1600-P 122 

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

as well as the rental and leasing of automotive and industrial machinery equipment. The 

cost weight for Moveable Capital is 1.353 percent 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 was calculated as the mean PLI expense 

expressed as a percentage of total expenses. The cost weight 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 percent 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 expense data. The cost weight for Medical 

Supplies Expenses is 1.760 percent in the proposed 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 weights 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 are measures of price 
CMS-1600-P 123 

change at the intermediate or final stage of production. They are the preferred proxies for 

physician purchases as these prices appropriately reflect the product’s first commercial 

transaction. 

● Consumer Price Indices (CPIs): CPIs measure change in the prices of final 

goods and services bought by consumers. Like the PPIs, they are fixed weight indexes. 

Since they may not represent the price changes faced by producers, CPIs are used if there 

are no appropriate PPIs or if the particular expenditure category is likely to contain 

purchases made at the final point of sale. 

● Employment Cost Indices (ECIs) for Wages & Salaries: These ECIs measure 

the rate of change in employee wage rates per hour worked. These fixed-weight indexes 

are not affected by employment shifts among industries or occupations and thus, measure 

only the pure rate of change in wages. 

● Employment Cost Indices (ECIs) for Employee Benefits: These ECIs measure 

the rate of change in employer costs of employee benefits, such as the employer’s share 

of Social Security taxes, pension and other retirement plans, insurance benefits (life, 

health, disability, and accident), and paid leave. Like ECIs for wages & salaries, the 

ECIs for employee benefits are not affected by employment shifts among industries or 

occupations. 

When choosing wage and price proxies for each expense category, we evaluate 

the strengths and weaknesses of each proxy variable using the following four criteria. 

● Relevance: The price proxy should appropriately represent price changes for 

specific goods or services within the expense category. Relevance may encompass 

judgments about relative efficiency of the market generating the price and wage 

increases. 
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 variability can conflict with relevance—since 

the more specifically a price variable is defined (in terms of service, commodity, or 

geographic area), the higher the possibility of high sampling variability. A 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 monthly and quarterly data to annual data. 

● Public availability: For transparency, we prefer to use data sources that are 

publicly available. 

Below we discuss the price and wage proxies 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 TAP, we are proposing to use the ECI 

for Wages and Salaries for Professional and Related Occupations (Private Industry) (BLS 

series code CIU2020000120000I) to measure price growth of this category in the 

proposed revised 2006-based MEI. The current 2006-based MEI used Average Hourly 

Earnings (AHE) for Production and Non-Supervisory Employees for the Private Nonfarm 

Economy. 

The MEI TAP had two recommendations concerning the price proxy for 

physician Wages and Salaries. The first recommendation from the MEI TAP was 

Recommendation 4.1, which was that: “...OACT revise the price proxy associated with 
CMS-1600-P 125 

Physician Wages and Salaries from an Average Hourly Earnings concept to an 

Employment Cost Index concept.” AHEs are calculated by dividing gross payrolls for 

wages and salaries by total hours. The AHE proxy was representative of actual changes 

in hourly earnings for the nonfarm business economy, including shifts in employment 

mix. The recommended alternative, the ECI concept, measures the rate of change in 

employee wage rates per hour worked. ECIs measure the pure rate of change in wages 

by industry and/or occupation and are not affected by shifts in employment mix across 

industries and occupations. The MEI TAP thought 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 Index for Wages and Salaries, Professional and 

Related, Private Industry. The Panel believes this change would maintain consistency 

with the guidance provided in the 1972 Senate Finance Committee report titled ‘Social 

Security Amendments of 1972,’ which stated that the index should reflect changes in 

practice expenses and ‘general earnings.’ In the event this change would be determined 

not to meet the legal requirement that the index reflect “general earnings,” the Panel 

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 Security Amendments 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 other professionals that receive 

advanced training. Additionally, we believe the ECI is a more appropriate concept than 

the AHE because it can isolate wage trends without being impacted by the change in the 

mix of employment. 

(2) Physician Benefits 

The MEI TAP states in Recommendation 4.3 that, “...any change in the price 

proxy for Physician Wages and Salaries be accompanied by the selection and 

incorporation of a Physician Benefits price proxy that is consistent with the Physician 

Wages and Salaries price proxy.” We are proposing to use the ECI for Benefits for 

Professional and Related Occupations (Private Industry) to measure price 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 series ID CIU2010000120000I) and the relative 

importance of wages and salaries within total compensation. We believe this series is 

technically appropriate because it better reflects the benefit trends for professionals 

requiring advanced training. The current 2006-based MEI market basket used the ECI for 

Total Benefits for the Total Private Industry. 

b. Practice Expense 

(1) Non-Physician Employee Compensation 

(a) Non-Physician Wages and Salaries 

(i) Non-Physician, Non-Health-Related Wages and Salaries 

● Professional and Related: We will continue using the ECI for Wages and 
CMS-1600-P 127 

Salaries for Professional and Related Occupation (Private Industry) (BLS series code 

CIU2020000120000I) to measure the price growth of this cost category. 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 (Private Industry) (BLS series code 

CIU2020000110000I) to measure the price growth of this cost category. 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 Industry) (BLS series code CIU2020000220000I) to 

measure the price growth of this cost category. This is the same proxy used in the current 

2006-based MEI. 

● Services: We will continue using the ECI for Wages and Salaries for Service 

Occupations (Private Industry) (BLS series code CIU2020000300000I) to measure the 

price growth of this cost category. This is the same proxy used in the current 2006-based 

MEI. 

(ii) Non-physician, Health-Related Wages and Salaries 

In Recommendation 4.4, the MEI TAP “...recommend[ed] the disaggregation of 

the Non-Physician Compensation costs to include an additional category for healthrelated workers. This disaggregation would allow for health-related workers to be 

separated from non-health-related workers. CMS should rely directly on PPIS data to 

estimate the health-related non-physician compensation cost weights. The non-health, 

non-physician wages should be further disaggregated based on the Current Population 

Survey and Occupational Employment Statistics data. The new health-related cost 

category should be proxied by the ECI, Wages and Salaries, Hospital (NAICS 622), 
CMS-1600-P 128 

which has an occupational mix that is reasonably close to that in physicians’ offices. The 

Non-Physician Benefit category should be proxied by a composite benefit index 

reflecting the same relative occupation weights as the non-physician wages.” We are 

proposing to use the ECI for Wages and Salaries for Hospital Workers (Private Industry) 

(BLS series code CIU2026220000000I) to measure the price growth of this cost category 

in the 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. However, we are proposing to expand the number 

of occupations from four to five by adding detail on Non-Physician Health-Related 

Benefits. The weights and price proxies for the composite benefits index will be revised 

to reflect the addition of the new category. Table 17 lists the five ECI series and 

corresponding weights used to construct the proposed 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 Professional 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) 39 
CMS-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 entitled Professional Services that should 

consist of the All Other Services cost category (and its respective weight) and the Other 

Professional Expenses cost category (and its respective weight). The Panel further 

recommends that this category be disaggregated into appropriate occupational categories 

consistent with the relevant price proxies.” We are proposing to implement this 

recommendation in the proposed revised 2006-based MEI using a cost category titled 

“All Other Professional Services.” Likewise, the MEI TAP stated in Recommendation 

4.7 that “...price changes associated with the Professional Services category be proxied 

by an appropriate blend of Employment Cost Indexes that reflect the types of 

professional services purchased by physician offices.” We agree with this 

recommendation and are proposing to the use the following price proxies for each of the 

new occupational categories: 

● Professional, Scientific, and Technical Services: We are proposing to use the 

ECI for Total Compensation for Professional, Scientific, and Technical Services (Private 

Industry) (BLS series code CIU2015400000000I) to measure the price growth of this cost 

category. This cost category was not broken out separately in the current 2006-based 

MEI. 

● Administrative and Support Services: We are proposing to use the ECI for 

Total Compensation for Administrative, Support, Waste Management, and Remediation 

Services (Private Industry) (BLS series code CIU2015600000000I) to measure the price 

growth of this cost category. This cost category was not broken out separately in the 
CMS-1600-P 130 

current 2006-based MEI. 

● All Other Services: We are proposing to use the ECI for Compensation for 

Service Occupations (Private Industry) (BLS series code CIU2010000300000I) to 

measure the price growth of this cost category. 

(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 this 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 measure 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 the CPI-U for All Products less 

Food and Energy (BLS series code CUUR0000SA0L1E) 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 for 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 measure the price growth of this 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 code 
CMS-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 Nonresidential Buildings (NAICS 53112) for the 

MEI Fixed Capital cost category as it represents the types of fixed capital expenses most 

likely faced by physicians. The Panel noted the volatility in the index, which is greater 

than the Consumer Price Index for Owners’ Equivalent Rent of Residences. This relative 

volatility merits ongoing monitoring and evaluation of alternatives.” We are proposing to 

use the PPI for Lessors of Nonresidential 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 Lessors of Nonresidential Buildings is more 

appropriate as fixed capital expenses in physician offices should be more congruent with 

trends in business office space costs than residential costs. 

● Moveable Capital: In Recommendation 4.6, the MEI TAP states that “...CMS 

conduct research into and identify a more appropriate price proxy for Moveable Capital 

expenses. In particular, the Panel believes it is important that a proxy reflect price 

changes in the types of non-medical equipment purchased in the production of 

physicians’ services, as well as the price changes associated with Information and 

Communication Technology expenses (including both hardware and software).” We 

intend to continue to investigate possible data sources that could be used to proxy the 

physician expenses related to moveable capital in more detail. However, we 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 is 
CMS-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 for PLI is based on data collected directly 

by CMS from a sample of commercial insurance carriers. The MEI TAP discussed the 

methodology of the CMS PLI index, as well as considered alternative data sources for the 

PLI price proxy, including information available from BLS and through state insurance 

commissioners. MEI TAP Finding 4.3 states: 

“The Panel finds the CMS-constructed professional liability insurance price index 

used to proxy changes in professional liability insurance premiums in the MEI represents 

the best currently available method for its intended purpose. The Panel also believes the 

pricing patterns of commercial carriers, as measured by the CMS PLI index, are 

influenced by the same driving forces as those observable in policies underwritten by 

physician-owned insurance entities; thus, the Panel believes the current index 

appropriately reflects the price changes in premiums throughout the industry.” Given 

this 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 Surgical Appliances (BLS series code 

WPU156301) and the CPI–U for Medical Equipment and Supplies (BLS series code 

CUUR0000SEMG). This is the same proxy used in the current 2006-based MEI. 
CMS-1600-P 133 

TABLE 18: Proposed Revised 2006-Based 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 - Wages 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% ECI - 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% Composite - 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 period (67 FR 80019), we implemented a change 

in the way the MEI was adjusted to account for changes in productivity. The MEI used 

for the 2003 physician payment update incorporated changes in the 10-year moving 

average of private nonfarm business (economy-wide) multifactor productivity that were 

applied to the entire index. Previously, the index incorporated changes in productivity by 

adjusting the labor portions of the index by the 10-year moving average of economy-wide 

private nonfarm business labor productivity. 

The MEI TAP was asked to review this approach. In Finding 5.1, “[t]he Panel 

reviewed the basis for the current economy-wide multifactor productivity adjustment 

(Private Nonfarm Business Multifactor Productivity) in the MEI and finds such an 

adjustment continues to be appropriate. This adjustment prevents ‘double counting’ of 

the effects of productivity improvements, which would otherwise be reflected in both (i) 

the increase in compensation and other input price proxies underlying the MEI, and (ii) 

the growth in the number of physician services performed per unit of input resources, 

which results from advances in productivity by individual physician practices.” 

Based on the MEI TAP’s finding, we will continue to use the current method for 

adjusting the full MEI for multifactor productivity in the proposed revised 2006-based 
CMS-1600-P 135 

MEI. As described in the CY 2003 PFS final rule with comment period, we believe this 

adjustment is appropriate because it explicitly reflects the productivity gains associated 

with all inputs (both labor and non-labor). We believe that using the 10-year moving 

average percent change in economy-wide multifactor productivity is appropriate for 

deriving a stable measure that helps alleviate the influence that the peak (or a trough) of a 

business cycle may have on the measure. The adjustment will be based on the latest 

available historical economy-wide nonfarm business multifactor productivity data as 

measured and published by BLS. 

4. Results of 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 the proposed revised 2006-based MEI is 0.1 

percent lower than the current 2006-based MEI over the 2005-2013 period. On an annual 

basis over this period, the differences vary by up to plus or minus 0.7 percentage points. 

In the two most recent years (CY 2012 and CY 2013), the annual percent change in the 

proposed revised 2006-based MEI was within 0.1 percentage point of the percent change 

in the current 2006-based MEI. The majority of these differences over the historical 

period can be attributed to the revised price proxy for physician wages and salaries and 

benefits and the revised price proxy for fixed capital. 

TABLE 19: Annual Percent Change in the Proposed Revised 2006-Based MEI, not 

including productivity adjustment 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 3.4 
CMS-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 percentage point lower 

than the projected increase using the current 2006-based MEI. In the CY 2014 PFS final 

rule with comment period, we will incorporate historical data through the second quarter 

of 2013, and therefore, the current 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 adjustment, the 10-year moving average percent change 

adjustment for CY 2014 is 0.9 percent, which is based on the most historical data 

available from BLS at the time of the proposed rule. If more recent historical data of 

MFP is available at the time of the final rule, 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% 1.7 

 Non-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% -1.2 
CMS-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 - Compensation 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 resource 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 total 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, section 1848(e)(1)(A)(iii) of the Act requires that the work 

GPCIs reflect only one-quarter of the relative cost differences compared to the national 

average. In addition, section 1848(e)(1)(G) of the Act sets a permanent 1.5 work GPCI 

floor for services furnished in Alaska beginning January 1, 2009, and section 

1848(e)(1)(I) of the Act sets a permanent 1.0 PE GPCI floor for services furnished in 

frontier states (as defined in section 1848(e)(1)(I) of the Act) beginning January 1, 2011. 

Additionally, section 1848(e)(1)(E) of the Act provided for a 1.0 floor for the work 

GPCIs, which was set to expire at the end of 2012. Section 602 of the ATRA amended 

the statute to extend the 1.0 floor for the work GPCIs through CY 2013 (that is, for 

services furnished no later than December 31, 2013). 

Section 1848(e)(1)(C) of the Act requires us to review and, if necessary, adjust 

the GPCIs at least every 3 years. Section 1848(e)(1)(C) of the Act requires that “if more 

than 1 year has elapsed since the date of the last previous GPCI adjustment, the 

adjustment to be applied in the first year of the next adjustment shall be 1/2 of the 

adjustment that otherwise would be made.” Therefore, since the previous GPCI update 

was implemented in CY 2011 and CY 2012, we 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 GPCIs and are proposing new GPCIs, as well 

as a revision to the cost share weights that correspond to all three GPCIs in this proposed 

rule. We also calculate a geographic adjustment 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 weights. While we do not actually use GAFs in 

computing the fee schedule payment for a specific service, they are useful in comparing 

overall areas costs and payments. The actual effect on payment for any actual service 

will deviate from the GAF to the extent that the proportions of work, PE and MP RVUs 

for the service differ from those of the GAF. 

As noted above, section 602 of the ATRA extended the 1.0 work GPCI floor only 

through December 31, 2013. Therefore, the proposed CY 2014 work GPCIs and 

summarized GAFs do not reflect the 1.0 work floor. However, as required by sections 

1848(e)(1)(G) and 1848(e)(1)(I) of the Act, the 1.5 work GPCI floor for Alaska and the 

1.0 PE GPCI floor for frontier states are permanent, and therefore, applicable in 

CY 2014. See Addenda D and E to this proposed 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 type. Additionally, each of the three GPCIs 

relies on its own data source(s) and methodology for calculating its value as described 

below. Additional information on the CY 2014 GPCI update may be found in our 
CMS-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 supporting 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 reflect the relative costs of physician 

labor by Medicare PFS locality. As required by statute, the physician work GPCI reflects 

one quarter of the relative wage differences for each locality compared to the national 

average. 

To calculate the physician work GPCIs, we use wage data for seven professional 

specialty occupation categories, adjusted to reflect one-quarter of the relative cost 

differences for each locality compared to the national average, as a proxy for physicians’ 

wages. Physicians’ wages are not included in the occupation categories used in 

calculating the work GPCI because Medicare payments are a key determinant of 

physicians’ earnings. Including physician wage data in calculating the work GPCIs 

would potentially introduce some circularity to the adjustment since Medicare payments 

typically contribute to or influence physician wages. That is, including physicians' 

wages in the physician work GPCIs would, in effect, make the indices, to some extent, 

dependent upon Medicare payments. 

The physician work GPCI updates in CYs 2001, 2003, 2005, and 2008 were based 

on professional earnings data from the 2000 Census. However, for the CY 2011 GPCI 

update (75 FR 73252), the 2000 data were outdated and wage and earnings data were not 

available from the more recent Census because the “long form” was discontinued. 

Therefore, we used the median hourly earnings from the 2006 through 2008 Bureau of 
CMS-1600-P 142 

Labor Statistics (BLS) Occupational Employment Statistics (OES) wage data as a 

replacement for the 2000 Census data. The BLS OES data meet several criteria that we 

consider to be important for selecting a data source for purposes of calculating the 

GPCIs. For example, the BLS OES wage and employment data are derived from a large 

sample size of approximately 200,000 establishments of varying sizes nationwide from 

every metropolitan area and can be easily accessible to the public at no cost. 

Additionally, the BLS OES is updated regularly, and includes a comprehensive set of 

occupations and industries (for example, 800 occupations in 450 industries). 

Because of its reliability, public availability, level of detail, and national scope, 

we believe the BLS OES continues to be the most appropriate source of wage and 

employment data for use in calculating the work GPCIs (and as discussed in section 

II.E.2.b the employee wage component and purchased services component of the PE 

GPCI). Therefore, for the proposed CY 2014 GPCI update, we used updated BLS OES 

data (2009 through 2011) as a replacement for the 2006 through 2008 data to compute the 

work GPCIs. 

We note that the Medicare Payment Advisory Commission (MedPAC) was 

required by section 3004 of the MCTRJCA to submit a report to the Congress by June 15, 

2013 that assesses whether any adjustment under section 1848 of the Act to distinguish 

the difference in work effort by geographic area is appropriate and, if so, what that level 

should be and where it should be applied. In the report, MedPAC was required to also 

assess the impact of the work geographic adjustment under the Act, including the extent 

to which the floor on such adjustment impacts access to care. We 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 to 
CMS-1600-P 143 

the work GPCI. 

b. Practice Expense GPCIs 

The PE GPCIs are designed to measure the relative cost difference in the mix of 

goods and services comprising practice expenses (not including malpractice expenses) 

among the PFS localities as compared to the national average of these costs. Whereas the 

physician work GPCIs (and as discussed later in this section, the MP GPCIs) are 

comprised of a single index, the PE GPCIs are comprised of four component indices 

(employee wages; purchased services; office rent; and equipment, supplies and other 

miscellaneous expenses). The employee wage index component measures geographic 

variation in the cost of the kinds of skilled and unskilled labor that would be directly 

employed by a physician practice. Although the employee wage index adjusts for 

geographic variation in the cost of labor employed directly by physician practices, it does 

not account for geographic variation in the cost of services that typically would be 

purchased from other entities, such as law firms, accounting firms, information 

technology consultants, building service managers, or any other third-party vendor. The 

purchased services index component of the PE GPCI (which is a separate index from 

employee wages) measures geographic variation in the cost of contracted services that 

physician practices would typically buy. (For more information on the development of 

the purchased service index, we refer readers to the CY 2012 PFS final rule with 

comment period (76 FR 73084 through 73085).) The office rent index component of the 

PE GPCI measures relative geographic variation in the cost of typical physician office 

rents. For the medical equipment, supplies, and miscellaneous expenses component, we 

believe there is a national market for these items such that there is not significant 

geographic variation in costs. Therefore, the “equipment, supplies and other 
CMS-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 calculate the employee wage and purchased 

services indices for the PE GPCI. As discussed in section II.E.2.a., because of its 

reliability, public availability, level of detail, and national scope, we continue to believe 

the BLS OES is the most appropriate data source for collecting wage and employment 

data. Therefore, in calculating the proposed CY 2014 GPCI update, we used updated 

BLS OES data (2009 through 2011) as a replacement for the 2006 through 2008 data for 

purposes of calculating the employee wage component and purchased service index of 

the PE GPCI. 

Office Rent Index Discussion

Since the inception of the PFS, we have used residential rent data (primarily the 

two-bedroom residential apartment rent data produced by the Department of Housing and 

Urban Development (HUD) at the 50th percentile) as the proxy to measure the relative 

cost difference in physician office rents. As discussed in the CY 2012 PFS final rule with 

comment period (76 FR 73084), we had concerns with the continued use of the HUD 

rental data because the data were not updated frequently and the Census "long form," 

which was used to collect the necessary base year rents for the HUD Fair Market Rent 

(FMR) data, was discontinued in CY 2010 and would no longer be available for future 

updates. Therefore, we examined the suitability of using 3-year (2006-2008) American 

Community Survey (ACS) rental data as a proxy for physician office rents to replace the 

HUD data. We determined that the ACS is one of the largest nationally representative 

surveys of household rents in the United States conducted annually by the U.S. Census 
CMS-1600-P 145 

Bureau, sampling approximately 3 million addresses with a recent response rate above 97 

percent, and that it reports rental information for residences at the county level. Given 

that the ACS rental data provided a sufficient degree of reliability, is updated annually, 

and was expected to be available for future updates, we used the 2006 through 2008 ACS 

3-year residential rent data as a replacement for the HUD data to create the office rent 

index for the CY 2012 PFS final rule with comment (76 FR 73084). For all the same 

reasons that we used the ACS data for the last GPCI update, we 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 whether utilities are included in their rent. Thus, the cost of 

utilities cannot be separated from “gross rents” since some individuals monthly rent also 

covers the cost of utilities. As discussed in section II.E.2.d. we combined the cost 

weights for fixed capital and utilities when assigning a proposed weight to the office rent 

component of the PE GPCI. 

For many years, we have received requests from physicians and their 

representatives to use commercial rent data instead of residential rent data as a proxy to 

measure the relative cost differences in physician office rent. Additionally, in a report 

entitled “Geographic Adjustment in Medicare Payment, Phase I: Improving Accuracy,'' 

prepared for CMS under contract and released on September 28, 2011, the Institute of 

Medicine recommended that “a new source of data should be developed to determine the 

variation in the price of commercial office rent per square foot.” The Institute of 

Medicine report did not identify any new data source and did not suggest how a new 

source of data might be developed. Because we could not identify a reliable commercial 

rental data source that is available on a national basis and includes data for non-
CMS-1600-P 146 

metropolitan areas, we continued to use residential rent data for the CY 2012 GPCI 

update. 

For the CY 2014 GPCI update, we continued our efforts to identify a reliable 

source of commercial rent data that could be used in calculating the rent index. We could 

not identify a nationally representative commercial rent data source that is available in 

the public sector. However, we identified a proprietary commercial rent data source that 

has potential for use in calculating the office rent indices in future years. To that end, we 

are attempting to negotiate an agreement with the proprietor to use the data for purposes 

of calculating the office rent component of the PE GPCI. 

One of the challenges of using a proprietary data source is our ability to make 

information available to the public. When using government data, we are able to release 

all data for public consideration. However, when using a proprietary data source, it is 

likely that restrictions will be imposed on its use and our ability to disclose data. In such 

a situation, those wishing to replicate our calculations based on detailed data would also 

need to purchase the underlying proprietary data. We also believe that, generally 

speaking, a proprietary “for profit” data source is more susceptible to periodic changes in 

the criteria used for data collection, including possible changes in the data collected, the 

frequency at which the data is updated, changes in ownership, and the potential for 

termination of the survey vehicle entirely as changes are made to address economic 

pressures or opportunities. As such, we cannot predict that a given proprietary data 

source will be available in the format needed to develop office rent indices in the future. 

Since we have not identified a nationally representative commercial rent data source that 

is available in the public sector, we believe it would be necessary to use a proprietary 

data source for commercial office rent data. That is, in the absence of using a proprietary 
CMS-1600-P 147 

data source, it is unlikely that we would be able to use commercial rent data to calculate 

the office rent index component of the PE GPCI. Therefore, we request comments on the 

potential future use of a proprietary commercial rent data source as well as whether there 

is a source for these data that is not proprietary. 

c. Malpractice Expense (MP) GPCIs 

The MP GPCIs measure the relative cost differences among PFS localities for the 

purchase of professional liability insurance (PLI). The MP GPCIs are calculated based 

on insurer rate filings of premium data for $1 million to $3 million mature claims-made 

policies (policies for claims made rather than services furnished during the policy term). 

For the CY 2011 GPCI update (sixth update) we used 2006 and 2007 malpractice 

premium data (75 FR 73256). The proposed CY 2014 MP GPCI update reflects 2011 

and 2012 premium data. 

Additionally, for the past several GPCI updates, we were not able to collect MP 

premium data from insurer rate filings for the Puerto Rico payment locality. For the CY 

2014 (seventh) GPCI update, we worked directly with the Puerto Rico Insurance 

Commissioner and Institute of Statistics to obtain data on MP insurance premiums that 

were used to calculate an updated MP GPCI for Puerto Rico. Using updated MP 

premium data would result in a 17 percent increase in MP GPCI for the Puerto Rico 

payment locality under the proposed fully phased-in seventh GPCI update, which would 

be effective CY 2015. 

d. GPCI Cost Share Weights 

To determine the cost share weights for the proposed CY 2014 GPCIs, we used 

the weights we 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. As 
CMS-1600-P 148 

discussed in detail in that section, the MEI was rebased and revised in the CY 2011 PFS 

final rule with comment period (75 FR 73262 through 73277) to reflect the 

weighted-average annual price change for various inputs needed to provide physicians' 

services. We have historically updated the GPCI cost share weights to make them 

consistent with the most recent update to the MEI, and propose to do so again for CY 

2014. We would note that consistent with this approach in the CY 2011 proposed rule, 

the last time the MEI was revised, we proposed to update the GPCI cost share weights to 

reflect these revisions to the MEI. However, in response to public comments we did not 

finalize the proposal in the CY 2011 PFS final rule with comment period (75 FR 73258 

and 73260), so that we could explore public comments received suggesting the 

reallocation of labor related costs from the medical equipment, supplies and 

miscellaneous component to the employee compensation component and comments 

received on the cost share weight for the rent index of the PE GPCI as well as to continue 

our analysis of the cost share weights attributed to the PE GPCIs as required by section 

1848(e)(1)(H)(iv) of the Act. 

In the CY 2012 PFS final rule (76 FR 73085 through 73086) we addressed 

commenter concerns regarding the inclusion of the cost share weight assigned to utilities 

within the office rent component of the PE GPCI and to geographically adjust wage 

related industries contained within the medical equipment, supplies and miscellaneous 

component of the PE GPCI. As a result, to accurately capture the utility measurement 

present in the ACS two bedroom gross rent data, the cost share weight for utilities was 

combined with the fixed capital portion to form the office rent index. Additionally, we 

developed a purchased service index to geographically adjust the labor-related 

components of the “All Other Services” and “Other” Professional Expenses” categories 
CMS-1600-P 149 

of the 2006-based MEI market basket. Upon completing our analysis of the GPCI cost 

share weights (as required by the Act) and addressing commenters’ concerns regarding 

the office rent and labor related industries previously contained in the medical equipment, 

supplies and other miscellaneous components of the PE GCPI, we updated the GPCI cost 

share weights consistent with the weights established in the 2006-based MEI in the CY 

2012 PFS final rule (76 FR 73086). 

The proposed revised 2006-based MEI cost share weights reflect our actuaries’ 

best estimate of the weights associated with each of the various inputs needed to provide 

physicians’ services. Use of the current MEI cost share weights also provides 

consistency across the PFS in the use of this data. Given that we have addressed previous 

commenters concerns about the allocation of labor related costs (as discussed earlier in 

this section) and that we have completed our analysis of the GPCI cost share weights (as 

required by the Act) we believe it is appropriate to propose to adopt the weights we are 

proposing to use for the revised 2006-based MEI as the GPCI cost share weights for CY 

2014. 

As a result, the cost share weight for the work GPCI (as a percentage of the total) 

in this proposal is changed from 48.266 percent to 50.866 percent, and the cost share 

weight for the PE GPCI is revised from 47.439 percent to 44.839 percent with a change 

in the employee compensation component from 19.153 to 16.553 percentage points. The 

cost share weights for the office rent component (10.223 percent), purchased services 

component (8.095 percent), and the medical equipment, supplies, and other 

miscellaneous expenses component (9.968 percent) of the PE GPCI and the cost share 

weight for the MP GPCI (4.295 percent) remains unchanged. A discussion of the specific 
CMS-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 revised weight of 50.866 for the physician 

compensation cost category as the proposed work GPCI cost share weight. 

(2) Practice Expense GPCIs 

 For the cost share weight for the PE GPCIs, we used the revised 2006-based MEI 

proposed weight for the PE category of 49.134 percent minus the PLI category weight of 

4.295 percent (because the relative costs differences in malpractice expenses are 

measured by its own GPCI). Therefore, the proposed cost share weight for the PE GPCIs 

is 44.839 percent. 

(a) Employee Compensation 

 For the employee compensation portion of the PE GPCIs, we used the proposed 

non-physician employee compensation category weight of 16.553 percent reflected in the 

revised 2006-based MEI. 

(b) Office Rent 

We set the PE GPCI office rent portion at 10.223 percent which includes the 

proposed revised 2006-based MEI cost weights for fixed capital (reflecting the expenses 

for rent, depreciation on medical buildings and mortgage interest) and utilities. As 

discussed previously in this section, we 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 rent for all ACS survey respondents, we combined these two 

components to calculate office rent values that were used to calculate the office rent 
CMS-1600-P 151 

index component of the proposed PE GPCI. For purposes of consistency, we combined 

those two cost categories when assigning a proposed weight to the office rent component. 

(c) Purchased Services 

 As discussed in section II.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 Professional Services.” The proposed weight for “All Other 

Professional Services” is 8.095. As noted in the CY 2012 PFS final rule with comment 

period (76 FR 73084), we only adjust for locality cost differences of the labor-related 

share of the purchased services index. We determined that only 5.011 percentage points 

of the total 8.095 proposed weight are labor-related and, thus, would be adjusted for 

locality cost differences (5.011 adjusted purchased service + 3.084 non-adjusted 

purchased services = 8.095 total cost share weight). Therefore, only 62 percent 

(5.011/8.095) of the purchased service index is adjusted for geographic cost differences 

while the remaining 38 percent (3.084/8.095) of the purchased service index is not 

adjusted for geographic variation. 

(d) Equipment, Supplies, and Other Miscellaneous Expenses 

To calculate the medical equipment, supplies, and other miscellaneous expenses 

component, we removed PLI (4.295 percentage points), non-physician employee 

compensation (16.553 percentage points), fixed capital/utilities (10.223 percentage 

points), and purchased services (8.095 percentage points) from the total proposed PE 

category weight (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, 
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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 weights 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 Care Act added a new subparagraph (I) under 

section 1848(e)(1) of the Act to establish a 1.0 PE GPCI floor for physicians' services 

furnished in frontier States effective January 1, 2011. In accordance with section 

1848(e)(1)(I) of the Act, beginning in CY 2011, we applied a 1.0 PE GPCI floor for 

physicians' services furnished in States determined to be frontier States. In general, a 

frontier state is one in which at least 50 percent of the counties are “frontier counties,” 

which are those that have a population per square mile of less than 6. For more 

information on the criteria used to define a frontier state, we refer readers to the FY 2011 

Inpatient Prospective Payment System final rule (75 FR 50160 through 50161). There 

are no changes in the States identified as "Frontier States" for 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 Section 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 section, the periodic review and adjustment 

of GPCIs is mandated by section 1848(e)(1)(C) of the Act. At each update, the proposed 

GPCIs are published in the PFS proposed rule to provide an opportunity for public 

comment and further revisions in response to comments prior to implementation. The 

proposed CY 2014 updated GPCIs for the first and second year of the 2-year transition, 

along with the GAFs, 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 localities are statewide areas (that is, only 

one locality for the entire state). There are 52 localities in the other 16 states, with 10 

states having 2 localities, 2 states having 3 localities, 1 state having 4 localities, and 3 
CMS-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 localities that make up the 

remainder of the total of 89 localities. The development of the current locality structure 

is described in detail in the CY 1997 PFS proposed rule (61 FR 34615) and the 

subsequent final rule with comment period (61 FR 59494). 

Prior to 1992, Medicare payments for physicians’ services were made under the 

reasonable charge system. Payments were based on the charging patterns of physicians. 

This resulted in large differences in payment for physicians’ services among types of 

services, geographic payment areas, and physician specialties. Recognizing this, the 

Congress replaced the reasonable charge system with the Medicare PFS in the Omnibus 

Budget Reconciliation Act (OBRA) of 1989, and the PFS went into effect 

January 1, 1992. Payments under the PFS are based on the relative resources involved 

with furnishing services, and are adjusted to account for geographic variations in resource 

costs as measured by the GPCIs. 

Payment localities originally were established under the reasonable charge system 

by local Medicare carriers based on their knowledge of local physician charging patterns 

and economic conditions. These localities changed little between the inception of 

Medicare in 1967 and the beginning of the PFS in 1992. Shortly after the PFS took 

effect, CMS undertook a study in 1994 that culminated in a comprehensive locality 

revision that was implemented in 1997 (61 FR 59494). 

The revised locality structure reduced the number of localities from 210 to the 

current 89, and the number of statewide localities increased from 22 to 34. The revised 

localities were based on locality resource cost differences as reflected by the GPCIs. For 

a full discussion of the methodology, see the CY 1997 PFS final rule with comment 
CMS-1600-P 155 

period (61 FR 59494). The current 89 fee schedule areas are defined alternatively by 

state boundaries (for example, Wisconsin), metropolitan areas (for example, Metropolitan 

St. Louis, MO), portions of a metropolitan area (for example, Manhattan), or rest-of-state 

areas that exclude metropolitan areas (for example, Rest of Missouri). This locality 

configuration is used to calculate the GPCIs that are in turn used to calculate payments 

for physicians’ services under the PFS. 

As stated in the CY 2011 PFS final rule with comment period (75 FR 73261), we 

require that changes to the PFS locality structure be done in a budget neutral manner 

within a state. For many years, before making any locality changes, we have sought 

consensus from among the professionals whose payments would be affected. In recent 

years, we have also considered more comprehensive changes to locality configuration. In 

2008, we issued a draft comprehensive report detailing four different locality 

configuration options 

(www.cms.gov/physicianfeesched/downloads/ReviewOfAltGPCIs.pdf). The alternative 

locality configurations in the report are described below. 

● Option 1: CMS Core-Based Statistical Area (CBSA) Payment Locality 

Configuration: CBSAs are a combination of Office of Management and Budget (OMB’s) 

Metropolitan Statistical Areas (MSAs) and Micropolitan Statistical Areas. Under this 

option, MSAs would be considered as urban CBSAs. Micropolitan Statistical Areas (as 

defined by OMB) and rural areas would be considered as non-urban (rest of state) 

CBSAs. This approach would be consistent with the areas used in the Inpatient 

Prospective Payment System (IPPS) pre-reclassification wage index, which is the 

hospital wage index for a geographic area (CBSA or non-CBSA) calculated from 

submitted hospital cost report data before statutory adjustments reconfigure, or 
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“reclassify” a hospital to an area other than its geographic location, to adjust payments 

for differences in local resource costs in other Medicare payment systems. Based on data 

used in the 2008 locality report, this option would increase the number of PFS localities 

from 89 to 439. 

● Option 2: Separate High-Cost Counties from Existing Localities (Separate 

Counties): Under this approach, higher cost counties are removed from their existing 

locality structure, and they would each be placed into their own locality. This option 

would increase the number of PFS localities from 89 to 214, using a 5 percent GAF 

differential to separate high-cost counties. 

● Option 3: Separate MSAs from Statewide Localities (Separate MSAs): This 

option begins with statewide localities and creates separate localities for higher cost 

MSAs (rather than removing higher cost counties from their existing locality as described 

in Option 2). This option would increase the number of PFS localities from 89 to 130, 

using a 5 percent GAF differential to separate high-cost MSAs. 

● Option 4: Group Counties Within a State Into Locality Tiers Based on Costs 

(Statewide Tiers): This option creates tiers of counties (within each state) that may or 

may not be contiguous but share similar practice costs. This option would increase the 

number of PFS localities from 89 to 140, using a 5 percent GAF differential to group 

similar counties into statewide tiers. 

For a detailed discussion of the public comments on the contractor’s 2008 draft 

report detailing four different locality configurations, we refer readers to the CY 2010 

PFS proposed rule (74 FR 33534) and subsequent final rule with comment period (74 FR 

61757). There was no public consensus on the options, although a number of 

commenters expressed support for Option 3 (separate MSAs from statewide localities) 
CMS-1600-P 157 

because the commenters believed this alternative would improve payment accuracy and 

could mitigate potential reductions to rural areas compared to Option 1 (CMS CBSAs). 

In response to some public comments regarding the third of the four locality 

options, we had our contractor conduct an analysis of the impacts that would result from 

the application of Option 3. Those results were displayed in the final locality report 

released in 2011. The final report, entitled “Review of Alternative GPCI Payment 

Locality Structures – Final Report,” may be accessed directly from the CMS website at 

www.cms.gov/PhysicianFeeSched/downloads/Alt_GPCI_Payment_Locality_Structures_

Review.pdf. 

Moreover, at our request, the Institute of Medicine conducted a comprehensive 

empirical study of the Medicare GAFs established under sections 1848(e) (PFS GPCI) 

and 1886(d)(3)(E) (IPPS hospital wage index) of the Act. These adjustments are 

designed to ensure Medicare payments reflect differences in input costs across 

geographic areas. The first of the Institute of Medicine’s two reports entitled, 

“Geographic Adjustment in Medicare Payment, Phase I: Improving Accuracy'' 

recommended that the same labor market definition should be used for both the hospital 

wage index and the physician geographic adjustment factor. Further, the Institute of 

Medicine recommended that MSAs and statewide non-metropolitan statistical areas 

should serve as the basis for defining these labor markets. 

Under the Institute of Medicine’s recommendations, MSAs would be considered 

as urban CBSAs. Micropolitan Areas (as defined by the OMB) and rural areas would be 

considered as non-urban (rest of State) CBSAs. This approach would be consistent with 

the areas used in the IPPS pre-reclassification wage index to make geographic payment 

adjustments in other Medicare payment systems. For more information on the Institute of 
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Medicine’s recommendations on the PFS locality structure, see the CY 2013 PFS final 

rule with comment period (77 FR 68949). We also provided our technical analyses of the 

Institute of Medicine Phase I recommendations in a report released on the PFS website at 

www.cms.gov/PhysicianFeeSched. 

Additionally, the Phase I report can be accessed on the Institute of Medicine's 

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

b. Institute of Medicine Phase II Report Discussion 

The Institute of Medicine’s second report, entitled “Geographic Adjustment in 

Medicare Payment - Phase II: Implications for Access, Quality, and Efficiency” was 

released July 17, 2012 and can be accessed on the Institute of Medicine’s 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 distribution of the health care workforce, quality of care, 

population health, and the ability to provide efficient, high value care. The Institute of 

Medicine’s Phase II report also included an analysis of the impacts of implementing its 

recommendations for accuracy in geographic adjustments which include a CBSA-based 

locality structure under the PFS. The Institute of Medicine analysis found that adopting a 

CBSA-based locality structure under the PFS creates large changes in county GAF values; 

for example, approximately half of all US counties would experience a payment reduction. 

The Institute of Medicine also found that GPCIs calculated under a CBSA-based locality 

structure would result in lower GAFs in rural areas (relative to the national average) because 
CMS-1600-P 159 

the GPCI values for rural areas would no longer include metropolitan practice costs within 

the current “rest-of-state” or “statewide” localities. 

(1) Institute of Medicine Phase II Report Recommendations 

The Institute of Medicine developed recommendations for improving access to and 

quality of medical care. The recommendations included in the Institute of Medicine’s Phase 

II report are summarized as follows: 

● Recommendation 1: The Medicare program should develop and apply policies 

that promote access to primary care services in geographic areas where Medicare 

beneficiaries experience persistent access problems. 

● Recommendation 2: The Medicare program should pay for services that 

improve access to primary and specialty care for beneficiaries in medically underserved 

urban and rural areas, particularly telehealth technologies. 

● Recommendation 3: To promote access to appropriate and efficient primary 

care services, the Medicare program should support policies that would allow all 

qualified practitioners to practice to the full extent of their educational preparation. 

● Recommendation 4: The Medicare program should reexamine its policies that 

provide location-based adjustments for specific groups of hospitals, and modify or 

discontinue them based on their effectiveness in ensuring adequate access to appropriate 

care. 

● Recommendation 5: Congress should fund an independent ongoing entity, 

such as the National Health Care Workforce Commission, to support data collection, 

research, evaluations, and strategy development, and make actionable recommendations 

about workforce distribution, supply, and scope of practice. 
CMS-1600-P 160 

● Recommendation 6: Federal support should facilitate independent external 

evaluations of ongoing workforce programs intended to provide access to adequate health 

services for underserved populations and Medicare beneficiaries. These programs 

include the National Health Services Corps, Title VII and VIII programs under the Public 

Health Service Act, and related programs intended to achieve these goals. 

(2) Institute of Medicine Phase II Report Conclusions 

The Institute of Medicine committee concluded that geographic payment adjustments 

under the PFS are not a strong determinant of access problems and not an appropriate 

mechanism for improving the distribution of the healthcare workforce, quality of care, 

population health, and the ability to provide efficient, high value care. Specifically, the 

Institute of Medicine committee stated “that there are wide discrepancies in access to and 

quality of care across geographic areas particularly for racial and ethnic minorities. 

However, the variations do not appear to be strongly related to differences in or potential 

changes to fee for service payment” (Page. 6). The committee also concluded “that Medicare 

beneficiaries in some geographic pockets face persistent access and quality problems, and 

many of these pockets are in medically underserved rural and inner-city areas. However, 

geographic adjustment of Medicare payment is not an appropriate approach for addressing 

problems in the supply and distribution of the health care workforce. The geographic 

variations in the distribution of physicians, nurses and physician assistants, and local 

shortages that create access problems for beneficiaries should be addressed through other 

means” (Page. 7). Moreover, the committee concluded that “geographic [payment] 

adjustment is not an appropriate tool for achieving policy goals such as improving quality of 

expanding the pool of providers available to see Medicare beneficiaries” (Page. 9). 

(3) CMS Summary Response to Institute of Medicine Phase II Report 
CMS-1600-P 161 

The Institute of Medicine’s Phase II report recommendations are broad in scope, 

do not propose specific recommendations for making changes to the GPCIs or PFS 

locality structure, or are beyond the statutory authority of CMS. 

We agree with the Institute of Medicine’s assessment that many counties would 

experience a payment reduction and that large payment shifts would occur as a result of 

implementing a CBSA-based locality configuration under the PFS. Based on our 

contractor’s analysis, there would be significant redistributive impacts if we were to 

implement a policy that would reconfigure the PFS localities based on the Institute of 

Medicine’s CBSA-based locality recommendation. Many rural areas would see 

substantial decreases in their corresponding GAF and GPCI values as higher cost 

counties are removed from current “rest of state” payment areas. Conversely, many 

urban areas, especially those areas that are currently designated as “rest of state” but are 

located within higher cost MSAs, would experience increases in their applicable GPCIs 

and GAFs. That is, given that urban and rural areas would no longer be grouped together 

(for example, as in the current 34 statewide localities), many rural areas would see a 

reduction in payment under a CBSA-based locality configuration. 

As noted earlier in this section, we are assessing a variety of approaches to changing 

the locality structure under the PFS and will continue to study options for revising the 

locality structure. However, to fully assess the implications of proposing a nationwide 

locality reconfiguration under the PFS, we must also assess and analyze the operational 

changes necessary to implement a revised locality structure. Given that all options under 

consideration (including the Institute of Medicine’s CBSA-based approach) would expand 

the number of current localities and result in payment reductions to primarily rural areas, 

presumably any nationwide locality reconfiguration could potentially be transitioned over a 
CMS-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, transitioning from the current locality structure to a 

nationwide reconfigured locality structure would present operational and administrative 

challenges that need to be identified and addressed. Therefore, we have begun to assess the 

broad operational changes that would be involved in implementing a nationwide locality 

reconfiguration under the PFS. Accordingly, we believe that it would be premature to make 

any statements about potential changes we would consider making to the PFS localities at 

this time. Any changes to PFS fee schedule areas would be made through future notice and 

comment rulemaking. 

 In the event that we develop a specific proposal for changing the locality 

configuration during future rulemaking, we would provide detailed analysis on the impact 

of the changes for physicians in each county. 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, Medicare coverage for services delivered via a 

telecommunications system was limited to services that did not require a face-to-face 

encounter under the traditional model of medical care. Examples of these services 

included interpretation of an x-ray, electroencephalogram tracing, and cardiac pacemaker 

analysis. 

Section 4206 of the BBA provided for coverage of, and payment for, consultation 

services delivered via a telecommunications system to Medicare beneficiaries residing in 

rural health professional shortage areas (HPSAs) as defined by the Public Health Service 

Act. Additionally, the BBA required that a Medicare practitioner (telepresenter) be with 

the patient at the time of a teleconsultation. Further, the BBA specified that payment for 

a teleconsultation had to be shared between the consulting practitioner and the referring 

practitioner and could not exceed the fee schedule payment that would have been made to 

the consultant for the service furnished. The BBA prohibited payment for any telephone 

line charges or facility fees associated with the teleconsultation. We implemented this 

provision in the CY 1999 PFS final rule with comment period (63 FR 58814). 

Effective October 1, 2001, section 223 of the Medicare, Medicaid and SCHIP 

Benefits Improvement Protection Act of 2000 (BIPA) (Pub. L. 106-554) added section 

1834(m) to the Act, which significantly expanded Medicare telehealth services. Section 

1834(m)(4)(F)(i) of the Act defines Medicare telehealth services to include consultations, 

office visits, office psychiatry services, and any additional service specified by the 

Secretary, when delivered via a telecommunications system. We first implemented this 
CMS-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 Secretary to establish a process that provides for 

annual updates to the list of Medicare telehealth services. We established this process in 

the CY 2003 PFS final rule with comment period (67 FR 79988). 

As specified in regulations at §410.78(b), we generally require that a telehealth 

service be furnished via an interactive telecommunications system. Under §410.78(a)(3), 

an interactive telecommunications system is defined as, “multimedia communications 

equipment that includes, at a minimum, audio and video equipment permitting two-way, 

real-time interactive communication between the patient and distant site physician or 

practitioner. Telephones, facsimile machines, and electronic mail systems do not meet 

the definition of an interactive telecommunications system.” An interactive 

telecommunications system is generally required as a condition of payment; however, 

section 1834(m)(1) of the Act allows the use of asynchronous “store-and-forward” 

technology when the originating site is a federal telemedicine demonstration program in 

Alaska or Hawaii. As specified in regulations at §410.78(a)(1), store-and-forward means 

the asynchronous transmission of medical information from an originating site to be 

reviewed at a later time by the practitioner at the distant site. 

Medicare telehealth services may be furnished to an eligible telehealth individual 

notwithstanding the fact that the practitioner furnishing the telehealth service is not at the 

same location as the beneficiary. An eligible telehealth individual means an individual 

enrolled under Part B who receives a telehealth service furnished at an originating site. 

Under the BIPA, originating sites were limited under section 1834(m)(3)(C) of the Act to 

specified medical facilities located in specific geographic areas. The initial list of 

telehealth originating sites included the office of a practitioner, a critical access hospital 
CMS-1600-P 165 

(CAH), a rural health clinic (RHC), a federally qualified health center (FQHC) and a 

hospital (as defined in section 1861(e) of the Act). More recently, section 149 of the 

Medicare Improvements for Patients and Providers Act of 2008 (Pub. L. 110-275) 

(MIPPA) expanded the list of telehealth originating sites to include a hospital-based renal 

dialysis center, a skilled nursing facility (SNF), and a community mental health center 

(CMHC). To serve as a telehealth originating site, a site must also be located in an area 

designated as a rural HPSA, in a county that is not in a metropolitan statistical area 

(MSA), or must be an entity that participates in a federal telemedicine demonstration 

project that has been approved by (or receives funding from) the Secretary as of 

December 31, 2000. Finally, section 1834(m) of the Act does not require the eligible 

telehealth individual to be with a telepresenter at the originating site. 

b. Current Telehealth Billing and Payment Policies

As noted previously, Medicare telehealth services can only be furnished to an 

eligible telehealth beneficiary in a qualifying originating site. An originating site is defined 

as one of the specified sites where an eligible telehealth individual is located at the time the 

service is being furnished via a telecommunications system. The originating sites 

authorized by the statute are as follows: 

● Offices of a physician or practitioner; 

● Hospitals; 

● CAHs; 

● RHCs; 

● FQHCs; 

● Hospital-Based or Critical Access Hospital-Based Renal Dialysis Centers 

(including Satellites); 
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 medical nutrition therapy (MNT); 

● Neurobehavioral status exam; 

● Individual and group health and behavior assessment and intervention (HBAI); 

● Subsequent hospital care; 

● Subsequent nursing facility care; 

● Individual and group kidney disease education (KDE); 

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

● Smoking cessation services; 

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

● Screening and behavioral counseling interventions in primary care to reduce 

alcohol misuse; 

● Screening for depression in adults; 

● Screening for sexually transmitted infections (STIs) and high intensity 

behavioral counseling (HIBC) to prevent STIs; 
CMS-1600-P 167 

● Intensive behavioral therapy for cardiovascular disease; and 

● Behavioral counseling for obesity. 

In general, the practitioner at the distant site may be any of the following, 

provided that the practitioner is licensed under state law to furnish the service via a 

telecommunications system: 

● Physician; 

● Physician assistant (PA); 

● Nurse practitioner (NP); 

● Clinical nurse specialist (CNS); 

● Nurse-midwife; 

● Clinical psychologist; 

● Clinical social worker; 

● Registered dietitian or nutrition professional. 

Practitioners furnishing Medicare telehealth services submit claims for telehealth 

services to the Medicare contractors that process claims for the service area where their 

distant site is located. Section 1834(m)(2)(A) of the Act requires that a practitioner who 

furnishes a telehealth service to an eligible telehealth individual be paid an amount equal 

to the amount that the practitioner would have been paid if the service had been furnished 

without the use of a telecommunications system. Distant site practitioners must submit 

the appropriate HCPCS procedure code for a covered professional telehealth service, 

appended with the –GT (via interactive audio and video telecommunications system) or –

GQ (via asynchronous telecommunications system) modifier. By reporting the –GT or –

GQ modifier with a covered telehealth procedure code, the distant site practitioner 

certifies that the beneficiary was present at a telehealth originating site when the 

telehealth service was furnished. The usual Medicare deductible and coinsurance policies 

apply to the telehealth services reported by distant site practitioners. 
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 site facility fee, the provider or supplier where 

the eligible telehealth individual is located must submit a claim with HCPCS code Q3014 

(telehealth originating site facility fee), and the provider or supplier is paid according to 

the applicable payment methodology for that facility or location. The usual Medicare 

deductible and coinsurance policies apply to HCPCS code Q3014. By submitting 

HCPCS code Q3014, the originating site certifies that it is located in either a rural HPSA 

or non-MSA county or is an entity that participates in a federal telemedicine 

demonstration project that has been approved by (or receives funding from) the Secretary 

as of December 31, 2000 as specified in section 1834(m)(4)(C)(i)(III) of the Act. 

As previously described, certain professional services that are commonly 

furnished remotely using telecommunications technology, but that do not require the 

patient to be present in-person with the practitioner when they are furnished, are covered 

and paid in the same way as services delivered without the use of telecommunications 

technology when the practitioner is in-person at the medical facility furnishing care to the 

patient. Such services typically involve circumstances where a practitioner is able to 

visualize some aspect of the patient’s condition without the patient being present and 

without the interposition of a third person’s judgment. Visualization by the practitioner 

can be possible by means of x-rays, electrocardiogram or electroencephalogram tracings, 

tissue samples, etc. For example, the interpretation by a physician of an actual 

electrocardiogram or electroencephalogram tracing that has been transmitted via 

telephone (that is, electronically, rather than by means of a verbal description) is a 

covered physician’s service. These remote services are not Medicare telehealth services 

as defined under section 1834(m) of the Act. Rather, these remote services that utilize 
CMS-1600-P 169 

telecommunications technology are considered physicians’ services in the same way as 

services that are furnished in-person without the use of telecommunications technology; 

they are paid under the same conditions as in-person physicians’ services (with no 

requirements regarding permissible originating sites), and should be reported in the same 

way (that is, without the –GT or –GQ modifier appended). 

c. Geographic Criteria for Originating Site Eligibility 

Section 1834(m)(4)(C)(i)(I) – (III) of the Act specifies three criteria for the 

location of eligible telehealth originating sites. One of these is for entities participating in 

federal telemedicine demonstration projects as of December 31, 2000, and the other two 

are geographic. One of the geographic criteria is that the site is located in a county that is 

not in an MSA and the other is that the site is located in an area that is designated as a 

rural HPSA under section 332(a)(1)(A) of the Public Health Service Act (PHSA) (42 

U.S.C. 254e(a)(1)(A)). Section 332(a)(1)(A) of the PHSA provides for the designation of 

various types of HPSAs, but does not provide for “rural” HPSAs. In the absence of 

guidance in the PHSA, CMS has in the past interpreted the term “rural” under section 

1834(m)(4)(C)(i)(I) to mean an area that is not located in an MSA. As such, the current 

geographic criteria for telehealth originating sites limits eligible sites to those that are not 

in an MSA. 

To determine rural designations with more precision, HHS and CMS have 

sometimes used methods that do not rely solely on MSA designations. For example, the 

Office of Rural Health Policy (ORHP) uses the Rural Urban Commuting Areas (RUCAs) 

to determine rural areas within MSAs. RUCAs are a census tract-based classification 

scheme that utilizes the standard Bureau of Census Urbanized Area and Urban Cluster 

definitions in combination with work commuting information to characterize all of the 
CMS-1600-P 170 

nation's census tracts regarding their rural and urban status and relationships. They were 

developed under a collaborative project between ORHP, the U.S. Department of 

Agriculture's Economic Research Service (ERS), and the WWAMI Rural Health 

Research Center (RHRC). A more comprehensive description is available at the USDA 

ERS 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 primary code numbers (1 through 10) refer to 

the primary, or single largest, commuting share. Census tracts with RUCA codes of 4 

through 10 refer to areas with a primary commuting share outside of a metropolitan area. 

In addition to counties that are not in an MSA, ORHP considers some census tracts in 

MSA counties to be rural. Specifically, census tracts with RUCA codes 4 through 10 are 

considered to be rural, as well as census tracts with RUCA codes 2 and 3 that are also at 

least 400 square miles and have a population density of less than 35 people per square 

mile. 

We 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 include geographic areas located in rural census tracts within 

MSAs would allow for the appropriate inclusion 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 policy so that geographic eligibility for an 

originating site would be established and maintained on an annual basis, consistent with 

other telehealth payment policies. Absent this proposed change, the status of a 
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geographic area’s eligibility for telehealth originating site payment is effective at the 

same time as the effective date for changes in designations that are made outside of CMS. 

This proposed change would reduce the likelihood that mid-year changes to geographic 

designations would result in sudden disruptions to beneficiaries’ access to services, 

unexpected changes in eligibility for established telehealth originating sites and avoid the 

operational difficulties associated with administering with mid-year Medicare telehealth 

payment changes. We are proposing to establish geographic eligibility for Medicare 

telehealth originating sites for each calendar year based upon the status of the area as of 

December 31st of the prior calendar year. Accordingly, we are proposing to revise our 

regulations at §410.78(b)(4) to conform with 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 process provides the public with an ongoing 

opportunity to submit requests for adding services. We assign any request to make 

additions to the list of telehealth services to one of two categories. In the November 28, 

2011 Federal Register (76 FR 73102), we finalized revisions to criteria that we use to 

review requests in the second category. The two categories are: 

● Category 1: Services that are similar to professional consultations, office 

visits, and office psychiatry services that are currently on the list of telehealth services. 

In reviewing these requests, we look for similarities between the requested and existing 

telehealth services for the roles of, and interactions among, the beneficiary, the physician 

(or other practitioner) at the distant site and, if necessary, the telepresenter. We also look 

for similarities in the telecommunications system used to deliver the proposed service, for 
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example, the use of interactive audio and video equipment. 

● Category 2: Services that are not similar to the current list of telehealth 

services. Our review of these requests includes an assessment of whether the service is 

accurately described by the corresponding code when delivered via telehealth and 

whether the use of a telecommunications system to deliver the service produces 

demonstrated clinical benefit to the patient. In reviewing these requests, we look for 

evidence indicating that the use of a telecommunications system in delivering the 

candidate telehealth service produces clinical benefit to the patient. Submitted evidence 

should include both a description of relevant clinical studies that demonstrate the service 

furnished by telehealth to a Medicare beneficiary improves the diagnosis or treatment of 

an illness or injury or improves the functioning of a malformed body part, including dates 

and findings, and a list and copies of published peer reviewed articles relevant to the 

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

not include minor or incidental benefits. 

Some examples of clinical benefit include the following: 

● Ability to diagnose a medical condition in a patient population without access 

to clinically appropriate in-person diagnostic services. 

● Treatment option for a patient population without access to clinically 

appropriate in-person treatment options. 

● Reduced rate of complications. 

● Decreased rate of subsequent diagnostic or therapeutic interventions (for 

example, due to reduced rate of recurrence of the disease process). 

● Decreased number of future hospitalizations or physician visits. 

● More rapid beneficial resolution of the disease process treatment. 
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● Decreased pain, bleeding, or other quantifiable symptom. 

● Reduced recovery time. 

Since establishing the process to add or remove services from the list of approved 

telehealth services, we have added the following to the list of Medicare telehealth 

services: individual and group HBAI services; psychiatric diagnostic interview 

examination; ESRD services with 2 to 3 visits per month and 4 or more visits per month 

(although we require at least 1 visit a month to be furnished in-person by a physician, 

CNS, NP, or PA to examine the vascular access site); individual and group MNT; 

neurobehavioral status exam; initial and follow-up inpatient telehealth consultations for 

beneficiaries in hospitals and skilled nursing facilities (SNFs); subsequent hospital care 

(with the limitation of one telehealth visit every 3 days); subsequent nursing facility care 

(with the limitation of one telehealth visit every 30 days); individual and group KDE; and 

individual and group DSMT (with a minimum of 1 hour of in-person instruction to ensure 

effective injection training), smoking cessation services; alcohol and/or substance abuse 

and brief intervention services; screening and behavioral counseling interventions in 

primary care to reduce alcohol misuse; screening for depression in adults; screening for 

sexually transmitted infections (STIs) and high intensity behavioral counseling (HIBC) to 

prevent STIs; intensive behavioral therapy for cardiovascular disease; and behavioral 

counseling for obesity. 

Requests to add services to the list of Medicare telehealth services must be 

submitted and received no later than December 31 of each calendar year to be considered 

for the next rulemaking cycle. For example, requests submitted before the end of 

CY 2013 will be considered for the CY 2015 proposed rule. Each request for adding a 

service to the list of Medicare telehealth services must include any supporting 
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documentation the requester wishes us to consider as we review the request. Because we 

use the annual PFS rulemaking process as a vehicle for making changes to the list of 

Medicare telehealth services, requestors should be advised that any information 

submitted is subject to public disclosure for this purpose. For more information on 

submitting a request for an addition to the list of Medicare telehealth services, including 

where to mail these requests, we refer readers to the CMS 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 additions to the CY 2014 telehealth list. 

a. Submitted Requests 

The American Telemedicine Association (ATA) submitted a request to add CPT 

codes 98969 (Online assessment and management service provided by a qualified 

nonphysician health care professional to an established patient, guardian, or health care 

provider not originating from a related assessment and management service provided 

within the previous 7 days, using the Internet or similar electronic communications 

network) and 99444 (Online evaluation and management service provided by a physician 

to an established patient, guardian, or health care provider not originating from a related 

E/M service provided within the previous 7 days, using the Internet or similar electronic 

communications network) to the list of Medicare telehealth services. 

As we explained in the CY 2008 PFS final rule with comment period (72 FR 

66371), we assigned a status indicator of ‘‘N’’ (Non-covered service) to these services 
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because: (1) these services are non-face-to-face; and (2) the code descriptor includes 

language that recognizes the provision of services to parties other than the beneficiary 

and for whom Medicare does not provide coverage (for example, a guardian). Under 

section 1834(m)(2)(A) of the Act, Medicare pays the physician or practitioner furnishing 

a telehealth service an amount equal to the amount that would have been paid if the 

service was furnished without the use of a telecommunications system. Because CPT 

codes 98969 and 99444 are currently noncovered, there would be no Medicare payment if 

these services were furnished without the use of a telecommunications system. Since 

these codes are noncovered services for which no payment may be made under Medicare, 

we are not proposing to add online evaluation and management services to the list of 

Medicare Telehealth Services for CY 2014. 

b. Other Additions 

 Under our existing policy, we add services to the telehealth list on a category 1 

basis when we determine that they are similar to services on the existing telehealth list 

with respect to the roles of, and interactions among, the beneficiary, physician (or other 

practitioner) at the distant site and, if necessary, the telepresenter. As we stated in the CY 

2012 proposed rule (76 FR 42826), we believe that the category 1 criteria not only 

streamline our review process for publically requested services that fall into this category, 

the criteria also expedite our ability to identify codes for the telehealth list that resemble 

those services already on this list. 

For CY 2013, CMS finalized a payment policy for new CPT code 99495 

(Transitional care management services with the following required elements: 

Communication (direct contact, telephone, electronic) with the patient and/or caregiver 

within 2 business days of discharge medical decision making of at least moderate 
CMS-1600-P 176 

complexity during the service period face-to-face visit, within 14 calendar days of 

discharge) and CPT code 99496 (Transitional care management services with the 

following required elements: Communication (direct contact, telephone, electronic) with 

the patient and/or caregiver within 2 business days of discharge medical decision making 

of high complexity during the service period face-to-face visit, within 7 calendar days of 

discharge). These services are for a patient whose medical and/or psychosocial problems 

require moderate or high complexity medical decision making during transitions in care 

from an inpatient hospital setting (including acute hospital, rehabilitation hospital, longterm acute care hospital), partial hospitalization, observation status in a hospital, or 

skilled nursing facility/nursing facility, to the patient’s community setting (home, 

domiciliary, rest home, or assisted living). Transitional care management is comprised of 

one face-to-face visit within the specified time frames following a discharge, in 

combination with non-face-to-face services that may be performed by the physician or 

other qualified health care professional and/or licensed clinical staff under his or her 

direction. 

We believe that 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, and do not require the patient to be present in-person 
CMS-1600-P 177 

with the practitioner when they are furnished. As such, we do not need to consider 

whether the non-face-to-face aspects of the TCM service are similar to other telehealth 

services. Were these components of the TCM services separately billable, they would 

not need to be on the telehealth list to be covered and paid in the same way as services 

delivered without the use of telecommunications technology. Therefore, we 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 telehealth frequency limitation for subsequent 

nursing facility services reported by CPT codes 99307 through 99310. Subsequent 

nursing facility services were added to the list of Medicare telehealth services in the CY 

2011 PFS final rule (75 FR 73317 through 73318), with a limitation of one telehealth 

subsequent nursing facility care service every 30 days. In the CY 2011 PFS final rule (75 

FR 73615) we noted that, as specified in our regulation at §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 frequency limitation be removed due to “recent 

federal telecommunications policy changes” and newly available information from recent 

studies. Specifically, the ATA pointed to the Federal Communications Commission 

(FCC) pilot funding of a program to facilitate the creation of a nationwide broadband 

network dedicated to health care, connecting public and private non-profit health care 

providers in rural and urban locations, and a series of studies that demonstrated the value 
CMS-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 services. We discussed our complementary commitments to 

ensuring that SNF residents, given their potential clinical acuity, continue to receive inperson visits as appropriate to manage their complex care and to make sure that Medicare 

pays only for medically reasonable and necessary care. To meet these commitments, we 

believed it was appropriate to limit the provision of subsequent nursing facility care 

services furnished through telehealth to once every 30 days. 

We then reviewed the publicly available information regarding both the FCC pilot 

program and the ATA-referenced studies in light of the previously stated commitments to 

assess whether these developments warrant a change in 30-day frequency limitation 

policy. Based on our review of the FCC demonstration project and the studies referenced 

in the request, we found no information regarding the relative clinical benefits of SNF 

subsequent care when furnished via telehealth more frequently than once every 30 days. 

We did note that the FCC information reflected an aim to improve access to medical 

specialists in urban areas for rural health care providers, and that medical specialists in 

urban areas can continue to use the inpatient telehealth consultation HCPCS G-codes 

(specifically G0406, G0407, G0408, G0425, G0426, or G0427) when reporting medically 

reasonable and necessary consultations furnished to SNF residents via telehealth without 

any frequency limitation. 

We also reviewed the studies referenced by the ATA to assess whether they 

provided evidence that more frequent telehealth visits would appropriately serve this 

particular population given the potential medical acuity and complexity of patient needs. 
CMS-1600-P 179 

We did not find any such evidence in the studies. Three of the studies identified by the 

ATA were not directly relevant to SNF subsequent care services. One of these focused 

on using telehealth technology to treat patients with pressure ulcers after spinal cord 

injuries. The second focused on the usefulness of telehealth technology for patients 

receiving home health care services. A third study addressed the use of interactive 

communication technology to facilitate the coordination of care between hospital and 

SNF personnel on the day of hospital discharge. The ATA also mentioned a peerreviewed presentation delivered at its annual meeting related to SNF patient care, 

suggesting that the presentation demonstrated that telehealth visits are better for SNF 

patients than in-person visits to emergency departments or, in some cases, visits to 

physician offices. Although we did not have access to the full presentation it does not 

appear to address subsequent nursing facility services, so we do not believe this is 

directly relevant to the clinical benefit of SNF subsequent care furnished via telehealth. 

More importantly, none of these studies addresses the concerns we have expressed about 

the possibility that nursing facility subsequent care visits furnished too frequently through 

telehealth rather than in-person could compromise care for this potentially acute and 

complex patient population. 

We remain committed to ensuring that SNF inpatients receive appropriate inperson visits and that Medicare pays only for medically reasonable and necessary care. 

We are not persuaded by the information submitted by the ATA that it would be 

beneficial or advisable to remove the frequency limitation we established for SNF 

subsequent care when furnished via telehealth. Because we want to ensure that nursing 

facility patients with complex medical conditions have appropriately frequent, medically 

reasonable and necessary encounters with their admitting practitioner, we continue to 
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believe that it is appropriate for some subsequent nursing facility care services to be 

furnished through telehealth. At the same time, because of the potential acuity and 

complexity of SNF inpatients, we remain committed to ensuring that these patients 

continue to receive in-person, hands-on visits as appropriate to manage their care. 

Therefore, we are not proposing any changes to the limitations regarding SNF subsequent 

care services furnished via 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 annual, 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 another separate therapy cap for physical therapy 

(PT) and speech-language pathology (SLP) services combined. 

Until October 1, 2012, the therapy caps applied to all outpatient therapy services 

except those 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 section 1833(a)(8)(B) of the 

Act as the “outpatient hospital services exemption.” Section 3005(b) of the MCTRJCA 

added section 1833(g)(6) of the Act to temporarily suspend the outpatient hospital 

services exemption, thereby requiring that the therapy caps apply to services described 

under section 1833(a)(8)(B) of the Act from October 1, 2012 to December 31, 2012 for 

services furnished during 2012. This broadened application of the therapy caps was 

extended through December 31, 2013, by section 603(a) of the ATRA. In addition, 

section 603(b) of the ATRA amended section 1833(g)(6) of the Act to specify that during 

CY 2013, for outpatient therapy services paid under section 1834(g) of the Act (those 

furnished by a critical access hospital (CAH)), we must count towards the therapy caps 

the amount that would be payable for the services under Medicare Part B if the services 

were paid as outpatient therapy services under section 1834(k)(1)(B) of the Act, which 

describes payment for outpatient therapy services furnished by hospitals and certain other 

entities, instead of as CAH outpatient therapy services under section 1834(g) of the Act. 
CMS-1600-P 182 

Payment for outpatient therapy services under section 1834(k)(1)(B) of the Act is made at 

80 percent of the lesser of the actual charge for the services or the applicable fee schedule 

amount as defined in section 1834(k)(3) of the Act. Section 1834(k)(3) of the Act defines 

applicable fee schedule to mean the payment amount determined under a fee schedule 

established under section 1848 of the Act, which refers to the PFS, or an amount under a 

fee schedule for comparable services as the Secretary specifies. The PFS is 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 specified that nothing in the amendments to 

section 1833(g)(6) of the Act “shall be construed as changing the method of payment for 

outpatient therapy services under 1834(g) of the Act.” 

Since CY 2011, a therapy multiple procedure payment reduction (MPPR) policy 

has applied to the second and subsequent “always therapy” services billed on the same 

date of service for one patient by the same practitioner or facility under the same NPI. 

Prior to April 1, 2013, the therapy MPPR reduced the practice expense portion of officebased services by 20 percent and reduced the 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 specify 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 by 
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CAHs during CY 2013 are counted towards the therapy caps using the amount that would 

be paid for those services under section 1834(k)(1)(B) of the Act, which is how 

outpatient therapy services furnished by hospitals and certain other entities 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 applicable 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 with the statutory amendments made by the 

ATRA. Including the therapy MPPR in calculating incurred expenses for therapy 

services furnished by CAHs treats CAH services consistently with services furnished in 

other applicable settings. Therefore, therapy services furnished by CAHs during CY 

2013 count towards the therapy caps using the amount that would be payable under 

section 1834(k)(1)(B) of the Act, which includes an applicable MPPR. For a list of the 

“always therapy” codes subject to the therapy MPPR policy, see Addendum H of this 

proposed rule. 

The therapy cap amounts under section 1833(g) of the Act are updated each year 

based on the Medicare Economic Index (MEI). Specifically, the annual caps are 

calculated by updating the previous year’s cap by the MEI for the upcoming calendar 

year and rounding to the nearest $10 as specified in section 1833(g)(2)(B) of the Act. 

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 section 5107 of the Deficit Reduction Act of 

2005 (DRA), which amended section 1833(g)(5) of the Act, the exceptions process for 
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the therapy caps has been continuously extended several times through subsequent 

legislation (MIEA-TRHCA, MMSEA, MIPPA, the Affordable Care Act, MMEA, 

TPTCCA, and MCTRJCA). Last amended by section 603(a) of the ATRA, the Agency’s 

current authority to provide an exceptions process for therapy caps expires on December 

31, 2013. After expenses incurred for the beneficiary’s services for the year have 

exceeded the therapy cap, therapy suppliers and providers use the KX modifier on claims 

for services to request an exception to the therapy caps. By use of the KX modifier, the 

therapist is attesting that the services above the therapy cap are reasonable and necessary 

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

medical record. 

Under section 1833(g)(5)(C) of the Act, added by the MCTRJCA and extended 

through 2013 by the ATRA, we are required to apply a manual medical review process to 

therapy claims when a beneficiary’s incurred expenses exceed a threshold amount of 

$3,700. There are two separate thresholds of $3,700, just as there are two therapy caps, 

and incurred expenses are counted toward the thresholds in the same manner as the caps. 

Under the statute, the required application of the manual medical review process expires 

December 31, 2013. For information on the manual medical review process, go to 

www.cms.gov/Research-Statistics-Data-and-Systems/Monitoring-Programs/MedicalReview/TherapyCap.html. 

2. Proposed Application of Therapy Caps to Services furnished by CAHs 

Section 4541 of the BBA amended section 1833(g) of the Act to create the 

therapy caps discussed above. This BBA provision applied the therapy caps to outpatient 

therapy services described at section 1861(p) of the Act except for the outpatient therapy 

services described in section 1833(a)(8)(B) of the Act. Section 1833(a)(8)(B) of the Act 
CMS-1600-P 185 

refers to therapy services furnished by a hospital to an outpatient, to services furnished to 

a hospital inpatient who has exhausted, or is not entitled to, benefits under Part A; and to 

these same services when furnished by an entity under arrangements with a hospital. 

Payment for the services described under section 1833(a)(8)(B) of the Act is made under 

section 1834(k)(1)(B) of the Act. 

Section 4201 of the BBA amended section 1820 of the Act to require a process 

for establishment of CAHs. Payment for CAH outpatient services is described under 

section 1834(g) of the Act. 

When we proposed language to implement the BBA provision establishing 

therapy caps in the CY 1999 PFS proposed rule, we indicated in the preamble that the 

therapy caps do not apply to therapy services furnished directly or under arrangements by 

a hospital or CAH to an outpatient or to an inpatient who is not in a covered Part A stay 

(63 FR 30818, 30858). We included a similar statement in the preamble to the final rule; 

however, we did not include the same reference to CAHs in that sentence in the CY 1999 

PFS final rule with comment period (63 FR 58814, 58865). In the CY 1999 PFS final 

rule with comment period, we also stated generally that the therapy caps apply only to 

items and services furnished by nonhospital providers and therapists (63 FR 58865). In 

the CY 1999 proposed rule, we proposed to include provisions at §410.59(e)(3) and 

§410.60(e)(3) to describe, respectively, the outpatient therapy services that are exempt 

from the statutory therapy caps for outpatient OT services, and for outpatient PT and SLP 

services combined. Specifically, in the CY 1999 PFS proposed rule, we proposed to add 

the following regulatory language for OT and for PT at §§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 under 
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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 regulation text for PT in §410.60(e)(3). We 

note that for purposes of the therapy cap, outpatient PT services under our regulation at 

§410.60 include outpatient SLP services described under §410.62. As such, SLP services 

are included in the references to PT under §410.60. Although the rulemaking history and 

regulations appear inconclusive as to whether outpatient therapy services furnished by 

CAHs were intended to be subject to the therapy caps between January 1, 1999 and 

October 1, 2012, we believe that we inadvertently omitted the phrase “or CAH” in the 

CY 1999 final regulation for the occupational therapy cap. Moreover, we have 

consistently excluded all outpatient therapy services furnished by CAHs from the therapy 

caps over this time frame, whether the services were PT, SLP, or OT. 

Accordingly, from the outset of the therapy caps under section 1833(g) of the Act, 

therapy services furnished by CAHs have not been subject to the therapy caps. Thus, 

CAHs have not been required to use the exceptions process (including the KX modifier 

and other requirements) when furnishing medically necessary therapy services above the 

therapy caps; and therapy services furnished by CAHs above the threshold amounts have 

not been subject to the manual medical review process. Similarly, until section 603(b) of 

the ATRA amended the statute to specify the amount that must be counted towards the 

therapy caps and thresholds for outpatient therapy services furnished by CAHs, we did 

not apply towards the therapy caps or thresholds any amounts for therapy services 

furnished by CAHs. Therefore, we have interpreted 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 the 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 applied to outpatient therapy services furnished 

by CAHs. We concluded that the MCTRJCA amendment did not make the therapy caps 

applicable to services furnished by CAHs for which payment is made under section 

1834(g) of the Act because it affected only the outpatient hospital services described 

under section 1833(a)(8)(B) of the Act for which payment is made under section 

1834(k)(1)(B) of the Act. With the enactment in section 603(b) of the ATRA of specific 

language requiring us to count amounts 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 caps applicable to services furnished by CAHs, but directed 

us to count CAH services towards the caps. However, after reflecting on the language of 

section 1833(g) of the Act, we have concluded 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 Act, the therapy caps 

are made applicable to all services described under section 1861(p) of the Act except 

those described under the outpatient hospital services exemption. Section 1861(p) of the 

Act establishes the benefit category for outpatient PT, SLP and OT services, (expressly 

for PT services and, through section 1861(ll)(2) of the Act, for outpatient SLP services 
CMS-1600-P 188 

and, through section 1861(g) of the Act, for outpatient OT services). Section 1861(p) of 

the Act defines outpatient therapy services in the three disciplines as those furnished by a 

provider of services, a clinic, rehabilitation agency, or a public health agency, or by 

others under an arrangement with, and under the supervision of, such provider, clinic, 

rehabilitation agency, or public health agency to an individual as an outpatient; and those 

furnished by a therapist not under arrangements with a provider of services, clinic, 

rehabilitation agency, or a public health agency. As such, section 1861(p) of the Act 

defines outpatient therapy services very broadly to include those furnished by providers 

and other institutional settings, as well as those furnished in office settings. Under 

section 1861(u) of the Act, a CAH is a “provider of services.” As such, unless the 

outpatient therapy services furnished by a CAH fit within the outpatient hospital services 

exemption under section 1833(a)(8)(B) of the Act, the therapy caps would be applicable 

to PT, SLP, OT services furnished by a CAH. As noted above, section 1833(a)(8)(B) of 

the Act describes only outpatient therapy services for which payment is made under 

section 1834(k) of the Act. Payment for CAH services is made under section 1834(g) of 

the Act. Thus, the outpatient hospital services exemption to the therapy caps under 

section 1833(a)(8)(B) of the Act does not apply, and the therapy caps are applicable, to 

outpatient therapy services furnished by a CAH. 

However, we recognize that our current regulation specifically excludes PT and 

SLP services furnished by CAHs from the therapy caps, and our consistent practice since 

1999 has been to exclude PT, SLP and OT services furnished by CAHs from the therapy 

caps. As such, in order to apply the therapy caps and related policies to services 

furnished by CAHs for CY 2014 and subsequent years, we believe we would need to 

revise our regulations. 
CMS-1600-P 189 

We propose to apply the therapy cap limitations and related policies to outpatient 

therapy services furnished by a CAH beginning on January 1, 2014. Not only do we 

believe this is the proper statutory interpretation, but we also believe it is the appropriate 

policy. Under the existing regulations, with the suspension of the outpatient hospital 

services exemption through 2013, the therapy caps apply to outpatient therapy services 

paid under Medicare Part B and furnished in all applicable settings except CAHs. We 

believe that outpatient therapy services furnished by a CAH should be treated 

consistently with outpatient therapy services furnished in all other settings. Therefore, 

we propose to revise the therapy cap regulation at §410.60(e)(3) to remove the exemption 

for services furnished by a CAH. 

CAH outpatient therapy services are distinct from other outpatient therapy 

services in that outpatient therapy services furnished in office-based or other institutional 

settings are paid at the rates contained in the PFS, whereas CAHs are paid for outpatient 

therapy services under the methodology described under section 1834(g) of the Act. 

Because the CAH reasonable cost-based payment amounts are reconciled at cost 

reporting year-end, and are different from the fee schedule-based payments for other 

outpatient therapy services, it might have been difficult to identify the amounts that we 

should have accrued towards the therapy caps for services furnished by CAHs. 

Therefore, prior to 2013, not only did CMS not apply any caps to services provided by a 

CAH, but also did not count CAH services towards the caps. However, the ATRA 

amended the statute to require for outpatient therapy services furnished by CAHs during 

2013 that we count towards the caps and the manual medical review thresholds the 

amount that would be payable for the services under Medicare Part B as if the services 

were paid as outpatient therapy services under section 1834(k)(1)(B) of the Act instead of 
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as CAH services under section 1834(g) of the Act. Thus, the distinction in payment 

methodology no longer provides a technical barrier to including 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 hospital services exemption is suspended under 

current law only through December 31, 2013. If this provision is not extended, with our 

proposal to apply the therapy caps to services furnished by CAHs, effective January 1, 

2014, therapy services furnished by CAHs would be treated differently than services 

furnished in other outpatient hospital settings. We note that the exceptions process 

described above, including use of the KX modifier to attest to the medical necessity of 

therapy services above the caps and other requirements, would apply for services 

furnished by a CAH in the same way that it applies to outpatient therapy services 

furnished by certain other facilities. Similarly, the manual 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 outpatient therapy services furnished by certain 

other facilities. We recognize 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 specifying that the therapy caps apply to such 

services. 

Specifically, we propose to amend the regulations, which pertain to the OT 

therapy cap and the combined PT and SLP therapy cap, respectively, by including 
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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 Act. 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 outpatient (occupational/ physical) therapy services furnished by 

a CAH directly or under arrangements under the description of services to which the 

annual limitation applies. Further, we propose 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.” 
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H. Requirements for Billing “Incident To” Services

Section 1861(s)(2)(A) of the Act establishes the benefit category for services and 

supplies furnished as “incident to” the professional services of a physician. The statute 

specifies that “incident to” services and supplies are “of kinds which are commonly 

furnished in physicians' offices and are commonly either rendered without charge or 

included in physicians’ bills.” 

In addition to the requirements of the statute, our regulation at §410.26 sets forth 

specific requirements that must be met in order for physicians and other practitioners to 

bill Medicare for incident to physicians’ services. Section 410.26(a)(7) limits “incident 

to” services to those included under section 1861(s)(2)(A) of the Act and that are not 

covered under another benefit category. Section 410.26(b) specifies (in part) that in order 

for services and supplies to be paid as “incident to” services under Medicare Part B, the 

services or supplies must be: 

• Furnished in a noninstitutional setting to noninstitutional patients. 

• An integral, though incidental, part of the service of a physician (or other 

practitioner) in the course of diagnosis or treatment of an injury or illness. 

• Furnished under direct supervision (as specified under §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 specific to each type of practitioner 

who is allowed to bill for “incident to” services. These are found at §410.71(a)(2) 

(clinical psychologist services), §410.74(b) (physician assistants’ services), §410.75(d) 
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(nurse practitioners’ services), §410.76(d) (clinical nurse specialists’ services), and 

§410.77(c) (certified nurse-midwives’ services). When referring to practitioners who 

can bill for services furnished “incident to” their professional services, we are referring to 

physicians and these practitioners. 

“Incident to” services are treated as if they were furnished by the billing 

practitioner for purposes of Medicare billing and payment. Consistent with this 

terminology, in this discussion when referring to the practitioner furnishing the service, 

we mean the practitioner who is billing for the service. When we refer to the “auxiliary 

personnel” or the person who “provides” the service we are referring to an individual 

who is personally performing the service or some aspect of it. Since we treat “incident 

to” services as services furnished by the billing practitioner for purposes of Medicare 

billing and payment, payment is made to the billing practitioner under the PFS, and all 

relevant Medicare rules apply including, but not limited to, requirements regarding 

medical necessity, documentation, and billing. Those practitioners who can bill Medicare 

for “incident to” services are paid at their applicable Medicare payment rate as if they 

furnished the service. For example, when “incident to” services are billed by a physician, 

they are paid at 100 percent of the fee schedule amount, and when the services are billed 

by a nurse practitioner or clinical nurse specialist, they are paid at 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 complicated services, the types of services that 

can be furnished “incident to” physicians’ services have also expanded. States have 

increasingly adopted standards regarding the delivery of health care services in all 

settings, including physicians’ offices, in order to protect the health and safety of their 
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citizens. These state standards often include qualifications for the individuals who are 

permitted to furnish specific services or requirements about the circumstances under 

which services may be actually furnished. For example, since 2009, New York has 

required that offices in which surgery is furnished must be accredited by a state-approved 

accredited agency or organization. Similarly, Florida requires certain standards be met 

when surgery is furnished in offices, including that the surgeon must “examine the patient 

immediately before the surgery to evaluate the risk of anesthesia and of the surgical 

procedure to be performed” and “qualified anesthesia personnel shall be present in the 

room throughout the conduct of all general anesthetics, regional anesthetics and 

monitored anesthesia care.” 

Over the past years, several situations have come to our attention where Medicare 

was billed for “incident to” services that were provided by auxiliary personnel who did 

not meet the state standards for those services in the state in which the services were 

furnished. The physician or practitioner billing for the services would have been 

permitted under state law to personally furnish the services, but the services were actually 

provided by auxiliary personnel who were not in compliance with state law in providing 

the particular service (or aspect of the service). 

Practitioners authorized to bill Medicare for services that they furnish to Medicare 

beneficiaries are required under Medicare to comply with state law. For example, section 

1861(r) of the Act specifies that an individual can be considered a physician in the 

performance of any function or action only when legally authorized to practice in the 

particular field by the State in which he performs such function or action. Section 

410.20(b) of our regulations provides that payment is made for services only if furnished 

by a doctor who is “...legally authorized to practice by the state in which he or she 
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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 practitioner (NP) or clinical nurse specialist (CNS) that the NP or 

CNS is “legally authorized to perform by the 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 accordance with State law.” There are similar provisions for 

clinical psychologist services (§410.71(a)(2)), clinical social worker services 

(§410.73(b)(1)), physician assistants’ services (§410.74(a)(2)(ii)), clinical nurse 

specialists’ services (§410.76(b)(1)), and certified nurse-midwives’ services 

(§410.77(b)(1)). 

However, the Medicare requirements for services and supplies incident to a 

physician’s professional services (§410.26 discussed above), do not specifically make 

compliance with state law a condition of payment for services (or aspects of services) and 

supplies furnished and billed as “incident to” services. Nor do any of the regulations 

regarding services furnished “incident to” the services of other practitioners contain this 

requirement. Thus, Medicare has had limited recourse when services furnished incident 

to a physician’s or practitioner’s services are not furnished in compliance with state law. 

In 2009, the Office of Inspector General issued a report entitled “Prevalence and 

Qualifications of Nonphysicians Who Performed Medicare Physician Services” (OEI-09-

06-00430) that considered in part the qualifications of auxiliary personnel providing 

incident to physician services. This report found that services were being billed to 

Medicare that were provided by auxiliary personnel. After finding that services were 

being provided and billed to Medicare by auxiliary personnel “. . .who did not possess the 
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required licenses or certifications 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 personally perform the services they bill to 

Medicare ensure that no persons except...nonphysicians who have the necessary training, 

certification, and/or licensure, pursuant to State laws, State regulations, and Medicare 

regulations personally perform the services under the direct supervision of a licensed 

physician.” We are also proposing amendments to our regulations to address this 

recommendation. 

To ensure that auxiliary personnel providing services to Medicare beneficiaries 

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

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

recovered when such services are not furnished in compliance with the state law, we are 

proposing to add a requirement to the “incident to” regulations at §410.26, Services and 

supplies incident to a physician’s professional services: Conditions. Specifically, we are 

proposing to amend §410.26(b) by redesignating paragraphs (b)(7) and (b)(8) as 

paragraphs (b)(8) and (b)(9), respectively, and by adding a new paragraph (b)(7) to state 

that “Services and supplies must be furnished in accordance with applicable State law.” 

We are also proposing to amend the definition of auxiliary personnel at §410.26(a)(1) to 

require that the individual performing “incident to” services “meets any applicable 

requirements to provide the services, including licensure, imposed by the State in which 

the services are being furnished.” 

In addition, we are proposing to eliminate redundant and potentially incongruent 

regulatory language by replacing the specific “incident to” requirements currently 
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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) regarding clinical psychologist services to read 

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

psychologist if the requirements of §410.26 are met.” 

• Revise §410.74(b) regarding physician assistants’ services to read 

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

assistant if the requirements of §410.26 are met.” 

• Revise §410.75(d) regarding nurse practitioners 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 nurse specialists’ services to read 

with “Medicare Part B covers services and supplies incident to the services of a clinical 

nurse specialist if the requirements of §410.26 are met.” 

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

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

a certified nurse-midwife if the requirements of §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 the requirements for “incident 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” services is to reduce the 

regulatory burden and make it less difficult for practitioners to determine what is 
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required. Reconciling these regulatory requirements for physicians and all other 

practitioners who have the authority to bill Medicare for “incident to” services is also 

consistent with our general policy to treat nonphysician practitioners similarly to 

physicians unless there is a compelling reason for disparate treatment. We believe that 

this proposal would make the requirements clearer for practitioners furnishing “incident 

to” services without eliminating existing regulatory requirements or imposing new ones. 

We welcome comments on any requirements that we may have inadvertently overlooked 

in our proposed revisions, or any benefit that accrues from continuing to carry these 

separate regulatory requirements. 

The regulations applicable to Rural Health Clinics (RHCs) and Federally 

Qualified Health Centers (FQHCs) have similar “incident to” rules, and we are proposing 

to make conforming changes to these regulations. Specifically, we are also proposing to 

revise §405.2413(a), which addresses services and supplies incident to physicians’ 

services for RHCs and FQHCs, by redesignating paragraphs (a)(4) and (a)(5) as 

paragraphs (a)(5) and (a)(6), respectively and by adding a new paragraph (a)(4) that states 

services and supplies must be furnished in accordance with applicable state law. 

Additionally, we are proposing to amend §405.2415(a), which addresses services incident 

to nurse practitioner and physician assistant services by redesignating paragraphs (a)(4) 

and (a)(5) as paragraphs (a)(5) and (a)(6), respectively and by adding a new paragraph 

(a)(4) 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 clinical psychologist and clinical social worker services by 

redesignating paragraphs (a)(4) and (a)(5) as paragraphs (a)(5) and (a)(6), respectively 

and by adding a new paragraph (a)(4) that states services and supplies must be furnished 
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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 regulations are consistent with the traditional 

approach of relying primarily on the states to regulate the health and safety of their 

residents in the delivery of health care services. Throughout the Medicare program, as 

evidenced by several examples above, the qualifications required for the delivery of 

health care services are generally determined with reference to state law. As discussed 

above, our current regulations governing practitioners who can bill Medicare directly 

include a basic requirement to comply with state law when furnishing Medicare covered 

services. However, the Medicare regulations for “incident to” services and supplies do 

not specifically make compliance with state law a condition of payment for services and 

supplies furnished and billed as an incident to a practitioner’s services. The proposed 

amendments to our regulations would rectify this situation and make compliance with 

state law a requirement for all “incident to” services. In addition to health and safety 

benefits we believe would accrue to the Medicare 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 furnished, and provides the ability for the federal 

government to recover funds paid where services 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 Medicare program since auxiliary personnel furnishing services 

in a state would already be required to comply with the laws of that state. This regulatory 
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change would simply adopt the existing requirements as a condition of payment under 

Medicare. Codifying this requirement would provide the federal government a clear 

basis to deny a claim for Medicare payment when services are not furnished in 

accordance with applicable state law and the ability 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 states to regulate health care delivery in 

order to ensure the health and safety of their citizens.
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I. Complex Chronic Care Management Services

As we discussed in the CY 2013 PFS final 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 designed to improve payment 

for, and encourage long-term investment in, care management services. These initiatives 

include the following programs and demonstrations: 

● The Medicare Shared Savings Program (described in “Medicare Program; 

Medicare Shared Savings Program: Accountable Care Organizations; Final Rule'' which 

appeared in the November 2, 2011 Federal Register (76 FR 67802)). 

● The testing of the Pioneer ACO model, designed for experienced health care 

organizations (described on the Center for Medicare and Medicaid Innovation's 

(Innovation Center's) Web site at 

innovations.cms.gov/initiatives/ACO/Pioneer/index.html). 

● The testing of the Advance Payment ACO model, designed to support 

organizations participating in the Medicare Shared Savings Program (described on the 

Innovation Center's Web site at innovations.cms.gov/initiatives/ACO/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 and 
CMS-1600-P 202 

coordination of health care services are improved by making advanced primary care 

practices more broadly available (described on the CMS Web site at 

www.cms.gov/Medicare/DemonstrationProjects/DemoProjectsEvalRpts/downloads/mapcpdemo_Factsheet.pdf). 

● The Federally Qualified Health Center (FQHC) Advanced Primary Care 

Practice demonstration (described on the CMS Web site at 

www.cms.gov/Medicare/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 appropriately value care management within 

Medicare's statutory structure for fee-for-service physician payment and quality 

reporting. For example, in the CY 2013 PFS final rule with comment period, we adopted 

a policy to pay separately for care management involving the transition of a beneficiary 

from care furnished by a treating physician during a hospital stay to care furnished by the 

beneficiary's primary physician in the community (77 FR 68978 through 68993). We 

view potential refinements to the PFS such as these as part of a broader strategy that 

relies on input and information gathered from the initiatives described above, research 

and demonstrations from other public and private stakeholders, the work of all parties 
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involved in the potentially misvalued code initiative, and from the public at large. 

1. Patient Eligibility for Separately Payable 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 included in calculating the total work for the 

typical E/M services, and the total work for the typical service is used to develop RVUs 

for the E/M services. In the CY 2012 PFS proposed rule, we highlighted some of the 

E/M services that include substantial care management work. Specifically, we noted that 

the vignettes that describe a typical service for mid-level office/outpatient services (CPT 

codes 99203 and 99213) include furnishing care management, communication, and other 

necessary care management related to the office visit in the post-service work (76 FR 

42917). 

However, the physician community continues to tell us that the care management 

included in many of the E/M services, such as office visits, does not adequately describe 

the typical non-face-to-face care management work involved for certain categories of 

beneficiaries. Because the current E/M office/outpatient visit CPT codes were designed 

to support all office visits and reflect an overall orientation toward episodic treatment, we 

agree that these E/M codes may not reflect all the services and resources required to 

furnish comprehensive, coordinated care management for certain categories of 

beneficiaries. For example, we currently pay physicians separately for the non face-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 services 
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furnished to beneficiaries transitioning from care furnished by a treating physician during 

a hospital stay to care furnished by the beneficiary's primary physician in the community. 

Similar to these situations, we believe that the resources required to furnish 

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 adjustment of medical therapy. Therefore, for CY 

2015, we are proposing to establish a separate 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 Medicare claims for patients with selected 

multiple chronic conditions (see http://www.cms.gov/Research-Statistics-Data-andSystems/Statistics-Trends-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 department visits. We believe these findings 

would hold in general for 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 
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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 while simultaneously decreasing costs (for 

example, through reductions in hospitalizations, use of post-acute care services, and 

emergency department visits.) 

As described below in more detail in section II.I.3, we intend to develop standards 

for furnishing complex chronic care management services to ensure that the physicians 

who bill for these services have the capability to provide them. One of the primary 

reasons for our proposed 2015 implementation date is to provide sufficient time to 

develop and obtain public input on the standards 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 complex 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 office is closed so they can continue to 

participate in care decisions with the patient. 

● Continuity of care with a designated practitioner or member of the care team 

with whom the patient is able to get successive routine appointments. 

● Care management for chronic conditions including systematic assessment of 
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patient’s medical, functional, and psychosocial needs; system-based approaches to ensure 

timely receipt of all recommended preventive care services; medication reconciliation 

with review of adherence and potential interactions; and oversight of patient selfmanagement of medications. In consultation with the patient and other key practitioners 

treating the patient, the practitioner furnishing 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 congruent with patient choices and values. A plan of care is 

based on a physical, mental, cognitive, psychosocial, functional and environmental 

(re)assessment and an inventory of resources and supports. It is a comprehensive plan of 

care for all health issues. It typically includes, but is not limited to, the following 

elements: problem list, expected outcome and prognosis, measurable treatment goals, 

symptom management, planned interventions, medication management, 

community/social services ordered, how the services of agencies and specialists 

unconnected to the practice will be directed/coordinated, identify the individuals 

responsible for each intervention, requirements for periodic review and, when applicable, 

revision, of the care plan. The provider should seek to reflect a full list of problems, 

medications and medication allergies in the electronic health record to inform the care 

plan, care coordination and ongoing clinical care. 

● Management of care transitions within health care including referrals to other 

clinicians, visits following a patient visit to an emergency department, and visits 

following discharges from hospitals and skilled nursing facilities. The practice must be 

able to facilitate communication of relevant patient information through electronic 

exchange of a summary care record with other health care providers regarding these 

transitions. The practice must also have qualified personnel who are available to deliver 
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transitional care services to a patient in a timely way so as to reduce the need for repeat 

visits to emergency departments and re-admissions to hospitals and skilled nursing 

facilities. 

● Coordination with home and community based clinical service providers 

required to support a patient’s psychosocial needs and functional deficits. 

Communication to and from home and community based providers regarding these 

clinical patient needs must be documented in practice’s medical record system. 

● Enhanced opportunities for a patient to communicate with the provider 

regarding their care through not only the telephone but also through the use of secure 

messaging, internet or other asynchronous non face-to-face consultation methods. 

3. Standards for Furnishing Complex Chronic Care Coordination Services 

Not all physicians and qualified nonphysician practitioners who wish to furnish 

complex chronic care management services currently have the capability to fully provide 

the scope of services described in section II.I.2. without making additional investments in 

technology, staff training, and the development and maintenance of systems and 

processes to furnish the services. We intend to establish standards that would be 

necessary to provide high quality, safe complex chronic care management services. For 

example, potential standards could include the following: 

● The practice must be using a certified Electronic Health Record (EHR) for 

beneficiary care that meets the most recent HHS regulatory standard for meaningful use. 

The EHR must be integrated into the practice to support access to care, care coordination, 

care management and communication. 

● The practice must employ one or more advanced practice registered nurses or 

physicians assistants whose written job descriptions indicate that their job roles include 
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and are appropriately scaled to meet the needs for beneficiaries receiving services in the 

practice who require complex chronic care management services provided by the 

practice. 

● The practice must be able to demonstrate the use of written protocols by staff 

participating in the furnishing of services that describe: (1) the methods and expected 

“norms” for furnishing each component of complex chronic care management services 

provided by the practice; (2) the strategies for systematically furnishing health risk 

assessments to identify all beneficiaries eligible and who may be willing to participate in 

the 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 medical, 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 communicating common and anticipated clinical and 

non-clinical issues to beneficiaries; (7) care plans for beneficiaries post-discharge from 

an emergency department or other institutional health care setting, to assist beneficiaries 

with follow up visits with clinical and other suppliers or providers, and in managing any 

changes in their medications; (8) a systematic approach to communicate and 

electronically exchange clinical information with and coordinate care among all service 

providers involved in the ongoing care of a beneficiary receiving complex chronic care 

management services; (9) a systematic approach for linking the practice and a beneficiary 

receiving complex chronic care management services with long-term services and 

supports including home and community-based services; (10) a systematic approach to 

the care management of vulnerable beneficiary populations such as racial and ethnic 
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minorities and people with disabilities; and (11) patient education to assist the beneficiary 

to self-manage a chronic condition that is considered at least one of his/her complex 

chronic conditions. These protocols must be reviewed and 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 delivery of complex chronic care management services must 

have access at the time of service to the beneficiary's EHR that includes all of the 

elements necessary to meet the most recent HHS regulatory standard for meaningful use. 

This includes any and all clinical staff providing after hours care to ensure that the 

complex chronic care management services are available with this level of EHR 

support in the practice or remotely through a Virtual Private Network (VPN), a secure 

website, or a health information exchange (HIE) 24 hours per day and 7 days a week. 

Some have suggested that, to furnish these services, practices could be recognized 

as a medical home by one of the national organizations including: the National 

Committee for Quality Assurance (NCQA), the Accreditation Association for 

Ambulatory Health Care, The Joint Commission, URAC, etc.; which are formally 

recognizing primary care practices as a patient-centered medical home. We understand 

there are differences among the approaches taken by national organizations that formally 

recognize medical homes and therefore, we seek comment on these and other potential 

care coordination standards, and the potential 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 multiple 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 expected to last at least 12 months, or 

until the death of the patient, that place the patient at significant risk of death, 

acute exacerbation/decompensation, or functional decline; 

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

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

 Typically, we would expect the one or more hours of services to be provided 

by clinical staff directed by a physician or other qualified health care professional. 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 separately 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 availability 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 providers as part of care coordination. This 

would include a discussion with the patient about what complex chronic care 

management services are, how these services are accessed, how their information will be 

shared among other providers in the care team, and that cost-sharing applies to these 
CMS-1600-P 211 

services even when they are not delivered face-to-face in the practice. 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 chronic care management services were explained 

and offered to the patient, noting the patient’s decision to accept these services. Also, a 

written or electronic copy of the care plan would be provided to the beneficiary and this 

would also be recorded in the beneficiary’s electronic medical record. 

A practitioner would need to reaffirm with the beneficiary at least every 12 

months whether he or she wishes to continue 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. However, if the revocation occurs during a 

current 90-day complex chronic care management period, the revocation would not be 

effective until the end of that period. The beneficiary could notify the practitioner either 

verbally or in writing. At the time the informed consent is obtained, 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 effect of a revocation of consent on complex 

chronic care management services. 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 beneficiary with written confirmation that the 

practitioner would not be providing 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 may choose instead to receive these services 

from a different practitioner, which can begin at the conclusion of the current 90-day 
CMS-1600-P 212 

period. The new practitioner would need to fulfill all the requirements 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 beneficiary 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) why the services were provided and a description of the 

services provided. The notice may be delivered by a means of communication mutually 

agreed to by the practitioner and beneficiary such as mail, email, or facsimile, or in 

person (for example, at the time of an office visit.) The notice must be received by the 

beneficiary before the practitioner submits the claim for the services. A separate notice 

must be received by the beneficiary for each 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 patient, 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 patient require substantial revision of the care 

plan discussed in section II.I.2. Substantial revision to a care plan typically is required 

when the patient’s clinical condition changes sufficiently to require: significantly more 

intensive monitoring by clinical 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 care management services is generally 

bundled into the payment for face-to-face E/M visits, the resources required to provide 
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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 reflected in the payment 

for face-to-face E/M visits. For similar reasons, 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 facility payment also 

continues to be reflected in the payment for face-to-face E/M visits. 

We propose that complex chronic care management services include transitional 

care management services (CPT 99495, 99496), home health care supervision (HCPCS 

G0181), and hospice care supervision (HCPCS G0182). If furnished, in order to avoid 

duplicate payment, we propose that these services may not be billed separately during the 

90 days for which either GXXX1 or GXXX2 are billed. For similar reasons, we propose 

that GXXX1 or GXXX2 cannot be billed separately 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 claim 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 management services, the practitioner 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 of 
CMS-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 rounded up to 60 minutes in order to bill for 

these services. We also propose that for purposes of meeting the 60-minute requirement, 

the practitioner could count the time of only one clinical staff member for a particular 

segment of time, and could not count overlapping intervals such as when two or more 

clinical staff members are meeting about the patient. 

In future rulemaking, we intend to propose RVUs for complex chronic care 

management services. To inform our proposal, we seek input on the physician work and 

practice expenses associated with these services. 

5. Complex Chronic Care Management Services and the Annual Wellness Visit (AWV) 

(HCPCS codes G0438, G0439) 

We are proposing that a beneficiary 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 AWV is designed to enable a practitioner to 

systematically capture information that is essential for the development of a care plan. 

This includes the establishment of a list of current practitioners and suppliers that are 

regularly involved in providing medical care to the beneficiary, the assessment of the 

beneficiary’s functional status related to chronic health conditions, the assessment of 

whether the beneficiary suffers from any cognitive limitations or mental health conditions 

that could impair self-management of chronic health conditions, and an assessment of the 

beneficiary’s preventive health care needs including those that contribute to or result 

from a beneficiary’s chronic conditions. Second, the beneficiary’s selection of a 

practitioner to furnish the AWV is a useful additional indicator to assist us in knowing 
CMS-1600-P 215 

which single practitioner a beneficiary has chosen to furnish complex chronic care 

management services. While a beneficiary would retain the right to choose and change 

the practitioner to furnish complex chronic care management services, we do not believe 

that it is in the interest of a beneficiary to have more than one practitioner at a time 

coordinating the beneficiary’s care and we do not intend to pay multiple practitioners for 

furnishing these services over the same time period. Third, the AWV is updated annually 

which is consistent with the minimal interval for reviewing and modifying the care plan 

required for the 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 management services. For the 

less frequent situations when a beneficiary chooses 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 practitioner who furnished 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 Medicare Part B coverage period, for that time 

period we propose the Initial Preventive Physical Examination (G0402) can substitute for 

the AWV to allow a beneficiary to receive complex chronic care management services. 

6. Complex Chronic Care Management Services Furnished Incident to a Physician’s 

Service under General Physician Supervision 

We outline the requirements for billing for services furnished in the office, but not 

personally and directly performed by the physician or qualified nonphysician practitioner 
CMS-1600-P 216 

(referred to as a “practitioner” 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 “incident to” services is that a practitioner (as 

thet term is used in section II.H of this proposed rule directly supervise the provision of 

services by auxiliary personnel by being in the office suite and able to furnish assistance 

and direction throughout the provision of the service. Section 60.4 of the Manual 

specifically discusses the one exception that allows for general supervision of “incident 

to” services furnished to homebound patients in medically underserved areas. Under that 

provision, we identify more specific requirements for the personnel that can furnish 

“incident to” services under general supervision. For example, 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 physician 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 needs. 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 the time of day or day of the week. If the 

patient has a complex chronic care need outside of the practice’s normal business hours, 

the patient’s initial contact with 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 physician 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 patient during the 90-day period in order for the practitioner to 
CMS-1600-P 217 

be able to bill separately for the chronic care services. The time, 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 hours 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 requirement for “incident to” services. 

We believe that the additional requirements we impose for personnel under the 

exception for general supervision for homebound patients in medically underserved areas 

should apply in these circumstances where we are allowing a practitioner to bill Medicare 

for complex chronic care management services furnished under their general supervision 

and incident to their professional services. In both of these unusual cases, these 

requirements help to ensure that appropriate services are being furnished by appropriate 

personnel in the absence of the direct supervision. Specifically, we propose that if a 

practice meets all the conditions required to bill separately for complex chronic care 

management services, the time spent by a clinical staff employee furnishing aspects of 

these services to address a patient’s complex chronic care need outside 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 directly employed by the physician and the 

employed clinical staff person meets any relevant state requirements. 

● The services of the clinical staff person are an integral part of the physician’s 

complex chronic care management services to the patient (the patient must be one the 

physician is treating and for which informed consent is in effect), and are performed 

under the general supervision of the physician. General supervision means that the 
CMS-1600-P 218 

physician need not be physically present when the services are performed; however, the 

services must be performed under the physician’s overall supervision and control. 

Contact is maintained between the clinical staff person and the physician (for example, 

the employed clinical staff person contacts the physician directly if warranted and the 

physician retains professional responsibility for the service.) 

● The services of the employed clinical staff person meet all other “incident to” 

requirements with the exception of direct supervision. 

7. Complex Chronic Care Management Services and the Primary Care Incentive 

Payment Program (PCIP) 

 Under section 1833(x) of the Act, the PCIP provides a 10 percent incentive 

payment for primary care services within a specific range of E/M services when 

furnished by a primary care 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 disqualifying community primary care physicians who follow their 

patients into the hospital setting, we finalized a policy to remove allowed charges for 

certain E/M services furnished to hospital inpatients and outpatients from the total 

allowed charges in the PCIP primary care percentage calculation. In the CY 2013 final 

rule (77 FR 68993), we adopted a policy that the TCM code should be treated in the same 

manner as those services for the purposes of PCIP because post-discharge TCM services 

are a complement in the community setting to the hospital-based discharge day 

management services already excluded from the PCIP denominator. Similar to the codes 
CMS-1600-P 219 

already excluded from the PCIP denominator, we expressed concern that inclusion of the 

TCM code in the denominator of the primary care percentage calculation could produce 

unwarranted bias against ‘‘true primary care practitioners’’ who are involved in 

furnishing post-discharge care to their patients. 

 Complex chronic care management services are also similar to the services that 

we have already excluded from the from the PCIP denominator. For example, complex 

chronic care management includes management of care transitions within health care 

settings including referrals to other clinicians, visits following a patient visit to an 

emergency department, and visits following discharges from hospitals and skilled nursing 

facilities. Therefore, while physicians and qualified nonphysician practitioners who 

furnish complex chronic care management services would not receive an additional 

incentive payment under the PCIP for the service itself (because it is not considered a 

‘‘primary care service’’ for purposes of the PCIP), we propose that the allowed charges 

for complex chronic care management services would not be included in the denominator 

when calculating a physician’s or practitioner’s percent of allowed charges that were 

primary care services for purposes of the PCIP. 

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 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, as discussed in section II.I.1. We 

are proposing the scope of these complex chronic care management services discussed in 

section II.I.2; the billing requirements for these services as discussed in section II.I.4; the 
CMS-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 denominator exclusion as discussed in section 

II.I.7. 

We are seeking input from the public on, the standards required to provide these 

services as discussed in section II.I.3, and the work and PE that would be associated with 

these services. 

We are making this proposal to establish codes and separate payment for complex 

chronic care management services in the context of the broader multi-year strategy to 

appropriately recognize and value primary care 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 primary care, and care management 

and coordination services if the agency decides to pursue payment for a broader set of 

management and coordination services in future rulemaking. We also note that as we 

consider a final policy, we would assess the potential impact of the policy on our current 

programs and demonstrations designed to improve payment for, and encourage long-term 

investment in, care management services. Likewise, to assure that there are not duplicate 

payments for delivery of care management services, we 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 chiropractors in its definition of 

“physician” with language limiting chiropractors to “treatment by means of manual 

manipulation of the spine (to correct a subluxation).” Specifically, the Act says: 

The term “physician,” when used in connection with the performance of any 
CMS-1600-P 221 

function or actions means . . .a chiropractor who is licensed as such by the State 

(or in a State which does not license chiropractors 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 sections 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 authorized to perform the State or 

jurisdiction in which such treatment is provided.” 

The statute, thus, limits chiropractic coverage 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 the spine. Specifically, we 

provide for payment of the following codes listed in the chiropractic section of the CPT 

Manual. 

 98940 – Chiropractic manipulation treatment (CMT), spinal, 1-2 regions 

 98941 – CMT spinal, 3-4 regions 

 98942 – CMT spinal, 5 regions 

(CPT includes an additional CPT code 98943 – CMT extraspinal 1 or more 

regions for which Medicare does 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 requirements 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 physical 
CMS-1600-P 222 

exam requirement discussed above. In determining the relative value assigned to the 

CMT services we include this pre-manipulative patient assessment. 

These chiropractic codes have a global surgery 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 separate E/M services can be reported with a -25 modifier “if 

the patient’s condition requires a significant, separately identified 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 that 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 believed 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 would 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 separate 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 may not limit chiropractic coverage to manual 

manipulation to correct subluxation of the spine. 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 requirements for chiropractor services, would be 

appropriate. We are not proposing to pay chiropractors for E/M services in CY 2014. If 

after receiving and analyzing public comment we determine that it would be appropriate 
CMS-1600-P 223 

to modify our policy with respect to chiropractors 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 chiropractor would furnish E/M services that are 

with respect to treatment by means of manual manipulation of the spine (to correct a 

subluxation) that are not included within the definition of the CMT codes? Specifically, 

we are seeking information on the situations, the services that would 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 other 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 specifically for chiropractic E/M 

services similar to those for therapy evaluations or ophthalmic evaluations? With what 

frequency should chiropractors be allowed to bill E/M services? 

• What would justify E/M services beyond 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 are 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 Investigational Device Exemption 

Clinical Studies--Revision of Medicare Coverage

1. Statutory Authority and Background 

This proposed rule would revise certain Medicare regulations currently codified in 

§405.201 through 405.214, and §411.15(o) relating to coverage of the costs of routine 

items and services in Category A Investigational device exemption (IDE) studies and 

trials, and coverage of the costs of Category B, investigational devices and the costs of 

routine items and services in Category B investigational device exemption (IDE) studies 

and trials. It is based on section 1862(m) of the Act, which, among other things, 

authorizes the Secretary to establish 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 studies and trials of Category A devices conform 

to appropriate scientific and ethical standards. We are also proposing, based on our 

rulemaking authority in section 1871 of the Act, to extend the same criteria proposed for 

Category A IDE studies and trials to Category B IDE studies and trials. Our proposed 

rules are necessary to carry out the administration of the insurance program under Title 

XVIII of the Act). Finally, to ensure that coverage of items and services in IDE studies 

and trials is uniform across Medicare administrative 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 agreed to categorize investigational device 

exemptions (IDEs) for purposes of Medicare coverage. The process identified in this 

interagency agreement is reflected 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/investigational devices; and (2) Category B 

devices were described as nonexperimental/investigational devices. 

a. Coverage of IDE--Costs of Routine Items, Services, and Devices. 

 The September 19, 1995 rule created a path to Medicare coverage under certain 

circumstances for Category B investigational devices and the costs of routine items and 

services in IDE studies and trials. 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 contractors 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 variability 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, manufacturers, study sponsors, and hospitals). 

Most of the stakeholders told us that obtaining coverage of the device and the costs of 

routine items and services was inefficient; that each Medicare contractor has different 

processes to review IDE devices and studies. It also became apparent that the lack of 

centralization led to inconsistent IDE coverage across the Medicare contractors. These 

factors contributed to some reluctance to enroll Medicare beneficiaries in IDE studies. 

 We also requested feedback from the Medicare local contractors. We found that 

the Medicare contractors reviewed pertinent 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 ensure 
CMS-1600-P 226 

that the device, as used, is reasonable and necessary for the Medicare beneficiary and 

furnished in a setting appropriate to the patient’s medical needs. While each contractor’s 

process was appropriate, they were in practice slightly different from contractor to 

contractor; and in most cases duplicative. Furthermore, we found that local Medicare 

contractors were applying varying levels of scrutiny in reviewing IDE devices and the 

costs of routine items and services within IDE studies. Most contractors reviewed IDE 

study protocols extensively, while other contractors may have reviewed them less 

extensively. 

2. Proposals 

 We are proposing a transparent, centralized review process that would be more 

efficient by reducing the burden for stakeholders interested in conducting nationwide 

trials. Once the IDE coverage process is centralized, there would be a single entity 

making the IDE coverage decision. This enhances administrative efficiency by 

eliminating the need for duplicative reviews by Medicare local contractors and the 

submission of duplicated coverage requests to different contractors by stakeholders. We 

believe that a centralized review process would not significantly reduce the number of 

IDE devices currently covered; but we are specifically requesting public to comment on 

this issue. Changing the review and decision of IDE coverage to a centralized review 

process in no way changes any beneficiary appeal rights. 

a. Category A IDE Devices 

 In 2003, section 731(b) of the Prescription Drug, Improvement, and 

Modernization Act (MMA) provided that the Secretary could not exclude coverage for 

certain routine care costs in IDE studies and trials of Category A devices, provided to 

beneficiaries under section 1862(a)(1)(A) of the Act. A Category A IDE device is a 
CMS-1600-P 227 

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

and the FDA is unsure whether the device type can be safe and effective. In addition, the 

Secretary was given the authority to ensure that any Category A IDE device study 

conform to appropriate scientific and ethical standards (section 1862(m)(1) of the Act). 

While the Congress gave the Secretary the authority to determine the scope of routine 

care costs, the Congress did not authorize or establish coverage 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 continue to be noncovered under section 

1862(a)(1)(A) of the Act. 

 The Congress has expressly authorized the Secretary to establish criteria to ensure 

that any Category A IDE device study conform to appropriate scientific and ethical 

standards. (For more information, see section 1862(m)(2)(B) of the Act.) In the 

November 15, 2004 conforming final rule (69 FR 66420), we finalized a regulatory 

provision at §405.207(b)(2) requiring Category A IDE devices be furnished in 

conjunction with an FDA-approved clinical study and that the study standards would be 

defined through the national coverage determination (NCD) process. Rather than 

establish standards through the NCD process, we would specify the study standards in 

this proposed rule. We believe the Congress gave the Secretary the authority to create 

appropriate scientific and ethical standards because of their importance in protecting for 

Medicare beneficiaries. 

The use of standards is essential to protecting Medicare study participants in 

category A trials. Studies that have high scientific and ethical standards lead to 

generalizable and reliable knowledge for Medicare providers, practitioners and 

beneficiaries. 
CMS-1600-P 228 

We believe that minimum standards are needed for IDE studies and trials for 

which Medicare coverage of devices or routine items and services is provided to ensure 

that Medicare beneficiaries who volunteer to participate in studies are protected and that 

the study design is appropriate to answer questions of importance to Medicare and its 

beneficiaries. Although an item or service may be considered “reasonable and 

necessary” when used by a clinician for the benefit of an individual patient, it may not 

necessarily be reasonable and necessary when used in the context of an IDE study or trial. 

The use of such an item or service in an IDE study or trial may expose the study 

participants to increased risks that must be balanced by other factors, including the 

likelihood that the study would add important information to the body of medical 

knowledge. There are numerous studies that may 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 critical 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 delivery. Scientifically and ethically flawed 

studies will not produce valid results, exposing Medicare beneficiaries to unnecessary 

risk; and wasting time and resources for all involved. 

We are proposing 13 standards that Category 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 ethical values. The fifth and sixth proposed 

standards were developed in response to reports of egregious misconduct in the past in 

endeavors to conduct clinical research by placing individuals at the risk of harm for the 
CMS-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 potential conflicts of interest on the part of investigators, 

and the study subject’s autonomy is respected. 

The IDE study and trial standards 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 represented by the Medicareenrolled subjects. 

● The rationale for the study is well supported by available scientific and medical 

information, or it is intended to clarify or establish the health outcomes of interventions 

already in common clinical use. 

● The study results are not anticipated to unjustifiably duplicate existing 

knowledge. 

● The study design is methodologically appropriate and the anticipated number 

of enrolled subjects is appropriate to answer the research question(s) being asked in the 

study. 

● The study is sponsored by an organization or individual capable of completing 

it successfully. 

● The study is in compliance with all applicable federal regulations concerning 

the protection of human subjects found at 45 CFR part 46. 

● All aspects of the study are conducted 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 clinical research study is not designed to exclusively 

test toxicity or disease pathophysiology in healthy individuals. Trials of all medical 

technologies measuring therapeutic outcomes as one of the objectives may be exempt 

from this standard only if the disease or condition being studied is life threatening as 

defined in 21 CFR 312.81(a) and the patient has no other viable treatment options. 

● The study is registered on the ClinicalTrials.gov website and/or the Registry of 

Patient Registries (RoPR) by the principal sponsor/investigator prior to the enrollment of 

the first study subject. 

● The study protocol specifies the method and timing of public release of results 

on all pre-specified outcomes, including release of negative outcomes. The release 

should be hastened if the study is terminated early. The results must be made public 

within 24 months of the end of data collection. If a report is planned to be published in a 

peer reviewed journal, then that initial release may be an abstract that meets the 

requirements of the International Committee of Medical Journal Editors 

(http://www.icmje.org). However, a full report of the outcomes must be made public no 

later than 3 years after the end of data collection. 

● The study protocol explicitly discusses subpopulations affected by the item or 

service under investigation, particularly traditionally underrepresented groups in clinical 

studies, how the inclusion and exclusion criteria effect enrollment of these populations, 

and a plan for the retention and reporting of said populations in the study. If the inclusion 

and exclusion criteria are expected to have a negative effect on the recruitment or 

retention of underrepresented populations, the protocol must discuss why these criteria 

are necessary. 
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 population to infer whether Medicare 

patients may benefit from the intervention. Separate discussions in the protocol may be 

necessary for populations eligible for Medicare due to age, disability or Medicaid 

eligibility. 

In proposed §405.212(a)(1) through (7), we would set forth scientific standards 

for IDE studies or trials in which providers, practitioners, suppliers or beneficiaries are 

requesting payment for items or services provided 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 quality and validity of the study. The exercise 

of committing to paper all the aspects of the study is crucial to ensuring that all potential 

concerns have been addressed. It is impossible 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 scientific entities have done that. However, in 

proposed §405.212(a)(8) we would specify that all IDE studies or trials must have a 

written protocol addressing the Medicare standards. 

In proposed §405.212(a)(9), we would specify the “therapeutic intent” 

requirement. We are proposing a standard that 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 may exclusively test toxicity or disease 

pathophysiology, if the disease or condition being studied must be life-threatening as 
CMS-1600-P 232 

defined in 21 CFR 312.81(a) and the patient has no other viable treatment 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 ClinicalTrials.gov site. The National Institutes of 

Health/National Library of Medicine (NIH/NLM) established a clinical trials registry 

(ClinicalTrials.gov) to meet the requirement of the 1997 Food and Drug Administration 

Modernization Act. 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 

registry prior to enrollment of the first subject. 

Registration into ClinicalTrials.gov assures that beneficiaries would have 

pertinent information about and IDE study or trial Medicare supports — an essential 

component of transparency to facilitate patient-provider informed decision-making. The 

World Health Organization and International 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 address the issue of dissemination of the 

IDE study or trial findings. We believe that it is imperative that the results of IDE studies 

and trials for which Medicare has made payment of any clinical costs be made available 

to the public regardless of the outcomes. If trial results are not published, they do not add 

to the clinical evidence base and cannot be used for medical decision-making. For this 

standard, we are suggesting that the study 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 focus on the issue of under-representation 

of specific demographic groups in U.S. clinical research studies. We want to support 

studies that allow Medicare beneficiaries to voluntarily participate in; and that add to the 

knowledge base about the use of the IDE device in the Medicare population, to ultimately 

improve the quality of care that Medicare beneficiaries 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 clearly demonstrate differences of 

clinical importance in subgroups defined by gender, race/ethnicity, age, or other relevant 

subpopulations, then the protocol must discuss the necessary steps to enroll appropriate 

numbers of these populations to ensure a valid analysis of the intervention effects. It is 

not our intention to require a specific enrollment of all subpopulations. However, it is, 

our intention that all covered study protocols address populations affected by the 

technology under investigation with special emphasis on minority and other groups that 

have experienced disparities in health care due to a lack of quality research data. If 

convincing evidence indicates that no differences 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 explicitly discuss how the results are or are not expected to be 

generalizable to subsections of the Medicare population and 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 there are clear data 

documenting that no important differences exist between the Medicare beneficiaries and 

the population studied, the study must discuss the enrollment of appropriate numbers 
CMS-1600-P 234 

representative of the Medicare population to ensure that the analysis of the results of the 

intervention may be applicable to Medicare beneficiaries. 

In §405.211, we are proposing that if the following two characteristics are also 

included met in addition to the criteria listed in §405.212(a)(1) through (a)(13), we would 

automatically cover the costs of routine items and services in the a Category A study or 

trial, and the costs of the investigation device and the routine items and services in a 

Category B study or trial as follows: 

● The study is a pivotal study. 

● The study has is a superiority study design. 

In §405.212, we propose a process by which Category A IDE studies will qualify 

for Medicare coverage of routine items and services 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 nature 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 underlying questions of safety and effectiveness 

has been resolved. In the absence of a NCD, Medicare coverage for Category B devices 

has been decided by Medicare contractors, subject to review under the claims review 

process at § 405.211(b). If the Category B device 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-approved clinical study. 

Beyond Category A IDE studies, we believe that all investigational device studies 

wherein Medicare coverage is sought should conform to rigorous scientific and ethical 
CMS-1600-P 235 

standards. We believe that regardless of whether 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 Category B IDE trials must meet the same scientific and ethical 

standards. 

c. Review and Approval (§405.212) 

We are proposing a centralized 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-approved 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 additional criteria: 

● The study is a pivotal study. 

● The study has is a superiority study design. 

As we review the IDE studies, we would look for reasonable assurance that 

enrolled Medicare beneficiary subjects will receive the best possible care and are 

protected when they are subjects in these IDE studies. The pivotal study and superiority 

study design criteria furnish assurances that the study results will be informative for 

beneficiary choices and medical decision-making in the non-trial settings where most 

care is actually furnished. We believe that their decisions are facilitated by trial designs 

that allow them to compare their options and determine which one is superior for the 

beneficiary. Non-inferiority trial designs (in contrast to superiority designs) only support 

more limited and thus less useful conclusions, that is, that the investigated 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 

clinicalstudynotification@cms.hhs.gov or via hard copy to the following address: 

 Centers for Medicare & Medicaid Services 

 Center for Clinical Standards & Quality 

 Director, Coverage and Analysis Group 

 ATTN: Clinical Study Certification 

 Mailstop: S1-02-01 

 7500 Security Blvd 

 Baltimore, MD 21244 

d. Notification 

We propose that we would notify beneficiaries, 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 would be revised the section by removing, 
CMS-1600-P 237 

revising and adding definitions. Some of the definitions that we are proposing to remove 

comprise factors that will allow stakeholders to understand the 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 refers to the different designations of FDA 

devices. These designations are not relevant to CMS coverage of an IDE device and 

routine items and services in an IDE study. 

++ Post-market approval refers to a marketing application for a Class III device. 

Like class this is not relevant 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 conducted 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 registry. This is common practice 

in the research community. Studies and trials are now transparent – the study sites, 

investigator names, source of support, description of the study methods, and study results 

are open to the public, including Medicare beneficiaries. We believe that registration 

serves the public’s desire to obtain information about the studies they may want to 

participate. This is a benefit to beneficiaries and their providers participating in IDE 

studies. 

-- Pivotal studies or trials, which refer to clinical investigations designed to 
CMS-1600-P 238 

collect definitive evidence of the safety and effectiveness of a device for a specified 

intended use, typically in a statistically justified number of subjects. It may or may not 

be preceded by an early and/or a traditional feasibility study or trial. 

-- Routine care items and services, which refer to items and services that are 

otherwise generally available to Medicare beneficiaries (that 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 beneficiary 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 Medicare benefits outside of an IDE trial. 

-- Superiority studies refer to studies or trials that are intended to demonstrate at 

some pre-specified level of confidence that the 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 developed in cooperation with the FDA for 

the purposes of distinguishing those FDA classes under which investigational and noninvestigational devices fall. A Category A IDE device is considered an experimental 

device; and therefore, deemed noncovered by Medicare standards. 

 ++ Category A device would be defined as a device for which “absolute risk” of 

the device type has not been established (that is, the question of safety and effectiveness 

have not been resolved) and the FDA is unsure whether the device type can be safe and 
CMS-1600-P 239 

effective. 

++ The term Category B which was developed 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 manufacturers have obtained FDA approval for that 

device type. 

++ Contractors mean Medicare Administrative 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 CMS'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 investigational device exemption. An FDA-approved IDE 

application permits a device, which would otherwise be subject to marketing approval or 

clearance, to be shipped lawfully for the purpose of conducting a clinical study in 

accordance with 21 U.S.C. 360j(g) and 21 CFR parts 812 and 813. 

 In §405.203, FDA categorization of investigational devices, we are not proposing 

any changes. We have found that the interagency agreement between the FDA and CMS 

that supports the FDA categorization of devices to one of two categories for 

investigational purpose is widely accepted among device manufacturers. Therefore, to 

avoid future confusion by changing the categorization, we believe that maintaining this 
CMS-1600-P 240 

process continues to support the development of new health technologies and tools that 

practitioners and beneficiaries 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 coverage determinations that implicate 

the Part 426 NCD/LCD appeals process. 

 In §405.207— 

 ● In paragraph (a), we are not proposing any changes to our current noncoverage 

of Category A IDE devices. As stated previously, 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, experimental/investigational (Category 

A) devices are not reasonable and necessary under section 1862(a)(1)(A) of the Act; and 

● Paragraph (b) currently states that all 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 longer 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 initiated before January 1, 2010, the device must 

be determined as intended for use in the diagnosis, monitoring or treatment of an 

immediately life-threatening disease or condition” because it is no longer 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 categorization, we are not proposing any 

changes to this section because we believe that maintaining this process continues to 
CMS-1600-P 241 

support the development of new health technologies and tools that practitioners and 

beneficiaries have access. 

 We are proposing to retain the protections in §405.215, Confidential Commercial 

and Trade Secret Information, without modification. We note that section 502(c) of the 

Act broadly prohibits the disclosure 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) outside 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 disclosure prohibition also applies to information 

reported or otherwise obtained by the Department 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 investigational 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 standards established in §405.21l. We are 

proposing this change to be consistent 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 authorizes Medicare coverage under Part B of 

ultrasound screening for abdominal aortic aneurysms (“AAA screening”), as defined in 

section 1861(bbb) of the Act. Our implementing regulations for AAA screening are at 

§410.19. AAA screening is covered for a beneficiary that meets certain criteria including 

that he or she must receive a referral during the initial preventive physical examination 

(IPPE) and has not previously had an AAA screening covered under the Medicare 

program. The IPPE, as described in section 1861(ww) of the Act (and regulations at 

§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 limitation for the IPPE effectively reduces a 

Medicare beneficiary’s ability to obtain a referral for AAA screening. 

Section 1834(n) of the Act, added by section 4105 of the Affordable Care Act, 

grants the Secretary the discretion and authority to modify coverage of certain preventive 

services identified in section 1861(ddd)(3) of the Act, which in turn cross-references 

section 1861(ww)(2) of the Act (including AAA screening at section 1861(ww)(2)(L). 

The Secretary may modify coverage to the extent that such modification is consistent 

with the recommendations of the United States Preventive Services Task Force 

(USPSTF) per section 1834(n)(1)(A) of the Act. In 2005, the USPSTF recommended 

“one-time screening for [AAA] by ultrasonography in men ages 65 through 75 who have 

ever smoked. (Grade: B Recommendation)” (Screening for Abdominal Aortic 

Aneurysm: Recommendation Statement. 

http://www.uspreventiveservicestaskforce.org/uspstf05/aaascr/aaars.htm). The USPSTF 
CMS-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 discretion and authority under section 1834(n) 

of the Act to modify coverage of AAA screening consistent with the recommendations of 

the USPSTF to eliminate the one-year time limit with respect to the referral for this 

service. This proposed modification would allow coverage of AAA screening for eligible 

beneficiaries without requiring them to receive a referral as part of the IPPE. Specifically 

for purposes of coverage of AAA screening, we 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 definition 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 beneficiaries were either not eligible to receive 

an IPPE (which did not become effective until January 1, 2005) or may not have taken 

advantage of the IPPE when they were eligible, 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 invite public comment on this proposal. 

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

Blood Tests

1. Background and Statutory Authority 

 Sections 1861(s)(2)(R) and 1861(pp)(1) of the Act authorize Medicare coverage 

of colorectal cancer screening. The statute authorizes coverage of screening fecal occult 
CMS-1600-P 244 

blood tests (FOBT), screening flexible sigmoidoscopies, screening colonoscopies, and 

other tests determined to be appropriate, subject to certain frequency and payment limits. 

Section 410.37(b) (condition for coverage of screening FOBT) specifies that Medicare 

Part B pays for screening FOBT if ordered in writing by the beneficiary’s attending 

physician. For purposes of §410.37, “attending physician” is defined as “a doctor of 

medicine or osteopathy (as defined in section 1861(r)(1) of the Act) who is fully 

knowledgeable about the beneficiary’s medical condition, and who would be responsible 

using the results of any examination performed in the overall management of the 

beneficiary’s specific medical problem.” 

 The coverage provisions for FOBT screening were established in 1997 and 

effective on January 1, 1998 (62 FR 59048, October 31, 1997). In the preamble to that 

final rule, we stated that the requirement for a written order from the attending physician 

was intended to make certain that beneficiaries receive appropriate preventive counseling 

about the implications and possible results of having these examinations performed (62 

FR 59081). 

Since then, Medicare coverage of preventive services has expanded to include, 

among other things, coverage of an annual wellness visit (as defined in §410.15). The 

annual wellness visit includes provisions for furnishing personalized health advice and 

appropriate referrals. In addition to physicians, the annual wellness visit can be furnished 

by certain nonphysician practitioners, including physician assistants, nurse practitioners, 

and clinical nurse specialists. 

 Additionally, §410.32 provides coverage and payment rules for diagnostic x-ray 

tests, diagnostic laboratory tests, and other diagnostic tests. Section 410.32(a)(2) states: 

“Nonphysician practitioners (that is, clinical nurse specialists, clinical psychologists, 
CMS-1600-P 245 

clinical social workers, nurse-midwives, nurse practitioners, and physician assistants) 

who furnish services that would be physician services if furnished by a physician, and 

who are operating within the scope of their authority under State law and within the 

scope of their Medicare statutory benefit, may be treated the same as physicians treating 

beneficiaries for the purpose of this paragraph.” 

2. Proposed Revisions 

We are proposing to revise §410.37(b), “Condition for coverage of screening 

fecal-occult blood tests,” to allow an attending physician, physician assistant, nurse 

practitioner, or clinical nurse specialist to furnish written orders for screening FOBT. 

These proposed modifications would allow 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 regarding whether a practitioner permitted to 

order a screening FOBT must be the beneficiary’s attending practitioner as described 

earlier. 
CMS-1600-P 246 

D. Ambulance Fee Schedule

1. Amendment to Section 1834(l)(13) of the Act 

Section 146(a) of the Medicare Improvements for Patients and Providers Act of 

2008 (Pub. L. 110-275, enacted on July 15, 2008) (MIPPA) amended section 

1834(l)(13)(A) of the Act to specify that, effective for ground ambulance services 

furnished on or after July 1, 2008 and before January 1, 2010, the ambulance fee schedule 

amounts for ground ambulance services shall be increased as follows: 

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

rural census tract of a metropolitan statistical area, the fee schedule amounts shall be 

increased by 3 percent. 

● For covered ground ambulance transports that do not originate in a rural area or 

in a rural census tract of a metropolitan statistical area, the fee schedule amounts shall be 

increased by 2 percent. 

Sections 3105(a) and 10311(a) of the Affordable Care Act further amended 

section 1834(l)(13)(A) of the Act to extend the payment add-ons described above for an 

additional year, such that these add-ons also applied to covered ground ambulance 

transports furnished on or after January 1, 2010, and before January 1, 2011. In the 

CY 2011 PFS final rule with comment period (75 FR 73385, 73386, 73625), we revised 

§414.610(c)(1)(ii) to conform the regulations to this statutory requirement. 

Section 106(a) of the Medicare and Medicaid Extenders Act of 2010 (Pub. L.111-

309, enacted December 15, 2010) (MMEA) again amended section 1834(l)(13)(A) of the 

Act to extend the payment add-ons described above for an additional year, such that these 

add-ons also applied to covered ground ambulance transports furnished on or after 

January 1, 2011, and before January 1, 2012. In the CY 2012 End-Stage Renal Disease 
CMS-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 Payroll Tax Cut Continuation Act of 2011 

(TPTCA) (Pub. L. 112-78, enacted on December 23, 2011) amended section 

1834(l)(13)(A) of the Act to extend the payment add-ons described above through 

February 29, 2012; and section 3007(a) of the Middle Class Tax Relief and Job Creation 

Act of 2012 (Pub. L. 112-96, enacted on February 22, 2012) (MCTRJCA) further 

amended section 1834(l)(13)(A) of the Act to extend these payment add-ons through 

December 31, 2012. Thus, these payment add-ons also applied to covered ground 

ambulance transports furnished on or after January 1, 2012 and before January 1, 2013. 

In the CY 2013 PFS final rule (77 FR 69139, 69368), we revised §414.610(c)(1)(ii) to 

conform the regulations to this statutory requirement. 

Subsequently, section 604(a) of the ATRA amended section 1834(l)(13)(A) of the 

Act to extend the payment add-ons described above through December 31, 2013. Thus, 

these payment add-ons also apply to covered ground ambulance transports furnished on 

or after January 1, 2013 and before January 1, 2014. Thus, we propose to revise 

§414.610(c)(1)(ii) to conform the regulations to this statutory requirement. 

This statutory requirement is self-implementing. A plain reading of the statute 

requires only a ministerial application of the mandated rate increase, and does not require 

any substantive exercise of discretion on the part of the Secretary. 

2. Amendment to Section 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 area 
CMS-1600-P 248 

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

fee schedule for air ambulance services furnished on December 31, 2006, must continue 

to be treated as a rural area for purposes of making payments under the ambulance fee 

schedule for air ambulance services furnished during the period July 1, 2008 through 

December 31, 2009. 

 Sections 3105(b) and 10311(b) of the Affordable Care Act amended section 

146(b)(1) of MIPPA to extend this provision for an additional year, through 

December 31, 2010. In the CY 2011 PFS final rule (75 FR 73385, 73386, and 73625 

through 73626), we revised §414.610(h) to conform the regulations to this statutory 

requirement. 

 Section 106(b) of the MMEA amended section 146(b)(1) of MIPPA to extend this 

provision again through December 31, 2011. In the CY 2012 ESRD PPS final rule 

(76 FR 70284, 70285, and 70315), we revised §414.610(h) to conform the regulations to 

this statutory requirement. 

 Subsequently, section 306(b) of the TPTCCA amended section 146(b)(1) of 

MIPPA to extend this provision through February 29, 2012; and section 3007(b) of the 

MCTRJCA further amended section 146(b)(1) of MIPPA to extend this provision 

through December 31, 2012. In the CY 2013 PFS final rule (77 FR 69139, 69140, and 

69368), we revised §414.610(h) to conform the regulations to this statutory requirement. 

 Subsequently, section 604(b) of the ATRA amended section 146(b)(1) of MIPPA 

to extend this provision through June 30, 2013. Thus, we propose to revise §414.610(h) 

to conform the regulations to this statutory requirement. 

 This statutory requirement is self-implementing. A plain reading of the statute 

requires only a ministerial application of a rural indicator, and does not require any 
CMS-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” indicator on the ZIP Code file for air ambulance 

services through June 30, 2013. 

3. Amendment to Section 1834(l)(12) of the Act 

Section 414 of the Medicare Prescription Drug, Improvement and Modernization 

Act of 2003 (Pub. L. 108-173, enacted on December 8, 2003) (MMA) added section 

1834(l)(12) to the Act, which specified that in the case of ground ambulance services 

furnished on or after July 1, 2004, and before January 1, 2010, for which transportation 

originates in a qualified rural area (as described in the statute), the Secretary shall provide 

for a percent increase in the base rate of the fee schedule for such transports. The statute 

requires this percent increase to be based on the Secretary’s estimate of the average cost 

per trip for such services (not taking into account mileage) in the lowest quartile of all 

rural county populations as compared to the average cost per trip for such services (not 

taking into account mileage) in the highest quartile of rural county populations. Using 

the methodology specified in the July 1, 2004 interim final rule (69 FR 40288), we 

determined that this percent increase was equal to 22.6 percent. As required by the 

MMA, this payment increase was applied to ground ambulance transports that originated 

in a “qualified rural area”; that is, to transports that originated in a rural area included in 

those areas comprising the lowest 25th percentile of all rural populations arrayed by 

population density. For this purpose, rural areas included Goldsmith areas (a type of 

rural census tract). 

 Sections 3105(c) and 10311(c) of the Affordable Care Act amended section 

1834(l)(12)(A) of the Act to extend this rural bonus for an additional year through 
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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 amended section 1834(l)(12)(A) of the Act to 

extend this rural bonus through February 29, 2012; and section 3007(c) of the MCTRJCA 

further amended section 1834(l)(12)(A) of the Act to extend this rural bonus through 

December 31, 2012. In the CY 2013 PFS final rule with comment period (77 FR 69140, 

69368), we revised §414.610(c)(5)(ii) to conform the regulations to these statutory 

requirements. 

 Subsequently, section 604(c) of the ATRA amended section 1834(l)(12)(A) of the 

Act to extend this rural bonus through December 31, 2013. Therefore, we are continuing 

to apply the 22.6 percent rural bonus described above (in the same manner as in previous 

years), to ground ambulance services with dates of service on or after January 1, 2013 

and before January 1, 2014 where transportation originates in a qualified rural area. 

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 Code 
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File. 

 This statutory requirement is self-implementing. This provision requires a oneyear extension of the rural bonus (which was previously established by the Secretary) 

through December 31, 2013, and does not require any substantive exercise of discretion 

on the part of the Secretary. 

4. Addition of section 1834(l)(15) of the Act 

 Section 637 of the ATRA, which added section 1834(l)(15) of the Act, specifies 

that the fee schedule amount otherwise applicable under the preceding provisions of 

section 1834(l) of the Act shall be reduced by 10 percent for ambulance services 

furnished on or after October 1, 2013, consisting of non-emergency basic life support 

(BLS) services involving transport of an individual with end-stage renal disease for renal 

dialysis services (as described in section 1881(b)(14)(B) of the Act) furnished other than 

on an emergency basis by a provider of services or a renal dialysis facility. We are 

proposing to revise §414.610 by adding paragraph (c)(8) to conform the regulations to 

this statutory requirement. 

 This statutory requirement is self-implementing. A plain reading of the statute 

requires only a ministerial application of the mandated rate decrease, and does not require 

any substantive exercise of discretion on the part of the Secretary. Accordingly, for the 

ambulance services described in section 637 of the ATRA furnished on or after 

October 1, 2013, the fee schedule amount otherwise applicable (both base rate and 

mileage) 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 the 
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following studies: 

(A) A study that analyzes data on existing cost reports for ambulance services 

furnished by hospitals and critical access hospitals, including variation by characteristics 

of such providers of services, with a Report to Congress on such study due no later than 

October 1, 2013; and 

(B) A study of the feasibility of obtaining cost data on a periodic basis from all 

ambulance providers of services and suppliers for potential use in examining the 

appropriateness of the Medicare add-on payments for ground ambulance services 

furnished under the fee schedule under section 1834(l) of the Act and in preparing for 

future reform of such payment system, with a Report to Congress due on such study no 

later than July 1, 2014. 

Further, in conducting the study under paragraph (B) above, section 604(d)(2) of 

the ATRA directs the Secretary to: 

● Consult with industry on the design of such cost collection efforts; 

● Explore the use of cost surveys and cost reports to collect appropriate cost data 

and the periodicity of such cost data collection; 

● Examine the feasibility of developing a standard cost reporting tool for 

providers of services and suppliers of ground ambulance services; and 

● Examine the ability to furnish such cost data by various types of ambulance 

providers of services and suppliers, especially by rural and super-rural providers of 

services and suppliers. 

 As noted above, in conducting the study under section 604(d)(1) of the ATRA 

described in paragraph (B) above, the Secretary is required to consult with industry on 

the design of such cost collection efforts (see section 604(d)(2)(A) of the ATRA). We 
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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 all ambulance providers of 

services and suppliers for potential use in examining the appropriateness of the Medicare 

add-on payments for ground ambulance services furnished under the fee schedule under 

section 1834(l) of the Act and in preparing for future reform of such payment system. 

We therefore invite public comment on these issues as part of the study we are 

conducting under section 604(d)(1)(B) of the ATRA. 

E. Proposals Regarding the Clinical Laboratory Fee Schedule

1. Background on the Clinical Laboratory Fee Schedule 

Under Medicare Part B, clinical diagnostic laboratory tests furnished on or after 

July 1, 1984, in a physician’s office, by an independent laboratory, or by a hospital 

laboratory for its outpatients and nonpatients 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 State or a local geographic area; or 

● A national limitation amount (NLA) (section 1833(a)(1)(D)(i), (a)(2)(D)(i), 

(h)(1), and (h)(4)(B) of the Act). The NLA for a clinical diagnostic laboratory test 

performed after December 31, 1997 is equal to 74 percent of the median of all fee 

schedules established for that test for that laboratory setting or 100 percent of such 

median in the case of a clinical diagnostic laboratory test performed on or after 

January 1, 2001, that the Secretary determines is a new test for which no limitation 

amount has previously been established (section 1833(h)(4)(B)(viii) of the Act). 
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Currently, we update the CLFS amounts annually to reflect changes in the 

Consumer Price Index for all Urban Consumers (U.S. city average) (CPI-U) and apply a 

multi-factor productivity adjustment (see section 1833(h)(2)(A) of the Act). In the past, 

we also implemented other adjustments or did not apply the change in the CPI-U to the 

CLFS 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 tests where a new or substantially revised 

HCPCS code is assigned on or after January 1, 2005, we determine the basis for, and 

amount of, payment for these clinical diagnostic laboratory tests (see section 1833(h)(8) 

of the Act and 42 CFR §§414.500 through 414.509). Once established, however, in most 

cases, we only have the opportunity to reconsider the basis and/or amount of payment for 

new tests for one additional year after the basis or payment is initially set. Once the 

reconsideration process is complete, payment is not further adjusted (except by a change 

in the CPI-U, the productivity adjustment, and any other adjustments required by statute), 

regardless of any shift in the actual costs incurred to perform the test. 

This lack of an established mechanism to adjust payment amounts is unique 

among the Medicare payment schedules and systems. Generally, fee schedules and 

prospective payment systems are evaluated each year to reflect the changing mix of 

services provided under that system or schedule and then the system or schedule is 

adjusted to maintain budget neutrality. Since there is currently no process to make such 

adjustments for the CLFS, payment amounts are essentially locked in place and do not 

change when the cost of the test changes. As discussed below, in this proposed rule, we 
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are proposing to implement a process to adjust payment amounts based on changes in 

technology. 

2. Proposals Regarding Technological Changes Under Section 1833(h)(2)(A)(i) of the 

Act 

a. Background on Technological Changes 

There has been a significant amount of technological change in the clinical 

laboratory area since the implementation of the CLFS, which has resulted in the increased 

use of point-of-care testing, brand new tests being developed, and the proliferation of 

laboratory-developed tests. The Institute of Medicine (IOM) dedicated a chapter of its 

2000 report “Medicare Laboratory Payment Policy: Now and in the Future” to discussing 

trends in laboratory technology. The report noted rapid and dramatic innovation in the 

laboratory sector since the 1980s and remarkable growth in the range and complexity of 

available tests. The IOM concluded that the introduction of new tests, advances in 

equipment and testing techniques, and the proliferation of advanced information 

technology have all made testing more efficient and automated. 

Technology has enabled a significant site-of-service shift for many laboratory 

tests from the laboratory environment to the point of health care delivery. This point-ofcare testing has increased since the 1980s, when this type of testing first became 

available, mainly due to changes in technology which resulted in smaller, cheaper, and 

more portable test kits that are simple to use. For example, drug abuse testing has 

become readily available at the point of care. Point-of-care testing can be performed in 

various institutional and community settings but the main objective of such testing is to 

produce a result quickly, at the place where the patient is receiving care, such as at a 
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physician’s office or at a hospital bedside, to facilitate decisions about appropriate 

treatment. 

There are also brand new technologies that did not exist when the CLFS was 

established, most notably genetic and genomic tests. This area of medicine evolved from 

the work of the Human Genome Project and subsequent research and development by 

both the federal government and private firms. The cost of sequencing a genome has 

dropped dramatically since the early inception of this technology in 2001 from more than 

$95 million per genome to approximately $5,700 in early 2013 

(http://www.genome.gov/pages/der/sequencing_cost.xlsx). Early tests in this area were less likely 

to be covered by Medicare because they were either screening tests or tests for conditions 

found in the pediatric population. As this area has expanded over the past several 

decades, Medicare has taken on a more prominent role in payment for these services (see 

77 FR 68994 through 69002 for a thorough discussion of how Medicare pays for these 

tests). We expect the number of codes and tests in this area to continue to grow as the 

technology evolves and more tests become available in the areas of pharmacogenomics, 

personalized and predictive medicine, and companion diagnostics. 

We also note the growth in laboratory-developed tests (LDTs) over the years. 

These proprietary tests are developed by laboratories, which then offer the service of 

providing the test. Some of the most advanced laboratory tests currently being performed 

are LDTs which use sophisticated proprietary technology. Many LDTs do not have their 

own codes; instead, they are billed using unlisted codes for which contractors establish a 

payment amount. Other LDTs were billed to Medicare using “stacking 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 replaced 
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with 114 new test-specific codes. These payment processes provide us with limited 

information about the technology used to perform these tests. However, we know that 

the number of LDTs has been growing over the years and multiple laboratories have 

developed ways to perform the same test. Further, our recent experience with using a gap 

filling methodology to price molecular pathology tests, which are often LDTs, has shown 

that the costs of performing these tests have decreased since contractors initially 

established payment amounts for the tests, or compared to the code stack previously 

billed. Our experience with gap filling molecular pathology tests has also shown that 

there is wide variation in the cost of performing the same test by different laboratories. 

We believe that, given the technological changes that have occurred in the 

laboratory industry over the past several decades and the growth in the number of clinical 

laboratory tests (CMS has added approximately 800 new test codes to the CLFS since its 

inception), it would be appropriate to establish a process to reconsider payment amounts 

on the CLFS to take into account increased efficiency, changes in laboratory personnel 

and supplies necessary to conduct a test, changes in sites of service, and other changes 

driven by technological advances. 

Section 1833(h)(2)(A)(i) of the Act requires the Secretary to set the fee schedules 

for clinical laboratory tests “for the 12-month period beginning July 1, 1984, adjusted 

annually (to become effective on January 1 of each year) by, subject to [the multi-factor 

productivity adjustment], [the change in the CPI-U] and subject to such other adjustments 

as the Secretary determines are justified by technological changes” (emphasis added). 

Under this authority, we are proposing 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. 
CMS-1600-P 258 

b. Proposed Definition of Technological Changes 

We are proposing to define technological changes as changes to the tools, 

machines, supplies, labor, instruments, skills, techniques, and devices by which 

laboratory tests are produced and used. Changes in technology could result in changes to, 

among other things, the resources required to perform the test (such as the type, volume, 

or number of supplies or reagents required), the laboratory personnel required to perform 

the test, and/or the frequency of testing, volume of testing, or site of service (for example, 

a shift in service site from a specialty laboratory to a physician’s office). We believe this 

broad definition would capture all of the technological changes that could impact the 

resource inputs for various tests on the CLFS. As discussed below, the technological 

changes for a specific test would be discussed in the proposed rule in which we are 

proposing to adjust the payment amount for that test, and we would seek public comment 

on our determination of the technological changes and the payment adjustment. 

c. Proposed Process 

We are proposing that, each year, we would review certain codes on the CLFS, as 

described in the next section, to determine whether we believe that payment for these 

codes should be adjusted due to technological changes. For those codes where we 

determine that payment adjustments should be made, beginning with the CY 2015 PFS 

proposed rule, we would identify the test code, discuss how it has been impacted by 

technological changes, and propose an associated adjustment to the payment amount for 

the test code as appropriate to reflect the impact of such technological changes. 

We believe such adjustments could be made both to increase fee schedule 

amounts (for example, in situations where new high cost technologies are employed), and 

to provide for reductions in existing amounts (for example in situations where technology 
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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 the 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 after 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 support or establish an adjustment to the 

payment amount due to technological changes. 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 adjustments would be applied after we establish the 

new payment amount through our usual instruction process. 

We believe that this proposed process would best allow for the greatest amount of 

transparency in review and the most structured and consistent opportunity for the public 

to provide input into the process. We are soliciting comment on these proposals. 

d. Proposed Identification and Prioritization of Codes to be Reviewed 

We are proposing to review all codes currently 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, until we have reviewed all of the codes on 

the CLFS. We believe that the payment amounts for codes that have been on the CLFS 

the longest amount of time would be most affected by changes in technology because, in 

general, technology is most expensive earliest in its life cycle but decreases in cost as the 
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technology matures and diffuses. If during the course of reviewing these individual 

codes we find that there are additional, newer codes that are clinically and/or 

technologically similar, we are proposing to consider them for review at the same time as 

we review the older codes because we expect we would have the same or similar 

justifications for making payment adjustments to those codes. We intend to review these 

codes as quickly as possible but we believe there would be a significant administrative 

burden associated with such a comprehensive review of the 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 technological changes, we are proposing to 

review codes added to the CLFS after 2015 that have been on the CLFS for at least 5 

years. We would also review codes again that have not been reviewed in the previous 5 

years, as time and resources allow. We believe that tests that are less than 5 years old are 

likely still in their technological infancy and enough time would not have passed to 

adequately assess any change in technology for those services. Similarly, for previously 

reviewed codes, we believe that technology likely would not 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 codes for review, including those that had been 

previously reviewed for technological change. 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. Further, we are proposing that the nomination 
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must include an explanation from the nominator of the technological change in the 

service and the way that change affects its delivery. We would then consider these 

nominations and, in the Federal Register the following year, either propose a payment 

change based on technological changes or explain why we think such a change is not 

warranted at that time. 

We are proposing to codify the proposed process at 42 CFR §414.511. 

We are seeking public comment on these proposals. We also are seeking 

comment on alternative approaches to achieving 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 laboratory tests into the base payment for the Ambulatory 

Payment Classification (APC). For details on this proposal, please see the “Proposed 

Changes to Packaged Items and Services” section of the CY 2014 OPPS/ASC proposed 

rule. Comments on the OPPS proposal should 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. 
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F. Liability for Overpayments to or on Behalf of Individuals including Payments to 

Providers or Other Persons

1. Background and Statutory Authority 

CMS waives recovery of overpayments in certain situations for claims based feefor-service provider, supplier or beneficiary overpayments in accordance with section 

1870 of the Act. Section 1870(b) and (c) of the Act provide a waiver of recovery of 

provider, supplier or beneficiary overpayments under certain presumptions within a 

specified timeframe. Section 1870(b) and (c) of the Act allow the Secretary to reduce the 

specified time period to not less than one year if the Secretary finds that such a reduction 

is consistent with the objectives of the Medicare program. Section 638 of the American 

Taxpayer Relief Act of 2012 (ATRA) (Pub. L. 112–240, enacted January 2, 2013) 

changed the timeframes associated with section 1870(b) and (c) of the Act. 

Section 1870(b) of the Act provides for the waiver of recovery of an overpayment 

to a provider of services (hereinafter, “provider”) or other person whenever that provider 

or other person is “without fault” in incurring the overpayment. For purposes of section 

1870 of the Act and this proposed rule, the term “other person” includes practitioners, 

physicians, and other suppliers. 

Section 1870(b) of the Act also establishes circumstances under which a provider 

or other person is presumed for administrative purposes to be “without fault” for an 

overpayment. If an overpayment is determined after a specified period of time, a 

provider or other person is presumed to be “without fault.” This presumption is negated, 

however, if there is evidence to show that the provider or other person was responsible 

for causing the overpayment. 

Section 1870(c) of the Act provides for the waiver of recovery of an overpayment 
CMS-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 Social Security or Medicare 

programs or would be “against equity and good conscience.” 

Section 1870(c) of the Act also establishes circumstances under which recovery 

of an overpayment for an individual is presumed to be “against equity and good 

conscience.” After a specified period of time, recovery of certain overpayments from 

individuals who are “without fault” is presumed “against equity and good conscience.” 

The overpayments addressed by this provision are payments for items or services for 

which payment may not be made because of the prohibitions found in section 1862(a)(1) 

or (a)(9) of the Act. Sections 1862(a)(1) and (a)(9) prohibit payment for, among other 

things, items and services that are not reasonable and necessary or that are for custodial 

care. 

Section 638 of the ATRA amended the timeframe specified in section 1870(b) of 

the Act “without fault” presumption from 3 to 5 years so that the presumption of “without 

fault” only applies if the Medicare claims based fee-for-service overpayment 

determination for a provider or other person is made subsequent to the fifth year (instead 

of the third year) following the year in which the notice was sent to such individual that 

such amount had been paid. Likewise, section 638 of the ATRA amended the timeframe 

in section 1870(c) of the Act so that the presumption for “against equity and good 

conscience” for certain types of denials for an individual who is “without fault” only 

applies if the overpayment determination is made subsequent to the fifth year (instead of 

the third year) following the year in which notice of such payment was sent to such 

individual. 

These ATRA changes do not affect or change CMS’ claims reopening regulation 
CMS-1600-P 264 

at §405.980. Specifically, we retain our authority 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 event for the “without fault” and “against 

equity and good conscience” presumptions. These 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 the 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 overpayment determination is made subsequent to 

the fifth year (instead of the third year) following the year in which the notice was sent to 

such individual that such amount had been paid. 

Likewise, we propose to amend the timeframe at §405.355(b) for the presumption 

“against equity and good conscience” for certain types of denials for an individual who is 

“without fault” so that the presumption would apply if the overpayment determination is 

made subsequent to the fifth year (instead of the third year) following the year in which 

the notice of payment was sent to the individual. 

Additionally, in our review of the current regulation implementing section 

1870(c) of the Act, we noted that §405.355(b) does not clearly reflect the statutory 

language, which limits the “against equity and good conscience” presumption to 

overpayments associated with denials under section 1862(a)(1) or (a)(9) of the Act. 

Accordingly, we propose to update and clarify §405.355(b) so that it clearly reflects the 

statutory language by adding that the “against equity and good conscience” presumption 

would be applicable for an individual who is “without fault” only if the overpayment is 
CMS-1600-P 265 

related to items and services that are not payable under section 1862(a)(1) or (a)(9) of the 

Act. In addition, we propose to delete the 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. 
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G. Physician Compare Website

1. Background and Statutory Authority 

 Section 10331 (a)(1) of the Affordable Care Act, requires that, by no later than 

January 1, 2011, we develop a Physician Compare Internet website with information on 

physicians enrolled in the Medicare program under section 1866(j) of the Act, as well as 

information on other eligible professionals who participate in the Physician Quality 

Reporting System (PQRS) under section 1848 of the Act. 

 CMS launched the first phase of Physician Compare on December 30, 2010 

(www.medicare.gov/physiciancompare). In the initial phase, we posted the names of 

eligible professionals that satisfactorily submitted quality data for the 2009 PQRS, as 

required by section 1848(m)(5)(G) of the Act. 

 Section 10331(a)(2) of the Affordable Care Act also requires that, no later than 

January 1, 2013, and for reporting periods that begin no earlier than January 1, 2012, we 

implement a plan for making publicly available through Physician Compare information 

on physician performance that provides comparable information on quality and patient 

experience measures. We met this requirement in advance of January 1, 2013, as 

outlined below, and intend to continue to address elements of the plan through 

rulemaking. 

 To the extent that scientifically sound measures are developed and are available, 

we are required to include, to the extent practicable, the following types of measures for 

public reporting: 

● Measures collected under the PQRS. 

● An assessment of patient health outcomes and functional status of patients. 

● An assessment of the continuity and coordination of care and care transitions, 
CMS-1600-P 267 

including episodes of care and risk-adjusted resource use. 

● An assessment of efficiency. 

● An assessment of patient experience and patient, caregiver, and family 

engagement. 

● An assessment of the safety, effectiveness, and timeliness of care. 

● Other information as determined appropriate by the Secretary. 

As required under section 10331(b) of the Affordable Care Act, in developing and 

implementing the plan, we must include, to the extent practicable, the following: 

● Processes to ensure that data made public are statistically valid, reliable, and 

accurate, including risk adjustment mechanisms used by the Secretary. 

● Processes for physicians and eligible professionals whose information is being 

publicly reported to have a reasonable opportunity, as determined by the Secretary, to 

review their results before posting to Physician Compare. This would consist of a 30-day 

preview period for all measurement performance data that will allow physicians and other 

eligible professionals to view their data as it will appear on the website in advance of 

publication. Details of the preview process will be communicated on the Physician 

Compare Initiative page on CMS.gov in advance of the preview period. 

● Processes to ensure the data published on Physician Compare provides a robust 

and accurate portrayal of a physician’s performance. 

● Data that reflects the care provided to all patients seen by physicians, under 

both the Medicare program and, to the extent applicable, other payers, to the extent such 

information would provide a more accurate portrayal of physician performance. 

● Processes to ensure appropriate attribution of care when multiple physicians 

and other providers are involved in the care of the patient. 
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● Processes to ensure timely statistical performance feedback is provided to 

physicians concerning the data published on Physician Compare. 

● Implementation of computer and data infrastructure and systems used to 

support valid, reliable and accurate reporting activities. 

 Section 10331(d) of the Affordable Care Act requires us to consider input from 

multi-stakeholder groups in selecting quality measures for Physician Compare, which we 

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 through Physician Compare, section 10331(e) 

of the Affordable Care Act requires the Secretary, as the Secretary deems appropriate, to 

consider the plan to transition to value-based purchasing for physicians and other 

practitioners that was developed under section 131(d) of the Medicare Improvements for 

Patients and Providers Act of 2008 (MIPPA) (Pub. L. 110-275, enacted on July 15, 

2008). 

 Under section 10331(f) of the Affordable Care Act, we are required to submit a 

report to the Congress, by January 1, 2015, on Physician Compare development, and 

include information on the efforts and plans to collect and publish data on physician 

quality and efficiency and on patient experience of care in support of value-based 

purchasing and consumer choice. Initial work on this report is currently underway. 

Section 10331(g) of the Affordable Care Act provides that any time before that date, we 

may continue to expand the information made available on Physician Compare. 

 We believe section 10331 of the Affordable Care Act supports our overarching 

goals of providing consumers with quality of care information to make informed 

decisions about their healthcare, while encouraging clinicians to improve on the quality 
CMS-1600-P 269 

of care they provide to their patients. In accordance with section 10331 of the Affordable 

Care Act, we intend to utilize Physician Compare to publicly report physician 

performance results. 

2. Public Reporting of Physician Performance Data 

 Since the initial launch of the website, we have continued to build on and improve 

Physician Compare. In 2013, we launched a full redesign of Physician Compare offering 

significant improvements including a complete overhaul of the underlying database and a 

new Intelligent Search feature, addressing two of our stakeholders’ primary critiques of 

the site and considerably improving functionality and usability. The primary source of 

administrative information on Physician Compare is the Provider Enrollment, Chain, and 

Ownership System (PECOS); as the sole source of verified Medicare professional 

information, PECOS remains the primary information source. However, with the 

redesign, we incorporated Medicare claims information to verify the information in 

PECOS to ensure only the most current and accurate information is included on the site. 

 With the redesign, users can now search for Medicare physicians and other 

healthcare professionals by defining a location – a ZIP code, a city/State combination, an 

exact address, or landmark – and by entering a medical specialty, health 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 specialties, practice locations, group affiliations, 

hospital affiliations that link to the hospital’s profile on Hospital Compare as available, 

Medicare Assignment status, education, languages spoken, and American Board of 
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Medical Specialties (ABMS) board certification information. In addition, for group 

practices, users can also view group practice names, specialties, practice locations, 

Medicare Assignment status, and affiliated professionals. 

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 report under the PQRS, as 

well as those eligible professionals who are successful electronic prescribers under the 

Medicare Electronic Prescribing (eRx) Incentive Program, and Physician Compare 

contains a link to the list of names. In addition to the list of names, there is a section on 

each individual’s profile page listing the quality programs under which the specific 

individual satisfactorily reported or was a successful electronic prescriber. The program 

name is listed and a green check mark clearly 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 which group practices are 

satisfactorily reporting in Group Practice Reporting 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 programs section of the profile page to note 

those individuals who report the PQRS Cardiovascular Prevention measures group in 

support of the Million Hearts Initiative. Finally, a check mark will be added to indicate 

those individuals who have earned a Maintenance of Certification Additional Incentive 
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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 Compare. The first phase of our plan was 

finalized with the 2012 PFS final rule with comment period (77 FR 69166), where we 

established that PQRS GPRO measures collected through the GPRO web interface during 

2012 would be publicly reported on Physician Compare. These measures will be publicly 

reported on Physician Compare in CY 2014. We expanded our plan with the 2013 PFS 

final rule with comment period (77 FR 69166) where we established that the specific 

GPRO web interface measures that would be posted on Physician Compare include the 

Diabetes Mellitus (DM) and Coronary Artery Disease (CAD) PQRS GPRO measures, 

and that we would develop and report composite measures for these measure groups in 

future years, if technically feasible. For data reported in 2013 under the GPRO, DM and 

CAD PQRS GPRO measures and composites collected via the GPRO web interface that 

meet the minimum sample size of 20 patients, and that prove to be statistically valid and 

reliable, will be publicly reported on Physician Compare in late CY 2014, if technically 

feasible. As we previously established, if the minimum threshold is not met for a 

particular measure, or the measure is otherwise deemed not to be suitable for public 

reporting, the group’s performance rate on that measure will not be publicly reported. 

In the Shared Savings Program final rule (76 FR 67948), we noted that because 

Accountable Care Organization (ACO) providers/suppliers that are eligible professionals 

are considered to be group practices for purposes of qualifying for a PQRS incentive 

under the Shared Savings Program, we would publicly report performance on quality 

measures as we report performance on quality measures for PQRS GPRO group 
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practices. Public reporting of performance on these measures will be presented at the 

ACO level only. 

In the CY 2013 PFS final rule with comment period (77 FR 69167), we also 

finalized our decision to publicly report Clinician and Group Consumer Assessment of 

Healthcare Providers and Systems (CG-CAHPS) data for group practices of 100 or more 

eligible professionals reporting data in 2013 under the GPRO, and for ACOs participating 

in the Shared Savings Program. We anticipate posting these data on Physician Compare 

as early as 2014. 

3. Future Development of Physician Compare 

We will continue to phase in an expansion of Physician Compare over the next 

several years by incorporating quality measures from a variety of sources, as technically 

feasible. We previously finalized a decision to publicly report on Physician Compare the 

performance rates on a limited set of web interface quality measures that group practices 

submit under the 2012 and 2013 PQRS GPRO web interface (76 FR 73417 and 77 FR 

69166). 

For 2014, we propose to expand the quality measures posted on Physician 

Compare by publicly reporting performance on all measures collected through the GPRO 

web interface for groups of all sizes participating in 2014 under the PQRS GPRO and for 

ACOs participating in the Medicare Shared Savings Program. 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 publication of quality data on Physician Compare so that group 

practices and ACOs can view their data as it will appear on Physician Compare before it 

is publicly reported. CMS will detail the process for the 30-day preview and provide a 
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detailed timeline and instructions for preview 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 option, 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 physicians and other eligible professionals 

under PQRS, we propose to publicly report on Physician Compare performance on 

certain measures that groups report via registries and EHRs in 2014 for the PQRS GPRO. 

Specifically, we propose to report, no earlier than 2015, performance on the GPRO 

registry and EHR measures identified below that can also be reported via the GPRO web 

interface in 2014. By proposing to include on Physician Compare performance on these 

measures reported by participants under the GPRO through registries and EHRs, as well 

as the GPRO web interface, we continue to provide beneficiaries with a consistent set of 

measures over time. For registry reporting, publicly reported measures would include: 

● Diabetes: Hemoglobin A1c Poor Control. 

● Heart Failure (HF): Beta-Blocker Therapy for Left Ventricular Systolic 

Dysfunction (LVSD). 

● Medication Reconciliation. 

● Preventive Care and Screening: Influenza Immunization. 

● Pneumococcal Vaccination Status for Older Adults. 

● Preventive Care and Screening: Breast Cancer Screening. 

● Colorectal Cancer Screening. 

● Coronary Artery Disease (CAD): Angiotensin-converting Enzyme (ACE) 
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Inhibitor or Angiotensin Receptor Blocker (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 Disease (CAD): Lipid Control. 

● Ischemic Vascular Disease (IVD): Use of Aspirin or Another Antithrombotic. 

● Preventive Care and Screening: Tobacco Use: Screening and Cessation 

Intervention. 

● Hypertension (HTN): Controlling High Blood Pressure. 

● Ischemic Vascular Disease (IVD): Complete Lipid Panel and LDL Control. 

● Preventive Care and Screening: Screening for High Blood Pressure and 

Follow-Up Documented. 

For EHR reporting, publicly reported measures would include: 

● Diabetes: Hemoglobin A1c Poor Control. 

● Heart Failure (HF): Beta-Blocker Therapy for Left Ventricular Systolic 

Dysfunction (LVSD). 

● Preventive Care and Screening: Influenza Immunization. 

● Pneumococcal Vaccination Status for Older Adults. 

● Preventive Care and Screening: Breast Cancer Screening. 

● Colorectal Cancer Screening. 

● Adult Weight Screening and Follow-Up. 

● Coronary Artery Disease (CAD): Lipid Control. 

● Ischemic Vascular Disease (IVD): Use of Aspirin or Another Antithrombotic. 

● Preventive Care and Screening: Tobacco Use: Screening and Cessation 
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Intervention. 

● Hypertension (HTN): Controlling High Blood Pressure. 

● Ischemic Vascular Disease (IVD): Complete Lipid Panel and LDL Control. 

● Preventive Care and Screening: Screening for High Blood Pressure and 

Follow-Up Documented. 

Consistent with the requirement under section 10331(a)(2) of the Affordable Care 

Act to make comparable information on patient experience of care measures publicly 

available, we previously finalized a plan to post performance on patient experience 

survey-based measures from the Clinician and Group Consumer Assessment of 

Healthcare Providers and Systems (CG-CAHPS) (77 FR 44804) including the following 

patient experience of care measures for group practices participating in the PQRS GPRO 

(77 FR 44964): 

● CAHPS: Getting Timely Care, Appointments, and Information. 

● CAHPS: How Well Your Doctors Communicate. 

● CAHPS: Patients’ Rating of Doctor. 

● CAHPS: Access to Specialists. 

● CAHPS: Health Promotion and Education 

These measures capture patients’ experiences with clinicians and their staff, and 

patients’ perception of care. We finalized a decision to publicly report performance on 

these measures on Physician Compare in 2014 for data collected for PY 2013 for group 

practices with 100 or more eligible professionals participating in the PQRS GPRO in 

2013 and reporting data through the GPRO web interface. At least for data reported for 

2013, we noted that we would administer and collect patient experience survey data on a 

sample of the group practices’ beneficiaries. 
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For ACOs participating in the Shared Savings Program, consistent with the PQRS 

policy of publicly reporting patient experience measures on Physician Compare starting 

with data collected for CY 2013, we will publicly report patient experience data in 

addition to the measure data reported through the GPRO web interface (76 FR 67948). 

Specifically, the patient experience measures that would be reported for ACOs include 

the CG-CAHPS measures in the Patient/Caregiver Experience domain finalized in the 

Shared Savings Program final rule (76 FR 67889): 

● CAHPS: Getting Timely Care, Appointments, and Information. 

● CAHPS: How Well Your Doctors Communicate. 

● CAHPS: Patients’ Rating of Doctor. 

● CAHPS: Access to Specialists. 

● CAHPS: Health Promotion and Education. 

● CAHPS: Shared Decision Making 

● CAHPS: Health Status/Functional Status 

For data reported for 2014, we propose to continue public reporting of these CGCAHPS data for PQRS GPRO group practices of 100 or more eligible professionals 

participating in the GPRO via the web interface and for Shared Savings Program ACOs 

reporting through the GPRO web interface or other CMS-approved tool or interface. 

Consistent with what we finalized for CY 2013 under the PQRS GPRO, we will 

administer and fund the collection of data for 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 important tools for assessing beneficiary 

experience of care and outcomes, and under our authority under section 1848(m)(3)(C) of 
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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 professionals to report CG-CAHPS by 

proposing to make these measures available for reporting the PQRS and for the Value 

Based Payment Modifier. We propose to publicly report CY 2014 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 reporting accurate, valid, and reliable data on 

Physician Compare and are aware that each group practice is unique in size and scope. 

We have closely evaluated the available data collection mechanisms, and are confident 

that CG-CAHPS is a well-tested collection mechanism with strong support from the 

healthcare community, and that it provides the best opportunity to collect useful and 

accurate data for the largest number of group practices. We propose to use only those 

survey domains that are applicable 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 comment period (77 FR 44804), we indicated 

our intention to publicly report performance rates on quality measures included in the 

2014 PQRS and for individual eligible professionals consistent with the requirements 

under section 10331 of the Affordable Care Act to provide information about physicians 

and other eligible professionals who participate in PQRS. We believe that individuallevel measure data is important in helping consumers make informed healthcare decisions 

and that this information should be posted on the site as soon as technically feasible. 
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Therefore, we propose to publicly report comparable data, as noted below, collected for 

the CY 2014 PQRS via claims, EHR or registry from individual eligible professionals as 

early as CY 2015. Specifically, we propose to post individual measures reported by 

individual eligible professionals in line with those measures reported by groups through 

the GPRO web interface. These measures include: 

● Diabetes: Hemoglobin A1c Poor Control. 

● Heart Failure (HF): Beta-Blocker Therapy for Left Ventricular Systolic 

Dysfunction (LVSD). 

● Medication Reconciliation. 

● Preventive Care and Screening: Influenza Immunization. 

● Pneumococcal Vaccination Status for Older Adults. 

● Preventive Care and Screening: Breast Cancer Screening. 

● Colorectal Cancer Screening. 

● Coronary Artery Disease (CAD): Angiotensin-converting Enzyme (ACE) 

Inhibitor or Angiotensin Receptor Blocker (ARB) Therapy -- Diabetes or Left 

Ventricular Systolic Dysfunction (LVEF < 40%). 

● Adult Weight Screening and Follow-Up. 

● Preventive Care and Screening: Screening for Clinical Depression. 

● Coronary Artery Disease (CAD): Lipid Control. 

● Ischemic Vascular Disease (IVD): Use of Aspirin or Another Antithrombotic. 

● Preventive Care and Screening: Tobacco Use: Screening and Cessation 

Intervention. 

● Hypertension (HTN): Controlling High Blood Pressure. 

● Ischemic Vascular Disease (IVD): Complete Lipid Panel and LDL Control. 
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● Preventive Care and Screening: Screening for High Blood Pressure and 

Follow-Up Documented. 

● Falls: Screening for Fall Risk. 

● Diabetes Mellitus: Low Density Lipoprotein (LDL-C) Control. 

● Diabetes Mellitus: High Blood Pressure Control. 

● Diabetes Mellitus: Hemoglobin A1c Control (<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 collected 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 data collected for CY 2015. 

In future years, we will consider expanding public reporting of, and seek 

comment on, measures that have been developed and collected by approved and vetted 

specialty societies for individual eligible professionals 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 participation by individual eligible healthcare 

professionals on initiatives such as Choosing Wisely, an initiative of the American Board 

of Internal Medicine Foundation. 

We are committed to making Physician Compare a constructive tool for Medicare 

beneficiaries, successfully meeting the Affordable 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 public 
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reporting of physician quality information allows consumers access to information that is 

currently available while we continue to develop the infrastructure necessary to support 

additional types of data and information on physicians’ quality measure performance. 

We intend to implement subsequent phases of the plan in future rulemaking, as needed. 

We invite comments regarding our proposals to: (1) publicly report performance 

rates on all quality measures that group practices 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 certain quality measures collected under the 

2014 PQRS GPRO via registry and EHR reporting 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 professionals who choose to voluntarily report CGCAHPS data as part of their participation in the PQRS GPRO; (4) publicly report 

performance on certain measures that are reported by individual eligible professionals 

reporting through an EHR, registry, or claims during 2014 under the 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 professionals, starting with data reported in 2015; 

and 2) to publicly report participation by individual eligible healthcare professionals on 

initiatives such as Choosing Wisely, an initiative of the American Board of Internal 

Medicine Foundation. 

For the above proposals, we note that we would only post data on Physician 
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Compare as it is technically feasible and as the data are available
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H. Physician Payment, Efficiency, and Quality Improvements – Physician Quality 

Reporting System

There are several healthcare quality improvement programs 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 Savings Program – is critical for programs 

involving physicians and other healthcare eligible professionals. The proposals that 

follow facilitate the alignment of programs, reporting systems, and quality measures. We 

believe that alignment of CMS quality improvement programs will decrease the burden 

of participation on physicians and allow them to spend more time and resources caring 

for beneficiaries. Furthermore, as the leaders 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 component. It is our intent that the following 

requirements will further improve alignment of physician-focused quality improvement 

programs, decrease burden and duplicative reporting for eligible professionals, increase 

engagement of physicians and other eligible professionals in quality improvement, and 

ultimately, lead to higher quality care for beneficiaries. 

This section contains the requirements for the Physician Quality Reporting 

System (PQRS). The PQRS, as set forth in sections 1848(a), (k), and (m) of the Act, is a 

quality reporting program that provides incentive payments and payment adjustments to 

eligible professionals based on whether or not they satisfactorily report data on quality 

measures for covered professional services furnished during a specified reporting period. 

The regulation governing the PQRS is located at §414.90. The program requirements for 
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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-Assessment-Instruments/PQRS/index.html. In addition, the 2011 

PQRS and eRx Experience Report, which provides information about eligible 

professional participation in PQRS, is available for download at 

http://www.cms.gov/Medicare/Quality-Initiatives-Patient-AssessmentInstruments/PQRS/index.html. 

In the CY 2013 PFS final rule with comment period (77 FR 69170), we finalized 

certain requirements for the 2013 and 2014 PQRS incentives, as well as 2015 and 2016 

PQRS payment adjustments. We also finalized certain requirements for future years, 

such as the reporting periods for the PQRS payment adjustment, as well as requirements 

for the various PQRS reporting mechanisms. Below, we propose to change some 

requirements for the 2014 PQRS incentive and 2016 PQRS payment adjustment, as well 

as to make changes to the PQRS measure set. Furthermore, we introduce our proposals 

for a new PQRS reporting option – satisfactory participation 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 feedback as we develop policies and proposals for 

the future. 

1. Proposed Changes to §414.90 

As noted previously, the regulation governing the PQRS is located at §414.90. 

We are proposing the following changes and technical corrections to §414.90: 

• Under §414.90(b), we are proposing to modify the definition of 

administrative claims to eliminate the words “the proposed” in the phrase “on the 
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proposed PQRS quality measures.” We are proposing to make this technical change 

because this language was inadvertently included in the final regulation despite the fact 

that the quality measures that eligible professionals report under the PQRS were finalized 

in the CY 2013 PFS final rule with comment period (77 FR 69364). 

• We propose to modify §414.90(f) to include the term “for satisfactory 

reporting” after the title “Use of consensus-based quality measures for satisfactory 

reporting.” We are adding the term “for satisfactory reporting” so that it is clear that the 

paragraph refers to satisfactory reporting, not the new standard of satisfactorily 

participating in a qualified clinical data registry. 

• We propose to modify the paragraph heading of §414.90(g) to add the 

term “satisfactory reporting”, so that the title of the paragraph reads “Satisfactory 

reporting requirements for the incentive payments.” We are proposing to make this 

change so that it is clear that the paragraph refers to satisfactory reporting, not the new 

standard of satisfactorily participating in a qualified clinical data registry. 

• We propose to modify the paragraph heading of §414.90(h) to add the 

term “satisfactory reporting”, so that the title of the paragraph reads “Satisfactory 

reporting requirements for the incentive payments.” We are proposing to make this 

change so that it is clear that the paragraph refers to satisfactory reporting, not the new 

standard of satisfactorily participating in a qualified clinical data registry. 

• 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 revising the regulation at §414.90 to list all 

the specific satisfactory reporting requirements for the 2014 PQRS incentive and 2016 
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PQRS payment adjustment, so that the different reporting requirements are specified in 

the regulation. We seek public comment on these proposals. 

2. Participation as a Group Practice in the Group Practice Reporting Option (GPRO) 

a. Proposed Changes to the Self-nomination, or Registration, Requirement for Group 

Practices to be Selected to Participate in the GPRO 

In the CY 2013 PFS final rule with comment period (77 FR 69172), we finalized 

requirements for the self-nomination process group practices must follow to participate in 

the PQRS GPRO. We propose to make two changes to the previously established selfnomination process for group practices. First, we propose to change the deadline for 

group practices to submit a self-nomination statement, or register, to participate in the 

PQRS GPRO. We previously established, 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 the 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 reporting 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 GPRO 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 professionals that wish to report the CG CAHPS survey measures 

(which are discussed later in this section) would be required 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 by 
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group practices to register to participate in the PQRS GPRO 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 whereby group practices may make multiple elections (such as 

submitting the self-nomination statement to register to participate in the PQRS GPRO, be 

evaluated for the PQRS GPRO using CG CAHPS 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 the 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 products 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 mechanisms. 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 mechanism under the new PQRS 

“satisfactory participation” option. 

a. Registry-based Reporting Mechanism 

In the CY 2013 PFS final rule with comment period, we finalized the following 

requirement for registries to become qualified to participate in PQRS for 2013 and 

beyond: Be able to collect all needed data elements and transmit to CMS the data at the 

TIN/NPI level for at least 3 measures (77 FR 69180). Since, as we describe in more 
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detail below, we are proposing to increase the number of measures eligible professionals 

would be required to report for the 2014 PQRS incentive from 3 to 9 measures covering 

at least 3 of the National Quality Strategy domains, we are proposing to change this 

registry requirement as follows: A qualified registry must be able to collect all needed 

data elements and transmit to CMS the data at the TIN/NPI level for at least 9 measures 

covering at least 3 of the National Quality Strategy 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 professionals to report CG CAHPS survey measures. 

The data collected on these CAHPS survey measures would not be transmitted to CMS 

via the previously established PQRS group practice reporting mechanisms (registry, 

EHR, or GPRO web interface). Rather, the data must be transmitted through a survey 

vendor. Therefore, to allow for the survey vendor to transmit survey measures data to 

CMS, we are proposing to modify §414.90(b), §414.90(g)(3), and §414.90(h)(3) to 

propose a new reporting mechanism – the certified survey vendor. 

In addition, §414.90(g)(3), and §414.90(h)(3) currently requires group practices to 

use only one mechanism to meet the requirements for satisfactory reporting (that is, CMS 

will not combine data submitted under multiple reporting mechanism to determine if the 

requirements for satisfactory reporting are met). 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 groups 
CMS-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 certified by CMS for a particular 

program year to transmit survey measures data to CMS. 

To obtain CMS certification, we propose that vendors would be required to 

undergo training, meet CMS standards on how to administer the survey, and submit a 

quality assurance plan. CMS would provide the identified vendor with an appropriate 

sample frame of beneficiaries from the group. The vendor would also be required to 

administer the survey according to established protocols to ensure valid and reliable 

results. Survey vendors would be supplied with mail and telephone versions of the 

survey in electronic form, and text for beneficiary pre-notification and cover letters. 

Surveys can be administered in English, Spanish, Cantonese, Mandarin, Korean, Russian 

and/or Vietnamese. Vendors would be required to use appropriate quality control, 

encryption, security and backup procedures to maintain survey response data. The data 

would then be securely sent back to CMS for scoring and/or validation. To ensure that a 

vendor possesses the ability to transmit survey measures data for a particular program 

year, we propose to require survey vendors to undergo this certification process for each 

year in which the vendor seeks to transmit survey measures data to CMS. We 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 Measures Groups Submitted via Claims

Individual eligible professionals may currently report PQRS quality measures 

data to meet the criteria for satisfactory reporting for the 2014 PQRS incentive via the 
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claims, registry, and EHR-based reporting mechanisms. This section contains our 

proposed changes to the criteria for satisfactory reporting of individual quality measures 

via claims and registries by individual eligible professionals for the 2014 PQRS 

incentive. Please note that we are not proposing to modify the criteria for satisfactory 

reporting of individual quality measures via EHR that were established in the CY 2013 

PFS final rule with comment period (see Table 91, 77 FR 69194). 

a. Proposed Changes to the Criterion for Satisfactory Reporting of Individual Quality 

Measures via Claims for Individual Eligible Professionals for the 2014 PQRS Incentive 

For 2014, in accordance with §414.90(c)(3), eligible professionals that 

satisfactorily report data on PQRS quality measures are eligible to receive an incentive 

equal to 0.5 percent of the total estimated Medicare Part B allowed charges for all 

covered professional services furnished by the eligible professional or group practice 

during the applicable reporting period. In the CY 2013 PFS final rule with comment 

period (see Table 91, 77 FR 69194), to maintain the reporting criterion with which 

individual eligible professionals are familiar, we finalized the same satisfactory reporting 

criterion for the submission of individual quality measures via claims that we finalized in 

previous years: For the 12-month reporting period for the 2014 PQRS incentive, report at 

least 3 measures, OR, if less than 3 measures apply to the eligible professional, report 1—

2 measures, AND report each measure for at least 50 percent of the eligible 

professional’s Medicare Part B FFS patients seen during the reporting period to which the 

measure applies. Measures with a 0 percent performance rate would not be counted. For 

an eligible professional who reports fewer than 3 measures via the claims-based reporting 

mechanism, the eligible professional would be subject to the Measures Applicability 

Validation (MAV) process, which would allow us to determine whether an eligible 
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professional should have reported quality data 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 for the satisfactory reporting of individual, 

claims-based measures by individual eligible professionals for the 2014 PQRS incentive 

as follows: For the 12-month reporting period for the 2014 PQRS incentive, report at 

least 9 measures, covering at least 3 of the National Quality Strategy domains, OR, if less 

than 9 measures apply to the eligible professional, report 1—8 measures, AND report 

each measure for at least 50 percent of the Medicare Part B FFS patients seen during the 

reporting period to which the measure applies. Measures with a 0 percent performance 

rate would not be counted. For an eligible professional who reports fewer than 9 

measures via the claims-based reporting mechanism, the eligible professional would be 

subject to the MAV process, which would allow us to determine whether an eligible 

professional should have reported quality data codes for additional measures. 

We note that this proposal would increase the number of measures 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 required to report. However, 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 

eligible professional’s quality performance under the Value-based Payment Modifier, 

justifies the increase in measures. 

We seek public comment on the proposed change to the criterion for the 
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satisfactory reporting of individual quality measures via claims for individual eligible 

professionals for the 2014 PQRS incentive. 

b. Proposed Changes to the Criterion for Satisfactory Reporting of Individual Quality 

Measures via Registry for Individual Eligible Professionals for the 2014 PQRS Incentive 

In the CY 2013 PFS final rule with comment period, to maintain reporting 

criterion with which individual eligible professionals are familiar, we finalized the same 

satisfactory reporting criterion for individual eligible professionals to report individual 

quality measures via registry that we finalized in previous years: For the 12-month 

reporting period for the 2014 PQRS incentive, report at least 3 measures AND report 

each measure for at least 80 percent of the eligible professional’s Medicare Part B FFS 

patients seen during the reporting period to which the measure applies. Measures with a 

0 percent performance rate would not be counted (77 FR 69189). 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 for at least 50 percent of the eligible 

professional’s Medicare Part B FFS patients seen during the reporting period to which the 

measure applies. Measures with a 0 percent performance rate would not be counted. 

We note that this proposal would increase the number of measures 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 significant increase in the number of measures an eligible 

professional is required to report. However, similar to the reasons we provided for 

proposing to increase the measure threshold from 3 measures to 9 for the claims-based 
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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 eligible professional’s quality performance under the 

Value-based Payment Modifier, justifies the change. We believe that collecting data on 9 

measures applicable to an eligible professional’s practice as opposed to 3 measures would 

provide us with a better picture of the overall quality of care furnished by that eligible 

professional for purposes of having PQRS reporting being used to assess quality 

performance under the Value-based Payment Modifier. 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 professional is required to report. Our proposal to 

increase the number of measures reported via claims and registry would align with our 

established reporting option for the EHR-based 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 would also decrease the number of patients 

for which an eligible professional must report for each measure from 80 percent to 50 

percent of an eligible professional’s applicable patients. We are proposing to drop the 

percentage threshold from 80 to 50 percent primarily 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 increase the number of 

measures an eligible professional is required to report via the registry-based reporting 

mechanism from 3 to 9 measures covering at least 3 of the National Quality Strategy 
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domains. The criteria for satisfactory reporting 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 individual quality measures via registry for individual eligible 

professionals for the 2014 PQRS incentive.

c. Proposed Changes to the Criterion for Satisfactory Reporting of Measures Groups via 

Claims for Individual Eligible Professionals for the 2014 PQRS Incentive 

In the CY 2013 PFS final rule with comment period, we finalized the following 

criteria for satisfactory reporting for individual eligible professionals to report measures 

groups via claims: Report at least 1 measures group AND report each measures group for 

at least 20 Medicare Part B FFS patients. Measures groups containing a measure with a 

zero percent performance rate will not be counted (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 streamline the reporting options available under 

the PQRS. The PQRS and eRx Experience Report stated that the number of eligible 

professionals who participated via claims-based measures groups reporting mechanism 

grew more than three-fold between 2008 and 2011. However, according to Appendix 8 

of the PQRS and eRx Experience Report titled “Eligible Professionals who Participated 

by Reporting Measures Groups through the Claims Reporting Mechanism for the 

Physician Quality Reporting System, by Specialty (2008 to 2011),” only 4,472 eligible 

professionals used this reporting option. Meanwhile, the Experience Report further 

shows that the option to report measures groups via registry has grown at an even faster 

rate with 12,894 participants in 2011. Therefore, in an effort to streamline the reporting 
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options available under the PQRS and to eliminate reporting options that are not widely 

used, we are proposing to remove this satisfactory reporting criterion for the 2014 PQRS 

incentive. Please note that, since 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 seek public comment on this proposal. 

5. Proposed Criteria for Satisfactory Reporting for the 2016 PQRS Payment Adjustment 

for Individual Eligible Professionals using the Claims and Registry Reporting 

Mechanisms 

Section 1848(a)(8) of the Act, as added by section 3002(b) of the Affordable Care 

Act, provides that for covered professional services furnished by an eligible professional 

during 2015 or any subsequent year, if the eligible professional does not satisfactorily 

report data on quality measures for covered professional services for the quality reporting 

period for the year, the fee schedule amount for services furnished by such professional 

during the year shall be equal to the applicable percent of the fee schedule amount that 

would otherwise apply to such services. For 2016 and subsequent years, the applicable 

percent is 98.0 percent. 

In the CY 2013 PFS final rule, we finalized seven different criteria for the 

satisfactory reporting by individual eligible professionals of data in PQRS quality 

measures for the 2016 PQRS payment adjustment (see 77 FR 69200-69204 and Table 91 

at 77 FR 69194). Although we are retaining five 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 additional criteria (based on two of the existing criteria). Specifically, 

we propose to remove the following criterion we previously finalized for the CY 2016 
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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 criterion 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 options that are not widely used. 

We also propose to remove the following criterion we previously finalized for the 

2016 payment adjustment for individual eligible 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 percent of the eligible 

professional’s Medicare Part B FFS patients seen during the reporting period to which the 

measures applies (Measures with a zero percent performance rate will not be counted). 

Finally, to maintain some consistency and to otherwise align with the criteria we are 

proposing for the 2014 PQRS incentive for individual eligible professionals, we are 

proposing two other criteria for satisfactory reporting by individual eligible professionals 

for the 2016 PQRS payment adjustment using the claims and registry reporting 

mechanisms. Specifically, we propose the following criterion for reporting individual 

measures via claims by individual eligible professionals for the 2016 PQRS payment 

adjustment: For the 12-month reporting period for the 2014 PQRS incentive, report at 

least 9 measures, covering at least 3 of the National Quality Strategy domains, OR, if less 

than 9 measures apply to the eligible professional, report 1—8 measures, AND report 

each measure for at least 50 percent of the Medicare Part B FFS patients seen during the 
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reporting period to which the measure applies. Measures with a 0 percent performance 

rate would not be counted. Similarly, for the same reasons we discussed previously, we 

propose the following criterion for reporting individual measures via qualified registry by 

individual eligible professionals for the 2016 PQRS payment adjustment: For the 12-

month reporting period for the 2014 PQRS incentive, 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. 

Please note that in the CY 2013 PFS final rule, we finalized the same criteria for 

satisfactorily reporting data on quality measures for covered professional services for the 

2016 PQRS payment adjustment as those for the 2014 PQRS incentive for individual 

eligible professionals (77 FR 69200). However, 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 payment adjustment and the 2014 PQRS 

incentive. In particular, there would be one more criterion for satisfactory reporting for 

the 2016 payment adjustment than for the 2014 PQRS incentive with respect to claimsbased reporting, but the other criteria 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 professionals reporting individual measures 

through claims, we believe it is still important to offer as many options as possible for the 

2016 PQRS payment adjustment, particularly since the penalty phase is relatively new 

under the PQRS. We also note that it would remain true that if an individual eligible 

professional were to meet any of the criteria for satisfactory reporting for the 2014 PQRS 
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incentive, the individual eligible professional would meet the requirements for 

satisfactory reporting for the 2016 PQRS payment adjustment (note, however, that the 

reverse would not necessarily be true since there 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 alignment still serves to 

reduce reporting burden, and as we have noted previously, we believe that proposing 

similar criteria for satisfactory reporting by individual eligible professionals for the 2014 

PQRS incentive and 2016 PQRS payment adjustment is appropriate because the reporting 

period for the 2014 PQRS incentive and 2016 PQRS payment adjustment coincide. As 

we 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 eligible professionals reporting individual 

measures through the claims-based reporting mechanism. 

6. Proposals Related to Satisfactory Participation in a Qualified 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 subparagraph (D) as subparagraph (F) and 

adding new subparagraph (D), to provide for a new standard for individual eligible 
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professionals to satisfy the PQRS beginning in 2014, based on satisfactory participation 

in a qualified clinical data registry. Below, we set forth our proposals for implementing 

this provision, including the proposed requirements for qualified clinical data registries 

and our proposals for individual eligible professionals to satisfactorily participate in a 

qualified clinical data registry with respect 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) Incentive Program, and Other Reporting Programs” (78 FR 9057). 

The Request for Information included a solicitation 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 information 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 eligible professional is satisfactorily 

participating, as determined by the Secretary, in a qualified clinical data registry for the 

year. Section 1848(m)(3)(E) of the Act, as added by section 601(b)(1) of the American 

Taxpayer Relief Act of 2012, authorizes the Secretary to define a qualified clinical data 

registry under the PQRS. Specifically, the Secretary is required to establish requirements 
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for an entity to be considered a qualified clinical data registry (including that the entity 

provide the Secretary with such information, at such times, and in such manner, as the 

Secretary determines necessary to carry out the provision). 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 fact, the collection and submission of PQRS 

quality measures data on behalf of eligible professionals are the functions a traditional 

“qualified registry” currently performs under the PQRS for purposes of eligible 

professionals satisfactorily reporting. The majority of commenters in response to the 

February 7, 2013 Request for Information stated that these qualified clinical data 

registries should serve additional roles aimed at quality improvement other than 

collecting and transmitting quality data to CMS. The commenters saw qualified clinical 

data registries as entities that should be at the forefront of quality improvement. We 

agree with the commenters. Therefore, we believe that a “qualified clinical data registry” 

specified under section 1848(m)(3)(E) of the Act, as added 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 and 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, provides that, when determining whether an 

entity should be considered a qualified clinical data registry, the Secretary shall take into 

consideration whether the entity: 

● Has in place mechanisms for the transparency of data elements and 

specifications, risk models, and measures; 
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● 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 initiatives 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 Database, 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, regional, and national levels; 

● A mechanism to target specific areas for clinical practice improvement; 

● The ability to investigate regional and national practice patterns in 

cardiothoracic surgery; and 

● The ability to conduct clinical and comparative 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 purposes 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 is 
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important that a qualified clinical data registry possess benchmarking capacity in order to 

be able to compare the quality of care furnished by eligible professionals so that eligible 

professionals using the qualified clinical data registry are aware of how the care they 

furnished is rated as compared to other professionals. Eligible professionals would be 

able to use this information to adjust the care they provide, if appropriate. While having 

the capacity to benchmark performance nationally is preferable, we believe that a 

qualified clinical data registry should, at a minimum, possess the capacity to benchmark 

performance across the eligible professionals using the qualified clinical data registry. 

● The ability to provide timely and frequent feedback to its eligible professionals. 

We believe it is important for eligible professionals using a clinical data registry to 

receive frequent and timely feedback on the quality measures data they report through the 

qualified clinical data registry. A traditional PQRS registry is required to provide at least 

2 feedback reports to eligible professionals using the registry. Since we believe that 

qualified clinical data registries should possess a more robust system, we believe that 

qualified clinical data registries should provide timely feedback at least quarterly so 

eligible professionals could view their reporting at least 4 times during the yearly 

reporting period. 

Therefore, based on CMS’ authority to define a qualified clinical data registry 

under section 1848(m)(3)(E) of the Act, as added by section 601(b) of the American 

Taxpayer Relief Act of 2012, and accounting for the considerations addressed in section 

1848(m)(3)(E)(ii) of the Act and for the reasons stated above, we propose to modify 

§414.90(b) to add a proposed definition for a qualified clinical data registry. Specifically, 

we propose to define a “qualified clinical data registry” for purposes of the PQRS as a 

CMS-approved entity (such as a registry, certification board, collaborative, etc.) that 
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collects medical and/or clinical data for the purpose of patient and disease tracking to 

foster improvement in the quality of care furnished to patients. 

First, we propose that a qualified clinical data registry must be able to submit 

quality measures data or results to CMS for purposes of demonstrating that, for a 

reporting period, its eligible professionals have satisfactorily participated in PQRS. We 

propose that a qualified clinical data registry must have in place mechanisms for the 

transparency of data elements and specifications, risk models, and measures. Second, 

with regard to the consideration under section 1848(m)(3)(E)(ii)(II) of the Act, as added 

by section 601(b) of the American Taxpayer 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 consideration under section 1848(m)(3)(E)(ii)(III) of the 

Act, as added by section 601(b) of the American Taxpayer Relief Act of 2012, that a 

qualified clinical data registry provide timely performance reports to participants at the 

individual participant level, we propose that a qualified clinical data registry must 

provide timely feedback at least quarterly on the measures for which the qualified 

clinical data registry would report on the individual eligible professional’s behalf for 

purposes of the eligible professional meeting the criteria for satisfactory participation 

under PQRS. 

Fourth, to address section 1848(m)(3)(E)(ii)(IV) of the Act, as added by section 

601(b) of the American Taxpayer Relief Act of 2012, regarding whether a qualified 

clinical data registry supports quality improvement initiatives for its participants, we 
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propose to require that a qualified clinical data registry possess a method to benchmark 

the quality of care measures an eligible professional provides with that of other eligible 

professionals performing the same or similar functions. Benchmarking would require 

that a qualified clinical data registry provide metrics to compare the quality of care its 

participating eligible professional provides. For example, the National Committee for 

Quality Assurance (NCQA) provides national and regional benchmarks for certain 

measures. Adopting benchmarks such as those provided by NCQA could serve to satisfy 

this requirement. 

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 Qualified Clinical Data Registry 

As we noted above, we are required, under section 1848(m)(3)(E)(i) of the Act, to 

establish requirements for an entity to be considered a qualified clinical data registry. 

Such requirements shall include a requirement that the entity provide the Secretary with 

such information, at such times, and in such manner, as the Secretary determines 

necessary to carry out this subsection. Section 1848(m)(3)(E)(iv) of the Act, as added by 

section 601(b) of the American Taxpayer Relief 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 proposing 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 requirements to ensure that the entity 

seeking to become a qualified clinical data registry is well-established: 
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● Be in existence as of January 1 the year prior to the year for which the entity 

seeks to become a qualified clinical data registry (for example, January 1, 2013, to be 

eligible to participate for purposes of data collected in 2014). This proposed requirement 

is also required of a traditional qualified registry. We believe it is important for an entity 

to test out its business practices to ensure that the practices it adopts truly foster the 

improvement of quality care prior to seeking to become a qualified clinical data registry. 

We believe that entities that have been in existence for less than one year prior to the year 

for which the entity seeks to become a qualified clinical data registry have not had an 

adequate opportunity to do so. 

● Have at least 100 clinical data registry participants by January 1 the year prior 

to the year for which the entity seeks to submit clinical quality measures data (for 

example, January 1, 2013, to be eligible to participate under the program with regard to 

data collected in 2014). Please note that not all participants would be required to 

participate in PQRS. We are proposing this requirement to ensure 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 traditional PQRS-qualified registry to 

have at least 25 registry participants, we believe it is appropriate that we require that a 

qualified clinical data registry have at least 100 participants. 

● Not be owned or managed by an individual, locally-owned, single-specialty 

group (for example, single-specialty practices with only 1 practice location or solo 
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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 participating professionals an appropriate 

Business Associate agreement that provides for the qualified clinical data registry’s 

receipt of patient-specific data from the eligible professionals as well as the qualified 

clinical data registry’s public disclosure of quality measure results. 

● 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 require qualified clinical data registries to meet the 

following requirements pertaining to the transmission of quality measures data to CMS: 

● To ensure that the qualified clinical data registry is compliant with applicable 

privacy and security laws and regulations, the entity must describe its plan to maintain 

Data Privacy and Security for data transmission, storage and reporting. 

● 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 supporting evidence/rationale, title, numerator, denominator, 

exclusions/exceptions, data elements and value sets in addition to measure level 

reporting rates, patient-level demographic data and/or the data elements needed to 

calculate the reporting rates by TIN/NPI. 

● Submit an acceptable “validation strategy” to CMS by March 31 of the 

reporting year the entity seeks qualification (for example, if an entity wishes to become 

qualified for participation with regard to data collected in 2014, this validation strategy 
CMS-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 Office of the National 

Coordinator for Health Information Technology (ONC) that are explained at 

http://www.healthit.gov/policy-researchers-implementers/2014-edition-final-test-method. 

● Perform the validation outlined in the strategy and send evidence of successful 

results to CMS by June 30 of the year following the reporting period (for example, June 

30, 2015, for data collected in the reporting periods occurring in 2014). 

● Obtain and keep on file for at least 7 years signed documentation that each 

holder of an NPI whose data are submitted to the qualified clinical data registry has 

authorized the registry to submit quality measure results and numerator and denominator 

data and/or patient-specific data on beneficiaries to CMS for the purpose of PQRS 

participation. This documentation would be required to be obtained at the time the 

eligible professional signs up with the qualified clinical data registry to submit quality 

measures data to the qualified clinical data registry and would be required to meet any 

applicable laws, regulations, and contractual business associate agreements. 

● Upon request and for oversight purposes, provide CMS access to the qualified 

clinical data registry’s database to review the beneficiary data on which the qualified 
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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 clinical data registries for a particular 

year, verify the information contained on the list (includes names, contact information, 

measures, cost, etc.) and agree to furnish/support all of the services listed on the list. 

● Make available to CMS samples of patient level data to audit the entity for 

purposes of validating the data submitted to CMS by the qualified clinical data registry, 

if determined to be necessary. 

● The entity must provide information on how the entity collects quality 

measurement data, if requested. 

● By March 31 of the year in which the entity seeks to participate in PQRS as a 

qualified clinical data registry, the entity must publically post (on the entity’s website or 

other publication available to the public) a detailed description (rationale, numerator, 

denominator, exclusions/exceptions, data elements) of the quality measures it collects to 

ensure transparency of information to the public. 

● The entity must report, on behalf of its individual eligible professional 

participants, a minimum of 9 measures that cross 3 National Quality Strategy domains. 

● The entity, on behalf of its individual eligible professional participants, must 

report on at least one outcomes-based measure (defined in this section below). 

● The entity, on behalf of its individual eligible professional participants, must 

report on a set of measures from one or more of the following categories: CG-CAHPS; 

NQF endorsed measures (information of which is available at 

http://www.qualityforum.org/Home.aspx); current PQRS measures; measures used by 

boards or specialty societies; and measures used in regional quality collaboratives. 
CMS-1600-P 308 

● The entity must demonstrate that it has a plan to publicly report their quality 

data through a mechanism where the public and registry participants can view data about 

individual eligible professionals, as well as view regional and national benchmarks. As 

an alternative, we considered requiring that the entity must benchmark within its own 

registry for purposes of determining relative quality performance 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 corrective tool used to level the playing field 

regarding the reporting of patient outcomes, adjusting for the differences in risk among 

specific patients (http://www.sts.org/patient-information/what-risk-adjustment). Risk 

adjustment also makes it possible to compare performance fairly. For example, if an 86 

year old female with diabetes undergoes bypass surgery, there is less chance for a good 

outcome when compared with a healthy 40 year old male undergoing the same procedure. 

To take factors into account which influence outcomes, for example, advanced age, 

emergency operation, previous heart surgery, a risk 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 disqualify the qualified clinical data registry, 

meaning the entity will not be allowed to submit quality measures data on behalf of its 

eligible professionals for purposes of meeting the criteria for satisfactory participation for 

the following year. Should an entity be disqualified, the entity must again become a 

qualified clinical data registry before it may submit quality measures data on behalf of its 

eligible professionals for purposes of the individual eligible professional participants 

meeting the criteria for satisfactory participation under the PQRS. Additionally, we 
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propose that the inaccurate data collected would be discounted for purposes of an 

individual eligible professional meeting the criteria for satisfactory participation in a 

qualified clinical data registry. We 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 clinical data registry, including that the entity provide us with 

such information, at such times, and in such manner, as we determine necessary to carry 

out the provision. Given the broad discretion afforded under the statute, we propose that 

qualified clinical data registries provide CMS with the quality measures data it collects 

from its eligible professional participants. We believe it is important that a qualified 

clinical data registry provide such data for a number of reasons. As we discuss in greater 

detail below, we believe such information is necessary for purposes of 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 eligible professional’s Medicare Part B PFS 

charges. Therefore, we propose to require that qualified clinical data registries submit 

quality measures data to CMS. Specifically, to further ensure that the quality measures 

data elements are reported to CMS in standardized 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 request, in one of two formats, either via a 

CMS-approved XML format or via the Quality Reporting Document Architecture 

(QRDA) category III format. The CMS-approved XML format is consistent with how 
CMS-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 measures via the QRDA 

category III format only since the QRDA category III format is one of the formats we 

require for an EP’s EHR or an EHR data submission vendor to submit quality measures 

data (see 77 FR 69183), we understand that the quality measures data collected by 

qualified clinical data registries vary and that these qualified clinical data registries may 

not be equipped to submit quality measures data to CMS using the QRDA category III 

format. 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 qualified clinical data registry is correct, 

we propose to require that qualified clinical data registries provide CMS a signed, written 

attestation statement via e-mail which states that the quality measure results and any and 

all data including numerator and denominator 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 data no later than the last Friday occurring 2 

months after the end of the respective reporting period (that is, February 27, 2015 for 

reporting periods occurring in 2014). We also propose that, if a qualified clinical data 

registry is submitting quality measures data on behalf of individual eligible professionals 

that are part of the same group practice (but not participating in the PQRS GPRO), the 

qualified clinical data registry would have the option to report the quality measures data 

to CMS in a batch containing data for each of the individual eligible professionals within 

the group practice, rather than submitting individual files for each eligible professional. 
CMS-1600-P 311 

In conjunction with our proposal to require that qualified clinical data registries be 

able to provide data on quality measures in a CMS-approved XML format, we propose to 

require that qualified clinical data registries report back to participants on the 

completeness, integrity, and accuracy of its participants’ 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 information CMS would require a qualified 

clinical data registry to furnish to CMS to determine that the eligible professionals have 

met the criteria for satisfactory participation for the 2014 PQRS incentive and 2016 

PQRS payment adjustment, in lieu of accepting quality measures data for reporting 

periods occurring in 2014 only, we considered proposing that a qualified clinical data 

registry provide CMS with a list of the eligible professionals (containing the respective 

eligible professionals’ TIN/NPI information) who participated in and reported quality 

data to the qualified clinical data registry in order to determine which individual eligible 

professionals met the criteria for satisfactory participation for the 2014 PQRS incentive 

and 2016 PQRS payment adjustment. We considered this alternative because we do not 

have experience collecting data from qualified clinical data registries, we are unfamiliar 

with the type of quality data qualified clinical data registries collect, and we are still 

building out our data infrastructure. 

We seek public comment on these proposals. 

c. Proposed Process for Being Designated as a Qualified Clinical Data Registry 

Section 1848(m)(3)(E)(v) of the Act, as added by section 601(b) of the American 

Taxpayer Relief Act of 2012, requires the Secretary to establish a process to determine 

whether or not an entity meets the requirements established under section 
CMS-1600-P 312 

1848(m)(3)(E)(i) of the Act. Such process may involve one or both of the following: (I) 

A determination by the Secretary; (II) A designation by the Secretary of one or more 

independent organizations to make such determination. This section sets forth our 

proposals for our process to determine whether or not an entity should be designated as a 

qualified clinical data registry. 

Consistent with what we require of traditional qualified registries under the 

PQRS, we 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 CMS to anticipate how many clinical data 

registries would participate for a certain year as well as provide information to eligible 

professionals about potential participating clinical data registries. We propose that the 

self-nomination statement contain the following information: 

● The name of the entity seeking to become a qualified clinical data registry. 

● The entity’s contact information, including phone number, email, and mailing 

address. 

● A point of contact, including the contact’s email address and phone number, 

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 registry would require its eligible professionals to report for 

purposes of participating in PQRS. In addition, the qualified clinical data registry must 

describe the rationale and evidence basis to support each measure it would require its 

eligible professionals to report. 

● The reporting period start date the entity will cover as a clinical data registry. 
CMS-1600-P 313 

Since we believe that accepting these statements via email would be the most efficient 

method for collecting and processing self-nomination statements, we propose to accept 

self-nomination statements via email only. However, 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 registries submit its self-nomination statement 

via a mailed letter to CMS. The self-nomination statement would be mailed to the 

following address: Centers for Medicare & Medicaid Services, Center for Clinical 

Standards and Quality, Quality Measurement and Health Assessment Group, 7500 

Security Boulevard, Mail Stop S3-02-01, Baltimore, MD 21244-1850. 

To ensure that CMS is able to process these self-nomination statements as early as 

possible, we propose that these 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 qualified (that is, January 31, 2014 for purposes of becoming a 

qualified clinical data registry for the reporting periods for the 2014 PQRS incentive and 

2016 PQRS payment adjustment). We understand that this is an early proposed deadline, 

particularly since this is a new reporting mechanism. However, it is necessary for us to 

propose a deadline of January 31 to ensure that 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 qualified clinical data registry, including whether 

or not the quality measures the entity intends to report on behalf of eligible professionals 

meet the requirements set forth in section I.11 of this proposed rule, and allow for 

sufficient time for eligible professionals to view a list of entities that are qualified as 

clinical data registries for the year prior to the end of the applicable reporting period for 

satisfactory participation in a qualified clinical data registry. We anticipate posting a list 
CMS-1600-P 314 

of the entities that are designated by CMS as qualified clinical data registries in the Fall 

of the same year.

Since participation in a qualified clinical data registry is a new option for 

individual eligible professionals, 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 entities 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 firmly established; however, at 

this time, we are proposing self-nomination for any year in which a qualified clinical data 

registry intends to participate under the PQRS.

We seek public comment on these proposals.

d. Proposed Reporting Period for the Satisfactory Participation by Individual Eligible 

Professionals in a Qualified Clinical Data Registry for the 2014 PQRS Incentive 

 Section 1848(m)(3)(D) of the Act, as redesignated and added by section 601(b) of 

the America Taxpayer Relief Act of 2012, authorizes the Secretary to treat an individual 

eligible professional as satisfactorily submitting data on quality measures under section 

1848(m)(A) of the Act if the eligible professional is satisfactorily participating in a 

qualified clinical data registry for the year. Given that satisfactory participation is with 

regard to the year, and to provide consistency with the reporting period applicable to 

individual eligible professionals who report quality measures data under section 

1848(m)(3)(A), we 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 individual 
CMS-1600-P 315 

eligible professionals to satisfactorily participate 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 quality measures collected based on 12-months 

provides a more accurate assessment of actions performed in a clinical setting than data 

collected based on shorter reporting periods. In addition, we believe a 12-month 

reporting period is appropriate given that the full calendar year would be utilized with 

regard to the participation by the individual eligible professional in the qualified clinical 

data registry. We invite public comment on the proposed 12-month, CY 2014 reporting 

period for the satisfactory participation of individual eligible professionals in a qualified 

clinical data registry for the 2014 PQRS incentive. 

e. Proposed Criteria for Satisfactory Participation for Individual Eligible Professionals In 

a Qualified Clinical Data Registry for the 2014 PQRS Incentive 

For 2014, in accordance with §414.90(c)(3), eligible professionals that 

satisfactorily report data on PQRS quality measures are eligible to receive an incentive 

equal to 0.5 percent of the total estimated Medicare Part B allowed charges for all 

covered professional services furnished by the eligible professional or group practice 

during the applicable reporting period. Section 1848(m)(3)(D) of the Act, as 

redesignated and added by section 601(b) of the America Taxpayer Relief Act of 2012, 

authorizes the Secretary to treat an individual eligible professional as satisfactorily 

submitting data on quality measures under section 1848(m)(A) of the Act if, in lieu of 

reporting measures under section 1848(k)(2)(C) of the Act, the eligible professional is 

satisfactorily participating in a qualified clinical data registry for the year. “Satisfactory 

participation” is a new standard under the PQRS and is a substitute for the underlying 
CMS-1600-P 316 

standard of “satisfactory reporting” data on covered professional services that eligible 

professionals must meet to earn a PQRS incentive or avoid the PQRS payment 

adjustment. Therefore, we propose to modify §414.90 to add paragraph (c)(5) to indicate 

that individual eligible professionals shall be treated as satisfactorily reporting data on 

quality measures if individual eligible professionals satisfactorily participate in a 

qualified clinical data registry for purposes of the PQRS incentive. This section also 

contains the criterion we are proposing for individual eligible professionals to meet to 

satisfactorily participate in a qualified clinical 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 registry. Therefore, we propose that, to meet the 

criteria for satisfactory participation for the 2014 PQRS incentive, an individual eligible 

professional would be required to: For the 12-month 2014 reporting period, report at least 

9 measures available for reporting under the qualified clinical data registry covering at 

least 3 of the National Quality Strategy domains, AND report each measure for at least 50 

percent of the eligible professional’s applicable patients. Of the measures reported via a 

qualified clinical data registry, the eligible professional must report on at least 1 outcome 

measure. We further propose that a qualified 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 registry may submit on behalf of an eligible 
CMS-1600-P 317 

professional at this time because we have no experience with qualified clinical data 

registries and the types of data on quality measures that they collect. 

We note that this proposed criterion for satisfactory participation is consistent 

with proposed requirements set forth (for example, the reporting period as well as the 

number of individual measures, domains, and applicable patients proposed to be 

reported) for meeting the criteria for the satisfactory reporting of individual PQRS quality 

measures using the traditional claims, registry, and EHR-based reporting mechanisms for 

the 2014 PQRS incentive (for example, 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 quality data reporting criterion for individual 

eligible professionals to satisfactorily participate in a qualified clinical data registry as for 

satisfactory reporting for the 2014 PQRS incentive so that this proposed satisfactory 

participation option to satisfy the PQRS is not disproportionately more advantageous or 

less burdensome than the other proposed criteria for satisfactory reporting for the 2014 

PQRS incentive. However, this proposed criterion for satisfactory participation departs 

from the proposed criteria for satisfactory reporting for the 2014 PQRS incentive in a 

number of ways. First, an eligible professional using a qualified clinical data registry is 

required to report on at least 1 outcome measure. Second, whereas the proposed criteria 

for satisfactory reporting on individual PQRS quality measures require the reporting of at 

least 1 Medicare Part B FFS patient, this proposed criterion for satisfactory participation 

in a qualified clinical data registry for 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 that 
CMS-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 experience with the capabilities of qualified 

clinical data registries, we anticipate that the criteria for satisfactory participation will 

further depart from the criteria for satisfactory reporting under PQRS and incorporate 

other quality improvement functions 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 eligible professionals in a qualified clinical data registry for 

the 2014 PQRS incentive. 

f. Proposed Reporting Period for the Satisfactory Participation for Individual Eligible 

Professionals in a Qualified Clinical Data Registry for the 2016 PQRS Payment 

Adjustment 

 Section 1848(m)(3)(D) of the Act, as redesignated and added by section 601(b) of 

the American Tax Relief Act of 2012, authorizes the Secretary to treat an individual 

eligible professional as satisfactorily submitting data on quality measures under section 

1848(m)(A) of the Act if the eligible professional is satisfactorily participating in a 

qualified clinical data registry for the year. Given that satisfactory participation is with 

regard to the year, and to provide consistency with how individual eligible professionals 

report quality measures data to a qualified clinical data registry, we 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 eligible professionals to satisfactorily 

participate in a qualified clinical data registry for purposes of the 2016 PQRS payment 

adjustment. We are proposing a 12-month reporting period because, based on our 
CMS-1600-P 319 

experience with the 12 and 6-month reporting periods for the PQRS incentives, we 

believe that data on quality measures collected based on 12-months provides a more 

accurate assessment of actions performed in a clinical 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 utilized with regard to the participation by the 

individual eligible professional in the qualified clinical data registry. 

We are proposing a 12-month reporting period occurring 2 years prior to the 

application of the 2016 PQRS payment adjustment for individual eligible professionals to 

allow time to perform all reporting analyses, and make determinations about whether the 

individual eligible professional satisfactorily participated in a qualified clinical data 

registry, prior to applying payment adjustments on eligible professionals’ Medicare Part 

B PFS claims in 2016. However, in future years, we may propose alternative reporting 

periods that could occur closer in time to the application 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, 2014) for the satisfactory participation of 

individual eligible professionals in a qualified clinical data 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 covered professional services 

furnished by an eligible professional during 2015 or any subsequent year, if the eligible 

professional does not satisfactorily report data on quality measures for covered 

professional services for the quality reporting period for the year, the fee schedule 
CMS-1600-P 320 

amount for services furnished by such professional during the year shall be equal to the 

applicable percent of the fee schedule amount that would otherwise apply to such 

services. For 2016 and subsequent years, the applicable percent is 98.0 percent. 

Section 1848(m)(3)(D) of the Act, as redesignated and added by section 601(b) of 

the American Tax Relief Act of 2012, authorizes the Secretary to treat an individual 

eligible professional as satisfactorily submitting data on quality measures under section 

1848(m)(A) of the Act if, in lieu of reporting measures under section 1848(k)(2)(C) of 

the Act, the eligible professional is satisfactorily participating in a qualified clinical data 

registry for the year. “Satisfactory participation” is a new standard under the PQRS and 

is a substitute for the underlying standard of “satisfactory reporting” data on covered 

professional services that eligible professionals must meet to earn a PQRS incentive or 

avoid the PQRS payment adjustment. Therefore, we 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 eligible professional 

satisfactorily participates in a qualified clinical data registry. This section also contains 

the criterion we are proposing for individual eligible professionals to meet to 

satisfactorily participate in a qualified clinical 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 criteria for meeting the 

new standard for satisfactory participation given that the proposed 12-month reporting 
CMS-1600-P 321 

period for satisfactory participation in a qualified clinical data registry for the respective 

2014 PQRS incentive and 2016 PQRS payment adjustments coincide. 

We seek public comment on the proposed criterion for the satisfactory 

participation by individual eligible 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 incentive and 2016 PQRS payment adjustment 

respectively. 

TABLE 24: Summary of Proposals for the 2014 PQRS Incentive: Proposed Criteria 

for Satisfactory Reporting of Individual Quality Measures via Claims and Registries 

and Proposed Satisfactory Participation Criterion for Individual Eligible 

Professionals in Qualified Clinical 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 measures 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 measures 
CMS-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 for the 2016 PQRS Payment Adjustment: 

Proposed Criteria for Satisfactory Reporting of Individual Quality Measures via 

Claims and Registries and Proposed Satisfactory Participation Criterion for 

Individual Eligible Professionals in Qualified 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 measures 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 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 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 professional’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 Reporting 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 measures are eligible to receive an incentive 
CMS-1600-P 323 

equal to 0.5 percent of the total estimated Medicare Part B allowed charges for all 

covered professional services furnished by the eligible professional or group practice 

during the applicable reporting period. We finalized criteria for the satisfactory reporting 

for group practices participating in the GPRO for the 2014 PQRS incentive in the CY 

2013 PFS final rule with comment period (see Table 93, 77 FR 69195). In this section, 

we propose to change some of the criteria for satisfactory reporting for group practices 

under the GPRO using the registry and GPRO 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. For 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 data fields for the 

first 218 consecutively ranked and assigned beneficiaries in the order in which they 

appear in the group’s sample for each module or preventive care measure. If the pool of 

eligible assigned beneficiaries is less than 218, then report on 100 percent of assigned 

beneficiaries (77 FR 69195). 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 reporting options that are largely unused, we 

propose to eliminate this criterion under the GPRO for the 2014 PQRS incentive. As a 

result, group practices comprised of 25-99 eligible professionals would no longer have 
CMS-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 harms these smaller groups’ practices, as group 

practices in the GPRO would still be able to report PQRS quality measures using either 

the registry or EHR-based reporting mechanisms. 

For reporting under the GPRO using the registry-based reporting mechanism, we 

finalized the following criterion for the satisfactory reporting of PQRS quality measures 

for group practices comprised of 2 or more eligible professionals for the 2014 PQRS 

incentive in the CY 2013 final rule with comment period: Report at least 3 measures, 

AND report each measure for at least 80 percent of the group practice’s Medicare Part B 

FFS patients seen during the reporting period to which the measure applies. Measures 

with a 0 percent performance rate will not be counted (77 FR 69196). For the same 

reasons we are proposing to increase the number of measures an individual eligible must 

report as well as decrease the percentage threshold for individual eligible professionals 

reporting via registry for the 2014 PQRS incentive, we propose the following modified 

criteria for the satisfactory reporting of individual quality measures under the GPRO for 

the registry-based reporting mechanism: Report at least 9 measures covering at least 3 of 

the National Quality Strategy domains, AND report each measure for at least 50% of the 

group practice’s applicable seen during the reporting period to which the measure 

applies. Measures with a 0 percent performance rate will not be counted. 

In addition, patient surveys are important tools for assessing beneficiary 

experience of care and outcomes. Many surveys are being used in both the private and 

public sectors, including the Medicare Health Outcomes Survey used by Medicare 

Advantage (MA) plans, Consumer Assessment of Healthcare Providers and Systems 

(CAHPS) survey tools, and Health Resources Services Administration's (HRSA's) Health 
CMS-1600-P 325 

Center Patient Satisfaction Survey. Over the past two years, we have developed a 

Consumer Assessment of Healthcare Providers and Systems (CAHPS) survey for use 

with the Medicare Shared Savings Program and the PQRS. In 2012, we field tested the 

survey with a sample of 6,750 Medicare Fee-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 Accountable Care Organizations (ACOs) participating in the 

Pioneer ACO program and the Medicare Shared 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 surveys are important tools for assessing 

beneficiary experience of care and outcomes, under our authority 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 practices comprised of 25 or more eligible 

professionals with a new satisfactory reporting criterion that would include the option to 

complete the CG CAHPS survey along with reporting 6 other PQRS measures for 

purposes of meeting the criteria for satisfactory reporting for the 2014 PQRS incentive 

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 assigning beneficiaries to a group based on 

whether the group provided the plurality of primary care services. Because we propose 
CMS-1600-P 326 

to assign beneficiaries to a group based on the 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 care services. In accordance with section 

1848(m)(3)(C)(ii) of the Act, which requires the GPRO to provide for the use of a 

statistical sampling model, we propose that the survey would be administered by certified 

survey vendor on behalf of the group practice for a sample of group’s assigned 

beneficiaries. As noted earlier, to complete this survey, a group practice must indicate its 

intent to report the CG CAHPS survey when it registers to participate in the PQRS via the 

GPRO. 

Please note that the CAHPS survey measures only cover 1 National Quality 

Strategy domain. In order to be consistent with 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 required to report on at least 6 

additional measures covering at least 2 National Quality Strategy domains. 

Specifically, we are proposing the following criteria for satisfactory reporting for 

the 2014 PQRS incentive: For the 12-month reporting period for the 2014 PQRS 

incentive, report all CAHPS survey measures via a certified vendor, AND report at least 

6 measures covering at least 2 of the National 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 satisfactory reporting 

of data on these PQRS quality measures under the GPRO for the 2014 PQRS incentive. 

8. Criteria for Satisfactory Reporting for the 2016 PQRS Payment Adjustment for Group 
CMS-1600-P 327 

Practices in the GPRO 

This section addresses the proposed criteria for satisfactory reporting for group 

practices in the GPRO for the 2016 PQRS payment adjustment using the registry, GPRO 

web interface, and certified survey vendor reporting mechanisms. In the CY 2013 PFS 

final rule with comment period, we finalized the same criteria for satisfactorily reporting 

data on quality measures for the 2016 PQRS payment adjustment that apply for the 2014 

PQRS incentive for the PQRS GPRO (77 FR 69200). We are making three of the same 

proposals for the criteria for satisfactory reporting under the GPRO for the 2016 PQRS 

payment adjustment that we are proposing for 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 comprised of 25-99 eligible 

professionals: Report on all measures included in the web interface; AND populate data 

fields for the first 218 consecutively ranked and assigned beneficiaries in the order in 

which they appear in the group’s sample for each module or preventive care measure. If 

the pool of eligible assigned beneficiaries is less than 218, then report on 100 percent of 

assigned beneficiaries. For the same reasons discussed previously and to maintain 

consistent criteria for the 2016 PQRS payment 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 report 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 the reporting period to which the measure 
CMS-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 provide group practices comprised of 25 or more 

eligible professionals with a new satisfactory reporting criterion that would include the 

option to complete the CG CAHPS survey along with reporting 6 other PQRS measures 

for purposes of meeting the criteria for satisfactory reporting for the 2014 PQRS 

incentive, we also propose the same criterion for purposes of meeting the criteria for 

satisfactory reporting for the 2016 PQRS payment adjustment. Specifically, we are 

proposing the following criteria for satisfactory reporting for the 2016 PQRS payment 

adjustment: For the 12-month reporting period for the 2016 PQRS payment adjustment, 

report all CAHPS survey measures via a certified vendor, AND report at least 6 measures 

covering at least 2 of the National Quality Strategy domains using the qualified registry, 

direct EHR product, EHR data submission vendor, or GPRO web interface reporting 

mechanisms. As noted earlier, to complete this survey, a group practice must indicate its 

intent to report the CG CAHPS survey when it registers to participate in the PQRS via the 

GPRO. 

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 that we proposed above for the 2014 PQRS 

Incentive: Report at least 9 measures covering at least 3 of the National Quality Strategy 

domains, AND report each measure for at least 50 percent of the group practice’s 

applicable patients seen during the reporting period to which the measure applies. 

Measures with a 0 percent performance rate will not be counted. In addition to the 
CMS-1600-P 329 

reasons we noted previously for modifying the existing registry satisfactory reporting 

criterion to increase the number of measures reported from 3 to 9, we believe it is 

appropriate to continue to align, 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 satisfactory 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 PQRS payment adjustment by meeting any of the criteria 

for satisfactory reporting adopted for the 2014 PQRS incentive for the 12-month 

reporting period). We believe this is appropriate since the reporting period for the 2014 

PQRS incentive and 2016 PQRS payment adjustment coincide. We seek public comment 

on these proposals as well as on whether we should offer alternative criteria for group 

practices participating in the PQRS GPRO to satisfy the 2016 PQRS payment adjustment 

similar to what we have established for individual eligible professionals 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 covering at least 3 of the National 

Quality Strategy domains, AND report each measure for at 

least 50 percent of the group practice’s applicable patients 

seen during the reporting period to which the measure applies. 

Measures with a 0 percent performance rate will not be 

counted. 

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 measures 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 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 covering at least 3 of the National 

Quality Strategy domains, AND report each measure for at 

least 50 percent of the group practice’s applicable patients 

seen during the reporting period to which the measure applies. 

Measures with a 0 percent performance rate will not be 

counted. 

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 measures 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 Considerations for the Selection of PQRS Quality 

Measures for Meeting the Criteria for Satisfactory Reporting for 2013 and Beyond for 

Individual Eligible Professionals 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 section 1890(a) of the Act 

(currently, that is the National Quality Forum, or NQF). However, in the case of a 

specified area or medical topic determined appropriate by the Secretary for which a 

feasible and practical measure has not been endorsed by the NQF, section 

1848(k)(2)(C)(ii) of the Act authorizes the Secretary to specify a measure that is not so 

endorsed as long as due consideration is given to measures that have been endorsed or 

adopted by a consensus organization identified by the Secretary, such as the AQA 

alliance. In light of these statutory requirements, we believe that, except in the 

circumstances specified in the statute, each PQRS quality measure must be endorsed by 

the NQF. Additionally, section 1848(k)(2)(D) of the Act requires that for each PQRS 

quality measure, "the Secretary shall ensure that eligible professionals have the 

opportunity to provide input during the development, endorsement, or selection of 

measures applicable to services they furnish." 

The statutory requirements under section 1848(k)(2)(C) of the Act, subject to the 

exception noted previously, require only that the measures be selected from measures that 

have been endorsed by the entity with a contract with the Secretary under section 1890(a) 

(that is, the NQF) and are silent for how the measures that are submitted to the NQF for 

endorsement were developed. The basic steps for developing measures applicable to 

physicians and other eligible professionals prior to submission of the measures for 

endorsement may be carried out by a variety of different organizations. We do not 
CMS-1600-P 332 

believe there needs to be any special restrictions on the type or make-up of the 

organizations carrying out this basic process of development of physician measures, such 

as restricting the initial development to physician-controlled organizations. Any such 

restriction would unduly limit the basic development of quality measures and the scope 

and utility of measures that may be considered for endorsement as voluntary consensus 

standards for purposes of the PQRS. 

In addition to section 1848(k)(2)(C) of the Act, section 1890A of the Act, which 

was added by section 3014(b) of the Affordable Care Act, requires that the entity with a 

contract with the Secretary under 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 such 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). Section 1890(A)(a) of the Act requires that the 

Secretary establish a pre-rulemaking process in which the Secretary must make publicly 

available by December 1st of each year a list of the quality and efficiency measures that 

the Secretary is considering for selection through rulemaking for use in the Medicare 

program. The NQF must provide CMS with the MAP’s input on selecting measures by 

February 1st of each year. The list of measures under consideration for 2013 is available 

at http://www.qualityforum.org/map/. 

 As we noted above, section 1848(k)(2)(C)(ii) of the Act provides an exception to 

the requirement that the Secretary select measures that have been endorsed by the entity 

with a contract under section 1890(a) of the Act (that is, the NQF). We may select 
CMS-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 have 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 care for Medicare beneficiaries. 

● Measures that address gaps in the quality of care delivered to Medicare 

beneficiaries. 

● Address Gaps in the PQRS measure set. 

● Measures impacting chronic conditions (chronic kidney disease, diabetes 

mellitus, heart failure, hypertension and musculoskeletal). 

● Measures applicable across care settings (such as, outpatient, nursing facilities, 

domiciliary, etc.). 

● Broadly applicable measures that could be used to create a core measure set 

required of all participating eligible professionals. 

● Measures groups that reflect the services furnished to beneficiaries by a 

particular specialty. 

10. Proposed PQRS Quality Measures 

Taking into consideration the statutory and non-statutory criteria we described 

previously, this section contains our proposals for the inclusion or removal of measures in 

PQRS for 2014 and beyond. We are classifying all proposed measures against six 
CMS-1600-P 334 

domains based on the National Quality Strategy’s six priorities, as follows: 

 (1) Person and Caregiver-Centered Experience and Outcomes. These are 

measures that reflect the potential to improve patient-centered care and the quality of care 

delivered to patients. They emphasize the importance of collecting patient-reported data 

and the ability to impact care at the individual patient level as well as the population level 

through greater involvement of patients and families in decision making, self-care, 

activation, and understanding of their health condition and its effective management. 

 (2) Patient Safety. These are measures that reflect the safe delivery of clinical 

services in both hospital and ambulatory settings and include processes that would reduce 

harm to patients and reduce burden of illness. These measures should enable longitudinal 

assessment of condition-specific, patient-focused episodes of care. 

 (3) Communication and Care Coordination. These are measures that demonstrate 

appropriate and timely sharing of information and coordination of clinical and preventive 

services among health professionals in the care team and with patients, caregivers, and 

families to improve appropriate and timely patient and care team communication. 

 (4) Community/Population Health. These are measures that reflect the use of 

clinical and preventive services and achieve improvements in the health of the population 

served. These are outcome-focused and have the ability to achieve longitudinal 

measurement that will demonstrate improvement or lack of improvement in the health of 

the US population. 

(5) Efficiency and Cost Reduction. These are measures that reflect efforts to 

significantly improve outcomes and reduce errors. These measures also impact and 

benefit a large number of patients and emphasize the use of evidence to best manage high 

priority conditions and determine appropriate use of healthcare resources. 
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 beyond, 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 desire to align measure 

titles with the measure titles that were proposed for 2013, 2014, 2015, and potentially 

subsequent years of the EHR Incentive Program, we note that the measure titles for 

measures available for reporting via EHR may change. To the extent that the EHR 

Incentive Program updates its measure titles to include version numbers (77 FR 13744), 

we intend to use these version numbers to describe the PQRS EHR measures that will 

also be available for reporting for the EHR Incentive Program. We will continue to work 

toward complete alignment of measure specifications across programs whenever 

possible. 

Through NQF’s measure maintenance process, NQF endorsed measures are 

sometimes updated to incorporate changes that we believe do not substantively change 

the nature of the measure. Examples of such changes could be updated diagnosis or 

procedure codes or changes to exclusions to the patient population or definitions. We 

believe these types of maintenance changes are distinct from more substantive changes to 

measures that result in what are considered new or different measures, and that they do 

not trigger the same agency obligations under the Administrative Procedure Act. In the 
CMS-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 incorporate those updates to the measure 

specifications that apply to the program (77 FR 69207). We believe this adequately 

balances our need to incorporate non-substantive NQF updates to NQF-endorsed 

measures in the most expeditious manner possible, while preserving the public’s ability 

to comment on updates that so fundamentally change an endorsed measure that it is no 

longer the same measure that we originally adopted. We also note that the NQF process 

incorporates an opportunity for public comment and engagement in the measure 

maintenance process. We will revise the Specifications Manual and post notices to 

clearly identify the updates and provide links to where additional information on the 

updates can be found. Updates will also be available on the CMS PQRS 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 measures), 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 professionals must report the most recent, updated 

version of a clinical quality measure. For example, for purposes of reporting clinical 

quality measures that are electronically specified during the PQRS reporting periods that 

occur in 2014, we would only accept the reporting of clinical quality measures that are 
CMS-1600-P 337 

electronically specified using versions of the 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, that once direct EHR products and EHR data 

submission vendors are issued a 2014 Edition certification for clinical quality measures, 

they will not necessarily be required to have such technology retested and recertified 

against the most recent, updated version of a clinical quality measure when such versions 

are made available. We propose that for purposes of PQRS, however, that the eligible 

professional’s direct EHR product or EHR data submission vendor must be tested and 

certified to the most 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 reporting periods that occur in 2014, we would 

only accept the reporting of clinical quality measures from direct EHR products or EHR 

data submission vendors that have been tested and certified to versions of the electronic 

specifications that were updated and posted on June 2013. We seek comment on our 

proposals to require eligible professionals to both use the most recent, updated version of 

an electronically specified clinical quality measure 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 electronic 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 Available for Reporting for 2014 and Beyond 

In the CY 2013 PFS final rule with comment period, we finalized the HHS 
CMS-1600-P 338 

Million Hearts Measures as a recommended set of core measures for which we encourage 

eligible professionals to report in PQRS (77 FR 69209). In addition to the HHS Million 

Hearts Measures we previously finalized, we are proposing to include the measures 

specified in Table 28 as additional 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 align 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 Quality Reporting System Recommended Core 

Measures for 2014 and Beyond 

NQF/ PQRS 

CMS E-Measure ID 

National 

Quality 

Strategy 

Domain 

Measure Title and Description¥

Measure Steward Claims Registry EHR GPRO (Web Interface)* Measures Groups 

Other Quality Reporting Programs 

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 MU2 
CMS-1600-P 339 NQF/ PQRS CMS E-Measure ID 

National 

Quality 

Strategy 

Domain 

Measure Title and Description¥

Measure Steward Claims Registry EHR GPRO (Web Interface)* Measures Groups 

Other Quality Reporting Programs 

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 were 

ordered 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 MU2 
CMS-1600-P 340 NQF/ PQRS CMS E-Measure ID 

National 

Quality 

Strategy 

Domain 

Measure Title and Description¥

Measure Steward Claims Registry EHR GPRO (Web Interface)* Measures Groups 

Other Quality Reporting Programs 

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 MU2 
CMS-1600-P 341 NQF/ PQRS CMS E-Measure ID 

National 

Quality 

Strategy 

Domain 

Measure Title and Description¥

Measure Steward Claims Registry EHR GPRO (Web Interface)* Measures Groups 

Other Quality Reporting Programs 

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 for 

Children 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 

ACO 
CMS-1600-P 342 NQF/ PQRS CMS E-Measure ID 

National 

Quality 

Strategy 

Domain 

Measure Title and Description¥

Measure Steward Claims Registry EHR GPRO (Web Interface)* Measures Groups 

Other Quality Reporting Programs 

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 MU2 
CMS-1600-P 343 NQF/ PQRS CMS E-Measure ID 

National 

Quality 

Strategy 

Domain 

Measure Title and Description¥

Measure Steward Claims Registry EHR GPRO (Web Interface)* Measures Groups 

Other Quality Reporting Programs 

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 failure 

who 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 are aligned with the 2014 Physician Quality 

Reporting System Claims and Qualified Registry measure titles and descriptions, and 

may differ from existing measures in other programs. When reporting data on these 

measures, please reference the National Quality 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 proposing to include in the PQRS measure 

set for 2014 and beyond. Please note that our rationale for proposing each of these 

measures is found below the measure description. 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 Measures and Those Included in Measures 

Groups for the Physician Quality Reporting System to be Available for Satisfactory 

Reporting via Claims, Registry, or EHR Beginning in 2014 

NQF/ PQRS CMS E-Measure ID 

National Quality Strategy 

Domain 

Measure Title and Description¥

Measure Steward Claims Registry EHR GPRO (Web Interface)* Measures Groups 

Other Quality Reporting Programs 

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 MU2 
CMS-1600-P 345 NQF/ PQRS CMS E-Measure ID National Quality Strategy Domain 

Measure Title and Description¥

Measure Steward Claims Registry EHR GPRO (Web Interface)* Measures Groups 

Other Quality Reporting Programs 

0108/

N/A 

136v3 Effective 

Clinical 

Care 

ADHD: Follow-Up Care for Children 

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 

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 
CMS-1600-P 346 NQF/ PQRS CMS E-Measure ID National Quality Strategy Domain 

Measure Title and Description¥

Measure Steward Claims Registry EHR GPRO (Web Interface)* Measures Groups 

Other Quality Reporting Programs 

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 alcohol 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 MU2 
CMS-1600-P 347 NQF/ PQRS CMS E-Measure ID National Quality Strategy Domain 

Measure Title and Description¥

Measure Steward Claims Registry EHR GPRO (Web Interface)* Measures Groups 

Other Quality Reporting Programs 

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 and 

existing 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 MU2 
CMS-1600-P 348 NQF/ PQRS CMS E-Measure ID National Quality Strategy Domain 

Measure Title and Description¥

Measure Steward Claims Registry EHR GPRO (Web Interface)* Measures Groups 

Other Quality Reporting Programs 

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 Depression 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 MU2 
CMS-1600-P 349 NQF/ PQRS CMS E-Measure ID National Quality Strategy Domain 

Measure Title and Description¥

Measure Steward Claims Registry EHR GPRO (Web Interface)* Measures Groups 

Other Quality Reporting Programs 

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 MU2 
CMS-1600-P 350 NQF/ PQRS CMS E-Measure ID National Quality Strategy Domain 

Measure Title and Description¥

Measure Steward Claims Registry EHR GPRO (Web Interface)* Measures Groups 

Other Quality Reporting Programs 

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 MU2 
CMS-1600-P 351 NQF/ PQRS CMS E-Measure ID National Quality Strategy Domain 

Measure Title and Description¥

Measure Steward Claims Registry EHR GPRO (Web Interface)* Measures Groups 

Other Quality Reporting Programs 

N/A/

N/A 

56v2 Person 

and 

Caregive

rCentered 

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 MU2 
CMS-1600-P 352 NQF/ PQRS CMS E-Measure ID National Quality Strategy Domain 

Measure Title and Description¥

Measure Steward Claims Registry EHR GPRO (Web Interface)* Measures Groups 

Other Quality Reporting Programs 

N/A/

N/A 

90v3 Person 

and 

Caregive

rCentered 

Experien

ce and 

Outcome

s 

Functional Status Assessment for 

Complex Chronic Conditions: 

Percentage of patients aged 65 years 

and older with heart failure who 

completed 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 MU2 
CMS-1600-P 353 NQF/ PQRS CMS E-Measure ID National Quality Strategy Domain 

Measure Title and Description¥

Measure Steward Claims Registry EHR GPRO (Web Interface)* Measures Groups 

Other Quality Reporting Programs 

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 MU2 
CMS-1600-P 354 NQF/ PQRS CMS E-Measure ID National Quality Strategy Domain 

Measure Title and Description¥

Measure Steward Claims Registry EHR GPRO (Web Interface)* Measures Groups 

Other Quality Reporting Programs 

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 MU2 
CMS-1600-P 355 NQF/ PQRS CMS E-Measure ID National Quality Strategy Domain 

Measure Title and Description¥

Measure Steward Claims Registry EHR GPRO (Web Interface)* Measures Groups 

Other Quality Reporting Programs 

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 X 
CMS-1600-P 356 NQF/ PQRS CMS E-Measure ID National Quality Strategy Domain 

Measure Title and Description¥

Measure Steward Claims Registry EHR GPRO (Web Interface)* Measures Groups 

Other Quality Reporting Programs 

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 X 
CMS-1600-P 357 NQF/ PQRS CMS E-Measure ID National Quality Strategy Domain 

Measure Title and Description¥

Measure Steward Claims Registry EHR GPRO (Web Interface)* Measures Groups 

Other Quality Reporting Programs 

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 

 X 
CMS-1600-P 358 NQF/ PQRS CMS E-Measure ID National Quality Strategy Domain 

Measure Title and Description¥

Measure Steward Claims Registry EHR GPRO (Web Interface)* Measures Groups 

Other Quality Reporting Programs 

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 replacement 

with 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/AM

APCPI 

 X 
CMS-1600-P 359 NQF/ PQRS CMS E-Measure ID National Quality Strategy Domain 

Measure Title and Description¥

Measure Steward Claims Registry EHR GPRO (Web Interface)* Measures Groups 

Other Quality Reporting Programs 

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/AM

APCPI 

 X 
CMS-1600-P 360 NQF/ PQRS CMS E-Measure ID National Quality Strategy Domain 

Measure Title and Description¥

Measure Steward Claims Registry EHR GPRO (Web Interface)* Measures Groups 

Other Quality Reporting Programs 

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/AM

APCPI

 X 
CMS-1600-P 361 NQF/ PQRS CMS E-Measure ID National Quality Strategy Domain 

Measure Title and Description¥

Measure Steward Claims Registry EHR GPRO (Web Interface)* Measures Groups 

Other Quality Reporting Programs 

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/AM

APCPI 

 X 
CMS-1600-P 362 NQF/ PQRS CMS E-Measure ID National Quality Strategy Domain 

Measure Title and Description¥

Measure Steward Claims Registry EHR GPRO (Web Interface)* Measures Groups 

Other Quality Reporting Programs 

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  X 
CMS-1600-P 363 NQF/ PQRS CMS E-Measure ID National Quality Strategy Domain 

Measure Title and Description¥

Measure Steward Claims Registry EHR GPRO (Web Interface)* Measures Groups 

Other Quality Reporting Programs 

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-month 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  X 
CMS-1600-P 364 NQF/ PQRS CMS E-Measure ID National Quality Strategy Domain 

Measure Title and Description¥

Measure Steward Claims Registry EHR GPRO (Web Interface)* Measures Groups 

Other Quality Reporting Programs 

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  X 
CMS-1600-P 365 NQF/ PQRS CMS E-Measure ID National Quality Strategy Domain 

Measure Title and Description¥

Measure Steward Claims Registry EHR GPRO (Web Interface)* Measures Groups 

Other Quality Reporting Programs 

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  X 
CMS-1600-P 366 NQF/ PQRS CMS E-Measure ID National Quality Strategy Domain 

Measure Title and Description¥

Measure Steward Claims Registry EHR GPRO (Web Interface)* Measures Groups 

Other Quality Reporting Programs 

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  X 
CMS-1600-P 367 NQF/ PQRS CMS E-Measure ID National Quality Strategy Domain 

Measure Title and Description¥

Measure Steward Claims Registry EHR GPRO (Web Interface)* Measures Groups 

Other Quality Reporting Programs 

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  X 
CMS-1600-P 368 NQF/ PQRS CMS E-Measure ID National Quality Strategy Domain 

Measure Title and Description¥

Measure Steward Claims Registry EHR GPRO (Web Interface)* Measures Groups 

Other Quality Reporting Programs 

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 eligible 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 X 
CMS-1600-P 369 NQF/ PQRS CMS E-Measure ID National Quality Strategy Domain 

Measure Title and Description¥

Measure Steward Claims Registry EHR GPRO (Web Interface)* Measures Groups 

Other Quality Reporting Programs 

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 eligible 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 X 
CMS-1600-P 370 NQF/ PQRS CMS E-Measure ID National Quality Strategy Domain 

Measure Title and Description¥

Measure Steward Claims Registry EHR GPRO (Web Interface)* Measures Groups 

Other Quality Reporting Programs 

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 eligible 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 X 
CMS-1600-P 371 NQF/ PQRS CMS E-Measure ID National Quality Strategy Domain 

Measure Title and Description¥

Measure Steward Claims Registry EHR GPRO (Web Interface)* Measures Groups 

Other Quality Reporting Programs 

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 eligible 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 X 
CMS-1600-P 372 NQF/ PQRS CMS E-Measure ID National Quality Strategy Domain 

Measure Title and Description¥

Measure Steward Claims Registry EHR GPRO (Web Interface)* Measures Groups 

Other Quality Reporting Programs 

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 

 X 
CMS-1600-P 373 NQF/ PQRS CMS E-Measure ID National Quality Strategy Domain 

Measure Title and Description¥

Measure Steward Claims Registry EHR GPRO (Web Interface)* Measures Groups 

Other Quality Reporting Programs 

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 Record. 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 X 
CMS-1600-P 374 NQF/ PQRS CMS E-Measure ID National Quality Strategy Domain 

Measure Title and Description¥

Measure Steward Claims Registry EHR GPRO (Web Interface)* Measures Groups 

Other Quality Reporting Programs 

0209/

N/A 

 Person 

and 

Caregive

rCentered 

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 that 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 

 X 
CMS-1600-P 375 NQF/ PQRS CMS E-Measure ID National Quality Strategy Domain 

Measure Title and Description¥

Measure Steward Claims Registry EHR GPRO (Web Interface)* Measures Groups 

Other Quality Reporting Programs 

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  X 
CMS-1600-P 376 NQF/ PQRS CMS E-Measure ID National Quality Strategy Domain 

Measure Title and Description¥

Measure Steward Claims Registry EHR GPRO (Web Interface)* Measures Groups 

Other Quality Reporting Programs 

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  X 
CMS-1600-P 377 NQF/ PQRS CMS E-Measure ID National Quality Strategy Domain 

Measure Title and Description¥

Measure Steward Claims Registry EHR GPRO (Web Interface)* Measures Groups 

Other Quality Reporting Programs 

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  X 
CMS-1600-P 378 NQF/ PQRS CMS E-Measure ID National Quality Strategy Domain 

Measure Title and Description¥

Measure Steward Claims Registry EHR GPRO (Web Interface)* Measures Groups 

Other Quality Reporting Programs 

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  X 
CMS-1600-P 379 NQF/ PQRS CMS E-Measure ID National Quality Strategy Domain 

Measure Title and Description¥

Measure Steward Claims Registry EHR GPRO (Web Interface)* Measures Groups 

Other Quality Reporting Programs 

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  X 
CMS-1600-P 380 NQF/ PQRS CMS E-Measure ID National Quality Strategy Domain 

Measure Title and Description¥

Measure Steward Claims Registry EHR GPRO (Web Interface)* Measures Groups 

Other Quality Reporting Programs 

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  X 
CMS-1600-P 381 NQF/ PQRS CMS E-Measure ID National Quality Strategy Domain 

Measure Title and Description¥

Measure Steward Claims Registry EHR GPRO (Web Interface)* Measures Groups 

Other Quality Reporting Programs 

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  X 
CMS-1600-P 382 NQF/ PQRS CMS E-Measure ID National Quality Strategy Domain 

Measure Title and Description¥

Measure Steward Claims Registry EHR GPRO (Web Interface)* Measures Groups 

Other Quality Reporting Programs 

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 breast 

feeding 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  X 
CMS-1600-P 383 NQF/ PQRS CMS E-Measure ID National Quality Strategy Domain 

Measure Title and Description¥

Measure Steward Claims Registry EHR GPRO (Web Interface)* Measures Groups 

Other Quality Reporting Programs 

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  X 
CMS-1600-P 384 NQF/ PQRS CMS E-Measure ID National Quality Strategy Domain 

Measure Title and Description¥

Measure Steward Claims Registry EHR GPRO (Web Interface)* Measures Groups 

Other Quality Reporting Programs 

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 professionals 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 X 
CMS-1600-P 385 NQF/ PQRS CMS E-Measure ID National Quality Strategy Domain 

Measure Title and Description¥

Measure Steward Claims Registry EHR GPRO (Web Interface)* Measures Groups 

Other Quality Reporting Programs 

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. There 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 

 X 
CMS-1600-P 386 NQF/ PQRS CMS E-Measure ID National Quality Strategy Domain 

Measure Title and Description¥

Measure Steward Claims Registry EHR GPRO (Web Interface)* Measures Groups 

Other Quality Reporting Programs 

N/A/

N/A 

 Person 

and 

Caregive

rCentered 

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 for prophylactic 

antibiotics. This measure would 

potentially not have any clinical 

limitations. 

ACS X 
CMS-1600-P 387 NQF/ PQRS CMS E-Measure ID National Quality Strategy Domain 

Measure Title and Description¥

Measure Steward Claims Registry EHR GPRO (Web Interface)* Measures Groups 

Other Quality Reporting Programs 

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 evaluate procedural

ACS X 
CMS-1600-P 388 NQF/ PQRS CMS E-Measure ID National Quality Strategy Domain 

Measure Title and Description¥

Measure Steward Claims Registry EHR GPRO (Web Interface)* Measures Groups 

Other Quality Reporting Programs 

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 X 
CMS-1600-P 389 NQF/ PQRS CMS E-Measure ID National Quality Strategy Domain 

Measure Title and Description¥

Measure Steward Claims Registry EHR GPRO (Web Interface)* Measures Groups 

Other Quality Reporting Programs 

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 X 
CMS-1600-P 390 NQF/ PQRS CMS E-Measure ID National Quality Strategy Domain 

Measure Title and Description¥

Measure Steward Claims Registry EHR GPRO (Web Interface)* Measures Groups 

Other Quality Reporting Programs 

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 site 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 X 
CMS-1600-P 391 NQF/ PQRS CMS E-Measure ID National Quality Strategy Domain 

Measure Title and Description¥

Measure Steward Claims Registry EHR GPRO (Web Interface)* Measures Groups 

Other Quality Reporting Programs 

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 professionals 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 X 
CMS-1600-P 392 NQF/ PQRS CMS E-Measure ID National Quality Strategy Domain 

Measure Title and Description¥

Measure Steward Claims Registry EHR GPRO (Web Interface)* Measures Groups 

Other Quality Reporting Programs 

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 professionals 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 X 
CMS-1600-P 393 NQF/ PQRS CMS E-Measure ID National Quality Strategy Domain 

Measure Title and Description¥

Measure Steward Claims Registry EHR GPRO (Web Interface)* Measures Groups 

Other Quality Reporting Programs 

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 professionals 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

ACS X 
CMS-1600-P 394 NQF/ PQRS CMS E-Measure ID National Quality Strategy Domain 

Measure Title and Description¥

Measure Steward Claims Registry EHR GPRO (Web Interface)* Measures Groups 

Other Quality Reporting Programs 

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 professionals 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 X 
CMS-1600-P 395 NQF/ PQRS CMS E-Measure ID National Quality Strategy Domain 

Measure Title and Description¥

Measure Steward Claims Registry EHR GPRO (Web Interface)* Measures Groups 

Other Quality Reporting Programs 

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 professionals 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 X 
CMS-1600-P 396 NQF/ PQRS CMS E-Measure ID National Quality Strategy Domain 

Measure Title and Description¥

Measure Steward Claims Registry EHR GPRO (Web Interface)* Measures Groups 

Other Quality Reporting Programs 

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 IQR 
CMS-1600-P 397 NQF/ PQRS CMS E-Measure ID National Quality Strategy Domain 

Measure Title and Description¥

Measure Steward Claims Registry EHR GPRO (Web Interface)* Measures Groups 

Other Quality Reporting Programs 

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 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 IQR 
CMS-1600-P 398 NQF/ PQRS CMS E-Measure ID National Quality Strategy Domain 

Measure Title and Description¥

Measure Steward Claims Registry EHR GPRO (Web Interface)* Measures Groups 

Other Quality Reporting Programs 

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 IQR 
CMS-1600-P 399 NQF/ PQRS CMS E-Measure ID National Quality Strategy Domain 

Measure Title and Description¥

Measure Steward Claims Registry EHR GPRO (Web Interface)* Measures Groups 

Other Quality Reporting Programs 

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 IQR 
CMS-1600-P 400 NQF/ PQRS CMS E-Measure ID National Quality Strategy Domain 

Measure Title and Description¥

Measure Steward Claims Registry EHR GPRO (Web Interface)* Measures Groups 

Other Quality Reporting Programs 

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 health 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 IQR 
CMS-1600-P 401 NQF/ PQRS CMS E-Measure ID National Quality Strategy Domain 

Measure Title and Description¥

Measure Steward Claims Registry EHR GPRO (Web Interface)* Measures Groups 

Other Quality Reporting Programs 

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 statistical 

data 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 Forum (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 after the measure title and description. 

TABLE 30: Measures Proposed for Removal from the Existing Physician Quality 

Reporting System Measure Set Beginning in 2014 

NQF/ PQRS 

National 

Quality 

Strategy 

Domain

Measure Title and Description¥

Measure Steward Claims Registry EHR GPRO (Web Interface)* Measures Groups 

Other Quality Reporting 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. 

AM

APCPI 

X X X 
CMS-1600-P 403 NQF/ PQRS 

National 

Quality 

Strategy 

Domain

Measure Title and Description¥

Measure Steward Claims Registry EHR GPRO (Web Interface)* Measures Groups 

Other Quality Reporting 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 diagnosis 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.

AM

APCPI 

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.

AM

APCPI 

X X X 
CMS-1600-P 404 NQF/ PQRS 

National 

Quality 

Strategy 

Domain

Measure Title and Description¥

Measure Steward Claims Registry EHR GPRO (Web Interface)* Measures Groups 

Other Quality Reporting 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/mm3

 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.

AM

APCPI

/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 antiretroviral 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. 

AM

APCPI

/NC

QA 

 X X 
CMS-1600-P 405 NQF/ PQRS 

National 

Quality 

Strategy 

Domain

Measure Title and Description¥

Measure Steward Claims Registry EHR GPRO (Web Interface)* Measures Groups 

Other Quality Reporting 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. 

AM

APCPI 

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.

AM

APCPI 

X X 
CMS-1600-P 406 NQF/ PQRS 

National 

Quality 

Strategy 

Domain

Measure Title and Description¥

Measure Steward Claims Registry EHR GPRO (Web Interface)* Measures Groups 

Other Quality Reporting 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 patients 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. 

AM

APCPI

/AC

CF/A

HA 

 X MU

1 
CMS-1600-P 407 NQF/ PQRS 

National 

Quality 

Strategy 

Domain

Measure Title and Description¥

Measure Steward Claims Registry EHR GPRO (Web Interface)* Measures Groups 

Other Quality Reporting 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. 

AM

APCPI

/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 

 X 
CMS-1600-P 408 NQF/ PQRS 

National 

Quality 

Strategy 

Domain

Measure Title and Description¥

Measure Steward Claims Registry EHR GPRO (Web Interface)* Measures Groups 

Other Quality Reporting 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 

 X 
CMS-1600-P 409 NQF/ PQRS 

National 

Quality 

Strategy 

Domain

Measure Title and Description¥

Measure Steward Claims Registry EHR GPRO (Web Interface)* Measures Groups 

Other Quality Reporting 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 

 X 
CMS-1600-P 410 NQF/ PQRS 

National 

Quality 

Strategy 

Domain

Measure Title and Description¥

Measure Steward Claims Registry EHR GPRO (Web Interface)* Measures Groups 

Other Quality Reporting 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. 

AM

APCPI 

 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 mmHg 

and prescribed two or more antihypertensive medications during the 

most recent office visit 

Rationale: Measure deletion due to 

duplicative measures within PQRS.

AM

APCPI

/AC

CF/A

HA 

 X 
CMS-1600-P 411 NQF/ PQRS 

National 

Quality 

Strategy 

Domain

Measure Title and Description¥

Measure Steward Claims Registry EHR GPRO (Web Interface)* Measures Groups 

Other Quality Reporting 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 X 
CMS-1600-P 412 NQF/ PQRS 

National 

Quality 

Strategy 

Domain

Measure Title and Description¥

Measure Steward Claims Registry EHR GPRO (Web Interface)* Measures Groups 

Other Quality Reporting 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. 

AM

APCPI 

 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. 

AM

APCPI 

 X MU

1 
CMS-1600-P 413 NQF/ PQRS 

National 

Quality 

Strategy 

Domain

Measure Title and Description¥

Measure Steward Claims Registry EHR GPRO (Web Interface)* Measures Groups 

Other Quality Reporting 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 

 X 
CMS-1600-P 414 NQF/ PQRS 

National 

Quality 

Strategy 

Domain

Measure Title and Description¥

Measure Steward Claims Registry EHR GPRO (Web Interface)* Measures Groups 

Other Quality Reporting 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 provider’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 X 
CMS-1600-P 415 NQF/ PQRS 

National 

Quality 

Strategy 

Domain

Measure Title and Description¥

Measure Steward Claims Registry EHR GPRO (Web Interface)* Measures Groups 

Other Quality Reporting 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 with 

the measure: Shared DecisionMaking: Trial of Conservative (Nonsurgical) Therapy 

AAH

KS/A

MAPCPI 

 X 

N/A/

N/A 

Person 

and 

Caregive

rCentered 

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.

AM

APCPI 

X X 
CMS-1600-P 416 NQF/ PQRS 

National 

Quality 

Strategy 

Domain

Measure Title and Description¥

Measure Steward Claims Registry EHR GPRO (Web Interface)* Measures Groups 

Other Quality Reporting 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 

 X 
CMS-1600-P 417 NQF/ PQRS 

National 

Quality 

Strategy 

Domain

Measure Title and Description¥

Measure Steward Claims Registry EHR GPRO (Web Interface)* Measures Groups 

Other Quality Reporting 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 diagnosis 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 diagnosis 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 

 X 
CMS-1600-P 418 NQF/ PQRS 

National 

Quality 

Strategy 

Domain

Measure Title and Description¥

Measure Steward Claims Registry EHR GPRO (Web Interface)* Measures Groups 

Other Quality Reporting Programs 

N/A/

N/A 

Effective 

Clinical 

Care 

Osteoporosis: Calcium Intake 

Assessment and Counseling:

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 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 diagnosis 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 

 X 
CMS-1600-P 419 NQF/ PQRS 

National 

Quality 

Strategy 

Domain

Measure Title and Description¥

Measure Steward Claims Registry EHR GPRO (Web Interface)* Measures Groups 

Other Quality Reporting 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 

 X 
CMS-1600-P 420 NQF/ PQRS 

National 

Quality 

Strategy 

Domain

Measure Title and Description¥

Measure Steward Claims Registry EHR GPRO (Web Interface)* Measures Groups 

Other Quality Reporting 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 

 X 
CMS-1600-P 421 NQF/ PQRS 

National 

Quality 

Strategy 

Domain

Measure Title and Description¥

Measure Steward Claims Registry EHR GPRO (Web Interface)* Measures Groups 

Other Quality Reporting 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 

 X 
CMS-1600-P 422 NQF/ PQRS 

National 

Quality 

Strategy 

Domain

Measure Title and Description¥

Measure Steward Claims Registry EHR GPRO (Web Interface)* Measures Groups 

Other Quality Reporting 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 

 X 
CMS-1600-P 423 NQF/ PQRS 

National 

Quality 

Strategy 

Domain

Measure Title and Description¥

Measure Steward Claims Registry EHR GPRO (Web Interface)* Measures Groups 

Other Quality Reporting 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 

 X 
CMS-1600-P 424 NQF/ PQRS 

National 

Quality 

Strategy 

Domain

Measure Title and Description¥

Measure Steward Claims Registry EHR GPRO (Web Interface)* Measures Groups 

Other Quality Reporting 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 are aligned with the 2014 Physician Quality 

Reporting System Claims and Qualified Registry measure titles and descriptions, and 

may differ from existing measures in other 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 group as “a subset of four or more 

Physician Quality Reporting System measures that have a particular clinical condition or 

focus in common. The denominator definition and coding of the measures group 

identifies the condition or focus that is shared across the measures within a particular 

measures group.” As we discussed in section 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 increase the number of individual measures to be 

reported via claims and registry, we believe it is also appropriate to increase the number 
CMS-1600-P 425 

of measures that would be reported in a measures group. Specifically, we propose to 

modify the minimum amount of measures that may be included in a PQRS measures 

group from four to six. Therefore, we are proposing to modify the definition of a 

measures group at §414.90(b) to indicate that a measures group would consist of at least 

six measures. Consequently, we are proposing to add additional measures to measures 

groups that previously contained less than six measures. We believe that, although it is 

appropriate to increase the number of measures in a measures group, we do not believe it 

would be appropriate to increase the minimum number of reportable measures in a 

measures group to 9, such as we are proposing for individual eligible professionals who 

report individual quality measures via claims and registry. Unlike reporting individual 

measures, where an eligible professional would 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 measures in a measures group in previously 

established measures groups, so that each measures 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 Exposure to Ionizing Radiation: This measures group 

represents a new clinical theme for eligible professionals to report and addresses a 
CMS-1600-P 426 

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 would be a measures group that specialty Radiologists and 

other eligible professionals within this scope of practice could report. 

● General Surgery: 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. 

● Gastrointestinal Surgery: This measures group could be reported by 

specialized general surgical eligible professionals 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. However, these 

measures address a gap in that it would produce data that specifically evaluate iatrogenic 

injury to adjacent organ, anastomotic leak intervention, and unplanned reoperation. 

Please note that, since we are proposing to eliminate the option to report measures 

groups via claims, all measures groups 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 measure titles and descriptions, 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 Beyond
CMS-1600-P 427 NQF/ PQRS 

Measure Title and Description 

Measure Developer 

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 through 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 period or a negative retinal exam (no 

evidence of retinopathy) in the 12 months 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 screening test or 

evidence of nephropathy during the measurement period

NCQA 

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, over-the-counters, herbals, 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 patients aged 18 through 

75 years with diabetes who had a foot examination 

NCQA 

TABLE 32: Proposed Chronic Kidney Disease (CKD) Measures Group for 2014 and 

Beyond NQF/ PQRS 

Measure Title and Description 

Measure Developer 

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 influenza immunization OR who reported 

previous receipt of an influenza immunization 

AMAPCPI 

1668/ 

121 

Adult Kidney Disease: Laboratory Testing (Lipid Profile): Percentage 

of patients aged 18 years and older with a diagnosis of chronic kidney 

disease (CKD) (stage 3, 4, or 5, not receiving Renal Replacement Therapy 

[RRT]) who had a fasting lipid profile performed at least once within a 12-

month period 

AMAPCPI 
CMS-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) (stage 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 which a Hemoglobin level is measured 

for patients aged 18 years and older with a diagnosis of advanced chronic 

kidney disease (CKD) (stage 4 or 5, not receiving Renal Replacement 

Therapy [RRT]) or End Stage Renal Disease (ESRD) (who are on 

hemodialysis or peritoneal dialysis) who are also receiving 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 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 

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 intervention if identified as a tobacco 

user

AMAPCPI 

TABLE 33: Proposed Preventive Care Measures Group for 2014 and Beyond NQF/ PQRS 

Measure Title and Description 

Measure Developer 

0046/ 

39 

Screening or Therapy for Osteoporosis for Women Aged 65 Years and 

Older: Percentage of female patients aged 65 years and older who have a 

central dual-energy X- ray absorptiometry (DXA) measurement ordered or 

performed at least once since age 60 or pharmacologic therapy prescribed 

within 12 months 

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 seen for a visit between October 1 and 

March 31 who received an influenza immunization OR who reported 

previous receipt of an influenza immunization 

AMAPCPI 
CMS-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 who 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 previous six months of the 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 intervention if identified as a tobacco 

user 

AMAPCPI 

TABLE 34: Proposed Coronary Artery Bypass Graft (CABG) Measures Group for 

2014 and Beyond NQF/ PQRS 

Measure Title and Description 

Measure Developer 

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 undergoing isolated CABG surgery who 

received an IMA graft 

STS 

0236/ 

44 

Coronary Artery Bypass Graft (CABG): Preoperative Beta-Blocker in 

Patients with Isolated CABG Surgery: Percentage of isolated Coronary 

Artery Bypass Graft (CABG) surgeries for patients aged 18 years and older 

who received a beta-blocker within 24 hours prior to surgical incision 

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 (CABG): Deep Sternal Wound Infection 

Rate: Percentage of patients aged 18 years and older undergoing isolated 

CABG surgery who, within 30 days postoperatively, develop deep sternal 

wound infection (involving muscle, bone, and/or mediastinum requiring 

operative intervention) 

STS 
CMS-1600-P 430 

0131/ 

166 

Coronary Artery Bypass Graft (CABG): Stroke: Percentage of patients 

aged 18 years and older undergoing isolated CABG surgery who have a 

postoperative stroke (i.e., any confirmed neurological deficit of abrupt onset 

caused by a disturbance in blood supply to the brain) that did not resolve 

within 24 hours 

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 failure) 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 operating room (OR) during the current 

hospitalization for mediastinal bleeding with or without tamponade, graft 

occlusion, valve dysfunction, or other cardiac reason 

STS 

0116/ 

169 

Coronary Artery Bypass Graft (CABG): Antiplatelet Medications at 

Discharge: Percentage of patients aged 18 years and older undergoing 

isolated CABG surgery who were discharged 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 discharged on a statin or other lipidlowering regimen 

STS 

TABLE 35: Proposed Rheumatoid Arthritis (RA) Measures Group for 2014 and 

Beyond NQF/ PQRS 

Measure Title and Description 

Measure Developer 

0054/ 

108 

Rheumatoid Arthritis (RA): Disease Modifying Anti-Rheumatic Drug 

(DMARD) Therapy: Percentage of patients aged 18 years and older who 

were diagnosed with RA and were prescribed, dispensed, or administered 

at least one ambulatory prescription for a DMARD 

NCQA 

AQA 

adopted

/176 

Rheumatoid Arthritis (RA): Tuberculosis Screening: Percentage of 

patients aged 18 years and older with 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-modifying anti-rheumatic drug (DMARD) 

AMAPCPI 

AQA 

adopted

/177 

Rheumatoid 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 disease activity within 12 months 

AMAPCPI 

AQA 

adopted 

/178 

Rheumatoid Arthritis (RA): Functional Status Assessment: Percentage 

of patients aged 18 years and older with a diagnosis of RA for whom a 

functional status assessment was performed at least once within 12 months 

AMAPCPI 

AQA Rheumatoid Arthritis (RA): Assessment and Classification of Disease AMA- 
CMS-1600-P 431 NQF/ PQRS 

Measure Title and Description 

Measure Developer 

adopted

/179 

Prognosis: Percentage of patients aged 18 years and older with a diagnosis 

of RA who have an assessment and classification 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 and, for those on prolonged doses of 

prednisone ≥ 10 mg daily (or equivalent) with improvement or no change 

in disease activity, documentation of glucocorticoid management plan 

within 12 months 

AMAPCPI 

TABLE 36: Proposed Perioperative Care Measures Group for 2014 and Beyond NQF/ PQRS 

Measure Title and Description 

Measure Developer 

0270/ 

20 

Perioperative Care: Timing of Prophylactic Parenteral Antibiotic – 

Ordering Physician: Percentage of surgical patients aged 18 years and older 

undergoing procedures with the indications for prophylactic parenteral 

antibiotics, who have an order for prophylactic parenteral antibiotic to be 

given within one hour (if fluoroquinolone or vancomycin, two hours), prior 

to the surgical incision (or start of procedure when no incision is required) 

AMAPCPI/ 

NCQA 

0268/ 

21 

Perioperative Care: Selection of Prophylactic Antibiotic – First OR 

Second Generation Cephalosporin: Percentage of surgical patients aged 18 

years and older undergoing procedures with the indications for a first OR 

second generation cephalosporin prophylactic antibiotic, who had an order 

for a first OR second generation cephalosporin for antimicrobial prophylaxis 

AMAPCPI/ 

NCQA 

0271/ 

22 

Perioperative Care: Discontinuation of Prophylactic Parenteral 

Antibiotics (Non-Cardiac Procedures): Percentage of non-cardiac surgical 

patients aged 18 years and older undergoing procedures with the indications 

for prophylactic parenteral antibiotics AND who received a prophylactic 

parenteral antibiotic, who have an order for discontinuation of prophylactic 

parenteral antibiotics within 24 hours of surgical end time 

AMAPCPI/ 

NCQA 

0239/ 

23 

Perioperative Care: Venous Thromboembolism (VTE) Prophylaxis 

(When Indicated in ALL Patients): Percentage of surgical patients aged 18 

years and older undergoing procedures for which VTE prophylaxis is 

indicated in all patients, who had an order for Low Molecular Weight 

Heparin (LMWH), Low-Dose Unfractionated Heparin (LDUH), 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/ 

NCQA 
CMS-1600-P 432 

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, over-the-counters, herbals, 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: 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 

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 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

ACS 

TABLE37: Proposed Back Pain Measures Group for 2014 and Beyond NQF/ PQRS 

Measure Title and Description 

Measure Developer 

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, over-the-counters, herbals, 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 assessed during the initial 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 visit to the clinician for the episode of 

back pain 

NCQA 
CMS-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 episode 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 back pain or undergoing back surgery 

who received advice against bed rest lasting four days or longer at the initial 

visit to the clinician for the episode of back pain 

NCQA 

TABLE 38: Proposed Hepatitis C Measures Group for 2014 and Beyond NQF/ PQRS 

Measure Title and Description 

Measure Developer 

0395/ 

84 

Hepatitis C: Ribonucleic Acid (RNA) Testing Before Initiating 

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 testing was performed 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 initiation 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 testing 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 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 

0399/ 

183 

Hepatitis C: Hepatitis A Vaccination in Patients with Hepatitis C Virus 

(HCV): Percentage of patients aged 18 years 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: 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 

TABLE 39: Proposed Heart Failure (HF) Measures Group for 2014 and Beyond
CMS-1600-P 434 NQF/ PQRS 

Measure Title and Description 

Measure Developer 

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 failure (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 Therapy for Left Ventricular Systolic 

Dysfunction (LVSD): Percentage of patients aged 18 years and older with a 

diagnosis of heart failure (HF) with a current or prior left ventricular ejection 

fraction (LVEF) < 40% who were prescribed 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 previous six months of the 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 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 

0079/ 

198 

Heart Failure: Left Ventricular Ejection Fraction (LVEF) Assessment: 

Percentage of patients aged 18 years and older with a diagnosis of heart 

failure for whom the quantitative or qualitative results of a recent or prior 

[any time in the past] LVEF assessment is documented within a 12 month 

period 

AMAPCPI/ 

ACCF/

AHA 

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 intervention if identified as a tobacco user 

AMAPCPI 

TABLE 40: Proposed Coronary Artery Disease (CAD) Measures Group for 2014 

and Beyond
CMS-1600-P 435 NQF/ PQRS 

Measure Title and Description 

Measure Developer 

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 aspirin 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 previous six months of the 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 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 

0074/ 

197 

Coronary Artery Disease (CAD): Lipid Control: Percentage of patients 

aged 18 years and older with a diagnosis of coronary artery disease seen 

within a 12 month period who have a LDL-C result < 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/dL, including at a minimum the 

prescription of a statin 

AMAPCPI/ 

ACCF/

AHA 

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 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 symptoms 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 Beyond NQF/ PQRS 

Measure Title and Description 

Measure Developer 
CMS-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 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. 

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 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 

0068/ 

204 

Ischemic Vascular Disease (IVD): Use of Aspirin or Another 

Antithrombotic: Percentage of patients aged 18 years and older with 

ischemic vascular disease (IVD) with documented use of aspirin or another 

antithrombotic 

NCQA 

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 intervention if identified as a tobacco user 

AMAPCPI 

0018/

236 

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 

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 

TABLE 42: Proposed HIV/AIDS Measures Group for 2014 and Beyond NQF/ PQRS 

Measure Title and Description 

Measure Developer 

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, over-the-counters, herbals, 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 diagnosis 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 and older with a diagnosis of HIV/AIDS 

and CD4+ cell count < 200 cells/mm3

 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 once 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 viral 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 infection 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, regardless 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 Beyond NQF/ PQRS 

Measure Title and Description 

Measure Developer 

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 alternative long term control medications 

(non-ICS). 

3. Total patients prescribed long-term control medication 

AMAPCPI/ 

NCQA 

0001/ 

64 

Asthma: Assessment of Asthma Control – Ambulatory Care Setting: 

Percentage of patients aged 5 through 64 years with a diagnosis of asthma 

who were evaluated at least once during the measurement period for asthma 

control (comprising asthma impairment and asthma risk) 

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 influenza immunization OR who reported 

AMAPCPI 
CMS-1600-P 438 

previous receipt of an influenza immunization 

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, over-the-counters, herbals, 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: Screening - Ambulatory Care Setting: Percentage 

of patients (or their primary caregiver) 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 environment at least once during the 

one-year measurement period 

AMAPCPI/ 

NCQA 

N/A/ 

232 

Asthma: Tobacco Use: Intervention - Ambulatory Care Setting: 

Percentage of patients (or their primary 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 smoke in their home environment) who 

received tobacco cessation intervention at least once during the one-year 

measurement period 

AMAPCPI/ 

NCQA 

TABLE 44: Proposed Chronic Obstructive Pulmonary Disease (COPD) Measures 

Group for 2014 and Beyond NQF/ PQRS 

Measure Title and Description 

Measure Developer 

0091/ 

51 

Chronic Obstructive Pulmonary Disease (COPD): Spirometry 

Evaluation: Percentage of patients aged 18 years 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 have 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 influenza immunization OR who reported 

previous receipt of an influenza immunization 

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 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 

0043/ 

111 

Preventive Care and Screening: Pneumococcal Vaccination for Patients 

65 Years and Older: Percentage of patients aged 65 years and older who 

NCQA 
CMS-1600-P 439 

 have ever received a pneumococcal vaccine 

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 intervention if identified as a tobacco user 

AMAPCPI 

TABLE 45: Proposed Inflammatory Bowel Disease (IBD) Measures Group for 2014 

and Beyond NQF/ PQRS 

Measure Title and Description 

Measure Developer 

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 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 bowel disease who have documented the 

disease type, anatomic location and 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 equal to 10 mg/day for 60 or greater 

consecutive days that have been prescribed 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 diagnosis of inflammatory bowel disease who 

have received dose of corticosteroids greater than or equal to 10 mg/day for 

60 or greater consecutive days and were assessed for risk of bone loss once 

per the reporting year 

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 disease for whom influenza immunization 

was recommended, administered or previously received during 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 disease that had pneumococcal vaccination 

administered or previously received 

AGA 
CMS-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 years and older with a diagnosis of 

inflammatory bowel disease for whom a tuberculosis (TB) screening was 

performed and results interpreted within 6 months prior to receiving a first 

course of anti-TNF (tumor necrosis factor) therapy 

AGA 

N/A/ 

275 

Inflammatory Bowel Disease (IBD): Assessment of Hepatitis B Virus 

(HBV) Status Before Initiating Anti-TNF (Tumor Necrosis Factor) 

Therapy: Percentage of patients aged 18 years and older with a diagnosis of 

inflammatory bowel disease who had 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 Beyond NQF/ PQRS 

Measure Title and Description 

Measure Developer 

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 previous six months of the 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 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 

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 intervention 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 Assessment at Initial Diagnosis: Percentage of 

patients aged 18 years and older with a diagnosis of obstructive sleep 

apnea who had an apnea hypopnea index (AHI) or a respiratory 

disturbance index (RDI) measured at the time of initial diagnosis 

AMAPCPI/ 

NCQA 
CMS-1600-P 441 

N/A/ 

278 

Sleep Apnea: Positive Airway Pressure Therapy Prescribed: 

Percentage of patients aged 18 years and older with a diagnosis of 

moderate or severe obstructive sleep apnea who were prescribed positive 

airway pressure therapy 

AMAPCPI/ 

NCQA 

N/A/ 

279 

Sleep Apnea: Assessment of Adherence to Positive Airway Pressure 

Therapy: Percentage of visits for patients aged 18 years and older with a 

diagnosis of obstructive sleep apnea who were prescribed positive airway 

pressure therapy who had documentation that adherence to positive airway 

pressure therapy was objectively measured 

AMAPCPI/ 

NCQA 

TABLE 47: Proposed Dementia Measures Group for 2014 and Beyond NQF/ PQRS 

Measure Title and Description 

Measure Developer 

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 severe 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 performed 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 diagnosis of dementia who have one or 

more neuropsychiatric symptoms who received or were recommended to 

receive an intervention for neuropsychiatric symptoms within a 12 month 

period 

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 regarding the risks of driving and 

alternatives to driving at least once within a 12 month period 

AMAPCPI 
CMS-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 additional sources for support within a 

12 month period 

AMAPCPI 

TABLE 48: Proposed Parkinson’s Disease Measures Group for 2014 and Beyond NQF/ PQRS 

Measure Title and Description 

Measure Developer 

N/A / 

289 

Parkinson’s Disease: Annual Parkinson’s Disease Diagnosis Review: 

All patients with a diagnosis of Parkinson’s disease who had an annual 

assessment including a review of current medications (e.g., medications that 

can produce Parkinson-like signs or symptoms) and a review for the 

presence of atypical features (e.g., falls at presentation and early in the 

disease course, poor response to levodopa, symmetry at onset, rapid 

progression [to Hoehn and Yahr stage 3 in 3 years], lack of tremor or 

dysautonomia) at least annually 

AAN 

N/A / 

290 

Parkinson’s Disease: Psychiatric Disorders or Disturbances 

Assessment: All patients with a diagnosis of Parkinson’s disease who were 

assessed for psychiatric disorders or disturbances (e.g., psychosis, 

depression, anxiety disorder, apathy, or impulse control disorder) at least 

annually 

AAN 

N/A / 

291 

Parkinson’s Disease: Cognitive 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 disease (or caregivers, as appropriate) who 

were queried about sleep disturbances at least annually 

AAN 

N/A / 

293 

Parkinson’s Disease: Rehabilitative Therapy Options: All patients with 

a diagnosis of Parkinson’s disease (or caregiver(s), as appropriate) who had 

rehabilitative therapy options (e.g., physical, occupational, or speech 

therapy) discussed at least annually 

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 appropriate who had the Parkinson’s disease 

treatment options (e.g., non-pharmacological treatment, pharmacological 

treatment, or surgical treatment) reviewed at least once annually 

AAN 

TABLE 49: Proposed Hypertension Measures Group for 2014 and Beyond NQF/ PQRS 

Measure Title and Description 

Measure Developer 

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 intervention 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 prescribed aspirin or other antithrombotic 

therapy 

ABIM 

N/A/ 

296 

Hypertension: Complete Lipid Profile: Percentage of patients aged 18 

through 90 years old with a diagnosis 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 documented 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 diagnosis 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 diagnosis 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 cholesterol level under control (at goal) 

ABIM 

N/A/ 

302 

Hypertension: Dietary and Physical Activity Modifications 

Appropriately Prescribed: Percentage of patients aged 18 through 90 

years old with a diagnosis of hypertension who received dietary and 

physical activity counseling at least once within 12 months

ABIM 

TABLE 50: Proposed Cardiovascular Prevention Measures Group for 2014 and 

Beyond NQF/ PQRS 

Measure Title and Description 

Measure Developer 

0064/ 

2 

Diabetes Mellitus: Low Density Lipoprotein (LDL-C) Control: 

Percentage of patients aged 18 through 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 aged 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 intervention if identified as a tobacco 

user 

PCPI 

0018/ 

236 

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 

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 period who were screened for high blood 

pressure (BP) AND a recommended follow-up plan is documented based 

on the current blood pressure reading as indicated 

CMS/ 

QIP 

TABLE 51: Proposed Cataracts Measures Group for 2014 and Beyond NQF/ PQRS 

Measure Title and Description 

Measure Developer 

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, over-the-counters, herbals, 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 cataract who had cataract surgery and no 

significant ocular conditions impacting the visual outcome of surgery and 

had best-corrected visual acuity of 20/40 or better (distance or near) 

achieved within 90 days following the cataract surgery 

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 which would indicate the occurrence of 

any of the following major complications: retained nuclear fragments, 

endophthalmitis, dislocated or wrong power IOL, retinal detachment, or 

wound dehiscence 

AMAPCPI/ 

NCQA 

0028/ 

226 

Preventive Care and Screening: Tobacco Use: Screening and Cessation 

Intervention: Percentage of patients 18 years and older who were screened 

AMAPCPI 
CMS-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 surgery and had improvement in visual 

function achieved within 90 days following the cataract surgery, based on 

completing a pre-operative and post-operative visual function survey 

AAO 

N/A/ 

304 

Cataracts: Patient Satisfaction within 90 Days Following Cataract 

Surgery: Percentage of patients aged 18 years and older in sample who had 

cataract surgery and were satisfied with their care within 90 days following 

the cataract surgery, based on completion of the Consumer Assessment of 

Healthcare Providers and Systems Surgical Care Survey 

AAO 

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 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

ACS 

TABLE 52: Proposed Oncology Measures Group for 2014 and Beyond NQF/ PQRS 

Measure Title and Description 

Measure Developer 

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 breast cancer who were prescribed 

tamoxifen or aromatase inhibitor (AI) 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 previously 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 influenza immunization OR who reported 

previous receipt of an influenza immunization 

AMAPCPI 
CMS-1600-P 446 

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, over-the-counters, herbals, 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 patient 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 report 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 who are seen in the ambulatory setting 

who have a baseline American Joint Committee on Cancer (AJCC) cancer 

stage or documentation that the cancer is metastatic in the medical record at 

least once during the 12 month reporting period 

AMAPCPI/ 

ASCO 

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 intervention if identified as a tobacco user 

AMAPCPI 

TABLE 53: Proposed Total Knee Replacement Measures Group for 2014 and 

Beyond NQF/ PQRS 

Measure Title 

Measure Developer 

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, over-the-counters, herbals, 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: 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 

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 documented shared decision-making with 

discussion of conservative (non-surgical) therapy (e.g. NSAIDs, analgesics, 

exercise, injections) prior to the procedure

AAHKS

/AMAPCPI 
CMS-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 infarction (MI), arrhythmia and stroke

AAHKS

/AMAPCPI 

N/A / 

N/A 

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

AAHKS

/AMAPCPI 

N/A / 

N/A 

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

AAHKS

/AMAPCPI 

TABLE 54: Proposed Optimizing Patient Exposure to Ionizing Radiation Measures 

Group for 2014 and Beyond NQF/ PQRS 

Measure Title 

Measure Developer 

N/A/ 

N/A 

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 

AMAPCPI 

N/A/ 

N/A 

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-month period prior to 

the current study

AMAPCPI 

N/A/ 

N/A 

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 

AMAPCPI 
CMS-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 external 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 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 

AMAPCPI 

N/A/ 

N/A 

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 (eg, follow-up CT imaging studies needed or that no follow-up is 

needed) based at a minimum on nodule size AND patient risk factors

AMAPCPI 

TABLE 55: Proposed General Surgery Measures Group for 2014 and Beyond NQF/ PQRS

Measure Title 

Measure Developer

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/mineral/dietary (nutritional) supplements 

AND must contain the medications’ name, dosage, frequency and route of 

administration

CMS/ 

QIP 

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 intervention if identified as a tobacco user

AMAPCPI 
CMS-1600-P 449 

N/A/

N/A 

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: (None provided by 

developer. Assumed description for specification provided. Requested 

Registry Reporting) 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 

ACS 

N/A/

N/A 

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:

(None provided by developer. Assumed description for specification provided. 

Requested Registry Reporting) 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 

ACS 

N/A/

N/A 

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: (None provided by developer. Assumed description for 

specification 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 

Ventral Hernia, Appendectomy, AV Fistula, Cholecystectomy, 

Thyroidectomy, Mastectomy +/- Lymphadenectomy or SLNB, Partial 

Mastectomy or Breast Biopsy/Lumpectomy +/- Lymphadenectomy or 

SLNB: Surgical Site Infection (SSI): (None provided by developer. Assumed 

description for specification provided. Requested Registry Reporting) 

Percentage of patients age 65 and older who had a surgical site infection 

ACS 
CMS-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 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

ACS 

TABLE 56: Proposed Gastrointestinal Surgery Measures Group for 2014 and 

Beyond NQF/ PQRS

Measure Title 

Measure Developer

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, over-the-counters, herbals, 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: 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 

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 Registry Reporting) 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 postoperatively. Synonyms for the injury could include: hole, wound, 

perforation, tear, injury, laceration, cautery injury, damage, disruption, or 

defect

ACS 
CMS-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. Assumed description for specification 

provided. Requested Registry Reporting) 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 

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 provided. Requested Registry Reporting) 

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 reexcisions; insertion of port-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 specification 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. Assumed description for specification 

provided. Requested Registry Reporting) Percentage of patients age 65 and 

older who had a surgical site infection

ACS 

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 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

ACS 
CMS-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 claims-based reporting mechanism: 

● PQRS #9 (NQF# 0105): Major Depressive Disorder (MDD): Antidepressant 

Medication during Acute Phase for Patients with 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 there 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 professionals 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 MAV cluster associated with PQRS #64. 
CMS-1600-P 453 

● PQRS #65 (NQF# 0069): Appropriate Treatment for Children with Upper 

Respiratory Infection (URI): Percentage 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 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 #66 (NQF# 0002): 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 (that is, appropriate testing). 

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 #87 (NQF# 0398): Hepatitis C: 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 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 eligible professionals to report via claims. 

● PQRS #89 (NQF# 0401): Hepatitis C: Counseling Regarding Risk of Alcohol 

Consumption: Percentage of patients aged 18 years and older with a diagnosis of hepatitis 

C who were counseled about the risks of alcohol use at least 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 there are still a sufficient 

amount of measures for these eligible professionals to report via claims. 

● PQRS #90 (NQF# 0394): 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: 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 Inappropriate Use: Percentage of adults aged 18 through 64 

years with a diagnosis of acute bronchitis 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 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 #126: DM: Diabetic Foot and 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 for these eligible professionals to report via 

claims. 

● PQRS #127 (NQF# 0416): Diabetes Mellitus: Diabetic Foot and Ankle Care, 
CMS-1600-P 455 

Ulcer Prevention – Evaluation of Footwear: Percentage 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): Rheumatoid Arthritis (RA): Tuberculosis 

Screening: Percentage of patients aged 18 years and older with 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 diseasemodifying anti-rheumatic drug (DMARD). 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 #177 (AQA Adopted): Rheumatoid 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 disease activity 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 #178 (AQA Adopted): Rheumatoid Arthritis (RA): Functional Status 

Assessment: Percentage of patients aged 18 years and older with a diagnosis of RA for 

whom a functional status assessment was performed 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 
CMS-1600-P 456 

amount of measures for these eligible professionals to report via claims. 

● PQRS #179 (AQA Adopted): Rheumatoid Arthritis (RA): Assessment and 

Classification of Disease Prognosis: Percentage of patients aged 18 years and older with a 

diagnosis of RA who have an assessment and classification of disease 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: Initial 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 more appropriately reported via registry. 

● PQRS #149 (NQF# 0319): 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 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. 

● PQRS #150 (NQF# 0314): Back Pain: Advice for Normal Activities: 

Percentage of patients aged 18 through 79 years with a diagnosis of back pain or 

undergoing back surgery who received advice for normal activities at the initial visit to 

the clinician for the episode of back pain. Rationale: We believe this measure (which is 

only reportable when reporting the entire Back Pain measures group) is more 

appropriately reported via registry 
CMS-1600-P 457 

● PQRS #151 (NQF# 0313): Back Pain: Advice Against Bed Rest: Percentage of 

patients aged 18 through 79 years with a diagnosis of back pain or undergoing back 

surgery who received advice against bed rest lasting four days or longer at the initial visit 

to the clinician for the episode of back pain. 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 Assessment of Healthcare Providers and 

Systems (CAHPS) Survey 

Because we believe these patient surveys are important tools for assessing 

beneficiary experience of care and outcomes, under our authority under section 

1848(m)(3)(C) of the Act to select the measures for which a group practice must report, 

we previously proposed a new satisfactory reporting criterion in this section to provide 

group practices comprised of 25 or more eligible professionals the option to complete the 

CG CAHPS survey for purposes of satisfying the 2014 PQRS incentive and 2016 PQRS 

payment adjustment. 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 Medication 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 previously, we believe it is important to align 

measures across programs to the extent possible. 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 related 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 Considerations for the Selection of PQRS Quality 

Measures for Meeting the Criteria for Satisfactory Participation in a Qualified Clinical 

Data Registry for 2014 and Beyond for Individual Eligible Professionals 

For the measures for which eligible professionals participating in a qualified 

clinical data registry must report, section 1848(m)(3)(D) of the Act, as amended and 

added by section 601(b) of the American Tax Relief Act of 2012, provides that the 

Secretary shall treat eligible professionals as satisfactorily submitting data on quality 

measures if they satisfactorily participate in a qualified clinical data registry. Section 

1848(m)(3)(E) of the Act, as added by section 601(b) of the American Tax Relief Act of 

2012, provides some flexibility with regard to the types of measures applicable to 

satisfactory participation in a qualified clinical data registry, by specifying that with 

respect to measures used by a qualified clinical data registry, sections 1890(b)(7) and 

1890A(a) of the Act shall not apply, and measures endorsed by the entity with a contract 
CMS-1600-P 459 

with the Secretary under section 1890(a) of the 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 would know best what measures should be reported to achieve the 

goal of improving the quality of care furnished by their eligible professionals. Although 

we 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 requirements for the measures that must be 

reported to CMS by a qualified clinical data registry for the purpose of its individual 

eligible professionals meeting the criteria for satisfactory participation under the PQRS: 

● The qualified clinical data 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-Centered Experience and Outcomes. These are 

measures that reflect the potential to improve patient-centered care and the quality of care 

delivered to patients. They emphasize the importance of collecting patient-reported data 

and the ability to impact care at the individual patient level as well as the population level 

through greater involvement of patients and families in decision making, self-care, 

activation, and understanding of their health condition and its effective management. 
CMS-1600-P 460 

++ Patient Safety. These are measures that reflect the safe delivery of clinical 

services in both hospital and ambulatory settings and include processes that would reduce 

harm to patients and reduce burden of illness. These measures should enable longitudinal 

assessment of condition-specific, patient-focused episodes of care. 

++ Communication and Care Coordination. These are measures that demonstrate 

appropriate and timely sharing of information and coordination of clinical and preventive 

services among health professionals in the care team and with patients, caregivers, and 

families 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 have the ability to achieve longitudinal 

measurement that will demonstrate improvement or lack of improvement in the health of 

the US population. 

++ Efficiency and Cost Reduction. These are measures that reflect efforts to 

significantly improve outcomes and reduce errors. These measures also impact and 

benefit a large number of patients and emphasize the use of evidence to best manage high 

priority conditions and determine appropriate use of healthcare resources. 

++ Effective Clinical Care. These are measures that reflect clinical care processes 

closely linked to outcomes based on evidence and practice guidelines. 

● The qualified clinical data registry must have at least 1 outcome measure 

available for reporting, which is a measure that assesses the results of health care that are 

experienced by patients (that is, patients’ clinical events; patients’ recovery and health 

status; patients’ experiences in the health system; and efficiency/cost). 
CMS-1600-P 461 

● The qualified clinical data registry may report on process measures, which are 

measures that focus on a process which leads to a certain outcome, meaning that a 

scientific basis exists for believing that the process, when executed well, will increase the 

probability of achieving a desired outcome. 

● The outcome and process measures reported must contain denominator data. 

That is, the lower portion of a fraction used to calculate a rate, proportion, or ratio. The 

denominator must describe the population eligible (or episodes of care) to be evaluated 

by the measure. This should indicate age, condition, setting, and timeframe (when 

applicable). For example, “Patients aged 18 through 75 years with a diagnosis of 

diabetes.” 

● The outcome and process measures reported must contain numerator data. 

That is, the upper portion of a fraction used to calculate a rate, proportion, or ratio. The 

numerator must detail the quality clinical action expected that satisfies the condition(s) 

and is the focus of the measurement for each patient, procedure, or other unit of 

measurement established by the denominator (that is, patients who received a particular 

service or providers that completed a specific outcome/process). 

● The qualified clinical data registry must provide denominator exceptions for 

the measures, where approriate. That is, those conditions that should remove a patient, 

procedure or unit of measurement from the denominator of the performance rate only if 

the numerator criteria are not met. Denominator exceptions allow for adjustment of the 

calculated score for those providers with higher risk populations. Denominator 

exceptions allow for the exercise of clinical judgment and should be specifically defined 

where capturing the information in a structured manner fits the clinical workflow. 
CMS-1600-P 462 

Generic denominator exception reasons used in measures fall into three general 

categories: Medical, Patient, or System reasons. 

● The qualified clinical data registry must provide denominator exclusions for 

the measures for which it will report to CMS, where appropriate. That is, those patients 

with conditions who should be removed from the measure population and denominator 

before determining if numerator criteria are met. (For example, Patients with bilateral 

lower extremity amputations would be listed as a denominator exclusion for a measure 

requiring foot exams.) 

● The qualified clinical data registry must provide to CMS descriptions for the 

measures for which it will report to CMS by no later than March 31, 2014. The 

descriptions must include: name/title of measures, NQF # (if NQF endorsed), 

descriptions of the denominator, numerator, and when applicable, denominator 

exceptions and denominator exclusions of the measure. 

We 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 determination that an eligible professional or group 

practice did not satisfactorily submit data on quality measures under the PQRS. Because 

we believe it is important to also allow eligible professionals who attempt to satisfactorily 

participate in a qualified clinical data registry to be able to request an informal review of 

the determination that the eligible professional satisfactorily participated in a qualified 

clinical data registry, we are proposing to modify §414.90(j) to allow individual eligible 

professionals who attempt to satisfactorily participate in a qualified clinical data registry 

the opportunity to request an informal review. We are not proposing to make any 
CMS-1600-P 463 

changes to the informal review process itself; rather, we propose to make the existing 

informal review process available to individual eligible professionals with regard to a 

determination that the individual eligible professional did not satisfactorily 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 for 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 which the payment adjustment is applied. When 

we first proposed the reporting periods for the PQRS payment adjustment, we received 

many comments from stakeholders who opposed 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 adjustment is applied. Although we understood the 

commenters’ concerns, we stated it was not operationally feasible to create a full calendar 

year reporting period for the PQRS payment adjustment 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 years prior to the adjustment year for reporting via claims, 

we are seeking comment about this issue again. In particular, in future years, should 

CMS consider establishing a reporting 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 reporting periods still be structured as 12-month 
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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 periods? We would consider such comments to the extent we 

address or revisit the reporting 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 claims 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 payment 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 practice that limits the practice 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 Identifier (NPI), who have reassigned their billing rights to 

the TIN.” Therefore, for group practices, CMS 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 may operate as one healthcare 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 this 
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concern. Therefore, we seek comment on whether we should modify the current 

definition of group practice to account for multiple TINs (that is, change the 

identification unit(s) to recognize a group practice). In addition, 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 geographical restrictions? 

Should we require that groups wishing to participate 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 commented 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 whether, in future years, we should move away 

from requiring group practices to self-nominate/register for the GPRO 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 for Group Practices Using the GPRO web 

interface. Currently, if the pool of assigned beneficiaries for a group practice using the 

GPRO web interface is less than the specified 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 payment adjustment. Conceivably, a group 

practice could have as few as one beneficiary assigned to the group practice and still 
CMS-1600-P 466 

qualify for the PQRS incentive or avoid the PQRS payment adjustment as long as the 

group practice successfully reports the measures 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 performance results from group practices with 

few assigned beneficiaries could skew the benchmark 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 reporting 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 Experience Report, approximately 72 

percent of eligible professionals (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 mechanism is also the reporting mechanism 

that allows for the most errors in reporting. Unlike the registry and EHR-based reporting 

mechanisms, where the quality measures data is submitted at the end of the reporting 

period, eligible professionals must report quality measures data at the time they submit 

their claims for payment for services. Therefore, 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 addition, 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 are 
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submitted to CMS. 

For these reasons, we seek comment as to whether CMS should eliminate the 

claims-based reporting mechanism beginning with the reporting period (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, registry, EHR, and the GPRO web interface: 

● For an eligible professional submitting PQRS quality measures data via claims, 

an eligible professional is required to submit no later than the last Friday of the second 

month after the end of the reporting period, that is, processed 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 reporting option with access to the GPRO web 

interface by no later than the first 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 for the 2013 incentive using the GPRO web 

interface tool, group practices selected to participate in the GPRO would be provided 

with access to the GPRO web interface by no later than the first quarter of 2014 for 
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purposes of reporting for the applicable 2013 reporting period for the incentive. 

We have received feedback from eligible 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 submission 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 for submission of quality 

measures data reported via claims any later than the last Friday of the second month after 

the end of the respective reporting 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 registry. 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 submission 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 assessment of PQRS payment adjustments. 

e. Integration of Clinical Quality Measures 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 adequately 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 available under the Hospital IQR 

Program that have been retooled to be reported under the PQRS during the 12-month 
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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 eligible professionals or 

group practices who elect to have their hospital’s performance scores attributed to them. 

f. Feedback Reports 

For eligible professionals reporting PQRS quality measures data via claims, CMS 

provides each eligible professional who submits a valid reporting quality data code 

(QDC) two feedback reports each year that provides detailed information on an eligible 

professional’s reporting performance. These feedback reports only provide data on 

PQRS reporting performance. Given our efforts to align with the Value-based Payment 

Modifier, we are exploring ways to merge the feedback reports provided to participants in 

the PQRS and Value-based Payment Modifier so that an eligible professional would 

receive one, merged feedback report showing reporting data for the PQRS and 

performance data for the Value-based Payment Modifier. We seek public comment on 

whether feedback reports for the PQRS and Value-based Payment Modifier should be 

merged. 

I. Electronic Health Record (EHR) Incentive Program

The HITECH Act (Title IV of Division B of the ARRA, together with Title XIII 

of Division A of the ARRA) authorizes incentive payments under Medicare and 

Medicaid for the adoption and meaningful use of certified EHR technology (CEHRT). 

Section 1848(o)(2)(B)(iii) of the Act requires that in selecting clinical quality measures 

(CQMs) for eligible professionals (EPs) to report under the EHR Incentive Program, and 
CMS-1600-P 470 

in establishing the form and manner of reporting, the Secretary shall seek to avoid 

redundant or duplicative reporting otherwise required. As such, we have taken steps to 

establish alignments among various quality reporting and payment programs that include 

the submission of CQMs. 

For CY 2012 and subsequent years, §495.8(a)(2)(ii) requires an EP to 

successfully report the clinical quality measures selected by CMS to CMS or the states, 

as applicable, in the form and manner specified by CMS or the states, as applicable. In 

the EHR Incentive Program Stage 2 Final Rule, we established clinical quality measure 

reporting options for the Medicare EHR Incentive Program for CY 2014 and subsequent 

years that include one individual reporting option that aligns with the PQRS’s EHR 

reporting option (77 FR 54058) and two group reporting options that align with the PQRS 

GPRO and Medicare Shared Savings Program (MSSP) and Pioneer ACOs (77 FR 54076 

to 54078). In this proposed rule, we are proposing two additional aligned options for EPs 

to report CQMs for the Medicare EHR Incentive Program for CY 2014 and subsequent 

years with the intention of minimizing the reporting burden on EPs. 

1. Proposed Qualified Clinical Data Registry Reporting Option 

Section 1848(m)(7) of the Act (“Integration of Physician Quality Reporting”) 

requires the Secretary to develop a plan to integrate reporting on quality measures under 

the PQRS with reporting requirements related 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 achieving 
CMS-1600-P 471 

meaningful use under the Medicare EHR Incentive 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 certification criteria if, during the 12-month 2014 

PQRS incentive reporting period, the EP reports 9 measures covering 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 least 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 this proposed rule, section 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 satisfactorily 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 subsequent years, we propose to allow 

EPs to submit CQM information using qualified clinical data registries, according to the 

proposed definition and requirements for qualified clinical data registries discussed in 

section IV.I. of this proposed rule. We are proposing this new option under the Medicare 

EHR Incentive Program beginning with the reporting 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 EHR 
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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 section 1848(m)(7) of the Act; and (3) because the 

proposed criteria for the satisfactory participation in a qualified clinical data registry for 

the 2014 PQRS incentive are similar to criteria we finalized for meeting the CQM 

component of achieving meaningful use under the Medicare EHR Incentive Program for 

2014. In the event that the criteria established for satisfactory participation in a qualified 

clinical data registry under PQRS in the final rule are different 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 addition 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 Incentive Program using a qualified clinical data 

registry must satisfy: (1) the EP must use CEHRT as required under the Medicare EHR 

Incentive Program; (2) the CQMs reported must be included in the Stage 2 final rule (see 

Table 8, 77 FR 54069) and use the same electronic specifications established for the EHR 

Incentive Program, (3) report 9 CQMs covering at least 3 domains, (4) if an EP’s CEHRT 

does not contain patient data for at least 9 CQMs covering at least 3 domains, then the EP 

must report the CQMs for which there is patient data and report the remaining CQMs as 

“zero denominators” as displayed by the EP’s CEHRT, and (5) an EP must have CEHRT 

that is certified to all of the certification criteria required for CQMs, including 

certification of the qualified clinical data registry itself for the functions it will fulfill (for 

example, calculation, electronic submission). We note that these proposed additional 

criteria are already final policies for the CQM reporting options that we established for 

EPs in the EHR Incentive Program Stage 2 final rule. We refer readers to that final rule 
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for further explanation of the policies related to clinical quality measure reporting under 

the EHR Incentive Program (77 FR 54049-54089). The electronic specifications for the 

clinical quality measures can be found at http://www.cms.gov/Regulations-andGuidance/Legislation/EHRIncentivePrograms/eCQM_Library.html. We are proposing 

this qualified clinical data registry reporting option only for those EPs who are beyond 

their first year of demonstrating meaningful use (MU). For purposes of avoiding a 

payment adjustment under Medicare, EPs who are in their first year of demonstrating MU 

in the year immediately preceding a payment adjustment year must satisfy their CQM 

reporting requirements by October 1 of such preceding year (for example, by October 1, 

2014 to avoid a payment adjustment in 2015). The proposed qualified clinical data 

registry reporting option would not enable an EP to meet the deadline to avoid a payment 

adjustment because these qualified clinical data registries would be submitting data on 

CQMs by the last day of February following the 2014 PQRS incentive reporting periods, 

which would occur after October 1, 2013. Therefore, EPs who are first-time meaningful 

EHR users must report CQMs via attestation as established in the EHR Incentive 

Program Stage 2 final rule (77 FR 54050). The reporting periods established in the EHR 

Incentive Program Stage 2 final rule would continue to apply to EPs who would choose 

to report CQMs under this proposed qualified clinical data registry reporting option for 

purposes of the Medicare EHR Incentive Program (77 FR 54049-54051).Please note that 

this may not satisfy requirements for other 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 are required to use CEHRT to 

submit information on clinical quality measures for the EHR Incentive Program. The 

2014 Edition certification criteria established by the Office of the National Coordinator 
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for Health IT (ONC) set the requirements for certification that cover the functionality 

needed to “capture and export” (45 CFR 170.314(c)(1)), “import and calculate” (45 

CFR 170.314(c)(2)), and for “electronic submission” (45 CFR 170.314(c)(3)) of each 

CQM that will be reported. 

As EPs are required to use CEHRT under section 1848(o)(2)(A)(iii) of the Act, 

we propose that for the Medicare EHR Incentive Program, an EP who seeks to report 

using a qualified clinical data registry that meets the criteria established for PQRS must 

also ensure that the registry selected is certified for the functionality that it is intended to 

fulfill and is a certified EHR Module that is part of the EP’s CEHRT. 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) Category 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 note that EPs would still need to include a 

certified EHR Module as part of their CEHRT that is certified to the CQM criteria listed 

at 45 CFR § 170.314(c)(1) (“capture and export”) for each of the CQMs that would be 

submitted to CMS for the purposes of meeting the CQM requirements of the Medicare 

EHR Incentive Program. If the qualified clinical data registry is performing the function 

of data capture for the CQMs that would be submitted to CMS, then the registry would 

need to be certified to the “capture and export” criteria listed at 45 CFR 170.314(c)(1). 

The certified EHR Module must be part of the EP’s CEHRT. 

We intend to revisit the certification criteria with ONC in the Stage 3 rulemaking 

for the purpose of developing a more flexible clinical data registry reporting option and 
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certification criteria for the EHR Incentive Program when Stage 3 begins. We welcome 

public comment and recommendations on a more flexible clinical data registry reporting 

option for meeting the CQM reporting requirement for MU and on the certification 

criteria that ONC could incorporate for clinical data registries. 

2. Proposed Group Reporting Option – Comprehensive Primary Care Initiative 

The Comprehensive Primary Care (CPC) Initiative, under the authority of section 

3021 of the Affordable Care Act, is a multi-payer initiative fostering collaboration 

between public and private health care payers to strengthen primary care. Under this 

initiative, CMS will pay participating primary care practices a care management fee to 

support enhanced, coordinated services. Simultaneously, participating commercial, State, 

and other federal insurance plans are also offering an enhanced payment to primary care 

practices that provide high-quality primary care. There are approximately 500 CPC 

participants across 7 health care markets in the U.S. More details on the CPC Initiative 

can be found at http://innovation.cms.gov/initiatives/Comprehensive-Primary-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 site that successfully submits at least 9 

electronically specified CQMs covering 3 domains. 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 practice site successfully submits and meets the 
CMS-1600-P 476 

reporting requirements of the CPC Initiative. We propose that only those EPs who are 

beyond their first year of demonstrating meaningful use may use this proposed CPC 

group reporting option, for the reasons explained in the preceding section in regard to 

avoiding a payment adjustment under Medicare. We propose that EPs who successfully 

submit as part of a CPC practice site in accordance with the requirements established for 

the CPC Initiative and using CEHRT would satisfy their CQM reporting requirement for 

the Medicare EHR Incentive Program. The CPC practice sites must submit the CQM 

data in the form and manner required 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 opportunity to report CQMs per 

the requirements established in the EHR Incentive Program Stage 2 final rule for EPs to 

report under the EHR Incentive Program beginning in CY 2014 (77 FR 54049). We 

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 specified and updated routinely to account for 

issues such as changes in billing and diagnosis codes and changes in medical practices. 

The requirements specified in the EHR Incentive Program Stage 2 final rule for EPs to 

report under the EHR Incentive Program beginning in CY 2014 allow for the reporting of 

different versions of the CQMs. However, it is not technically feasible for CMS to 

accept data that is reported according to the specifications of the older versions of the 

CQMs, including versions that may be allowed for reporting under the EHR Incentive 
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Program. We stated in the EHR Incentive Program Stage 2 final rule that, consistent with 

section 1848(o)(2)(B)(ii) of the Act, in the event that the Secretary does not have the 

capacity to receive CQM data electronically, EPs may continue to report CQM data 

through attestation (77 FR 54076). Therefore, we propose that EPs who seek to report 

CQMs electronically under the Medicare EHR Incentive Program must use the most 

recent version of the electronic specifications for the CQMs and have CEHRT that is 

tested and certified to the most recent version of the electronic specifications for the 

CQMs. For example, for the reporting periods in 2014, EPs who want to report CQM 

data electronically for purposes of satisfying the quality measure reporting component of 

meaningful use would be required to use the June 2013 version of the CQMs electronic 

specifications (available at http://www.cms.gov/Regulations-andGuidance/Legislation/EHRIncentivePrograms/eCQM_Library.html) and ensure that their 

CEHRT has been tested and certified to the June 2013 version of the CQMs for purposes 

of achieving the CQM component of meaningful use in 2014. EPs who do not wish to 

report CQMs electronically using the most recent version of the electronic specifications 

(for example, if their CEHRT has not been certified for that particular version) would be 

allowed to report CQM data to CMS by attestation for the Medicare EHR Incentive 

Program. For further explanation of reporting CQMs by attestation, we refer readers to 

the EHR Incentive Program Stage 1 final rule (77 FR 44430 through 44434) and the EHR 

Incentive Program’s Registration and Attestation page (available at 

https://ehrincentives.cms.gov/hitech/login.action). 

We invite public comment on these proposals. Specifically, we invite comment on 

whether there would be sufficient time for EHR technology developers to update their 

systems and timely distribute the updated CQM versions in a way that would enable EPs 
CMS-1600-P 478 

to report on the updated versions. Additionally, we invite comment on whether there are 

any data or logic dependencies in the eCQMs that EHR technology developers have 

experienced which, if not built in upfront and deployed before a reporting period, would 

result in inaccurate measures, if for example, an EHR technology was upgraded in the 

middle of an EP’s reporting period to the newest version of the CQMs (if we finalized 

our proposal to only accept the lasted published specification of an CQM).
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J. Medicare Shared Savings Program

Under section 1899 of the Act, CMS has established a Medicare Shared Savings 

Program (Shared Savings Program) to facilitate coordination and cooperation among 

providers to improve the quality of care for Medicare Fee-For-Service (FFS) 

beneficiaries and reduce the rate of growth in healthcare costs. Eligible groups of 

providers and suppliers, including physicians, hospitals, and other healthcare providers, 

may participate in the Shared Savings Program by forming or participating in an 

Accountable Care Organization (ACO). The final rule implementing the Shared Savings 

Program appeared in the Federal Register on November 2, 2011 (Medicare Shared 

Savings Program: Accountable Care Organizations Final Rule (76 FR 67802)). 

ACOs are required to completely and accurately report on all quality performance 

measures for all quality measurement reporting periods in each performance year of their 

agreement period. There are currently 33 quality performance measures under the Shared 

Savings Program. For Shared Savings Program ACOs beginning their agreement period 

in April or July, 2012, there will be two reporting periods in the first performance year, 

corresponding to calendar years 2012 and 2013. For ACOs beginning their agreement 

periods in 2013 or later, both the performance year and reporting period will correspond 

to the calendar year. Reporting on measures associated with a reporting period will 

generally be done in the spring of the following calendar year. For example, an ACO 

will submit quality measures for the 2015 reporting period in the spring of 2016.

1. Medicare Shared Savings Program and Physician Quality Reporting System Payment 

Adjustment 

Section 1899(b)(3)(D) of the Act affords the Secretary discretion to “* * * 

incorporate reporting requirements and incentive payments related to the physician 
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quality reporting initiative (PQRI), under section 1848, including such requirements and 

such payments related to electronic prescribing, electronic health records, and other 

similar initiatives under section 1848 * * *” and permits the Secretary to “use alternative 

criteria than would otherwise apply [under section 1848 of the Act] for determining 

whether to make such payments.” Under this authority, we incorporated certain 

Physician Quality Reporting System (PQRS) reporting requirements and incentive 

payments into the Shared Savings Program, including (1) the 22 GPRO quality measures 

identified in Table 1 of the final rule (76 FR 67889 through 67890); (2) reporting via the 

GPRO web interface; (3) criteria for satisfactory reporting; and (4) set January 1 through 

December 31 as the reporting period. The regulation governing the incorporation of 

PQRS incentives and reporting requirements under the Shared Savings Program is set 

forth at §425.504. 

Under section 1848(a)(8) of the Act, a payment adjustment will apply under the 

PQRS beginning in 2015 based on quality reporting during the applicable reporting 

period. Eligible professionals who are not satisfactory reporters will be subject to a 

payment adjustment applied to the PFS amount for covered professional services 

furnished by the eligible professional during 2015. For eligible professionals subject to 

the 2015 PQRS payment adjustment, the fee schedule amount is equal to 98.5 percent 

(and 98 percent for 2016 and each subsequent year) of the fee schedule amount that 

would otherwise apply to such services. To continue to align Shared Savings Program 

requirements with PQRS, for the 2013 reporting period (which will be used to determine 

the 2015 PQRS payment adjustment to PFS amounts), in the CY 2013 PFS final rule with 

comment (77 FR 69372), we amended §425.504 to include the PQRS reporting 

requirements necessary for eligible professionals in an ACO to avoid the 2015 PQRS 
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payment adjustment. Specifically, we required ACOs on behalf of eligible professionals 

that are ACO providers/suppliers to successfully report one ACO GPRO measure in 2013 

to avoid the payment adjustment in 2015. We also provided that ACO 

providers/suppliers that are eligible professionals may only participate under their ACO 

participant 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 payment 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 location and also bill Medicare under the TIN 

of an ACO participant at another practice location). As a result, ACO provider/suppliers 

who are eligible professionals that bill under a non-ACO participant TIN during the year 

could participate under the traditional PQRS as either individual EPs or a group practice 

for purposes of avoiding the PQRS payment adjustment for the claims billed under the 

non-ACO participant TIN. In fact, such EPs would have to do so to avoid the PQRS 

payment adjustment with respect to those claims because the regulation at §425.504 only 

applies to claims submitted by ACO providers/suppliers that are eligible professionals 

billing under an ACO participant TIN. If eligible professionals within an ACO meet the 

requirements for the PQRS payment adjustment established under the Shared Savings 

Program, only the claims billed through the TIN of the ACO participant will avoid the 

payment adjustment in 2015. 

For the 2014 reporting period and subsequent reporting periods (which would 

apply to the PQRS payment adjustment for 2016 and subsequent payment years), we 
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propose to align with the requirements for 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 satisfactorily report the 22 

ACO GPRO measures during the 2014 and subsequent reporting 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 eligible 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 modify the requirements for ACOs to 

satisfactorily report the 22 ACO GPRO measures to avoid the 2016 payment adjustments 

would not increase burden on ACOs or on ACO providers/suppliers that are eligible 

professionals because ACOs must already report these measures in order to satisfy the 

Shared Savings Program quality performance standard. Thus, this proposal would not 

increase the total number of measures that must be reported by the ACO and its ACO 

providers/suppliers that are eligible professionals. We also note that these proposals 

would not affect the Shared Savings Program quality performance standard reporting 

requirement under which ACOs are currently required to report on 33 quality 

performance measures, which include all 22 of the ACO GPRO quality measures. 

Additionally, ACOs are required to report certain measures 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 quality 
CMS-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 practices 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) specifically reference the use 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 use 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 finalized the following requirements with regard 

to establishing a performance benchmark for measures: (1) During the first performance 

year for an ACO, the quality performance standard is set at the level of complete and 

accurate reporting; (2) during subsequent performance years, the quality performance 

standard will be phased in such that ACOs will be assessed on their performance on each 

measure; (3) CMS designates a performance benchmark and minimum attainment level 

for each measure, and establishes a point scale for the measures; and (4) contingent upon 

data availability, performance benchmarks are defined by CMS based on national 
CMS-1600-P 484 

Medicare fee-for-service rates, national Medicare Advantage (MA) quality measure rates, 

or a national flat percentage. In the final rule, we indicated that we would not compare 

an ACO’s quality performance to the performance of other ACOs for purposes of 

determining an ACO’s overall quality score. We acknowledged, however, that in future 

program years, we should seek to incorporate actual ACO performance on quality 

measures into the quality benchmarks after seeking industry input through rulemaking. 

a. Data Sources Used to Establish Performance Benchmarks 

The regulation governing the data that CMS will use to establish the performance 

benchmarks for quality performance measures under the Shared Savings Program is set 

forth at §425.502(b)(2). This provision states that CMS will define the performance 

benchmarks based on national Medicare fee-for-service rates, national MA quality 

measure rates, or a national flat percentage. In the Shared Savings Program final rule, we 

responded to comments suggesting that quality performance benchmarks be set based on 

actual historical data submitted by ACOs. We stated that although we agreed that we 

should seek to incorporate actual ACO performance on quality scores into the quality 

benchmark, we would do so only in future rulemaking so that we could seek industry 

input. In addition, we noted that we expected to update the quality benchmarks over 

time, consistent with section 1899(b)(3)(C) of the Act, which requires CMS to seek to 

improve the quality of care furnished by ACOs participating in the Shared Savings 

Program over time. 

Consistent with our stated intention to incorporate actual ACO experience into 

quality measure benchmarks, for the 2014 reporting period, we propose to amend 

§425.502(b)(2) to permit CMS to use all available and applicable national Medicare 

Advantage and Medicare FFS performance data to set the quality performance 
CMS-1600-P 485 

benchmarks. Specifically, in addition to using 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 Savings Program and Pioneer ACOs in 2013 for 

the 2012 reporting period to set the performance benchmarks for the 2014 reporting 

period. We propose to publish the quality benchmarks based upon these data prior to the 

beginning of the 2014 reporting period through subregulatory guidance. As stated in the 

Shared Savings Program final rule, we will 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 conjunction with other available data to set 

benchmarks for the 2015 reporting period, and so on. We propose to retain the option of 

using flat percentages when data are unavailable, inadequate or unreliable to set quality 

performance benchmarks. Further, we clarify our intent to combine data derived from 

national Medicare Advantage and national Medicare FFS to set performance benchmarks 

when the measure specifications used under Medicare Advantage and FFS Medicare are 

the same. We propose to revise §425.502(b)(2)(i) to reflect this clarification. We seek 

comment on these proposals, and whether there are other data sources that should be 

considered in setting performance benchmarks. 

b. Ensuring Meaningful Differences in Performance Rates 

Data collected by CMS from the GPRO and Physician Group Practice 

Demonstration participants in 2012 coupled with previous CMS experience indicates that 

using actual data to calculate quality performance may result in some measures’ 

performance rates being tightly clustered. In this case, quality scores for the measure 

may not reflect clinically meaningful differences between the performance rates achieved 
CMS-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 30th and 90th

percentiles. In such an instance, even though there is little distinction in actual 

performance rates, a slight difference in performance on the measure may result in a 

significant difference in the number of quality points obtained for the Shared Savings 

Program. For example, two separate ACOs at the 50th percentile and the 90th percentile 

may have only a few tenths of a percentage point difference in their actual performance, 

but under the Shared Savings Program scoring methodology, the difference between their 

quality scores for that measure would be more noteworthy (1.4 points versus 2.0 points). 

We continue to believe it is desirable to use performance rates for measures based 

on actual data because doing this creates benchmarks that are simple to understand and 

apply, even if the rates are clustered, as the data reflect achievable performance on 

quality measures. However, allowing clustered performance rates for a measure may 

result in payment differences that are not be associated with clinically meaningful 

differences in patient care, as noted in the example above. 

Keeping these issues in mind, we propose to develop a methodology to spread 

clustered performance on measures. The first step in developing that methodology is to 

identify when performance on a measure is clustered. Clustering could be defined as less 

than a certain spread between performance rates in an identified range, for example, less 

than 6.0 percentage points between the performance rates associated with the 30th and 

90th percentiles, or less than 10.0 percentage points between the minimum and maximum 

values achieved by previous reporters of the quality measure. Alternatively, clustering 

could be defined as a spread of performance rates of less than x percentage points 

between any two deciles, for example, less than a 1.0 percentage point difference 
CMS-1600-P 487 

between the 60th and 70th decile. 

Once a clustered measure has been identified, the next step is to apply a 

methodology to spread or separate the performance rates within the measure. It is 

important to establish a meaningful performance rate, or starting point, around which to 

differentiate or spread the performance. For example, selecting a certain percentile or 

median value may represent one option for establishing a reasonable starting point. Once 

the starting point is set, then we could implement a series of fixed percentage point 

intervals around the starting point in both a positive and negative direction to increase the 

spread, for example, applying a fixed 1.0 percentage point interval between scored 

deciles. For example, if the starting point is the 60th percentile, and the performance rates 

at the 60th and 70th percentiles were observed to be 77.15 and 77.65 respectively, there 

would be only a 0.5 spread between the deciles. In contrast, applying a fixed 1.0 

percentage point interval to increase spread would result in a 1.0 difference between these 

rates, and the new performance rates would be 77.15 and 78.15 at the 60th and 70th

percentiles, respectively. In the alternative, we could take the spread calculated from a 

subset (for example, ACO performance only) of the underlying performance data if we 

believe that data reported by ACOs show a different variability than other data sources. 

For example, the spread between the measure’s percentiles could be based on historical 

ACO distribution only, not the historical distribution of Medicare Advantage and/or 

national fee-for-service, PQRS, and ACO data. The historical ACO distribution could 

then be applied to the Medicare Advantage and/or national fee-for-service, PQRS, and 

ACO percentile distribution to establish the measure’s percentiles. 

We believe that a clinically meaningful assessment of ACO quality is important. 

We also are interested in providing a pathway for ACOs new to quality reporting to 
CMS-1600-P 488 

achieve the quality reporting standard, and an incentive for experienced ACOs to 

continue improving and performing at high levels. We are therefore proposing to use a 

standardized method for calculating benchmark rates when a measure’s performance 

rates are tightly clustered. We propose that the application of a methodology to reduce 

measure clustering would only apply to quality measures whose performance rates are 

calculated as percentiles, that is, the methodology would not apply to measures whose 

performance rates are calculated as ratios, for example, measures such as the two ACO 

Ambulatory Sensitive Conditions Admissions and the All Condition Readmission 

measure. We believe that measures whose performance rates are calculated as ratios 

already demonstrate a high degree of clinically meaningful differences because they are 

risk adjusted to reflect the health status of the patient population being measured. 

We propose to define a tightly clustered measure, including clinical process and 

outcome measures reported through the GPRO web interface and CAHPS measures, as 

one that demonstrates less than a 6.0 percentage point spread in performance rates 

between the 30th and 90th percentiles. We believe using the 30th and 90th percentiles as 

the lower and upper bounds is reasonable because these bounds have been given some 

significance in earlier rulemaking; specifically, the Shared Savings Program rule sets the 

ACO’s minimum attainment level at the 30th percentile, below which the ACO achieves 

no points, and the ACO achieves full points for quality reporting at or above the 90th

percentile. Further, we propose to establish the starting point at the 60th percentile, the 

midpoint between the 30th and 90th percentiles, and then apply a positive 1.0 fixed 

percentage point interval for each decile above the 60th percentile and a negative 1.0 fixed 

percentage point interval for each decile below the 60th percentile. 

We recognize that spreading tightly clustered performance measures would 
CMS-1600-P 489 

decrease the lower bound necessary to meet the minimum attainment level for the 

measure, giving ACOs new to quality reporting a greater opportunity to meet the quality 

performance standard. At the same time, spreading tightly clustered performance rates 

would increase the upper bound necessary for achieving the maximum available quality 

points for the measure, giving already experienced ACOs an incentive to continue 

improving quality. Applying a 1.0 fixed percentage point interval achieves the goal of 

creating meaningful differences in performance. Further, we 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 original spread of a quality measure, 

based on all available data, which is compressed from a range of 75.83 at the 30th

percentile to 79.23 at the 90th percentile, that is, a spread of less than 6.0 percentage 

points. When the proposed methodology is applied, the 60th percentile (or 77.15 percent), 

serving as the starting point, remains unchanged. The spread increases 6.0 percentage 

points from 74.15 at the 30th percentile to 80.15 at the 90th percentile. As demonstrated 

and explained above, this methodology improves the distinction in performance between 

the minimum attainment level (30th percentile) and the maximum attainment level (90th

percentile).. 

TABLE 57: Proposed Methodology to Reduce Clustered Performance Rates 

Percentile 30th 40th 50th 60th 70th 80th 90th

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 purposes 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 these proposals. Specifically, we are seeking 
CMS-1600-P 490 

comment on whether or not a methodology should be applied to spread out clustered 

performance on measures. We are also seeking comment on the proposal to define 

clustered performance on a measure as one in which the spread of performance rates 

between the 30th and 90th percentiles is less than 6.0 percentage points, or whether other 

values should be used to define clustered measure performance, for example, when the 

minimum and maximum reported values are spread by less than 10.0 percentage points. 

We are seeking comment on whether there are alternative methodologies that should be 

considered to spread out clustered performance on measures. In addition, 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 spread between measures, or whether only the 

relevant performance data from a subset of reporters, such as ACO-reported data, as 

discussed above, should be used to determine the appropriate spread between deciles. 

c. Scoring CAHPS Measures Within the Patient Experience of Care Domain 

The preamble to the Shared Savings Program final rule (76 FR 67895-67900) 

outlines the total potential points available per domain as demonstrated in Table 58. As 

indicated in Table 58, under the final rule the Patient/Caregiver Experience Domain is 

weighted equally with other three quality domains at 25 percent and consists of 2 

measures: a composite of six Clinician and Group (CG) CAHPS summary survey 

measures (1) Getting Timely Care, Appointments and Information, (2) How Well Your 

Doctors Communicate, (3) Patient’s Rating of Doctor, (4) Access to Specialists, (5) 

Health Promotion and Education, (6) Shared Decision Making) and a Health 

Status/Functional Status measure. The six measures included in the composite will 

transition to pay-for-performance starting in the second year of an ACO’s agreement 
CMS-1600-P 491 

period. In contrast, the Health Status/Functional 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/Caregiver 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-reported 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 on 
CMS-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 the point scoring for the Patient/Caregiver 

Experience domain as demonstrated in Table 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 three 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 appropriate because it places greater emphasis on patient-reported 

experiences, promotes clinically meaningful differences in ACO performance within the 

domain, and is consistent with the statutory mandate to improve quality of care furnished 
CMS-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 modify 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 requires that we establish a value-based 

payment modifier and apply it to specific physicians and groups of physicians the 

Secretary determines appropriate starting January 1, 2015 and to all physicians and 

groups of physicians by January 1, 2017. On or after January 1, 2017, section 1848(p)(7) 

of the Act provides the Secretary discretion to apply the value-based payment modifier to 

eligible professionals as defined in section 1848(k)(3)(B) of the Act. Section 

1848(p)(4)(C) of the Act requires the value-based payment modifier to be budget neutral. 

In this proposed rule, we continue to phase 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 propose to refine the methodologies used in our 

approach to calculating the value-based payment modifier in order to better identify both 

high and low performers for upward and downward payment adjustments. 

2. Governing Principles for Physician Value-Based Payment Modifier Implementation. 

In the CY 2013 PFS final rule with comment period (77 FR 69306), we stated that 

the value-based payment modifier has the potential to help transform Medicare from a 

passive payer to an active purchaser of higher quality, more efficient and more effective 

healthcare by providing upward payment adjustments under the PFS to high performing 

physicians (and groups of physicians) and downward adjustments for low performing 

physicians (and groups of physicians). We also noted that Medicare is implementing 

value-based payment adjustments for other types of services, including inpatient hospital 

services. Further, in implementing value-based purchasing initiatives generally, we seek 

to recognize and reward high quality care and quality improvements, and to promote 
CMS-1600-P 495 

more efficient and effective care through the use of evidence-based measures, the 

reduction in administrative burden and duplication, and less fragmented care. 

 In the CY 2013 PFS final rule with comment period, we established that the 

following specific principles should govern the implementation of the value-based 

payment modifier (77 FR 69307). 

● A focus on measurement and alignment. Measures for the value-based 

payment modifier should consistently reflect differences in performance among 

physicians and physician groups, reflect the diversity of services furnished, and be 

consistent with the National Quality Strategy and other CMS quality initiatives, including 

the PQRS, the Medicare Shared Savings Program, and the Medicare EHR Incentive 

Program. 

● A focus on physician choice. Physicians should be able to choose the level 

(individual or group) at which their quality performance will be assessed, reflecting 

physicians’ choice over their practice configurations. The choice of level should align 

with the requirements of other physician quality reporting programs. 

● A focus on shared accountability. The value-based payment modifier can 

facilitate shared accountability by assessing performance at the group 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 information to help groups of physicians and 

physicians identify clinical areas where they are doing well, as well as areas in which 

performance could be improved by providing groups of physicians with 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 able to elect how the value-based payment 

modifier would apply to their payment under the PFS starting in CY 2015. As we gain 

more experience with physician measurement tools and methodologies, we can broaden 

the scope of measures assessed, refine physician peer groups, create finer payment 

distinctions, and provide greater payment incentives for high performance. 

3. Overview of Existing Policies for the Physician Value-Based Payment Modifier. 

In the CY 2013 PFS final rule with comment period, we finalized policies to 

phase-in the value-based payment modifier by applying it starting January 1, 2015 to 

payments under the Medicare PFS for physicians in groups of 100 or more eligible 

professionals. We identify a group of physicians as a single taxpayer identification 

number (TIN). For purposes of establishing group size only, we use the definition of an 

eligible professional as specified in section 1848(k) of the 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 beneficiary 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 from 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 payment 
CMS-1600-P 497 

modifier that will be applied to payments 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 and 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 other similar Innovation Center 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 value-based payment modifier for CY 2015 

calculated using the quality-tiering methodology, which could result in an upward, 

neutral, or downward adjustment amount. For groups that make this election, we use the 

performance rates on the quality measures reported through the PQRS reporting 

mechanism that the group selects for 2013 (that is, group practice reporting option 

(GPRO) web-interface, CMS-qualified registry, or PQRS Administrative Claims option) 

and the performance rates on three outcome measures to calculate the group’s quality 

composite under the quality-tiering approach. If a group in Category 1 that elects 

quality-tiering self-nominates for the GPRO web-interface or CMS-qualified registry 
CMS-1600-P 498 

and does not meet the satisfactory reporting criteria for the PQRS incentive payment, we 

use the group’s performance on the Administrative Claims option to calculate the 

group’s quality composite under the quality-tiering approach. The value-based payment 

modifier for groups of physicians in Category 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 the groups that are in 

Category 2, the value-based payment modifier for the CY 2015 payment adjustment 

period is -1.0 percent. 

We also finalized the following policies to calculate the value-based payment 

modifier using the quality-tiering approach. 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 with comment period (77 FR 69320 through 69326). To create the 

quality composite, we create a standardized 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 (two composite measures of potentially 

preventable hospital admissions for acute and chronic conditions and a measure of allcause hospital readmissions). The standardized score for each quality measure is 

calculated by dividing the difference between 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 deviation. The standardized scores for each 

measure are classified into one of six domains based on the national priorities related to 

clinical care, patient experience, population/community health, patient safety, care 
CMS-1600-P 499 

coordination, and efficiency established in the National Quality Strategy. Within each 

domain, we weight each measure’s standardized score equally to arrive at a domain 

score. The domains are then equally weighted to form a quality of care composite. 

When a domain does not contain quality measures (for example, when a group chooses a 

reporting mechanism that does not contain measures 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 cost composite using five 

measures of total per capita costs for beneficiaries attributed to the group practice. The 

five measures are total per capita costs (both Parts A and B) and total per capita costs for 

beneficiaries with four specific chronic conditions: chronic obstructive 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 any other group) of primary care services to the 

beneficiary. This attribution methodology is similar to the attribution 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 benchmark (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 beneficiaries (one measure) and total per capita costs for all 

attributed beneficiaries with specific conditions (four measures). Within each cost 

domain, each measure is equally weighted. In those instances 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 to 
CMS-1600-P 500 

the quality of care composite, each cost domain 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 categories 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 with the cost composite classification to 

determine the value-based payment modifier adjustment for the CY 2015 payment 

adjustment period according to the amounts in Table 60. 

TABLE 60: 2015 Value Modifier Amounts 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 +1.0x if (1) reporting Physician Quality Reporting System 

quality measures through the GPRO web-interface or CMS-qualified registry, and (2) average beneficiary 

risk score is in the top 25 percent of all beneficiary risk scores. 

To ensure budget neutrality, we first aggregate the downward payment 

adjustments in Table 60 for those groups in Category 1 that have elected quality tiering 

with the -1.0 percent downward payment adjustments for groups of physicians subject to 

the value-based payment modifier that fall within Category 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 performance period for the CY 2015 value-based 

payment modifier is CY 2013, these calculations will be performed after December 31, 

2013. 

This scoring methodology also provides an additional upward payment 

adjustment of +1.0x to groups of physicians that care for high-risk patients (as evidenced 
CMS-1600-P 501 

by the average HCC risk score of the attributed beneficiary population) and submit data 

on PQRS quality measures through PQRS via 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 percent of the distribution of beneficiary risk 

scores nationwide. This additional upward 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 inquire about the calculation of its value-based 

payment modifier. 

Since adopting these policies, the Institute of Medicine released a new report, 

“Interim Report of the Committee on Geographic Variation in Health Care Spending and 

Promotion of High-Value Care: Preliminary Committee 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 because it ties a group 

practice’s payment to its actions by rewarding high performing groups of physicians and 

penalizing low-performing groups of physicians. 

On January 31, 2013, we submitted two cost measures - 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 endorsement process for our cost measures. 

CMS is committed to refining our cost measures 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 individual physicians in 

nine states that practice in group of physicians with 25 or more eligible professionals. 

These reports contained performance information on the quality of care furnished, and 

the cost of that care, to Medicare beneficiaries by these physicians and groups of 

physicians. Overall findings and results from these reports confirm that we can develop 

reliable and valid quality and cost measures at the group and individual physician level 

on which to base the value-based payment modifier. Moreover, group report recipients 

have found the reports informative and they have suggested ways to improve them to 

facilitate care coordination and quality improvement. 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 Rule 

In this proposed rule, we propose additions and refinements to the existing valuebased payment modifier policies. These proposals continue our phased-in 

implementation of the value-based payment modifier by reinforcing our emphasis on 

quality measurement, alignment with the PQRS, physician choice, and shared 

accountability. Specifically, this proposed rule includes the following proposals: 

● To apply the value-based payment modifier to groups of physicians with 10 or 

more eligible professionals in CY 2016. 

● To make quality-tiering mandatory for groups within Category 1 for the CY 
CMS-1600-P 503 

2016 value-based payment modifier, except that groups of physicians with between 10 

and 99 eligible professionals would be subject only to any upward or neutral adjustment 

determined under the quality-tiering methodology, and groups of physicians with 100 or 

more eligible professionals would be subject to upward, neutral, or downward 

adjustments determined under the quality-tiering methodology. 

● To increase the amount of payment at risk under the value-based payment 

modifier from 1.0 percent to 2.0 percent in CY 2016. 

● To align the quality measures and quality reporting mechanisms for the valuebased payment modifier with those available to groups of physicians under the PQRS 

during the CY 2014 performance period. 

● To include the Medicare Spending Per Beneficiary (MSPB) measure in the 

total per capita costs for all attributed beneficiaries domain of the cost composite. 

● To refine the cost measure benchmarking methodology to account for the 

specialties of the physicians in the group. 

a. Group Size 

In the CY 2013 PFS final rule with comment period, we stated that we would 

gradually phase in the value-based payment modifier in CY 2015 by first applying it to 

large groups (77 FR 69308), which we defined as groups of physicians with 100 or more 

eligible professionals. We noted our view that it would be reasonable to focus on groups 

with 100 or more eligible professionals before expanding the application of the 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 threshold 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 other practitioners, such as physician assistants and nurse 

practitioners, in addition to physicians. 

TABLE 61: Eligible Professional/Physician 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 payment modifier in CY 2016 to groups of 

physicians with 10 or more eligible 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 modifier 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 all physicians in CY 

2017. As discussed below in Section K.5, CMS conducted statistical reliability 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 quality 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 measures 
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(with a case size of at least 20) included in the individual feedback reports. Given these 

results, we believe that we can reliably apply a value-based payment modifier to groups 

of physicians with 10 or more eligible professionals in CY 2016 and to smaller groups 

and to solo practitioners in future years. Accordingly, we propose to revise the 

regulations at §414.1210 to reflect that the CY 2016 value-based payment modifier 

would be applicable to physicians that are 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, for CY 2016, groups of physicians with 10 or 

more eligible professionals) using the same procedures that we finalized in the CY 2013 

PFS final rule with comment period (for a description of those procedures, we refer 

readers to 77 FR 69309 through 69310). Rather than querying Medicare’s PECOS data 

base as of October 15 or another date certain, however, we 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 of the close of the PQRS group selfnomination/registration process that will occur during the fall of CY 2014. We propose 

to revise the regulations at §414.1210(c) to reflect that identification of the groups of 

physicians subject to the value-based payment modifier is based on a query of PECOS at 

the close of the PQRS registration period and that groups of physicians are removed 

from this list if, based on a claims analysis, the group of physicians did not have the 

required number of eligible professionals, as defined in §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 Payment Modifier Adjustment Based on PQRS 

Participation 

 In the CY 2013 PFS final rule with comment period (77 FR 69311), we adopted 

a policy to categorize groups of physicians subject to the value-based payment modifier 

in CY 2015 based on a group’s participation in the PQRS. Specifically, we categorize 

groups of physicians eligible for the CY 2015 value-based payment modifier into two 

categories. Category 1 includes groups that either (a) self-nominate for the PQRS as a 

group and report at least one measure or (b) elect the PQRS Administrative Claims 

option as a group for CY 2013. Groups of physicians in Category 1 may elect to have 

their value-based payment modifier for CY 2015 calculated using the quality-tiering 

methodology, which could result in an upward, neutral, or downward adjustment 

amount. The value-based payment modifier for groups of physicians in Category 1 that 

do not elect quality tiering is 0.0 percent, meaning that physicians in these groups will 

not receive a payment adjustment under the value-based payment modifier for CY 2015. 

Category 2 includes groups of physicians that do not fall within Category 1. For those 

groups of physicians in Category 2, the value-based payment modifier for CY 2015 is -

1.0 percent. 

 We propose to use a similar two-category approach for the CY 2016 value-based 

payment modifier based on a group of physicians’ participation in the PQRS but with 

different criteria for inclusion in Category 1. Category 2 would include those groups of 

physicians that are subject to the CY 2016 value-based payment modifier and do not fall 

within Category 1. Our proposal 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 individually. We established in the CY 2013 PFS 
CMS-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-nominate 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 established the criteria for satisfactory 

reporting of data on PQRS quality measures via the GPRO for the PQRS payment 

adjustment for CY 2016 (77 FR 69200 through 69202) 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 practice. 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 group practice may wish to report 

data. In addition, eligible professionals in these groups of physicians may wish to use 

different reporting mechanisms to report data for PQRS, such as the claims-based 

reporting mechanism, EHRs, qualified registries, or the proposed qualified clinical data 

registry reporting mechanism. Therefore, for the CY 2016 value-based payment 

modifier, we 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 group practice in CY 2014 and that have at least 

70 percent of the group’s eligible professionals meet the criteria for satisfactory reporting 

of data on PQRS quality measures as individuals for the CY 2016 PQRS payment 

adjustment, or in lieu of satisfactory reporting, satisfactorily participate in a PQRSqualified clinical data registry for the CY 2016 PQRS payment adjustment. The criteria 

for satisfactory reporting by individual eligible professionals for the claims, qualified 

registry, and EHR reporting mechanisms for the CY 2016 PQRS payment adjustment 

were established in the CY 2013 PFS final rule with comment period (77 FR 69194 

through 69195 (Table 91), 69200-69202). We are proposing in Table 25 of this proposed 

rule the criteria for satisfactory participation in a qualified clinical data registry and other 

proposed changes to the criteria for satisfactory 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 modifier would be in Category 1 if at least 

70 percent of the individual eligible professionals in the group avoid the CY 2016 PQRS 

payment adjustment by any of the reporting options available under the PQRS. 

 We are proposing a 70 percent threshold for three reasons. First, although we 

expect 100 percent of a group’s eligible professionals to participate in PQRS, we believe 

that we will obtain a reliable indicator 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 individual eligible professionals 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 increase 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 individuals, not as members 
CMS-1600-P 509 

of a group practice. Third, based on an examination of 2011 PQRS data, at least 63 

percent of groups of physicians (TINs) participating in the PQRS with fewer than 50 

eligible professionals would meet the 70 percent 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 satisfactory 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 the 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 performance 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 satisfactory reporting (or 

the criteria for satisfactory participation, in the case of the 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 reporting periods that are established under 

the PQRS would continue to apply for purposes of the PQRS. In the event that the 

criteria that are finalized for the CY 2016 PQRS payment adjustment differ from what is 

proposed for the PQRS in this proposed rule, our intention is to align the criteria for 

inclusion in Category 1 to the extent possible with the criteria that are ultimately 

established for the CY 2016 PQRS payment adjustment. 

 We propose to more fully phase-in the quality-tiering methodology for calculating 
CMS-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 tiering for the CY 2016 value-based payment modifier (as was 

the case for the CY 2015 value-based payment modifier) and instead would be subject to 

mandatory quality tiering. We 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 eligible professionals would be subject only 

to upward or neutral adjustments derived under the quality-tiering methodology, while 

groups of physicians with 100 or more eligible professionals would be subject to upward, 

neutral, or downward adjustments derived under the quality-tiering methodology. In 

other words, we propose that groups of physicians in Category 1 with between 10 and 99 

eligible professionals would be held harmless from any downward adjustments derived 

from the quality-tiering methodology for the CY 2016 value-based payment modifier. 

We believe this proposed approach would reward 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 value-based payment modifier. Accordingly, 

we propose to revise the regulations at §414.1270 to reflect the proposal to make the 

quality-tiering methodology mandatory, with the exception noted above, for all groups of 

physicians subject to the value-based payment modifier in CY 2016 that fall within 

Category 1. We seek comment on this proposal. We are also revising the regulations at 

§414.1270 to clarify that for the CY 2015 payment adjustment period a group may be 

determined under the quality-tiering methodology to have poor performance based on 

low quality and high costs, low quality and average 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 both 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 professionals. 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 provide alerts at the point of care to 

physicians and practitioners to further facilitate provision of high quality care to 

Medicare beneficiaries. Moreover under the quality-tiering methodology for calculating 

the value-based payment modifier as we established in the CY 2013 PFS final rule with 

comment period and have updated in this proposed 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 appropriate to apply both upward and 

downward adjustments under the quality-tiering methodology to groups of physicians 

with 100 or more eligible professionals in 2016. We seek comments on our proposals 

and, in the alternative, whether we should treat groups of physicians with 100 or more 

eligible professionals in the same manner as we propose to treat groups of physicians 

with between 10 and 99 eligible professionals 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 specify the amount of payment that should be 

subject to the adjustment for the value-based payment modifier; however, section 

1848(p)(4)(C) of the Act requires the value-based payment modifier be implemented in a 

budget neutral manner. Budget neutrality means that payments will increase for some 

groups of physicians based on high performance and decrease for others based on low 

performance, but the aggregate amount of Medicare spending in any given year for 

physicians’ services will not change as a result of application of the value-based payment 

modifier. 

In the CY 2013 PFS final rule with comment period, we adopted a modest 

payment reduction of 1.0 percent for groups of physicians in Category 1 that elected 

quality tiering and were classified as low quality/high cost and for groups of physicians in 

Category 2 (77 FR 69323-24). Although we received 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 experience 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 considered comments on ways to better 

encourage improvements in physician efficiency and quality while still gradually phasing 

in the value-based payment modifier. We agree with commenters on the value of 
CMS-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 section 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 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 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 adjustment under the value-based payment 

modifier from 1.0 percent in CY 2015 to 2.0 percent for CY 2016. That is, for CY 2016, 

a -2.0 percent value-based payment modifier would apply to groups of physicians subject 

to the value-based payment modifier that fall in Category 2. In addition, we 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 classified 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 percent 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 clarify the PQRS GPRO reporting mechanisms available in 
CMS-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 Physician Quality Reporting System 

quality measures and average beneficiary risk score is in the top 25 percent of all beneficiary risk scores. 

Consistent with the policy adopted in the CY 2013 PFS final rule with comment 

period, the upward payment adjustment factor (“x”) would be determined after the 

performance period has ended based on the aggregate amount of downward payment 

adjustments. We note that any funds derived from the application of the downward 

adjustments to groups of physicians with 100 or more eligible professionals and the 

downward 2.0 percent adjustment applied to those groups of physicians subject to the 

value-based payment modifier that fall in Category 2, would be available to all groups of 

physicians eligible for value-based payment modifier upward payment adjustments. The 

quality-tiering methodology would continue to provide an additional upward payment 

adjustment of +1.0x to groups of physicians that care for high-risk beneficiaries (as 

evidenced by the average HCC risk score of the attributed beneficiary population). We 

seek comments on our proposal to increase the downward value-based payment modifier 

to 2.0 percent for those groups of physicians with 10 or more eligible professionals that 

are in Category 2 and for groups of physicians with 100 or more eligible professionals 

that are classified as low quality/high cost groups for the CY 2016 payment adjustment 

period. 

d. Performance Period 
CMS-1600-P 515 

In the CY 2013 PFS final rule with comment period (77 FR 69314), we adopted a 

policy that performance on quality and cost measures in CY 2014 will be used to 

calculate the value-based payment modifier that is applied to items and services for 

which payment is made under the PFS during CY 2016. We received comments 

requesting us to close the gap between the end of the performance period (for example, 

December 31, 2014) and the beginning of the payment adjustment period (for example, 

January 1, 2016), in order to strengthen the connection between the performance of 

physicians and groups of physicians and the financial incentives for quality 

improvement.3

 We understand that many private sector plans start to provide payment 

adjustment within 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 annual calendar year basis, options to close 

the one year gap between the close of the performance 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 performance period for quality data reported 

through the PQRS. In addition, we could calculate the total per capita cost measures on 

an April 1 through March 31 basis, thus closing the gap by three months. 

However, a byproduct of altering the performance periods is that the deadline for 

submitting quality information would have to occur at the end of the performance period. 

In addition, the review period during which groups of physicians will be able to review 

the calculation of the value-based payment modifier would be shortened to allow the 

 

3

 See, e.g., Comment of the American College of Surgeons comment on the CY 2013 PFS proposed rule 

(Aug. 31, 2012). 

4

 US GAO, Medicare Physician Payment: Private-Sector Initiatives Can Help Inform CMS Quality and 

Efficiency Incentive Efforts, GAO-13-160 (Dec. 2012), available at 

http://www.gao.gov/assets/660/651102.pdf. 
CMS-1600-P 516 

necessary system changes to implement the 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 requesting that we shorten the gap between 

the performance period and the payment adjustment period, we propose to use CY 2015 

as the performance period for the value-based payment modifier adjustments that will 

apply during CY 2017. We believe it is important to propose the performance period for 

the payment adjustments that will apply in CY 2017, because section 1848(p)(4)(B)(iii) 

of the Act requires all physicians and groups of physicians to be subject to the valuebased payment modifier beginning not later 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 modifier adjustments made in the CY 2017 

payment adjustment period. We seek comment on this proposal. 

We also are striving to provide more timely feedback to stakeholders regarding 

their cost and quality of care they 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 groups 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 anticipate that these reports will contain actionable 

information regarding beneficiaries attributed to the group, thereby enabling physicians 
CMS-1600-P 517 

in the group to better coordinate care and improve the quality of care furnished. We also 

are in the process of enhancing our quality reporting and report dissemination 

infrastructure such that we expect to provide QRURs in 2014 even closer to the end of 

the performance period. 

Despite these efforts, we expect there will 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 that 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 standardize the amounts on these claims in order 

to calculate the cost measures. This process takes one month. Concurrent 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 implement 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 comment period (77 FR 69315), we aligned 

our policies for the value-based payment modifier for CY 2015 with the PQRS reporting 

mechanisms available to groups of physicians in CY 2013, such that data that a group of 

physicians submitted for quality reporting purposes through any of the PQRS group 

reporting mechanisms in CY 2013 would be used for calculating the quality composite 

under the quality-tiering approach for the value-based payment modifier for CY 2015. 

Moreover, all of the quality measures for which groups of physicians are eligible to 
CMS-1600-P 518 

report under the PQRS are used to calculate the group of physicians’ value-based 

payment modifier for CY 2015, to the extent the group of physicians submits data on 

such measures. We also established a policy to include three additional quality measures 

(outcome measures) for all groups of physicians subject to the value-based payment 

modifier: (1) a composite of rates of potentially preventable hospital admissions for heart 

failure, chronic obstructive pulmonary disease, and diabetes; (2) a composite rate of 

potentially preventable hospital admissions for dehydration, urinary tract infections, and 

bacterial pneumonia, and (3) rates of an all-cause hospital readmissions measure (77 FR 

69315). 

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 improvement. 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 for the PQRS reporting periods in CY 2014 and 

all of the PQRS reporting mechanisms available to individual eligible professionals for 

the PQRS reporting periods in CY 2014. Accordingly, 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 which to base a group of physicians’ quality 
CMS-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 require data for each quality measure on at least 

20 beneficiaries, which is the reliability standard for the value-based payment modifier 

(77 FR 69322-69323). Given this level of reliability, we believe a six-month reporting 

period would be comparable to a 12-month reporting period for the purpose of evaluating 

the quality of care furnished by a group of physicians 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 reporting mechanisms, including quality measures 

reported through qualified clinical data registries, to calculate a group of physicians’ 

value-based payment modifier in CY 2016 to the extent that a group of physicians 

submits data on these measures. In addition, 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 patient 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 readmission measure – would continue to be 

included in the quality measures used for the value-based payment modifier in CY 2016. 

 Although we have received comments to require a core set of quality measures for 

the value-based payment modifier, we believe 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 practice. As we indicated previously, our primary 
CMS-1600-P 520 

focus is on measurement and alignment during 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 measurement. Thus, it is important to provide 

physicians and groups of physicians flexibility 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 individuals 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 performance rates of those eligible professionals 

reporting the measure. If all of the eligible professionals in a group of physicians subject 

to the CY 2016 value-based payment modifier satisfactorily participate in a PQRS 

qualified clinical data registry in CY 2014 and we are unable to receive quality 

performance data for those eligible professionals for 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 quality-tiering methodology, because we would 

not have data to reliably indicate whether the group should be classified as high or low 

quality under the quality-tiering methodology. Accordingly, we also propose to add a 

new subsection to our regulations 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 payment modifier applies to all physicians and 

groups of physicians in CY 2017 based on performance during CY 2015, we anticipate 
CMS-1600-P 521 

continuing our policy to align with the PQRS group reporting for all groups of physicians 

of two or more eligible professionals, and we anticipate permitting physicians who are 

solo practitioners to use any of the PQRS reporting mechanisms available to them under 

the PQRS for reporting periods in CY 2015 for purposes of the value-based payment 

modifier in CY 2017. Although we are not proposing to adopt this policy in this 

proposed rule, we seek comment on this approach to align the quality 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 measures in the value-based payment modifier 

cost composite. The five measures are total per capita costs (both Parts A and B) and 

total per capita costs for beneficiaries with four specific chronic conditions: chronic 

obstructive pulmonary disease (COPD), heart failure, coronary artery disease (CAD), and 

diabetes. We stated that the value-based payment modifier should incorporate additional 

measures that are consistent with the National Quality Strategy and other CMS quality 

initiatives. As a step toward that goal, beginning with the CY 2016 value-based payment 

modifier, we propose to expand the cost composite to include an additional measure, the 

Medicare Spending per Beneficiary (MSPB) measure (with one modification as discussed 

below). This section discusses the background of the MSPB measure and our proposals 

to incorporate it into the value-based payment modifier beginning with the CY 2016 

payment adjustment period and beyond. 

Background on the implementation of the MSPB measure for other CMS quality 
CMS-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 efficient, 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 for 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 belief that this measure provides an incentive 

for hospitals to build stronger relationships with and better 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 other quality measures, as a part of the valuebased payment modifier measure set, we believe that the measure would enable us to 

align incentives and similarly recognize physician groups involved in the provision of 

high-quality care at a lower cost to Medicare. This measure also addresses physician care 

associated with acute inpatient hospitalizations 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 variation in total Medicare 

spending is strongly influenced by the utilization of post-acute care.”1

 Medicare 

spending post-hospital discharge is a significant source of variation in the MSPB measure 

rates, with spending unrelated to readmissions being the largest source of variation in 

those post-discharge Medicare payments. As part of the value-based-payment modifier 

measure set, the MSPB measure would recognize 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.”1 
CMS-1600-P 523 

We propose that this measure would be added to the total per capita costs for all 

attributed beneficiaries domain of the value-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 the total per capita costs measure (because it 

includes all costs incurred by a beneficiary), albeit one that is related to the totality of 

services furnished surrounding an inpatient hospitalization, and thus belongs in the total 

per capita costs for all attributed beneficiaries domain. Moreover, we intend to propose 

in future rulemaking to replace the four measures in the total per capita costs for all 

attributed beneficiaries with specific conditions domain with cost measures derived from 

the CMS Episode Grouper and other episode-based costs derived from our recent and 

ongoing work with many specialty societies.5

 We solicit comments on these potential 

changes to the condition-specific cost measures as well as on the other elements of the 

cost composite in preparation for the CY 2015 performance period affecting payment 

adjustment year CY 2017. 

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 across the delivery system. By focusing on the cost of care 

and encouraging avoidance of unnecessary services, 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 Medicare-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 inclusion 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 services furnished surrounding hospitalizations 

(“index admissions”). The measure includes all 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) hospital6 through 30 days post discharge with certain 

exclusions. Certain hospitalizations at subsection (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 the beneficiary is not enrolled in both Part 

A and Part B Medicare do not count as index admissions. Costs for each episode are risk 

adjusted for age and severity of illness, and the included payments are standardized to 

remove differences attributable to geographic payment adjustments and other payment 

factors. The payment standardization is the same methodology used for the existing total 

per capita cost measures included in the value-based payment modifier. 

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 multiplied 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 attribute a MSPB index admission to the hospital at 

 

6

 Section 1886(d)(1)(B) of the Social Security Act defines 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 calculate the MSPB amount at the hospital 

level. 

After determining an individual hospital’s MSPB amount, we divide it by the 

national median MSPB amount to calculate a ratio. 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 generate 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 calculation. 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 Inpatient 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 (entitled “CMS Price Standardization”) 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 proposals to include the MSPB 

measure (as modified per the discussion above) in the value-based payment modifier cost 

composite and to add the measure to the total per capita costs for all attributed 

beneficiaries domain. We also propose to revise the regulations at §414.1235 to include 

the Medicare Spending per Beneficiary measure in the 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 costs for all attributed beneficiaries domain. 
CMS-1600-P 526 

As stated previously, all of our proposals related to the 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 the 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 identified by a single TIN), when any eligible 

professional in the group submits a Part B Medicare claim under the group’s TIN for a 

service rendered during an inpatient hospitalization that is an index admission for the 

MSPB measure 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 Part B claim for a service rendered during the 

hospitalization is the best way to assign responsibility for, and encourage greater 

coordination of, care furnished to Medicare beneficiaries who are hospitalized. Based on 

CY 2011 claims data, the proposed approach would enable approximately 11,419 groups 

of physicians with at least 10 eligible professionals to have an MSPB measure score 

included in their cost composite.7

 Our proposed approach incentivizes hospitals and 

physicians to furnish efficient, effective care during a hospitalization and to coordinate 

post-discharge care to avoid unnecessary services and preventable readmissions. Further, 

we believe that this attribution approach fosters shared accountability between hospitals 

 

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 provide 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 inpatient hospitalization that is an index 

admission for the MSPB measure during the performance period for the applicable 

calendar year payment adjustment period. Groups of physicians would have a Medicare 

Spending per Beneficiary measure score included in their cost composite based on the 

proposed attribution methodology for the MSPB. We welcome public comment on our 

proposal. 

We also considered attributing the MSPB episode to physician groups from which 

an eligible professional in the group billed a part B claim for a service rendered at any 

time during the Medicare Spending per Beneficiary episode (that is, from 3 days prior to 

an index admission through 30 days post-discharge). This attribution approach would 

place an even stronger emphasis on shared accountability for care provided to Medicare 

beneficiaries who are hospitalized, both during and after their hospitalization. Based on 

2011 claims data, we estimate that attribution 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 professionals to receive an 

MSPB measure performance rate for inclusion in the cost composite, as compared to our 

proposed attribution approach which considers only those eligible professionals who bill 

a Part B claim during the hospitalization. We welcome public comment on the 

alternative attribution approach under which we would attribute an MSPB episode to a 

physician group if any eligible professional in the group billed a Part B service during the 
CMS-1600-P 528 

3 days prior to an index admission through 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 provided the plurality of 

Part B services billed either: (1) during the entire MSPB episode (that is three days prior 

to hospital admission through 30 days post discharge); or (2) during the index 

hospitalization only. By “plurality” of services, we mean the highest total dollar amount 

paid by Medicare to any group of physicians who 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 physicians during that portion of an episode. This 

method is a single attribution approach unlike our proposal which is a multi-attribution 

approach. 

Using 2011 claims, we analyzed the number of TINs, comprised of 10 or more 

eligible professionals, that would be attributed an MSPB measure rate under these 

alternative attribution methods given a minimum of 20 MSPB episodes required. Our 

analyses revealed that 7,799 TINs (out of approximately 17,000 TINs (see Table 61)) 

would be eligible to receive an MSPB measure rate, if MSPB episodes were attributed to 

the group of physicians that received the plurality 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 that 7,582 TINs would be eligible to receive 
CMS-1600-P 529 

an MSPB measure rate, if MSPB episodes were attributed to the physician group that 

billed the plurality of Medicare Part B payments during the index admission. This 

represents a 34% decrease from 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 “most responsible” for the Part B Medicare 

payments made during the episode. We are not proposing these methods, because we 

believe our proposed multiple attribution approach better incentivizes a team approach to 

accountability for Medicare beneficiaries’ care during a hospitalization. We believe our 

proposed attribution approach is further supported by the higher number of TINs that will 

be able to receive an MSPB measure rate under that methodology. We seek comment, 

however, on these two single alternative 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 attribution method: attribute MSPB episodes 

to all TINs from which an eligible professional provided services representing at least 35 

percent of the total Medicare Part B payments made either: 1) during the entire MSPB 

episode (that is three days prior to hospital admission through 30 days post discharge); or 

2) during the index hospitalization only. This alternative could result in multiple 

attribution, if two eligible professionals from different TINs each provided services 

representing at least 35 percent of the Part B Medicare payments during one of the 

episode portions described above (either the full episode or during the index admission 
CMS-1600-P 530 

only). The rationale for this attribution approach is that it ensures that a group of 

physicians had responsibility for a significant portion 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 attribution approach better incentivizes a team 

approach to accountability for Medicare beneficiaries’ care during and after a 

hospitalization. We welcome public comment on this alternative attribution approach 

based on provision of services representing at least 35 percent of Medicare Part B 

payments made either during the entire MSPB episode or during the index 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 during 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 various minimum numbers 

of episodes for all Medicare-enrolled TINs with at least one EP (not just TINs of 10 or 

more eligible professionals) from May 2011 through December 2011. 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 furnished 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 reliability) signifies that all variation in the 

measure’s rates is the result of variation in the difference is performance across groups of 

physicians. Generally, reliabilities 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 Eligible 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 apply the value-based payment modifier to 

all physicians and groups of physicians. With a minimum of 10 cases, the measure is still 

very reliable, as illustrated in the Table 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 the same one we adopted in the CY 2013 PFS 

final rule with comment period that applies to quality and cost measures used in the 

value-based payment modifier (77 FR 69323). We welcome public comment on our 

proposed minimum of 20 episodes for inclusion of the Medicare Spending per 

Beneficiary measure in the cost composite for the value-based payment modifier and on 

the alternative 10 episode minimum that we considered. 

g. Refinements to the Cost Measure Composite Methodology 

 In the CY 2013 PFS final rule with comment period (77 FR 69322), we 
CMS-1600-P 532 

established a policy to create a cost composite for each group of physicians subject to 

the value-based payment modifier that includes five payment-standardized and riskadjusted cost measures. To calculate the each group’s cost measures, we first attribute 

beneficiaries to the group of physicians. We attribute beneficiaries using a two-step 

attribution methodology that is used for the Medicare Shared Savings Program and the 

PQRS GPRO and that focuses on the delivery of primary care services (77 FR 69320). 

We have observed that groups of physicians that do not provide primary care services 

are not attributed beneficiaries or are attributed fewer than 20 beneficiaries and, thus, we 

are unable to calculate reliable cost measures for those groups of physicians (77 FR 

69323). Given this development, we propose that, to the extent that we are unable to 

attribute a sufficient number of beneficiaries to a group of physicians subject to the 

value-based payment modifier and thus are unable to calculate any of the cost measures 

with at least 20 cases, the group of physicians’ cost composite score would be classified 

as “average” under the quality-tiering methodology. We believe this policy is 

reasonable because we would have insufficient information on which to classify the 

group of physicians’ costs as “high” or “low” under the quality-tiering methodology. 

Moreover, we believe that to the extent a group of physicians’ quality composite is 

classified as “high” or “low,” the groups of physicians’ value-based payment modifier 

should reflect that classification. Accordingly, we 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 create the cost composite by calculating a 
CMS-1600-P 533 

standardized score for each cost measure and then placing the measures into one of two 

equally weighted domains: (1) the total per capita costs for all attributed beneficiaries 

domain; and (2) the total per capita costs for attributed beneficiaries with specific 

conditions domain. This standardized score is referred to in statistical terms as a Z-score. 

To arrive at the standardized score for each cost measure, we compare the performance 

for each group’s cost measures to the benchmark (national mean) of other groups subject 

to the value-based payment modifier (peer group) for the same performance year. 

Specifically, we calculate the benchmark for each cost measure as the national mean of 

the performance rates among all groups of physicians to which beneficiaries are 

attributed and that are subject to the value-based payment modifier. For example, for CY 

2015, the cost measures of groups of 100 or more 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 examined the distribution of the overall 

total per capita cost measure among all groups of physicians with one or more eligible 

professionals to determine whether comparisons at the group level would be appropriate 

once we apply the value-based payment modifier to smaller groups of physicians and 

solo practitioners. We found that our current peer grouping methodology could have 

varied impacts on groups of physicians that are comprised of different physician 

specialties. This result occurs because the peer group for the per capita cost benchmarks 

is based on a national mean calculated among all groups of physicians subject to the 

value modifier rather than determined more narrowly (for example, within a physician 

specialty). 
CMS-1600-P 534 

For certain physician specialties, the types of services furnished typically have 

higher than average or lower than average costs, and thus can affect the group’s cost 

measures. For example, medical and other types 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 whole. By contrast, dermatologists and 

ophthalmologists, for example, perform relatively 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 together to provide services to the same 

beneficiaries, groups of physicians with a large proportion of high or low-cost specialists 

can affect the level of the group’s cost measures. Although the cost data are adjusted to 

account for the relative risk of patients, the effects of these adjustments do not fully offset 

this result at the physician and physician group level. 

To address this issue beginning with the CY 2016 value-based payment modifier, 

we considered two methods that account for the group practice’s specialty composition so 

that our quality-tiering methodology produces fair peer group comparisons and, 

ultimately, correctly ranks group of physicians based on actual performance. Taking 

account of physician specialties in making cost comparisons is similar to the approach we 

have used in the CY 2010 and CY 2011 Quality and Resource Use Reports (QRURs) for 

individual physicians in which we made cost comparisons at the individual physician 

specialty level. 

The first method, “specialty adjustment,” accounts for the specialty composition 

of the group prior to computing the standardized score for each cost measure. This 

method enables us to develop comparable benchmarks for the risk-adjusted cost measures 

against which to evaluate groups of physicians of smaller size who often have fewer or 
CMS-1600-P 535 

single specialty composition. More specifically, we would adjust the standardized score 

methodology to account for a group’s specialty composition using three steps: 

Step 1: Create a specialty-specific expected cost based on the national average 

for each cost measure (referred to as the “national specialty-specific expected costs”). To 

do so, we 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 the average cost of 

beneficiaries attributed to groups of physicians with that specialty, weighted by the 

number of EPs in each group. 

Step 2: Calculate the “specialty-adjusted expected cost” for each group of 

physicians by weighting the national specialty-specific expected costs by the group’s 

specialty composition of Part B payments. That is, the specialty-adjusted expected cost 

for each group is the weighted average of the national specialty-specific expected cost of 

all the specialties in the group, where the weights are each specialty’s proportion of the 

group’s Part B payments. The Part B payments for each specialty are determined based 

on the payments to each EP in the group, and each EP is identified with one specialty 

based on its claims. 

Step 3: Divide the total per capita cost by the specialty-adjusted expected cost, 

and multiply this ratio by the national average per capita cost so that we can convert this 

ratio to a dollar amount (referred to as the “specialty-adjusted total per capita cost”) that 

can then be used in the standardized (Z-) score to determine whether a group can be 

classified as high cost, low cost, or average. 

Below, we illustrate the three steps of the specialty adjustment to the standardized 

score with an example. Assume for simplicity that only two TINs and two specialties 
CMS-1600-P 536 

exist: TIN 1 and TIN 2, and Specialty A and Specialty B. For this example, assume that 

the total per capita costs and specialty shares are as shown in Table 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 specialty-specific expected cost for a specialty 

across all TINs, we first calculate the numerator, which is the product of each TIN’s total 

per capita cost times its weight (the number of attributed beneficiaries times that 

specialty’s share of the TIN’s EPs times the number of EPs of that specialty in that TIN), 

summed across all TINs. This sum is divided by the denominator, which is the sum 

across all TINs of the same weights that were used in the numerator. For this example, 

the national specialty-specific expected cost for Specialty A is ($12,000 * 1,500 * 

25%*10 + $8,000 * 2,000 * 35%*21) / (1,500 * 25%*10 + 2,000 * 35%*21) = $8,813. 

Similarly, the national specialty-specific expected cost for Specialty B is ($12,000 * 

1,500 * 75%*30 + $8,000 * 2,000 * 65%*39) / (1,500 * 75%*30 + 2,000 * 65%*39) = 

$9,599. 

National Specialty-Specific Expected Cost, by Specialty (step 1)

Specialty A: $8,813 

Specialty B: $9,599 

 Step 2: To calculate the specialty-adjusted expected cost for each group (TIN), 

we would multiply the above national specialty-specific expected costs by each group’s 

proportion of specialty-specific Part B payments. For each TIN, we compute the product 
CMS-1600-P 537 

of the TIN’s proportion of specialty-specific Part B payments, summed across all 

specialty types of the TIN. In our example, the specialty-adjusted expected cost for TIN 

1 would be computed as 35% * $8,813 + 65% * $9,599 = $9,324. Similarly, the 

specialty-adjusted expected cost for TIN 2 would be 60% * $8,813 + 40% *$9,599 = 

$9,127. 

Specialty-Adjusted Expected Cost, by TIN (step 2)

TIN 1: $9,324 

TIN 2: $9,127 

Step 3: We divide the total per capita cost by the specialty-adjusted expected cost 

and multiply this ratio by the national average per capita cost, to convert this ratio to a 

dollar amount. Assuming the national average per capita cost is $9,714, we can compute 

the specialty-adjusted total per capita cost for each TIN, as shown in Table 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 standardized (Z-) score. As can be seen, the 

specialty-adjusted total per capita cost for use in the standardized score is $12,502 for 

TIN 1 and $8,514 for TIN 2. 

To illustrate the impact of the specialty adjustment methodology, we examined 

the distribution, by specialty, of the overall specialty-adjusted total annual per capita cost 
CMS-1600-P 538 

measure based on 2011 claims for group of physicians with 1 or more eligible 

professionals. Table 66 includes the percentage of physicians in each specialty that 

practice in groups of 1 or more eligible professionals with 20 or more attributed 

beneficiaries and that, based only on this one measure, would be classified into low, 

average, and high cost groups. Table 66 does not represent all of the physicians within 

that specialty, rather only those 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 Beneficiaries, Classified by Cost 

 Percentage of Eligible Professionals in 

Groups (TINs) Classified as 

Specialty Low Cost Average 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 included in the value-based 
CMS-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-specific total per capita cost measures is 

identical to the total per capita cost measure that was described above. The specialty 

adjustment for the MSPB cost measure is analogous to that described above for the total 

per capita cost measure, except that “number of beneficiaries” is replaced with “number 

of episodes” and “per capita cost” is replaced with “per episode cost.” Thus, each cost 

measure will have its own set of specialty-specific expected costs. 

The second method, “comparability peer grouping,” 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 group’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 specialty is within a defined range for both group 

practices. For the purposes of computing peer groups, group practices also could be 

stratified by size, as measured by number of eligible professionals 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 mix in the group practice’s size category, group 

practices would be added to the peer group based on the next level of comparability in 

order to obtain the minimum number of group practices. Group practices that had a 

specialty mix more comparable to the practice’s own mix would receive 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 Financial Comparisons Across Hospitals. April 2009. HSR: 

Health Services Research 44:2, Part I: 577-592.
CMS-1600-P 541 

the peer group. Among the identified peers sharing the same specialty mix, those with 

the most cases would receive 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 comparability peer grouping 

approach reduced the average difference between the group’s performance and 

benchmark rate compared to the difference between the group’s performance and 

benchmark as computed based on the methodology we established in the CY 2013 PFS 

final rule with comment period and which does not consider the specialty composition of 

the group of physicians. Moreover, further analysis showed that this methodology 

consistently ranked groups of physicians. In other words, groups of physicians in the top 

and bottom 5th percentiles were consistent using this approach. 

On balance, we believe that the first method, the specialty benchmarking method, 

is preferable to account for the specialty composition of the group of physicians when 

making peer group comparisons and creating the standardized score for the cost measures 

for the value-based payment modifier. We also believe this methodology allows us to 

apply the value-based payment modifier to smaller size groups and solo practitioners. 

This methodology creates one national benchmark for each cost measure. Moreover, all 

groups of physicians (regardless of size) are assessed against that benchmark in creating 

the group of physicians’ standardized score. As discussed in the CY 2013 PFS final rule 

with comment period, we believe national benchmarks are appropriate for the valuebased payment modifier (77 FR 69322). Although the calculations discussed above may 

be very detailed, they are transparent and we can provide each group of physicians with 

information on how its costs were benchmarked in its Quality and Resource Use Report. 

By contrast, the second method, comparability peer grouping, requires us to 
CMS-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, which 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 acceptability among physicians. Moreover, treating the group of 

physicians as a whole also reinforces the shared accountability aspect of the value-based 

payment modifier. 

Given these considerations, we propose to use the first method, the specialty 

benchmarking method, to create the standardized score for each group’s cost measures 

beginning with the CY 2016 value-based payment modifier. Accordingly, we propose to 

amend our regulations at §414.1255 to include this policy in our cost composite 

methodology. We seek comment on our proposals, including comments on ways to 

streamline or enhance the calculation mechanics and to make the specialty adjustments 

more transparent and easily understood. We also seek comment on the alternative 

method, the comparability peer grouping method. We propose to identify the specialty 

for each EP based on the specialty that is listed on the largest share of the EP’s Part B 

claims. We understand that many physicians believe our current specialty designations 

may mask sub-specialist care furnished. We note that the procedures for obtaining a 

CMS specialty code are available at 

http://www.cms.gov/Medicare/Provider-Enrollment-andCertification/MedicareProviderSupEnroll/Taxonomy.html

Regardless of the method chosen, we will continue to monitor the effects of this 

policy over the next several years as we implement this program and may consider 
CMS-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 involved in furnishing care to Medicare FFS 

beneficiaries. Section 1848(n)(1)(A)(iii) of the Act also authorizes us to include 

information on the quality of care furnished to Medicare FFS beneficiaries. In 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 improvement. 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 distributed QRURs to each of the 54 

medical group practices that chose to participate 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 beneficiaries 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 geographically and various Medicare payment policies such as 

Indirect Graduate Medical Education and Disproportionate Share Hospital add-on 

payments. We also risk adjusted the cost measures based on the unique mix of patients 
CMS-1600-P 544 

attributed to the physician or group of physicians. Costs for beneficiaries 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 at 

http://www.cms.gov/Medicare/Medicare-Fee-for-ServicePayment/PhysicianFeedbackProgram/downloads/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 professionals, participated in the 2011 PQRS 

GPRO. On average the group contained the following type of medical professionals: 

Primary care physicians (22 percent); medical specialists (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 attributed a Medicare FFS beneficiary to 

the group if eligible professionals 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 plurality of CY 2011 E&M allowed 

charges for that beneficiary. The average beneficiary population attributed to a group 

practice was 12,764 beneficiaries, with the smallest group practice attributed 808 

beneficiaries and the largest attributed 33,907 beneficiaries. 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 correlation (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 1.75

RIsk -Adjusted Per Capita Cost

Average Risk Score for Beneficiaries 

Attributed to the GPRO Group

● We also constructed a quality composite score for each of the 54 groups by 

combining the 26 clinical quality measures, the chronic conditions ACSC composite9

 and 

acute conditions ACSC composite, and the two hospital discharge measures. Table 68 

displays the relationship between the composite 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), total per capita costs are fairly dispersed 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 1.5

Risk-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 individual 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 practices include physicians and other medical 

staff such as nurse practitioners and physician 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 PQRS measures for physicians who 

participated in the CY 2011 program. They also contained performance information on 
CMS-1600-P 547 

28 quality indicators for preventive care, medication management, and eight separate 

condition categories, such as chronic obstructive 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 physician resource use. These measures 

were payment-standardized and risk-adjusted total Parts A and B per capita costs for 

beneficiaries treated by the physician. Payment standardization adjusts for differences in 

Medicare payment rates to compare 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 beneficiaries attributed to the physician and 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 physician’s degree of involvement with the 

beneficiary. The three categories of attribution are directed, 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 beneficiaries, visiting a primary care physician 

during the year was associated with lower costs, but having a physician who is more 
CMS-1600-P 548 

involved in one’s care (that is, the physician directed or influenced care) is associated 

with the lowest costs, on average. For this analysis a physician 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 total 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 substantially higher than for the 14 measures 

that are included in the CY 2013 PQRS Administrative Claims reporting mechanism. 

Reliability scores range from zero to one and measure the extent to which the 

performance of one physician can be confidently 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 statistically significant variation across physicians is more likely to 

be detected using the most common self-reported 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 chronic condition, total per capita costs for heart 

failure were highest ($34,545), followed by COPD ($32,946), CAD ($25,906), and 

diabetes ($25,016). 

● Across the 9 states, the average reliability for physicians’ total per capita costs 
CMS-1600-P 549 

was very high at 0.97, when a physician had at least 20 cases. The average reliability of 

the total per capita cost 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 physician 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 at 

http://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 section 3003 of the Affordable 

Care Act, requires CMS to develop a Medicare episode grouper by January 1, 2012, and 

to include episode-based costs in the QRURs. An episode of care consists of medical 

and/or procedural services that address a specific medical condition or procedure that are 

delivered to a patient within a defined time period and are captured by claims data. An 

episode grouper is software that organizes 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 available 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 Interventions (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 based 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 procedure, such as a surgery, triggers, or begins, 

an episode of care. In this case, the group performing the surgery is assumed to be 

responsible for the care. We used this method to attribute PCI and CABG episode types 

to group practices. 

The latter two methods attribute the episode based on EPs’ relative billing made 
CMS-1600-P 551 

during the episode. Attribution using PFS costs assumes that certain types of EPs who 

are paid higher amounts during the episode are likely to have interacted most with the 

patient and directed the patient’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 the episode. Use of E&M visit attribution assumes that EPs 

who most frequently visit the beneficiary during the episode are likely to have substantial 

responsibility for the services rendered during 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-adjustment methodology calculated each episode’s 

expected cost based on three factors: patient health status; demographics; and beneficiary 

type. Using these factors, the risk-adjustment 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 providers to influence their risk-adjusted costs by 

changing their treatment patterns during the episode. The risk-adjusted cost amount was 

defined to be equal to the average episode cost nationally plus the difference between the 

episode cost level and the predicted cost level derived from the risk-adjustment model. 

All cost figures used in the risk-adjustment model are payment-standardized. 

To make the Supplemental QRURs more actionable for medical groups for 

quality improvement and care coordination, the Supplemental QRURs identify a 

suggested individual provider within the group who is likely to be directing the care 

 

10 CAD episodes are risk-adjusted each quarter, and the data used for risk adjustment is updated with each 

new quarter. 
CMS-1600-P 552 

during the episode. This individual is designated 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 at 

http://www.cms.gov/Medicare/Medicare-Fee-for-ServicePayment/PhysicianFeedbackProgram/Episode-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 Medicare and Medicaid Innovation) and to 

broaden the number of conditions that could be addressed by episode grouping. The 

feedback that CMS expects from the 54 medical 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 professionals. 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, outcome measures, and cost 

measures. 

The reports also incorporate many valuable suggestions we have received from 

specialty societies and professional societies on ways to make these reports more 
CMS-1600-P 553 

meaningful and actionable. In particular, the reports will contain details regarding: (1) 

Beneficiaries attributed to the group practice (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 billing under the group’s TIN; and (3) 

Hospitalizations for attributed beneficiaries to help each group manage its patients and 

potentially reduce hospital admissions (including, for example, (a) beneficiary 

identifying information, (b) hospital admission data such as data of admission, admitting 

hospital, principal diagnosis, and (c) discharge disposition information). We plan to 

provide this additional information to support the group’s quality improvement and care 

coordination efforts. As part of its review of these detailed reports, each group will also 

be able to compare the data in the reports 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 refine the annual QRURs in an iterative 

manner. As we have done in previous years, we will seek to further improve the reports 

by welcoming suggestions from recipients, specialty societies, professional associations, 

and others. We have worked with several specialty societies representing physicians in 

anesthesiology, cardiology, cardiothoracic surgery, emergency medicine, neurosurgery, 

pathology, and radiology to develop episode costs or other cost or utilization metrics to 

include in the annual QRURs. We believe these efforts could be productive as we use the 

QRURs to not only describe how the value-based payment modifier would apply to the 
CMS-1600-P 554 

group of physicians, but to provide these groups with utilization and other statistics that 

can be used for quality improvement 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 contain performance on the quality and cost 

measures used to score the composites and additional information to help physicians 

coordinate care and improve the quality of care furnished. 

 We continue to look at ways to streamline the QRURs supporting the PQRS 

and the physician value-based payment modifier programs in order to create one unified 

format for quality assessment to increase 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 Prescription Drug, Improvement, and Modernization 

Act of 2003 (MMA) (Pub. L. 108-173) amended title XVIII of the Act to establish a 

voluntary prescription drug benefit program at section 1860D-4(e) of the Act. Among 

other things, these provisions required the adoption of Part D e-prescribing standards. 

Prescription Drug Plan (PDP) sponsors and Medicare Advantage (MA) organizations 

offering Medicare Advantage-Prescription Drug Plans (MA-PD) are required to establish 

electronic prescription drug programs that comply with the e-prescribing standards that 

are adopted under this authority. There is no requirement that prescribers or dispensers 

implement e-prescribing. However, prescribers and dispensers who electronically 

transmit prescription and certain other information for covered drugs prescribed for 
CMS-1600-P 555 

Medicare Part D eligible beneficiaries, directly or through an intermediary, are required 

to comply with any applicable standards that are in effect. 

For a further discussion of the statutory basis for this proposed rule and the 

statutory requirements at section 1860D-4(e) of the Act, please refer to section I. 

(Background) of the E-Prescribing and the Prescription Drug Program proposed rule, 

published February 4, 2005 (70 FR 6256). 

b. Regulatory History 

(1) Foundation and Final Standards 

CMS utilized several rounds of rulemaking to adopt standards for the eprescribing program. Its first rule, which was published on November 7, 2005 (70 FR 

67568), adopted three standards that were collectively referred to as the “foundation” 

standards. We issued a subsequent rule on April 7, 2008 (73 FR 18918) that adopted 

additional standards which are referred to as “final” standards. One of these standards, 

the NCPDP Formulary and Benefit Standard, Implementation Guide, Version 1, Release 

0 (Version 1.0, hereafter referred to as the NCPDP Formulary and Benefit 1.0) was a 

subject of the calendar year (CY) 2013 Physician Fee Schedule (PFS) final rule with 

comment period (77 FR 68892 at 69329) and is the subject of this 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 “foundation” and “final” 

standards. 

(2) Updating e-Prescribing Standards 

As noted previously, transaction standards are periodically updated to take new 

knowledge, technology and other considerations into account. As CMS adopted specific 

versions of the standards when it adopted the foundation and final e-prescribing 
CMS-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 processes in its November 7, 2005 final rule (70 FR 

67579). 

The discussion noted that the rulemaking process will generally be used to retire, 

replace or adopt a new e-prescribing standard, but it also provided for a simplified 

“updating process” when a standard could be updated with a newer “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 comment rulemaking could be waived, in which 

case the use of either the new or old version of the adopted standard would be considered 

compliant upon the effective date of the newer version’s incorporation by reference in the 

Federal Register. 

(3) The NCPDP Formulary and Benefit Standard in the Part D e-Prescribing Regulations 

The backward compatibility concept has been used extensively to update the 

NCPDP SCRIPT standard in the Part D e-prescribing program, but it has not yet been 

used to update the adopted NCPDP Formulary and Benefit Standard. We proposed to 

update the NCPDP Formulary and Benefit 1.0 standard for the first time in the CY 2013 

PFS proposed rule (77 FR 44722), but we did not ultimately finalize those proposals. 

Specifically, we proposed to recognize NCPDP Formulary and Benefit Standard 3.0 as a 

backward compatible version of NCPDP Formulary and Benefits 1.0 effective 60 days 

from the publication of the final rule, and sought comment on when we should retire 

NCPDP Formulary and Benefits 1.0 as well as when we should adopt NCPDP 

Formulary and Benefits 3.0 as the official Part D e-prescribing standard As was noted in 
CMS-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 comment rulemaking, other Part D e-prescribing 

proposals that were being made at that time required full notice and comment 

rulemaking, so, as we didn’t wish to publish two e-prescribing rules contemporaneously, 

we elected to forgo our usual use of our simplified updating process for backward 

compatible standards (in which we waive notice and comment rulemaking and go straight 

to final) in favor of putting all of the proposals through full notice and comment 

rulemaking. 

2. Proposals 

a. Proposed backward compatible standards 

As was discussed in the CY 2013 PFS final rule with comment period (77 FR 

68892), we were persuaded by commenters to refrain from retiring Formulary and 

Benefit Standard 1.0 until NCPDP ceased supporting it on July 1, 2014. As further 

noted in that rule, we believed it best to delay implementing any of our Formulary and 

Benefits proposals, including recognitions of NCPDP Formulary and Benefit 3.0 as a 

backward compatible standard, until closer to that July 1, 2014 date. Our actions at that 

time were based on a belief that an extended period of use of either 3.0 or 1.0 would be 

ill-advised. 

Having come within roughly a year of the anticipated date upon which NCPDP 

will cease supporting NCPDP Formulary and Benefit 1.0, we believe that it is now 

appropriate to re-propose the recognition of NCPDP Formulary and Benefits 3.0 as a 

backward compatible version of Formulary and Benefits 1.0 effective 60 days after 

publication of a final rule until June 30, 2014, and, as discussed below, to propose the 

retirement of NCPDP Formulary and Benefits 1.0, effective July 1, 2014, and to propose 
CMS-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 discussed previously, while 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 other Part D e-prescribing proposals being 

made in this rule that require full notice and comment rulemaking, we will forgo use of 

the simplified updating method for backward compatible standards (in which we waive 

notice and comment rulemaking and go straight to final) in favor of putting all of the 

proposals through a single notice and comment rulemaking. 

Also, as was seen in our prior proposal to recognize backward compatibility using 

full notice and comment in place of the backward compatible methodology, we must also 

propose to require users of 3.0 to support users who are still using NCPDP Formulary and 

Benefit 1.0 until such time as that version is officially retired as a Part D e-prescribing 

standard and NCPDP Formulary and Benefit 3.0 is adopted as the official Part D 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 formulary and benefit information to prescribers 

via point-of-care (POC) systems. These include: 

● General formulary data (for example, therapeutic classes and subclasses); 

● Formulary status of individual drugs (that is, which drugs are covered); 

● Preferred alternatives (including any coverage restrictions, such as quantity 

limits and need for prior authorization); and 
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● Copayment (the copayments for one drug option versus another). 

Also as noted in that proposed rule, standards are updated over time to take 

industry feedback and new and modified business needs into account. See the CY 2013 

PFS proposed rule (77 FR 45023-45024) for a full discussion of the changes to that were 

made to the NCPDP Formulary and Benefit 1.0 as it was updated to the NCPDP 

Formulary and Benefit 3.0. 

 As noted above, having come within roughly a year of the anticipated date upon 

which NCPDP will cease supporting NCPDP Formulary and Benefit 1.0, we believe that 

it is now appropriate to re-propose the retirement of NCPDP Formulary and Benefits 1.0, 

effective July 1, 2014, and to propose the adoption of NCPDP Formulary and Benefits 

3.0 as the official Part D e-prescribing standard, effective July 1, 2014. 

 To effectuate these proposals, we propose to revise §423.160(b)(5). We 

propose to place the existing material in a new 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 NCPDP Formulary and Benefit 3.0. as a backward compatible 

version of the official Part D e-prescribing standard (NCPDP Formulary and Benefit 1.0), 

effective [60 days after publication of the final rule] through June 30, 2014. Furthermore, 

we propose to create a third new paragraph ((b)(5)(iii)) to reflect the retirement of 

NCPDP Formulary and Benefit 1.0 and the adoption of NCPDP Formulary and Benefit 

3.0 as the official Part D e-prescribing standard, effective July 1, 2014. Finally, we 

propose to make conforming changes to §423.160(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 advisability of expanding coverage for chiropractic 

services under Medicare. Current Medicare coverage for chiropractic services is limited 

to treatment by means of manual manipulation of the spine to correct a subluxation 

described in section 1861(r)(5) of the Act provided such treatment is legal in the state or 

jurisdiction where performed. The demonstration expanded Medicare coverage to 

include: “(A) care for neuromusculoskeletal conditions typical among eligible 

beneficiaries; and (B) diagnostic and other services that a chiropractor is legally 

authorized to perform by the state or jurisdiction in which such treatment is provided.” 

The demonstration was conducted in four geographically diverse sites, two rural and two 

urban regions, with each type including a Health Professional Shortage Area (HPSA). 

The two urban sites were 26 counties in Illinois and Scott County, Iowa, and 17 counties 

in Virginia. The two rural sites were the States of Maine and New Mexico. The 

demonstration, which ended on March 31, 2007, was required to be budget neutral as 

section 651(f)(1)(B) of MMA mandates the Secretary to ensure that “the aggregate 

payments made by the Secretary under the Medicare program do not exceed the amount 

which the Secretary would have paid under the Medicare program if the demonstration 

projects under this section were not implemented.” 

In the CY 2006, 2007, and 2008 PFS final rules with comment period 

(70 FR 70266, 71 FR 69707, 72 FR 66325, respectively), we included a discussion of the 

strategy that would be used to assess budget neutrality (BN) and the method for adjusting 

chiropractor fees in the event the demonstration resulted in costs higher than those that 

would occur in the absence of the demonstration. We stated that BN would be assessed 
CMS-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 diagnoses that are treated by chiropractors and 

physicians in the demonstration sites and control sites. We also stated that our analysis 

would not be limited to only review of chiropractor claims because the costs of the 

expanded chiropractor services may have an impact on other Medicare costs for other 

services. 

In the CY 2010 PFS final rule with comment period (74 FR 61926), we discussed 

the evaluation of this demonstration conducted by Brandeis University and the two sets 

of analyses used to evaluate BN. In the “All Neuromusculoskeletal Analysis,” which 

compared the total Medicare costs of all beneficiaries who received services for a 

neuromusculoskeletal condition in the demonstration areas with those of beneficiaries 

with similar characteristics from similar geographic areas that did not participate in the 

demonstration, the total effect of the demonstration on Medicare spending was 

$114 million higher costs for beneficiaries in areas that participated in the demonstration. 

In the “Chiropractic User Analysis,” which compared the Medicare costs of beneficiaries 

who used expanded chiropractic services to treat a neuromusculoskeletal condition in the 

demonstration areas, with those of beneficiaries with similar characteristics who used 

chiropractic services as was currently covered by Medicare to treat a 

neuromusculoskeletal condition from similar geographic areas that did not participate in 

the demonstration, the total effect of the demonstration on Medicare spending was a 

$50 million increase in costs. 

As explained in the CY 2010 PFS final rule, we based the BN estimate on the 

“Chiropractic User Analysis” because of its focus on users of chiropractic services rather 
CMS-1600-P 562 

than all Medicare beneficiaries with neuromusculoskeletal conditions, as the latter 

included those who did not use chiropractic services and who may not have become users 

of chiropractic services even with expanded coverage for them (74 FR 61926 through 

61927). Users of chiropractic services are most likely to have been affected by the 

expanded coverage provided by this demonstration. Cost increases and offsets, such as 

reductions in hospitalizations or other types of ambulatory care, are more likely to be 

observed in this group. 

As explained in the CY 2010 PFS final rule (74 FR 61927), because the costs of 

this demonstration were higher than expected and we did not anticipate a reduction to the 

PFS of greater than 2 percent per year, we finalized a policy to recoup $50 million in 

expenditures from this demonstration over a 5-year period, from CYs 2010 through 2014 

(74 FR 61927). Specifically, we are recouping $10 million for each such year through 

adjustments to the chiropractic CPT codes. Payment under the PFS for these codes will 

be reduced by approximately 2 percent. We believe that spreading this adjustment over a 

longer period of time will minimize its potential negative impact on chiropractic 

practices. 

For the CY 2013 PFS, our Office of the Actuary (OACT) estimated chiropractic 

expenditures to be approximately $470 million, which reflected the statutory 26.5 percent 

reduction to PFS payments scheduled to take effect that year. The statute was 

subsequently amended to impose a zero percent PFS update for CY 2013 instead of the 

26.5 percent reduction. In large part because of the change in the PFS update, OACT 

now estimates CY 2013 chiropractic expenditures to be approximately $580 million. 

Because of the change in projected chiropractic expenditures, we now expect to recoup 

approximately $11.6 million from the 2 percent payment reduction for chiropractic CPT 
CMS-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 expenditures based on previous year’s data. 

While OACT’s projections have included the statutory reductions to physician payments, 

the statute was amended in each year to avoid these reductions. As a result, Medicare 

expenditures for chiropractic services during the recoupment were higher than the OACT 

projections. Chiropractic services expenditures during the recoupment period have been 

as follows: $540 million in 2010; $520 million in 2011; and $580 million in 2012. In 

total, CMS recouped $32.8 million over the years of 2010, 2011 and 2012. OACT now 

projects chiropractic expenditures to be approximately $580 million in 2013. A 2 percent 

recoupment percentage for chiropractic services would result in approximately $11.6 

million in 2013. For the years 2010 through 2013, CMS would have recouped 

approximately $44.4 million of the $50 million required for budget neutrality. 

In 2014, CMS is reducing the recoupment percentage for the chiropractic codes to 

ensure the recoupment does not exceed the $50 million required for budget neutrality. 

OACT estimates chiropractic expenditures in CY 2014 will be approximately $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 under current law. CMS plans to recoup the remaining funds, 

approximately $5.6 million, and will reduce chiropractic CPT codes (CPT codes 98940, 

98941, and 98942) by the appropriate percentage, which by our preliminary estimates is 

one percent which takes into account the approximately 25 percent reduction in physician 

payments scheduled to occur in 2014 as provided under current law. If the statute is 
CMS-1600-P 564 

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 the statute is amended to provide for a zero percent PFS update, we would 

reduce the recoupment percentage to approximately 0.7 percent. We will reflect this 

reduction only in the payment files used by the Medicare contractors to process Medicare 

claims rather than through adjusting the RVUs. Avoiding an adjustment to the RVUs 

preserves the integrity of the PFS, particularly since many private payers also base 

payment on the RVUs. 

Therefore, as finalized in the CY 2010 PFS regulation and reiterated in the CYs 

2011 through 2013 PFS regulations, we are implementing this methodology and 

recouping excess expenditures under the chiropractic services demonstration from PFS 

payment for the chiropractor codes as set forth above. This recoupment addresses the 

statutory requirement for BN and appropriately impacts the chiropractic profession that is 

directly affected by the demonstration. We intend for CY 2014 to be the last year of this 

required recoupment. 
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 collection and its usefulness in carrying out the 

proper functions of our agency. 

● The accuracy of our estimate of the information collection burden. 

● The quality, utility, and clarity of the information to be collected. 

● Recommendations to minimize the information collection burden on the 

affected public, including automated collection techniques. 

We are soliciting public comment on each of these issues for the following 

sections of this document that contain information collection requirements (ICRs): 

1. ICRs Regarding Medical Services Coverage Decisions that Relate to Health Care 

Technology (§405.211)

The burden associated with the requirements 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 electronic documents: (1) a copy of the FDA 

IDE approval letter; (2) a copy of the IDE study protocol; (3) a copy of IRB approval 

letter(s); and (4) the ClinicalTrails.gov identifier. CMS reviews these documents to 

determine whether it should cover certain costs in an IDE trial or study. 

Each IDE trial sponsor will have to prepare these documents once. If the sponsor 
CMS-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. Since the IDE rule was passed in September 1995 

through 2012, there have been 4,000 IDE applications, averaging 222 per year. Adding 

another 8 percent brings the total estimate 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 copy 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 percent in fringe benefits for estimated 

hourly wage of $32.59 for an executive administrative assistant (occupation code 43-

6011). 

2. ICRs Regarding the Physician Quality Reporting System (PQRS) (§414.90)

We are making certain revisions to §414.90, primarily to include our proposals for 

the qualified clinical data registry option. All of the requirements and burden estimates 

are currently approved by OMB under OCN 0938-1059, and are not subject to additional 

OMB review under the authority of the Paperwork Reduction Act of 1995 (44 U.S.C. 

3501 et seq.). 

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 consensus-based quality 
CMS-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 and reporting mechanisms that would be 

available to eligible professionals and group practices who choose to participate in 2014, 

and provides the proposed criteria for satisfactory 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 comment period, we provided estimates 

related to the impact of the requirements we finalized for 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 period for reporting in 2014. Please note that 

we will base our estimates on information found in the 2011 Physician Quality Reporting 

System and eRx Reporting Experience and Trends (hereinafter “the PQRS Reporting 

Experience”). This report contains the latest data we have gathered on PQRS 

participation. The PQRS Reporting Experience is available at 

http://www.cms.gov/Medicare/Quality-Initiatives-Patient-AssessmentInstruments/PQRS/index.html?redirect=/PQRS/. According to the 2011 Reporting 

Experience Report, over 1 million professionals were eligible to participate in the PQRS. 

A total of $261,733,236 in PQRS incentives was paid by CMS for the 2011 program year, 

which encompassed 26,515 practices that included 266,521 eligible professionals (or 

approximately 27% of the professionals eligible to participate). The average incentive 
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earned for PQRS in 2011 per each individually-participating eligible professional was 

$1,059.

As we noted in our impact statement last year, we expect that, due to the 

implementation of payment adjustments beginning in 2015, participation in the PQRS 

would rise incrementally to approximately 300,000 eligible professionals and 400,000 

eligible professionals in 2013 and 2014, respectively. We believe our estimate of 

400,000 eligible professionals participating in PQRS in 2014 is accurate. 

With respect to the estimated amount of incentives earned, for 2014, eligible 

professionals can earn a 0.5 percent incentive (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 during 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 participate in the PQRS in 2014, the PQRS 

will distribute 2014 incentives to approximately (27% of 1 million eligible professionals) 

270,000 eligible professionals. At $1,059 per eligible professional, the PQRS would 

distribute approximately $286million in incentive payments in 2014. We believe these 

incentive payments will help offset the cost eligible professionals may undertake for 

participating in the PQRS for the applicable year. 

 We note that the total burden associated with participating in the PQRS is the time 

and effort associated with indicating intent to participate in the PQRS, if applicable, and 

submitting PQRS quality measures data. When establishing these burden estimates, we 

assume the following: 
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• The proposals for reporting for the PQRS for the 2014 incentive and 2016 payment 

adjustment would be established as proposed in this CY 2014 Medicare PFS proposed 

rule. 

• For an eligible professional or group practice using the claims, qualified registry, 

qualified clinical data registry, or EHR-based reporting mechanisms, we assume that 

the eligible professional or group practice would attempt to report PQRS quality 

measures data with the intention of earning the 2014 PQRS incentive. Therefore, an 

eligible professional or group practice would report on 9 measures. 

• With respect to labor costs, we believe that a billing clerk will handle the 

administrative duties associated with participating, while a computer analyst will 

handle duties related to reporting PQRS quality measures. According to the Bureau 

of Labor Statistics, the mean hourly wage for a billing clerk is approximately 

$16/hour whereas the mean hourly wage for a computer analyst is approximately 

$40/hour. 

Please note that these estimates do not reflect total costs estimates for participating in 

PQRS, but rather cost estimates that would 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 reporting quality measures data. Therefore, these 

burden estimates for individual eligible professionals participating in PQRS are based on 

the reporting mechanism the individual eligible professional chooses. However, we 

believe a new eligible professional or group practice would spend 5 hours—which 
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includes 2 hours to review PQRS measures list, review the various reporting options, and 

select a reporting option and measures on which to report and 3 hours to review the 

measure specifications and develop a mechanism for incorporating reporting of the 

selected measures into their office work flows. Therefore, we believe that the initial 

administrative costs associated with participating in PQRS would 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 – Individual Eligible Professionals 

Historically, the claims-based reporting mechanism is the most widely used 

reporting mechanism in PQRS. In 2011, 229,282 of the 320,422 eligible professionals 

(or 72 percent of eligible professionals) used the claims-based reporting mechanism. In 

the CY 2013 PFS final rule with comment period, we estimated that approximately 

320,000 eligible professionals, whether participating individually or in a group practice, 

would participate in PQRS by CY 2014 (77 FR 69338). We believe this estimate should 

be further modified to reflect a lower participation estimate in 2014 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 satisfactory reporting for the 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 individual quality measures. 

Based on these proposals, we estimate that approximately 230,000 eligible 
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professionals (that is, the same number of eligible professionals who participated in the 

PQRS using the claims-based reporting mechanism in 2011) will participate in the PQRS 

using the claims-based reporting mechanism. Therefore, we estimate that approximately 

58 percent of the eligible professionals participating in PQRS will use the claims-based 

reporting mechanism. 

With respect to an eligible professional who participated in PQRS via claims, the 

eligible professional must gather the required information, select the appropriate quality 

data codes (QDCs), and include the appropriate QDCs on the claims they submitted for 

payment. PQRS will collect QDCs as additional (optional) line items on the existing 

HIPAA transaction 837-P and/or CMS Form 1500 (OCN 0938-0999). Based on our 

experience with Physician Voluntary Reporting Program (PVRP), we continue to 

estimate that the time needed to perform all the steps necessary to report each measure 

via claims would range from 0.25 minutes to 12 minutes, depending on the complexity of 

the measure. Therefore, the time spent reporting 9 measures would range from 2.25 

minutes to 108 minutes. Using an average labor cost of $40/hour, we estimated that the 

time cost of reporting for an eligible professional via claims would range from $1.50 

(2.25 minutes or 0.0375 hours x $40/hour) to $72.00 (108 minutes or 1.8 hours x 

$40/hour) per reported case. With respect to how many cases an eligible professional 

would report when using the claims-based reporting mechanism, we established that an 

eligible professional would need to report on 50 percent of the eligible professional’s 

applicable cases. The actual number of cases on which eligible professional reports 

would vary depending on the number of the eligible professional’s applicable cases. 

However, in prior years, when the reporting threshold was 80 percent for claims-based 

reporting, we found that the median number of reporting cases for each measure was 9. 
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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 mechanism would range from ($1.50/per reported 

case x 6 reported cases) $9.00 to ($72.00/reported case x 6 reported cases) $432. 

d. Burden Estimate on PQRS Participation in CY 2014 via the Qualified Registry, 

Qualified Clinical Data Registry, or EHR Reporting Mechanisms 

 We noted previously that we estimate a significant reduction in the number of 

eligible professionals using the claims-based reporting mechanism to report PQRS 

quality measures data in 2014. Specifically, we estimate that approximately 230,000 

eligible professionals will participate in the PQRS using the claims-based reporting 

mechanism in 2014. Therefore, we estimate that the remainder of the eligible 

professionals (170,000) will participate in PQRS using either the qualified registry, 

qualified clinical data registry, EHR (using either a direct EHR or EHR data submission 

vendor), or the GPRO web interface reporting mechanisms. 

With respect to participation in a qualified registry or qualified clinical data 

registry, we are combining our estimates for the number of eligible professionals we 

believe will use the qualified registry and qualified clinical data registry reporting 

mechanisms for the 2014 PQRS incentive and 2016 PQRS payment adjustment. We are 

combining these estimates because we believe that, at least for this initial year, many of 

the registries that become qualified clinical data registries will also be existing qualified 

registries. As such, we anticipate there will be little to no additional registries that will 

submit quality measures data to the PQRS for purposes of the 2014 PQRS incentive and 

2016 PQRS payment adjustment. 
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In 2011, approximately 50,215 (or 16 percent) of the 320,422 eligible 

professionals participating in PQRS used the registry-based reporting mechanism. We 

believe the number of eligible professionals and group practices using a qualified registry 

or qualified clinical data registry would remain the same, as eligible professionals use 

registries for functions other than PQRS and therefore would obtain a qualified registry 

or qualified clinical data registry solely for PQRS reporting by CY 2014. Please note that 

this estimate would include participants choosing 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 mechanism. We believe the number of eligible 

professionals and group practices using the EHR-based reporting mechanism would 

increase as eligible professionals become more familiar with EHR products and more 

eligible professionals participate in programs encouraging use of an EHR, such as the 

EHR Incentive Program. In particular, we believe eligible professionals and group 

practices would transition from using the claims-based to the EHR-based reporting 

mechanisms. We estimate that approximately 50,000 eligible professionals (which is the 

same estimate as we are providing for eligible professionals who use the qualified 

registry or qualified clinical data registry-based reporting mechanisms), whether 

participating as an individual or part of a group practice, would use the EHR-based 

reporting mechanism in CY 2014. 

 With respect to an eligible professional or group practice who participated in 

PQRS via a qualified registry, qualified clinical data registry, direct EHR product, or 
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EHR data submission vendor’s product, we believe 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 submitted the quality measures data for the 

eligible professional. While we noted that there may be start-up costs associated with 

purchasing a qualified registry, direct EHR product, or EHR data submission vendor, we 

believe that an eligible professional or group practice would not purchase a qualified 

registry, qualified clinical data registry, direct EHR product, 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 registry, 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 the 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 mechanism. We note that the burden associated with reporting 

quality measures for group practices using the qualified registry or EHR-based reporting 

mechanisms are included in the estimates we provided for the qualified registry or EHRbased reporting mechanisms above. According 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 (formerly the GPRO tool). We estimate that because we are 

proposing to apply the value-based payment modifier to all group practices of 10 or more 

eligible professionals, we estimate that approximately 30% of such group practices, or 

about 5,100 group practices, will participate in the PQRS under the GPRO for purposes 

of the 2014 PQRS incentive and the 2016 payment adjustment. In addition, we estimate 
CMS-1600-P 575 

that of the 5,100 group practices that are expected to self-nominate to participate in the 

PQRS under the GPRO, approximately 70,000 eligible professionals (i.e. the remainder 

of the eligible professionals not participating in PQRS using the claims, qualified 

registry, qualified clinical data registry, or EHR-based reporting mechanisms), 

representing about 30% 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 professionals choosing to participate as part of a group practice 

under the GPRO would need to indicate their intent 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 effort associated with submitting this data. 

To submit quality measures data for PQRS, a group practice would need to (1) be 

selected to participate in the PQRS GPRO and (2) report quality measures data. With 

respect to the administrative duties for being selected to participate in 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. Therefore, we estimate that the cost of undergoing 

the GPRO selection process would 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 data 
CMS-1600-P 576 

submission methods, we estimate the burden 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 an 

applicable year would be ($40/hour x 79 hours) $3,160. 

In addition to the GPRO web interface, please 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. With respect to using a certified survey 

vendor, we believe there would be little to no burden associated for a group practice to 

report the CG CAHPS survey data to CMS, because the selected reporting mechanism 

submitted the quality measures data for the group practice. While there may be start-up 

costs associated with purchasing a certified survey vendor, we believe that a group 

practice would not purchase a certified survey vendor solely for the purpose of reporting 

the CG CAHPS survey for the PQRS. Therefore, we have not included the cost of 

purchasing a certified survey vendor in our burden estimates. 

f. Burden Estimate on PQRS Vendor Participation in CY 2014 

 Aside from the burden of eligible professionals and group practices participating 

in PQRS, we believe that entities that wish to become qualified clinical data registries 

would incur costs associated with participating in PQRS. However, we believe that the 

burden associated with participating in PQRS for these entities would be very similar to 

the burden associated with existing qualified registries participating in PQRS. 

 Based on the number of registries that have self-nominated to become a qualified 

PQRS registry in prior program years, we estimated that approximately 50 additional 

registries would self-nominate to be considered a qualified registry for PQRS. With 

respect to qualified registries and qualified clinical data registries, the total burden for 
CMS-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 quality measures data 

on behalf of its eligible professionals. With respect to administrative 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 statement, 2 hours to interview with CMS, 2 hours 

to calculate numerators, denominators, and measure results for each measure the registry 

wished to report using a CMS-provided measure flow, and 5 hours to complete an XML 

submission – to become qualified to report PQRS 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 measures data on behalf of its eligible 

professionals. 

With respect to the reporting of quality measures data, the burden associated with 

reporting is the time and effort associated with the registry 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 PQRS. Therefore, 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 registry. In this proposed rule, we set forth the 

requirements for a vendor to become qualified to become a qualified clinical data 

registry. Under the proposed requirements, we note that a vendor can be both a 

traditional qualified registry and qualified clinical data registry under the PQRS. Indeed, 

as we noted previously, we believe that many of the entities that will seek to become 

qualified clinical data registries will be similar to the existing qualified registries. In 

addition, at least initially, we propose that the process for becoming a qualified clinical 

data registry would be similar to the process for becoming a qualified registry. 

Therefore, we do not believe this new reporting 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/A1

Individual 

EP: EHR 

N/A 1 N/A N/A Minimal 50,000 N/A1

Group 

Practice: 

SelfNomination 

6.0 1 N/A $16 $96 5,100 $489,60

0 

Group 79 1 N/A $40 $3,160 340 $1,074,4
CMS-1600-P 579 

Practice: 

Reporting 

00 

1

 We believe that eligible professionals who choose to report quality measures data to PQRS using a registry, an EHR, 

or an EHR data submission vendor are already doing so for 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 Registries to Participate in PQRS 

 Hours Hourly 

Rate 

Cost Number of 

Respondents 

Total 

Cost 

Registry: SelfNomination 10 $16 $160 50 $8,000 

3. The Medicare EHR Incentive Program

The Medicare EHR Incentive Program provides incentive payments to eligible 

professionals, eligible hospitals, and CAHs that demonstrate meaningful use of certified 

EHR technology. We believe any burden or impact associated with our proposals 

regarding the EHR Incentive Program is already absorbed by the currently approved 

(OCN 0938-1158) burden and impact estimates provided the EHR Incentive Program. 

Consequently, the proposed requirements (and burden) are not subject to additional OMB 

review under the authority of the Paperwork Reduction Act of 1995 (44 U.S.C. 3501 et 

seq.). 

4. Submission of PRA-Related Comments

If you comment on these information collection and recordkeeping requirements, 

please do either of the following: 

 1. Submit your comments electronically as specified in the ADDRESSES section 

of this proposed rule; or 

 2. Submit your comments to the Office of Information and Regulatory Affairs, 

Office of Management and Budget, 

 Attention: CMS Desk Officer, [CMS-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 acknowledge or respond to them individually. 

We considered all comments we received by the date and time specified in the “DATES” 

section of this preamble, and, when we proceeded with a subsequent document, we 

responded to the comments in the preamble to that document. 
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 under the Affordable Care Act (Pub. L. 111–148), 

the Middle Class Tax Relief and Job Creation Act of 2012 (Pub. L. 112-96), the American 

Taxpayer Relief Act (ATRA) of 2013 (Pub. L. 112-240), and other statutory changes. This 

proposed rule also is necessary to make changes to other Part B related policies. 

B. Overall Impact

We have examined the impact of this rule as required by Executive Order 12866 on 

Regulatory Planning and Review (September 30, 1993), Executive Order 13563 on Improving 

Regulation and Regulatory Review (February 2, 2013), the Regulatory Flexibility Act (RFA) 

(September 19, 1980, Pub. L. 96-354), section 1102(b) of the Social Security Act, section 202 of 

the Unfunded Mandates Reform Act of 1995 (March 22, 1995; Pub. L. 104-4), Executive Order 

13132 on Federalism (August 4, 1999) and the Congressional Review Act (5 U.S.C. 804(2)). 

Executive Orders 12866 and 13563 direct agencies to assess all costs and benefits of 

available regulatory alternatives and, if regulation is necessary, to select regulatory approaches 

that maximize net benefits (including potential economic, environmental, public health and 

safety effects, distributive impacts, and equity). A regulatory impact analysis (RIA) must be 

prepared for major rules with economically significant effects ($100 million or more in any 

1 year). We estimate, as discussed below in this section, that the PFS provisions included in this 

proposed rule will redistribute more than $100 million in 1 year. Therefore, we estimate that this 

rulemaking is “economically significant” as measured by the $100 million threshold, and hence 

also a major rule under the Congressional Review Act. Accordingly, we have prepared a RIA 
CMS-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 and most other providers and suppliers are small entities, either by 

nonprofit status or by having revenues of less than $7.0 million in any 1 year (for details see the 

SBA's website at http://www.sba.gov/content/small-business-size-standards# (refer to the 

620000 series)). Individuals and states are not included in the definition of a small entity. 

The RFA requires that we analyze regulatory options for small businesses and other 

entities. We prepare a regulatory flexibility analysis unless we certify that a rule would not have 

a significant economic impact on a substantial number of small entities. The analysis must 

include a justification concerning the reason action is being taken, the kinds and number of small 

entities the rule affects, and an explanation of any meaningful options that achieve the objectives 

with less significant adverse economic impact on the small entities. 

For purposes of the RFA, physicians, NPPs, and suppliers are considered small 

businesses if they generate revenues of $10 million or less based on SBA size standards. 

Approximately 95 percent of providers and suppliers are considered to be small entities. There 

are over 1 million physicians, other practitioners, and medical suppliers that receive Medicare 

payment under the PFS. Because many of the affected entities are small entities, the analysis and 

discussion provided in this section as well as elsewhere in this proposed rule is intended to 

comply with the RFA requirements. 

In addition, section 1102(b) of the Act requires us to prepare an RIA if a rule may have a 

significant impact on the operations of a substantial number of small rural hospitals. This 

analysis must conform to the provisions of section 603 of the RFA. For purposes of section 
CMS-1600-P 583 

1102(b) of the Act, we define a small rural hospital as a hospital that is located outside of a 

Metropolitan Statistical Area for Medicare payment regulations and has fewer than 100 beds. 

We are not preparing an analysis for section 1102(b) of the Act because we have determined, and 

the Secretary certifies, that this proposed rule would not have a significant impact on the 

operations of a substantial number of small rural hospitals. 

Section 202 of the Unfunded Mandates Reform Act of 1995 also requires that agencies 

assess anticipated costs and benefits on state, local, or tribal governments or on the private sector 

before issuing any rule whose mandates require spending in any 1 year of $100 million in 1995 

dollars, updated annually for inflation. In 2013, that threshold is approximately $141 million. 

This proposed rule will impose no mandates on state, local, or tribal governments or on the 

private sector. 

Executive Order 13132 establishes certain requirements that an agency must meet when it 

promulgates a proposed rule (and subsequent final rule) that imposes substantial direct 

requirement costs on state and local governments, preempts state law, or otherwise has 

Federalism implications. Since this regulation does not impose any costs on state or local 

governments, the requirements of Executive Order 13132 are not applicable. 

We have prepared the following analysis, which together with the information provided 

in the rest of this preamble, meets all assessment requirements. The analysis explains the 

rationale for and purposes of this proposed rule; details the costs and benefits of the rule; 

analyzes alternatives; and presents the measures we would use to minimize the burden on small 

entities. As indicated elsewhere in this proposed rule, we are proposing to implement a variety 

of changes to our regulations, payments, or payment policies to ensure that our payment systems 

reflect changes in medical practice and the relative value of services, and to implement statutory 
CMS-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 relevant Federal rules that duplicate, overlap, or 

conflict with this proposed rule. The relevant sections of this proposed rule contain a description 

of significant alternatives if applicable. 

C. Relative Value Unit (RVU) Impacts 

1. Resource-Based Work, PE, and Malpractice RVUs 

Section 1848(c)(2)(B)(ii)(II) of the Act requires that increases or decreases in RVUs may 

not cause the amount of expenditures for the year to differ by more than $20 million from what 

expenditures would have been in the absence of these changes. If this threshold is exceeded, we 

make adjustments to preserve budget neutrality. 

Our estimates of changes in Medicare revenues for PFS services compare payment rates 

for CY 2013 with proposed payment rates for CY 2014 using CY 2012 Medicare utilization as 

the basis for the comparison. The payment impacts reflect averages for each specialty based on 

Medicare utilization. The payment impact for an individual physician could vary from the 

average and would depend on the mix of services the physician furnishes. The average change 

in total revenues would be less than the impact displayed here because physicians furnish 

services to both Medicare and non-Medicare patients and specialties may receive substantial 

Medicare revenues for services that are not paid under the PFS. For instance, independent 

laboratories receive approximately 83 percent of their Medicare revenues from clinical 

laboratory services that are not paid under the PFS. 

We note that these impacts do not include the effect of the January 2014 conversion 

factor changes under current law. The annual update to the PFS conversion factor is calculated 

based on a statutory formula that measures actual versus allowed or “target” expenditures, and 
CMS-1600-P 585 

applies a sustainable growth rate (SGR) calculation intended to control growth in aggregate 

Medicare expenditures for physicians’ services. This update methodology is typically referred to 

as the “SGR” methodology, although the SGR is only one component of the formula. Medicare 

PFS payments for services are not withheld if the percentage increase in actual expenditures 

exceeds the SGR. Rather, the PFS update, as specified in section 1848(d)(4) of the Act, is 

adjusted to eventually bring actual expenditures back in line with targets. If actual expenditures 

exceed allowed expenditures, the update is reduced. If actual expenditures are less than allowed 

expenditures, the update is increased. By law, we are required to apply these updates in 

accordance with sections 1848(d) and (f) of the Act, and any negative updates can only be 

averted by an Act of the Congress. While the Congress has provided temporary relief from 

negative updates for every year since 2003, a long-term solution is critical. We are committed to 

working with the Congress to reform Medicare physician payments to provide predictable 

payments that incentivize quality and efficiency in a fiscally responsible way. We provide our 

most recent estimate of the SGR and physician update for CY 2014 on our website at 

http://www.cms.gov/Medicare/Medicare-Fee-for-ServicePayment/SustainableGRatesConFact/index.html?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 different 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 information represented in Table 71: 
CMS-1600-P 586 

• Column A (Specialty): The Medicare specialty code as reflected in our 

physician/supplier enrollment files. 

• Column B (Allowed Charges): The aggregate estimated PFS allowed charges for the 

specialty based on CY 2012 utilization and CY 2013 rates. That is, allowed charges are 

the PFS amounts for covered services and include coinsurance and deductibles (which are 

the financial responsibility of the beneficiary). These amounts have been summed across 

all services furnished by physicians, practitioners, and suppliers within a specialty to 

arrive at the total allowed charges for the specialty. 

• Column C (Impact of Work and Malpractice (MP) RVU Changes): This column shows 

the estimated CY 2014 impact on total allowed charges of the changes in the work and 

malpractice RVUs, including the impact of changes due to 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 TESTING 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 selected policy proposals on total allowed 

charges, by specialty. The following is an explanation of the information represented in 

Table 72: 

• Column A (Specialty): The Medicare specialty code as reflected in our 

physician/supplier enrollment files. 

• Column B (Allowed Charges): The aggregate estimated PFS allowed charges for the 

specialty based on CY 2012 utilization and CY 2013 rates. That is, allowed charges 

are the PFS amounts for covered services and include coinsurance and deductibles 

(which are the financial responsibility of the beneficiary). These amounts have been 

summed across all services furnished by physicians, practitioners, and suppliers 

within a specialty to arrive at the total allowed charges for the specialty. 

• Column C (Impact of 2012 Claims data, 90 Percent Equipment Utilization 

Assumption, Ultrasound Changes, and Other Minor Changes): This column shows 

the estimated CY 2014 impact on total allowed charges of the changes in the RVUs 

due to the 90 percent equipment utilization assumption discussed in section II.A.2.f. 

of this proposed rule, ultrasound changes discussed 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 changes 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/GYNECOLOGY $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 TESTING 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 the 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 certain nonfacility services at the facility 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 contribute to the impacts shown in Table 71. 

These include a statutory change that requires us to use a 90 percent equipment utilization rate 

rather than the previously used 75 percent for expensive diagnostic imaging equipment as 

discussed in section II.A.2.f of this proposed rule, proposals to update direct practice expense 

inputs, as discussed in section II.A.5. of this proposed rule and proposals to adjust time for some 

services, as discussed in section II.B.3.c. of this proposed rule. 
CMS-1600-P 593 

Table 72 shows the same information as provided in Table 71, but rather than isolating 

the policy impact on physician work, practice expense, and malpractice separately, Table 72 

shows the impact of varied proposed 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 specialty of all the proposed RVU changes. These 

impacts range from an increase of 3 percent for clinical social workers, clinical psychologists, 

nurse anesthetists, and emergency medicine, to a decrease of 26 percent for independent 

laboratories. Again, these impacts are estimated prior to the application of the negative CY 2014 

conversion factor (CF) update applicable 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 selected these procedures from among the most 

commonly furnished by a broad spectrum of physician specialties. The change in both facility 

rates and the nonfacility rates are shown. For an explanation of facility and nonfacility PE, we 

refer readers to Addendum A of this proposed rule. 
CMS-1600-P 594 

TABLE 73: Impact of Proposed Rule on CY 2014 Payment for Selected Procedures (Based on the Marc

Physician Update)* 

Facility Non-Fa

CPT/ 

 HCPCS 1

MOD Short Descriptor 

CY 20132

CY 20143

(pre update) 

% Change 

(pre update) 

CY 20144

(post update) 

% Change 

(post update) 

CY 20132

CY 20143

(pre update) 

% Change 

11721 Debride nail 6 or more $24.50 $25.32 3% $19.04 -22% $44.91 $45.29 117000 Destruct premalg lesion $57.16 $57.42 0% $43.18 -24% $83.36 $81.67 -227130 Total hip arthroplasty $1,454.48 $1,481.54 2% $1,114.1

0 

-23% NA NA N

27244 Treat thigh fracture $1,242.18 $1,262.91 2% $949.69 -24% NA NA N27447 Total knee arthroplasty $1,552.81 $1,582.11 2% $1,189.7

3 

-23% NA NA N

33533 Cabg arterial single $1,906.31 $1,944.12 2% $1,461.9

5 

-23% NA NA N

35301 Rechanneling of artery $1,096.22 $1,112.04 1% $836.24 -24% NA NA N43239 Upper gi endoscopy 

biopsy 

$174.54 $177.26 2% $133.29 -24% $359.28 $347.74 -3

66821 After cataract laser 

surgery 

$325.26 $323.84 0% $243.52 -25% $344.99 $342.39 -1

66984 Cataract surg w/iol 1 

stage 

$667.87 $673.00 1% $506.09 -24% NA NA N

67210 Treatment of retinal 

lesion 

$520.55 $523.21 1% $393.45 -24% $538.92 $540.69 0

71010 Chest x-ray 1 view 

frontal 

NA NA NA NA NA $23.82 $23.90 0

71010 26 Chest x-ray 1 view 

frontal 

$8.85 $9.27 5% $6.97 -21% $8.85 $9.27 5

77056 Mammogram both 

breasts 

NA NA NA NA NA $114.66 $114.49 0

77056 26 Mammogram both 

breasts 

$42.19 $43.87 4% $32.99 -22% $42.19 $43.87 4
CMS-1600-P 595 

Facility Non-Fa

CPT/ 

 HCPCS 1

MOD Short Descriptor 

CY 20132

CY 20143

(pre update) 

% Change 

(pre update) 

CY 20144

(post update) 

% Change 

(post update) 

CY 20132

CY 20143

(pre update) 

% Change 

77057 Mammogram screening NA NA NA NA NA $81.66 $81.32 077057 26 Mammogram screening $34.02 $35.31 4% $26.55 -22% $34.02 $35.31 477427 Radiation tx 

management x5 

$178.28 $185.46 4% $139.46 -22% $178.28 $185.46 4

88305 26 Tissue exam by 

pathologist 

$36.74 $38.16 4% $28.70 -22% $36.74 $38.16 4

90935 Hemodialysis one 

evaluation 

$71.11 $73.47 3% $55.25 -22% NA NA N

92012 Eye exam establish 

patient 

$53.08 $54.92 3% $41.30 -22% $87.44 $86.67 -1

92014 Eye exam&tx estab pt 

1/>vst 

$80.29 $82.74 3% $62.22 -23% $126.23 $125.90 0

93000 Electrocardiogram 

complete 

NA NA NA NA NA $18.37 $18.19 -1

93010 Electrocardiogram 

report 

$8.17 $8.56 5% $6.44 -21% $8.17 $8.56 5

93015 Cardiovascular stress 

test 

NA NA NA NA NA $79.61 $77.75 -2

93307 26 Tte w/o doppler 

complete 

$44.23 $46.01 4% $34.60 -22% $44.23 $46.01 4

93458 26 L hrt artery/ventricle 

angio 

$315.73 $324.55 3% $244.06 -23% $315.73 $324.55 3

98941 Chiropract manj 3-4 

regions 

$30.62 $31.39 2% $23.60 -23% $36.40 $37.45 3

99203 Office/outpatient visit 

new 

$75.19 $77.75 3% $58.47 -22% $108.19 $108.42 0

99213 Office/outpatient visit 

est 

$49.67 $51.71 4% $38.89 -22% $72.81 $72.76 0

99214 Office/outpatient visit $76.55 $79.18 3% $59.54 -22% $106.83 $107.35 0
CMS-1600-P 596 

Facility Non-Fa

CPT/ 

 HCPCS 1

MOD Short Descriptor 

CY 20132

CY 20143

(pre update) 

% Change 

(pre update) 

CY 20144

(post update) 

% Change 

(post update) 

CY 20132

CY 20143

(pre update) 

% Change 

est 

99222 Initial hospital care $134.73 $138.38 3% $104.06 -23% NA NA N99223 Initial hospital care $198.01 $203.65 3% $153.14 -23% NA NA N99231 Subsequent hospital 

care 

$38.11 $39.23 3% $29.50 -23% NA NA N

99232 Subsequent hospital 

care 

$70.09 $72.40 3% $54.44 -22% NA NA N

99233 Subsequent hospital 

care 

$101.05 $104.14 3% $78.31 -22% NA NA N

99236 Observ/hosp same date $212.30 $218.63 3% $164.41 -23% NA NA N99239 Hospital discharge day $104.79 $107.35 2% $80.73 -23% NA NA N99283 Emergency dept visit $59.88 $61.70 3% $46.40 -23% NA NA N99284 Emergency dept visit $114.66 $118.05 3% $88.77 -23% NA NA N99291 Critical care first hour $217.75 $223.26 3% $167.89 -23% $272.18 $273.91 199292 Critical care addl 30 

min 

$109.55 $112.70 3% $84.75 -23% $120.78 $123.05 2

99348 Home visit est patient NA NA NA NA NA $82.34 $84.53 399350 Home visit est patient NA NA NA NA NA $173.52 $177.61 2G0008 Immunization admin NA NA NA NA NA $25.86 $24.97 -31 CPT codes and descriptions are copyright 2012 American Medical Association. All Rights Reserved. Applicable FARS/DFARS app2 Payments based on the 2013 conversion factor of 34.0230. 3 Payments based on the 2013 conversion factor of 34.0230, adjusted to 35.6653 to include the budget neutrality adjustment. 4 Payments based on the estimated 2014 conversion factor of 25.7109 adjusted to 26.8199 to include a budget 

neutrality adjustment. 
CMS-1600-P 597 

D. Effect of Proposed Changes to Medicare Telehealth Services 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 eligible 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 access to care in rural areas, based on recent 

utilization of current Medicare telehealth services, including services similar to 

transitional care management, we estimate no significant impact on PFS expenditures 

from the proposed additions. 

E. Geographic Practice Cost Indices (GPCIs)

Based upon statutory requirements we are proposing to update the GPCIs for each 

Medicare payment locality. The proposed GPCIs incorporate the use of updated data and 

cost share weights as discussed in II.E. The Act requires that updated GPCIs be phased in 

over two years. Addendum D shows the estimated effects of the revised GPCIs on area 

GAFs for the transition year (CY 2014) and the fully implemented year (CY 2015). The 

GAFs reflect the use of the updated underlying GPCI data, and the 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 schedule payment for a specific service, they 

are useful in comparing overall areas costs and payments. The actual geographic 

adjustment to payment for any actual service will be different from the GAF to the extent 

that the proportions of work, PE and malpractice expense RVUs for the service differ 

from those of the GAF. 

The most significant changes occur in 22 payment localities where the fully 
CMS-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 payment 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 share weights has a minimal impact on locality 

GAFs. The total impact of the GPCI revisions is shown in the 2015 GPCI values of 

Addendum E. 

We note that the proposed CY 2014 physician work GPCIs and summarized 

geographic adjustment factors (GAFs) published in Addenda D and E reflect the 

elimination of the 1.0 work GPCI floor provided in section 1848 (e)(1)(E) of the Act, 

which is set to expire prior to the implementation of the CY 2014 PFS. 

F. Other Provisions of the 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 estimated 0.8 percent increase for CY 2014 under 

the current MEI compared to a 0.7 percent increase for CY 2014 under the proposed 

revised MEI.” 

2. Coverage of Items and Services furnished in FDA-Approved Investigational Device 

Exemption (IDE) Clinical Trials 

 We are proposing a transparent centralized review process that would be more 

efficient by reducing the burden for stakeholders. Once the IDE coverage process is 

centralized, there will be a single entity making the IDE coverage decision. This also 

eliminates duplicative reviews by Medicare local contractors and the numerous 

applications sent to contractors by stakeholders requesting IDE coverage. We believe 
CMS-1600-P 599 

that a centralized review process 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 coverage of one-time AAA screening without 

receiving a referral as part of the IPPE, for beneficiaries that meet certain other eligibility 

criteria (a family history of AAA or, for men aged 65-75, a history of smoking). 

Approximately 45 percent of men aged 65-75 have a history of smoking. It is unknown 

how many individuals have a family history of AAA or how many beneficiaries will avail 

themselves of this benefit. Therefore, the impact of this change is unknown for CY 2014. 

4. Modification to Medicare Coverage of Colorectal Cancer Screening 

 As discussed in section III.C. of this proposed rule, sections 1861(s)(2)(R) and 

1861(pp)(1) of the Act, and implementing regulations at 42 CFR 410.37 authorize 

Medicare coverage of screening FOBT. We are proposing to modify §410.37(b) to allow 

attending physicians, physician assistants, nurse practitioners, and clinical nurse 

specialists to furnish orders for screening FOBTs. 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 impact of this change is unknown for CY 2014. 

5. Ambulance Fee Schedule 

As discussed in section III.D. of this proposed rule, section 604(a) through (c) of 

the ATRA require the extension of certain add-on payments for ground ambulance 
CMS-1600-P 600 

services and the extension of certain rural area designations for purposes of air 

ambulance payment. In addition, as discussed in section III.D. of this 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 provisions of section 

1834(l) of the Act shall be reduced by 10 percent for ambulance services furnished on or 

after October 1, 2013, consisting of non-emergency basic life support (BLS) services 

involving transport of an individual with end-stage renal disease for renal dialysis 

services (as described in section 1881(b)(14)(B) of the Act) furnished other than on an 

emergency basis by a provider of services or a renal dialysis facility. The ambulance 

extender provisions and the mandated 10 percent rate decrease discussed above are 

enacted through legislation that is self-implementing. We are proposing to amend the 

regulation text at §414.610 only to conform the regulations to these self-implementing 

statutory requirements. As a result, we are not making any policy proposals associated 

with these legislative provisions and there is no associated regulatory impact 

6. Clinical Laboratory Fee Schedule 

 We are proposing to add language to the Code of Federal Regulations to codify 

authority provided by statute and to establish a process under which we will 

systematically reexamine the payment amounts established under the CLFS to determine 

if changes in technology for the delivery of that service warrant an adjustment to the 

payment amount. We are also proposing a definition for the term technological changes. 

Adjustments made under the new process could both increase fee schedule amounts and 

provide for reductions in existing amounts. We cannot estimate a net impact at this time. 

7. Liability for Overpayments to or on Behalf of Individuals including Payments to 
CMS-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 “without 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 comment period, we provided estimates 

related to the impact of the requirements we finalized for the PQRS for 2014. Since we 

are making additional proposals for 2014, this section modifies the impact statement 

provided for 2014 in the CY 2013 PFS final rule with comment period. Please note that 

we will base our estimates on information found in the 2011 Physician Quality Reporting 

System and eRx Reporting Experience and Trends (hereinafter “the PQRS Reporting 

Experience”). This report contains the latest data we have gathered on PQRS 

participation. The PQRS Reporting Experience is available at 

http://www.cms.gov/Medicare/Quality-Initiatives-Patient-AssessmentInstruments/PQRS/index.html?redirect=/PQRS/. According to the 2011 Reporting 

Experience Report, over 1 million professionals were eligible to participate in the PQRS. 

A total of $261,733,236 in PQRS incentives was paid by CMS for the 2011 program year, 

which encompassed 26,515 practices that included 266,521 eligible professionals (or 
CMS-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 last year, we expect that, due to the 

implementation of payment adjustments beginning in 2015, participation in the PQRS 

would rise incrementally to approximately 300,000 eligible professionals and 400,000 

eligible professionals in 2013 and 2014, respectively. We believe our estimate of 

400,000 eligible professionals participating in PQRS in 2014 is accurate. 

With respect to the estimate amount of incentives earned, for 2014, eligible 

professionals can earn a 0.5 percent incentive (that is, a bonus payment equal to 0.5 

percent of the total allowed Part B charges for covered professional services under the 

PFS furnished by the eligible professional during the reporting period) for satisfactory 

reporting, 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 participate in the PQRS in 2014, the PQRS 

will distribute 2014 incentives to approximately (27 percent of 1 million eligible 

professionals) 270,000 eligible professionals. At $1,059 per eligible professional, the 

PQRS would distribute approximately $286 million in incentive payments in 2014. We 

believe these incentive payments will help offset the cost eligible professionals may 

undertake for participating in the PQRS for the applicable year. 

 We note that the total burden associated with participating in the PQRS is the time 

and effort associated with indicating intent to participate in the PQRS, if applicable, and 

submitting PQRS quality measures data. When establishing these burden estimates, we 

assume the following: 
CMS-1600-P 603 

• The proposals for reporting for the PQRS for the 2014 incentive and 2016 payment 

adjustment would be established as proposed in this CY 2014 Medicare PFS proposed 

rule. 

• For an eligible professional or group practice 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 believe that a billing clerk will handle the 

administrative duties associated with participating, while a computer analyst will 

handle duties related to reporting PQRS quality measures. According to the Bureau 

of Labor Statistics, the mean hourly wage for a billing clerk is approximately 

$16/hour whereas the mean hourly wage for a computer analyst is approximately 

$40/hour. 

 For an eligible professional who wishes to participate in the PQRS as an 

individual, the eligible professional need not indicate his/her intent to participate. The 

eligible professional may simply begin reporting quality measures data. Therefore, these 

burden estimates for individual eligible professionals participating in the PQRS are based 

on the reporting mechanism the individual eligible professional chooses. However, we 

believe a new eligible professional or group practice would spend 5 hours—which 

includes 2 hours to review the PQRS measures list, review the various reporting options, 

and select a reporting option and measures on which to report and 3 hours to review the 

measure specifications and develop a mechanism for incorporating reporting of the 
CMS-1600-P 604 

selected measures into their office work flows. Therefore, we believe that the initial 

administrative costs associated with participating in the PQRS would be approximately 

$80 ($16/hour x 5 hours). 

 With respect to an eligible professional who participates in the PQRS via claims, 

the eligible professional must gather the required information, select the appropriate 

quality data codes (QDCs), and include the appropriate QDCs on the claims they submit 

for payment. The PQRS collects QDCs as additional (optional) line items on the existing 

HIPAA transaction 837-P and/or CMS Form 1500 (OCN: 0938-0999). Based on our 

experience with Physician Voluntary Reporting Program (PVRP), we continue to 

estimate that the time needed to perform all the steps necessary to report each measure 

via claims will range from 0.25 minutes to 12 minutes, depending on the complexity of 

the measure. Therefore, the time spent reporting 9 measures would range from 2.25 

minutes to 108 minutes. Using an average labor cost of $40/hour, we estimate that time 

cost of reporting for an eligible professional via claims would range from $1.50 (2.25 

minutes or 0.0375 hours x $40/hour) to $72.00 (108 minutes or 1.8 hours x $40/hour) per 

reported case. With respect to how many cases an eligible professional would report 

when using the claims-based reporting mechanism, we proposed that an eligible 

professional would need to report on 50 percent of the eligible professional’s applicable 

cases. The actual number of cases on which an eligible professional would report would 

vary depending on the number of the eligible professional’s applicable cases. However, 

in prior years, when the reporting threshold was 80 percent, we found that the median 

number of reporting cases for each measure was 9. Since we are proposing to reduce the 

reporting threshold to 50 percent, we estimate that the average number of reporting cases 
CMS-1600-P 605 

for each measure would be reduced to 6. Based on these estimates, we estimate that the 

total cost of reporting for an eligible professional choosing the claims-based reporting 

mechanism would range from ($1.50/per reported case x 6 reported cases) $9.00 to 

($72.00/reported case x 6 reported cases) $432. 

 With respect to an eligible professional or group practice who participates in the 

PQRS via a qualified registry, direct EHR product, EHR data submission vendor product, 

or qualified clinical data registry, we believe there would be little to no burden associated 

for an eligible professional or group practice to report PQRS quality measures data to 

CMS, because the selected reporting mechanism submits the quality measures data for 

the eligible professional. While we note that there may be start-up costs associated with 

purchasing a qualified registry, direct EHR product, EHR data submission vendor, or 

qualified clinical data registry, we believe that an eligible professional or group practice 

would not purchase a qualified registry, direct EHR product, EHR data submission 

vendor product, or qualified clinical data registry solely for the purpose of reporting 

PQRS quality measures. Therefore, we have not included the cost of purchasing a 

qualified registry, direct EHR, EHR data submission vendor product, or qualified clinical 

data registry in our burden estimates. 

 Unlike eligible professionals who choose to report individually, we 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 group practice. The total burden 

for group practices who submit PQRS quality measures data via the proposed GPRO 

web-interface would be the time and effort associated with submitting this data. To 

submit quality measures data for the PQRS, a group practice would need to (1) be 
CMS-1600-P 606 

selected to participate in the PQRS GPRO and (2) report quality measures data. With 

respect to the administrative duties for being selected to participate in the PQRS as a 

GPRO, we believe it would take approximately 6 hours – including 2 hours to decide to 

participate in the PQRS as a GPRO, 2 hours to self-nominate, and 2 hours to undergo the 

vetting process with CMS officials – for a group practice to be selected to participate in 

the PQRS GPRO for the applicable year. Therefore, we estimate that the cost of 

undergoing the GPRO selection process would be ($16/hour x 6 hours) $96. With 

respect to reporting, the total reporting burden is the time and effort associated with the 

group practice submitting the quality measures data (that is, completed the data collection 

interface). Based on burden estimates for the PGP demonstration, which uses the same 

data submission methods, we estimate the burden 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 applicable year would be ($40/hour x 79 hours) 

$3,160. 

 Aside from the burden of eligible professionals and group practices participating 

in the PQRS, we believe that vendors of registries, qualified clinical data registries, direct 

EHR products, and EHR data submission vendor products incur costs associated with 

participating in the PQRS. Please note that we have proposed requirements for a new 

reporting mechanism in this CY 2014 PFS proposed rule – the qualified clinical data 

registry. For purpose of these burden estimates, we believe that, at least in its initial 

stage, vendors of a qualified clinical data registry would have burden estimates similar to 

traditional registries, as we believe many of the vendors seeking to become qualified as a 
CMS-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 PQRS Quality Measures Data would be the 

time and effort associated with submitting this data. To submit quality measures data for 

the proposed program years for PQRS, a registry would need to (1) become qualified for 

the applicable year and (2) report quality measures data on behalf of its eligible 

professionals. With respect to administrative duties related to the qualification process 

for both traditional registries and clinical data registries, we 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 numerators, denominators, and measure results 

for each measure the registry wishes to report using a CMS-provided measure flow, and 5 

hours to complete an XML submission – to become qualified to report PQRS quality 

measures data. Therefore, we 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 reporting of quality measures data, we believe the burden 

associated with reporting is the time and effort associated with the registry calculating 

quality measures results from the data submitted to the registry by its eligible 

professionals, submitting numerator and denominator data on quality measures, and 

calculating these measure results. We believe, however, that registries already perform 

these functions for its eligible professionals irrespective of participating in the PQRS. 

Therefore, we believe there would be little to no additional burden associated with 

reporting PQRS quality measures data. Whether there is any additional reporting burden 
CMS-1600-P 608 

will vary with each registry, depending on the registry’s level of savvy with submitting 

quality measures data for the PQRS. 

 With respect to EHR products, the total burden for direct EHR products and EHR 

data submission vendors who submit PQRS Quality Measures Data would be the time 

and effort associated with submitting this data. To submit quality measures data for the 

proposed program years under the PQRS, a direct EHR product or EHR data submission 

vendor would need to report quality measures data on behalf of its eligible professionals. 

Please note that we are not proposing to continue to require direct EHR products and 

EHR data submission vendors to become qualified to submit PQRS quality measures 

data. 

In addition to the GPRO web interface, please note that we have proposed a new 

reporting mechanism that would be available to group practices comprised of 25+ eligible 

professionals: the certified survey vendor. With respect to using a certified survey 

vendor, we believe there would be little to no burden associated for a group practice to 

report the CG CAHPS survey data to CMS, because the selected reporting mechanism 

submitted the quality measures data for the group practice. While there may be start-up 

costs associated with purchasing a certified survey vendor, we believe that a group 

practice would not purchase a certified survey vendor solely for the purpose of reporting 

the CG CAHPS survey for the PQRS. Therefore, we have not included the cost of 

purchasing a certified survey vendor in our burden estimates. 
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 Minimal 

Group Practice: SelfNomination 6.0 1 N/A $16 $96 

Group Practice: Reporting 79 1 N/A $40 $3,160 

TABLE 75: Estimated Costs per Vendor to Participate in the PQRS 

 Estimated Hours Hourly Rate Total Cost 

Registry: Self-Nomination 10 $16 $160 

10. Medicare EHR Incentive Program 

Please note that the requirements for meeting the clinical quality measures (CQM) 

component of achieving meaningful use for the EHR Incentive Program in 2014 were 

established in a standalone final rule published on September 4, 2012 (77 FR 53968). 

The proposals contained in this CY 2014 PFS 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 believe any impacts these proposals would 

have are absorbed in the impacts discussion published in the EHR Incentive Program 

final rule published on September 4, 2012. 

11. Medicare Shared Savings Program 

 Please note that the requirements for participating in the Medicare Shared Saving 

Program and the impacts of these requirements were established in the final rule for the 

Medicare Shared Savings Program that appeared in the Federal Register on November 
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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 related to PQRS under section 1848 to include 

reporting requirements related to the payment adjustment. Since ACO participants and 

ACO provider/suppliers will not have to report PQRS separately to avoid the payment 

adjustment, this reduces the quality reporting burden for ACO participants participating 

in the Shared Savings Program. There is no impact for the additional proposals related to 

requirements for setting benchmarks or for scoring the CAHPS measure modules. 

12. Physician Value-Based Payment Modifier and the Physician Feedback Reporting 

Program 

The changes to the Physician Feedback Program in section III.K. of this proposed 

rule would not impact CY 2014 physician payments under the Physician Fee Schedule. 

We anticipate that as we approach implementation of the value modifier, physicians will 

increasingly participate in the Physician Quality Reporting System to determine and 

understand how the value modifier could affect their payments. 

13. Existing Standards for E-prescribing under Medicare Part D and Identification 

This section of the proposed rule imposes no new requirements because use of the 

official Part D e-prescreening standards; NCPDP SCRIPT 10.6, Formulary and Benefit 

3.0 are voluntary, and as such, it will not have a significant economic impact on a 

substantial number of small entities, small rural hospitals or state, local, or tribal 

governments or on the private sector. 

14. Chiropractic Services Demonstration 

As discussed in section III.M. of this proposed rule, we are continuing the 
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recoupment of the $50 million in expenditures from this demonstration in order to satisfy 

the BN requirement in section 651(f)(1)(B) of the MMA. We initiated this recoupment in 

CY 2010 and this will be the fifth and final year. As discussed in the CY 2010 PFS final 

rule with comment period, we finalized a policy to recoup $10 million each year through 

adjustments to payments under the PFS for chiropractic CPT codes in CYs 2010 through 

2014. For each year of this recoupment, we have provided OACT’s projected 

chiropractic expenditures based on previous year’s data. While OACT’s projections have 

included the statutory reductions to physician payments, the statute was amended in each 

year to avoid these reductions. As a result, Medicare expenditures for chiropractic 

services during the recoupment were higher than the OACT projections. Chiropractic 

services expenditures during the recoupment period have been as follows: $540 million 

in 2010; $520 million in 2011; and $580 million in 2012. In total, CMS recouped $32.8 

million over the years of 2010, 2011 and 2012. OACT now projects chiropractic 

expenditures to be approximately $580 million in 2013. A 2 percent recoupment 

percentage for chiropractic services would result in approximately $11.6 million in 2013. 

For the years 2010 through 2013, CMS would have recouped approximately $44.4 

million of the $50 million required for budget neutrality. 

CMS plans to recoup the remaining funds, approximately $5.6 million, and will 

reduce chiropractic CPT codes (CPT codes 98940, 98941, and 98942) by the appropriate 

percentage, which by our preliminary estimates is one percent if the approximately 25 

percent reduction in physician 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 the 
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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 preceding preamble provides descriptions of the 

statutory provisions that are addressed, identifies those policies when discretion has been 

exercised, presents rationale for our final policies and, where relevant, alternatives that 

were considered. 

H. Impact on Beneficiaries 

There are a number of changes in this proposed 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-based payment modifier to adjust physician 

payment beginning in CY 2015; improved accuracy in payment through revisions to the 

inputs used to calculate payments under the PFS and the capping certain nonfacility 

services at the facility rate plus the lower of the OPPS or ASC rate; 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 policy changes could result in a change in 

beneficiary liability as relates to coinsurance (which is 20 percent of the fee schedule 

amount if applicable for the particular provision after the beneficiary has met the 

deductible). To illustrate this point, as shown in Table 73, the CY 2013 national payment 

amount in the nonfacility setting for CPT code 99203 (Office/outpatient visit, new) is 
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$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 proposed rule, using the current (CY 2013) CF 

of 34.0376, adjusted to 35.6652 to include budget neutrality, the CY 2014 national 

payment amount in the nonfacility setting for 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 Circular A-4 (available at 

http://www.whitehouse.gov/omb/circulars/a004/a-4.pdf), in Table 76 (Accounting 

Statement), we have prepared an accounting 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. 
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TABLE 76: Accounting Statement: Classification of Estimated Expenditures 

CATEGORY TRANSFERS 

CY 2014 Annualized Monetized Transfers Estimated decrease in expenditures of $19.6 billion 

for PFS conversion factor update. 

From Whom To Whom? Federal Government to physicians, other 

practitioners and providers and suppliers who receive 

payment under Medicare. 

CY 2014 Annualized Monetized Transfers Estimated 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 Estimated decrease in expenditures of $50 million 

for liability for overpayments to or on behalf of 

individuals including payments to providers or other 

persons. 

From Whom To Whom? Federal Government to physicians, other 

practitioners and providers and suppliers who receive 

payment under Medicare. 

TABLE 77: Accounting Statement: Classification of Estimated Costs, Transfer, 

and Savings 

Category Transfer 

CY 2014 Annualized Monetized 

Transfers of beneficiary cost 

coinsurance. 

$29 million 

From Whom to Whom? Beneficiaries 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 Flexibility Analysis.” The previous analysis, 

together with the preceding portion of this preamble, provides a Regulatory Impact 

Analysis. 
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 In accordance with the provisions of Executive Order 12866, this regulation was 

reviewed by the Office of Management and Budget. 
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List of Subjects

42 CFR Part 405

Administrative practice and procedure, Health facilities, Health professions, Kidney 

diseases, Medical devices, Medicare, Reporting and recordkeeping requirements, Rural areas, Xrays. 

42 CFR Part 410

Health facilities, Health professions, Kidney diseases, Laboratories, Medicare, Reporting 

and recordkeeping requirements, Rural areas, X-rays. 

42 CFR Part 411 

Kidney diseases, Medicare, Reporting and recordkeeping requirements. 

42 CFR Part 414

Administrative practice and procedure, Health facilities, Health professions, Kidney 

diseases, Medicare, Reporting and recordkeeping requirements. 

42 CFR Part 423

Administrative practice and procedure, Emergency medical services, Health facilities, 

Health maintenance organizations (HMO), Health professionals, Medicare, Penalties, Privacy, 

Reporting and recordkeeping requirements. 

42 CFR Part 425 

Administrative practice and procedure, Health facilities, Health professions, Medicare, 

Reporting and recordkeeping requirements. 
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 For the reasons set forth in the preamble, the Centers for Medicare & Medicaid Services 

propose to amend 42 CFR chapters IV as set forth below: 

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

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

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 paragraph (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 furnished in IDE studies. 

(b) Definitions. As used in this subpart— 

Category A (Experimental) device refers to a device for which “absolute risk” of the 

device type has not been established (that is, initial questions of safety and effectiveness have not 

been resolved) and the FDA is unsure whether the device type can be safe and effective. 

Category B (Nonexperimental/investigational) device refers to a device for which the 

incremental risk is the primary risk in question (that is, initial questions of safety and 

effectiveness of that device type have been resolved), or it is known that the device type can be 

safe and effective because, for example, other manufacturers have obtained FDA approval for 

that device type. 
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ClinicalTrials.gov refers to the National Institutes of Health’s National Library of 

Medicine’s online registry and results database of publicly and privately supported clinical 

studies of human participants conducted around the world. 

Contractors refers to Medicare Administrative Contractors and other entities that contract 

with CMS to review and adjudicate claims for Medicare items and services. 

IDE stands for investigational device exemption. An FDA-approved IDE application 

permits a device, which would otherwise be subject to marketing approval or clearance, to be 

shipped lawfully for the purpose of conducting a clinical study in accordance with 21 U.S.C. 

360j(g) and 21 CFR parts 812 and 813. 

Pivotal studies or trials refer to clinical investigations designed to collect definitive 

evidence of the safety and effectiveness of a device for a specified intended use, typically in a 

statistically justified number of subjects. It may or may not be preceded by an early and/or a 

traditional feasibility study. 

Routine care items and services refer to items and services that are otherwise generally 

available to Medicare beneficiaries (that 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 beneficiary were not enrolled in a clinical trial. 

Superiority studies or trials refers to studies or trials that are intended to demonstrate at 

some prespecified level of confidence that the effect of an investigational treatment is superior to 

that of an active control by more than a prespecified margin. 

 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) * * * 
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(2) Routine care items and services related to experimental/investigational (Category A) 

devices as defined in § 405.201(b); and furnished in conjunction with an FDA-approved 

clinical trial that meet the IDE study standards in §405.212. 

* * * * * 

4. Section 405.211 is revised 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) ClinicalTrial.gov identifier. 

(b) Coverage of routine care items and services for Category A devices. Medicare may 

cover routine care items and services furnished in any FDA-approved Category A IDE study if 

the criteria in §405.212(a)(1) through (13) are met. Medicare covers routine care items and 

services furnished in any FDA-approved Category A IDE study if the criteria in §405.212(a) and 

(b) are met. 

(c) Coverage of Category B IDE devices and routine care. Medicare may cover a 

Category B IDE device and routine care items and services furnished in any FDA-approved 

Category B IDE study if the criteria in §405.212(a)(1) through (13) are met. Medicare covers a 

Category B IDE device and routine care items and services furnished in any FDA-approved 

Category B IDE study if the criteria in §405.212(a) and (c) are met. 

(d) Coverage of Category A routine services 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 under §405.212(b) or (c), CMS considers whether 
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the study’s attainment of the criteria 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 added 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 purpose of the study is to test whether the item or service meaningfully 

improves health outcomes of patients who are represented by the Medicare-enrolled subjects. 

(2) The rationale for the study is well supported by available scientific and medical 

information, or it is intended to clarify or establish the health outcomes of interventions already 

in common clinical use. 

(3) The study results are not anticipated to unjustifiably duplicate existing knowledge. 

(4) The study design is methodologically appropriate and the anticipated number of 

enrolled subjects is adequate to answer the research question(s) being asked in the study. 

(5) The study is sponsored by an organization or individual capable of completing it 

successfully. 

(6) The study is in compliance with all applicable Federal regulations concerning the 

protection of human subjects found at 45 CFR part 46. 

(7) All aspects of the study are conducted according to appropriate standards of scientific 

integrity set by the International Committee of Medical Journal Editors. 

(8) The study has a written protocol that clearly demonstrates adherence to the standards 

listed here as Medicare requirements. 
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(9) Where appropriate, the clinical research study is not designed to exclusively test 

toxicity or disease pathophysiology in healthy individuals. Trials of all medical technologies 

measuring therapeutic outcomes as one of the objectives may be exempt from this standard only 

if the disease or condition being studied is life threatening as defined in 21 CFR 312.81(a) and 

the patient has no other viable treatment options. 

(10) The study is registered on the ClinicalTrials.gov website and/or the Registry of 

Patient Registries (RoPR) by the principal sponsor/investigator prior to the enrollment of the first 

study subject. 

(11) The study protocol specifies the method and timing of public release of results on all 

pre-specified outcomes, including release of negative outcomes. The release should be hastened 

if the study is terminated early. The results must be made public within 24 months of the end of 

data collection. If a report is planned to be published in a peer reviewed journal, then that initial 

release may be an abstract that meets the requirements of the International Committee of Medical 

Journal Editors. However a full report of the outcomes must be made public no later than three 

(3) years after the end of data collection. 

(12) The study protocol explicitly discusses subpopulations affected by the item or 

service under investigation, particularly traditionally underrepresented groups in clinical studies, 

how the inclusion and exclusion criteria effect enrollment of these populations, and a plan for the 

retention and reporting of said populations in the study. If the inclusion and exclusion criteria are 

expected to have a negative effect on the recruitment or retention of underrepresented 

populations, the protocol must discuss why these criteria are necessary. 

(13) The study protocol explicitly discusses how the results are or are not expected to be 

generalizable to subsections of the Medicare population to infer whether Medicare patients may 
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benefit from the intervention. Separate 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 paragraph (a) of this section and the study is the 

following: 

(1) A pivotal study. 

(2) A superiority study design. 

(c) Medicare covers the IDE device and routine care items and services in an FDAapproved Category B IDE study that meets the requirements 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 section, a provider of services or other person 

shall, in the absence of evidence to the contrary, be deemed to be without fault if the 

determination of the carrier, the intermediary, or the Centers for Medicare & Medicaid Services 

that more than the correct amount was paid was made subsequent to the fifth year following the 

year in which notice was sent to such individual that such amount had been paid. 

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

§405.355 Waiver of adjustment or recovery. 

* * * * * 
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(b) Adjustment or recovery of an incorrect payment (or only such part of an incorrect 

payment as may be determined to be inconsistent with the purposes of Title XVIII of the Act) 

against an individual who is without fault shall be deemed to be against equity and good 

conscience if the incorrect payment was made for items and services that are not payable under 

section 1862(a)(1) or (a)(9) of the Act and if the determination that such payment was incorrect 

was made subsequent to the fifth year following the year in which notice of such payment was 

sent to such individual. 

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 redesignated 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 applicable State law; 

(5) Furnished under the direct supervision 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 redesignated paragraph (a)(5). 

D. Revising paragraph (b). 

The revision and addition reads as follows: 

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

(a) * * * 

(4) Services and supplies must be furnished in accordance with applicable State law; 

(5) Furnished under the direct supervision of a nurse practitioner, physician assistant, 

nurse midwife, specialized nurse practitioner or a physician; and 

* * * * * 

(b) The direct supervision requirement is met in the case of a nurse practitioner, physician 

assistant, nurse midwife, or specialized nurse practitioner only if such a person is permitted to 

supervise such services under the written policies governing the rural health clinic. 

* * * * * 

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 redesignated paragraph (a)(5). 

D. Revising paragraph (b). 

The revision and addition reads as follows: 

§405.2452 Services and supplies incident to clinical psychologist and clinical social worker 

services. 

(a) * * * 

(4) Services and supplies must be furnished in accordance with applicable State law; 

(5) Furnished under the direct supervision of a clinical psychologist, clinical social 

worker or physician; and 

* * * * * 

(b) The direct supervision requirement in paragraph (a)(5) of this section is met only if 
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the clinical psychologist or clinical social worker is permitted to supervise such services 

under the written policies governing the Federally qualified health center. 

PART 410—SUPPLEMENTARY MEDICAL INSURANCE (SMI) BENEFITS

 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 “eligible 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) and (9), respectively. 

C. Adding new paragraph (b)(7). 

The revision and addition reads as follows: 

§410.26 Services and supplies incident to a physician’s professional services: Conditions. 

(a) * * * 

(1)Auxiliary personnel means any individual who is acting under the supervision of a 

physician (or other practitioner), regardless of whether the individual is an employee, leased 

employee, or independent contractor of the physician (or other practitioner) or of the same entity 

that employs or contracts with the physician (or other practitioner) and meets any applicable 

requirements to provide the services, including licensure, imposed by the State in which the 

services are being furnished. 

* * * * * 

(b) * * * 
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(7) Services and supplies must be furnished in accordance with applicable State law. 

* * * * * 

14. Section 410.37 is amended by revising paragraph (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 writing by the beneficiary’s attending 

physician, physician assistant, nurse practitioner, or clinical 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 services furnished by a CAH directly or under 

arrangements shall be counted towards the annual limitation on incurred expenses as if such 

services were paid under section 1834(k)(1)(b) of the Act. 

(2)* * * 

(iv) Outpatient occupational therapy services furnished by a nurse practitioner, clinical 

nurse specialist, or physician assistant or incident to their services; and 
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(v) Outpatient occupational therapy services 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 annual limitation on incurred expenses as if such 

services were paid under section 1834(k)(1)(b) of the Act. 

(2) * * * 

(v) Outpatient physical therapy and speech-language pathology services furnished by a 

nurse practitioner, clinical nurse specialist, or physician assistant or incident to their services; 

and 

(vi) Outpatient physical therapy and speech-language pathology services furnished by a 

CAH directly or under arrangements. 

* * * * * 

17. Section 410.71 is amended by revising paragraph (a)(2) to read as follows: 
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§410.71 Clinical psychologist services and services and supplies incident to clinical 

psychologist services. 

(a) * * * 

(2) Medicare Part B covers services and supplies incident to the services of a clinical 

psychologist if the requirements of §410.26 are met. 

* * * * * 

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

§410.74 Physician assistants’ services. 

* * * * * 

 (b) Services and supplies furnished incident to a physician assistant’s services. Medicare 

Part B covers services and supplies incident to the services of a physician assistant if the 

requirements of §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 incident to the services of a nurse practitioner if the requirements of 

§410.26 are met. 

* * * * * 

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

§410.76 Clinical nurse specialists’ services. 

* * * * * 

(d) Services and supplies furnished incident to clinical nurse specialists’ services. 
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Medicare Part B covers services and 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 paragraph (c) to read as follows: 

§410.77 Certified nurse-midwives’ services: Qualifications and conditions. 

* * * * * 

(c) Incident to services: Basic rule. Medicare Part B covers services and supplies 

incident to the services of a certified nurse-midwife if the requirements of §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 nursing facility care services (not including the 

Federally-mandated periodic visits under §483.40(c) of this chapter and with the limitation of 

one telehealth visit every 30 days by the patient’s admitting physician or nonphysician 

practitioner), professional consultations, psychiatric diagnostic interview examination, 

neurobehavioral status exam, individual psychotherapy, pharmacologic management, end-stage 

renal disease-related services included in the monthly capitation payment (except for one “hands 

on” visit per month to examine the access site), individual and group medical nutrition therapy 

services, individual and group kidney disease education services, individual and group diabetes 

self-management training services (except for one hour of “hands on” services to be furnished in 
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the initial year training period to ensure effective injection training), individual and group health 

and behavior assessment and intervention services, smoking cessation services, alcohol and/or 

substance abuse and brief intervention services, screening and behavioral counseling 

interventions in primary care to reduce alcohol misuse, screening for depression in adults, 

screening for sexually transmitted infections (STIs) and high intensity behavioral counseling 

(HIBC) to prevent STIs, intensive behavioral therapy for cardiovascular disease, behavioral 

counseling for obesity, and transitional care management services furnished by an interactive 

telecommunications system if the following conditions are met: 

* * * * * 

(4) Originating sites must be: 

(i) Located in a health professional shortage area (as defined under section 332(a)(1)(A) 

of the Public Health Service Act (42 U.S.C. 254e(a)(1)(A)) that is either outside of a 

Metropolitan Statistical Area (MSA) as of December 31st of the preceding calendar year or 

within a rural census tract of an MSA as determined by the Office of Rural Health Policy of the 

Health Resources and Services Administration as of December 31st of the preceding calendar 

year, or 

(ii) Located in a county that is not included in a Metropolitan Statistical Area as defined 

in section 1886(d)(2)(D) of the Act as of December 31st of the preceding year, or 

(iii) An entity participating in a Federal telemedicine demonstration project that has been 

approved by, or receive funding from, the Secretary as of December 31, 2000 regardless of its 

geographic location. 

* * * * * 

PART 411—EXCLUSIONS FROM MEDICARE AND LIMITATIONS ON MEDICARE 

PAYMENT 
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 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 paragraph (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 MEDICAL 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 Social 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 visit every 3 days by the patient’s 

admitting physician or practitioner), subsequent nursing facility care services (with the limitation 

of one telehealth visit every 30 days by the patient’s admitting physician or nonphysician 

practitioner), professional consultations, psychiatric diagnostic interview examination, 

neurobehavioral status exam, individual psychotherapy, pharmacologic management, end-stage 

renal disease-related services included in the monthly capitation payment (except for one “hands 

on” visit per month to examine the access site), individual and group medical nutrition therapy 
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services, individual and group kidney disease education services, individual and group diabetes 

self-management training services (except for one hour of “hands on” services to be furnished in 

the initial year training period to ensure effective injection training), individual and group health 

and behavior assessment and intervention, smoking cessation services, alcohol and/or substance 

abuse and brief intervention services, screening and behavioral counseling interventions in 

primary care to reduce alcohol misuse, screening for depression in adults, screening for sexually 

transmitted infections (STIs) and high intensity behavioral counseling (HIBC) to prevent STIs, 

intensive behavioral therapy for cardiovascular disease, behavioral counseling for obesity, and 

transitional care management services furnished via an interactive telecommunications system is 

equal to the current fee schedule amount applicable for the service of the physician or 

practitioner. 

(i) Emergency department or initial inpatient telehealth consultations. The Medicare 

payment amount for emergency department or initial inpatient telehealth consultations furnished 

via an interactive telecommunications system is equal to the current fee schedule amount 

applicable to initial hospital care provided by a physician or practitioner. 

(ii) Follow-up inpatient telehealth consultations. The Medicare payment amount for 

follow-up inpatient telehealth consultations furnished via an interactive telecommunications 

system is equal to the current fee schedule amount applicable to subsequent hospital care 

provided by a physician or practitioner. 

* * * * * 

 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”. 
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3. Revise the definition of “Measures group”. 

4. Add the definition of “Qualified clinical data registry”. 

B. Adding paragraphs (c)(5), (e)(2), and (f)(4). 

C. Revising the paragraph headings to paragraphs (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 determine which measures an eligible professional or 

group practice reports. 

Certified survey vendor means a vendor that is certified by CMS for a particular program 

year to transmit survey measures data to CMS. 

* * * * * 

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 denominator 
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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 satisfactorily participated in PQRS. A 

qualified clinical data registry must have in place mechanisms for the transparency of data 

elements and specifications, risk models, and measures. 

(ii) Provide timely feedback, 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 individual eligible professional’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 professional is satisfactorily participating, as 

determined by the Secretary, in a qualified clinical data registry (as defined in paragraph (b) of 

this section). 
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(i) For purposes of this paragraph, the reporting period for 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 professional is satisfactorily 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 paragraph, 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 satisfactory reporting. *** 

* * * * * 

(4) These criteria do not apply to measures reported by qualified clinical data registries 

for purposes of satisfactory participation. 

* * * * * 

(g) Satisfactory reporting requirements 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 vendor mechanism (as specified in paragraph 
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(g)(3)(v) of this section), a group practice must report information on Physician Quality 

Reporting System quality measures identified 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 certified by CMS for a particular program year to 

transmit survey measures data to CMS. Group practices that elect this reporting mechanism 

must select an additional 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 vendor 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 and subsequent years, reporting CAHPS survey 

measures to CMS using a vendor that is certified by CMS for a particular program year to 

transmit survey measures data to CMS. Group practices that elect this reporting mechanism 

must select an additional reporting mechanism in order to meet the criteria for satisfactory 

reporting for the payment adjustment. 

* * * * * 

(j) Informal review. Eligible professionals (or in the case of group practices defined in 
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paragraph (b) of this section) may seek an informal review of the determination that an eligible 

professional (or in the case of group practices defined 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 satisfactorily participate in a qualified clinical data registry under 

the Physician Quality Reporting System. 

* * * * * 

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

§414.511 Adjustments to the Clinical Laboratory Fee Schedule based on Technological 

Changes.

(a) CMS may make adjustments to the as CMS determines are justified by technological 

changes. 

(b) Technological changes are changes to the tools, machines, supplies, labor, 

instruments, skills, techniques, and devices by which laboratory tests are produced and used. 

 (c) CMS will propose and finalize any adjustments to the fee schedules as CMS 

determines are justified by technological changes in the Federal Register. 

 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)* * * 
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 (ii) For services furnished during the period July 1, 2008 through December 31, 2013, 

ambulance services originating in: 

 (A) Urban areas (both base rate and mileage) are paid based on a rate that is 2 percent 

higher than otherwise is applicable under this section. 

 (B) Rural areas (both base rate and mileage) are paid based on a rate that is 3 percent 

higher than otherwise is applicable under this section. 

* * * * * 

 (5) * * * 

 (ii) For services furnished during the period July 1, 2004 through December 31, 2013, the 

payment amount for the ground ambulance base rate is increased by 22.6 percent where the point 

of pickup is in a rural area determined to be in the lowest 25 percent of rural population arrayed 

by population density. The amount of this increase is based on CMS’s estimate of the ratio of 

the average cost per trip for the rural areas in the lowest quartile of population compared to the 

average cost per trip for the rural areas in the highest quartile of population. In making this 

estimate, CMS may use data provided by the GAO. 

* * * * * 

(8) For ambulance services furnished on or after October 1, 2013 consisting of nonemergency basic life support (BLS) services involving transport of an individual with end-stage 

renal disease for renal dialysis services (as described in section 1881(b)(14)(B)) furnished other 

than on an emergency basis by a provider of services or a renal dialysis facility, the fee schedule 

amount otherwise applicable (both base rate and mileage) is reduced by 10 percent. 

* * * * * 

 (h) Treatment of certain areas for payment for air ambulance services. Any area that was 

designated as a rural area for purposes of making payments under the ambulance fee schedule for 
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air ambulance services furnished on December 31, 2006, must be treated as a rural area for 

purposes of making payments under the ambulance fee schedule for air ambulance services 

furnished during the period July 1, 2008 through June 30, 2013. 

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 period, to physicians in groups with 100 or 

more eligible professionals based on the performance period described at § 414.1215(a). 

(2) For the CY 2016 payment adjustment period, to physicians in groups with 10 or 

more eligible professionals based on the performance period described at § 414.1215(b). 

* * * * * 

(c) Group size determination. The list of groups of physicians subject to the valuebased payment modifier for the CY 2015 payment adjustment period is based on a query of 

PECOS on October 15, 2013. For each subsequent calendar year payment adjustment period, 

the list of groups of physicians subject to the value-based payment modifier is based on a query 

of PECOS that occurs within 10 days of the close of the 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 claims analysis, 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. 

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

§ 414.1215 Performance and payment adjustment periods for the value-based payment 

modifier.
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* * * * * 

(c) The performance period is calendar year 2015 for value-based payment modifier 

adjustments made in the calendar year 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-based payment modifier (or individual eligible 

professionals within such groups) may submit data on quality measures as specified under the 

Physician Quality Reporting System using the reporting mechanisms for which they are eligible. 

33. Section 414.1225 is revised to read as follows: 

§ 414.1225 Alignment of Physician Quality Reporting System quality measures and 

quality measures for the value-based payment modifier. 

All of the quality measures for which groups of physicians or individual eligible 

professionals are eligible to report under the Physician Quality Reporting System in a given 

calendar year are used to calculate the value-based payment modifier for the applicable payment 

adjustment period, as defined in §414.1215, to the 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 payment adjustment period, costs 

for groups of physicians subject to the value-based payment modifier are assessed based on a 

cost composite comprised of the following 6 cost measures (only the measures identified in 

paragraphs (a)(1) through (5) of this section are included for the value-based payment modifier 

for the CY 2015 payment adjustment period): 

(1) Total per capita costs for all attributed beneficiaries. 
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(2) Total per capita costs for all attributed beneficiaries with diabetes. 

(3) Total per capita costs for all attributed beneficiaries with coronary artery disease. 

(4) Total per capita costs for all attributed beneficiaries with chronic obstructive 

pulmonary disease. 

(5) Total per capita costs for all attributed beneficiaries with heart failure. 

(6) Medicare Spending per Beneficiary associated with an acute inpatient 

hospitalization. 

(b) Included payments. Cost measures enumerated in paragraph (a) of this section 

include all fee-for-service payments made under Medicare Part A and Part B. 

(c) Cost measure adjustments. (1) Payments under Medicare Part A and Part B will be 

adjusted using CMS’ payment standardization methodology to ensure fair comparisons across 

geographic areas. 

(2) The CMS-HCC model (and adjustments for ESRD status) is used to adjust 

standardized payments for the measures listed at paragraphs (a)(1) through (5) of this section. 

(3) The beneficiary’s age and severity of illness are used to adjust the Medicare 

Spending per Beneficiary measure as specified in paragraph (a)(6) of this section. 

35. Section 414.1240 is revised to read as follows: 

§ 414.1240 Attribution for quality of care and cost measures. 

(a) Beneficiaries are attributed to groups of physicians subject to the value-based 

payment modifier using a method generally consistent with the method of assignment of 

beneficiaries under §425.402 of this chapter, for measures other than the Medicare Spending per 

Beneficiary measure. 

(b) For the Medicare Spending per Beneficiary (MSPB) measure, a MSPB episode is 

attributed to a group of physicians subject to the value-based payment modifier if any eligible 
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professional in the group submits a Medicare Part B claim under the group’s TIN for a service 

rendered during an inpatient hospitalization that is an index admission for the MSPB measure 

during the 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 period, the benchmark for each cost measure 

is the national mean of the performance rates calculated among all groups of physicians for 

which beneficiaries are attributed to the group of physicians that are subject to the value-based 

payment modifier. In calculating the national benchmark, groups of physicians’ performance 

rates are weighted by the number of beneficiaries used to calculate the group of physician’s 

performance rate. 

(b) Beginning with the CY 2016 payment adjustment period, the cost measures of a 

group of physicians subject to the value-based payment modifier are adjusted to account for the 

group’s specialty mix, by computing the weighted average of the national specialty-specific 

expected costs. Each national specialty-specific expected cost is weighted by the proportion of 

each specialty in the group, the number of eligible professionals of each specialty in the group, 

and the number of beneficiaries attributed to the group. 

(c) The national specialty-specific expected costs referenced in paragraph (b) of this 

section are derived by calculating, for each specialty, the average cost of beneficiaries attributed 

to groups of physicians that include that specialty. 

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

§ 414.1260 Composite scores. 

* * * * * 

(b) * * * 
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(1) * * * 

(i) Total per capita costs for all attributed beneficiaries: Total per capita costs measure 

and Medicare Spending per Beneficiary measure; and 

* * * * * 

38. Section 414.1270 is revised to read as follows: 

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

(a) For the CY 2015 payment adjustment period: 

(1) Downward payment adjustments. A downward payment adjustment will be applied 

to a group of physicians subject to the value-based payment modifier if-- 

(i) Such group neither self-nominates for the PQRS GPRO and reports at least one 

measure, nor elects the PQRS administrative claims option for CY 2013 as defined in 

§414.90(h). 

(A) Such adjustment will be -1.0 percent. 

(B) [Reserved]. 

(ii) Such group elects that its value-based payment modifier be calculated using a 

quality-tiering approach, and is determined to have poor performance (low quality and high 

costs; low quality and average costs; or average quality and high costs). 

(A) Such adjustment will not exceed -1.0 percent as specified in §414.1275(c)(1). 

(B) [Reserved]. 

(2) No payment adjustments. There will be no value-based payment modifier 

adjustment applied to a group of physicians subject to the value-based payment modifier if such 

group either: 

(i) Self-nominates for the PQRS GPRO and reports at least one measure; or 

(ii) Elects the PQRS administrative claims option for CY 2013 as defined in §414.90(h). 
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(3) Upward payment adjustments. If a group of physicians subject to the value-based 

payment modifier elects that the value-based payment modifier be calculated using a qualitytiering approach, upward payment adjustments are determined based on the projected aggregate 

amount of downward payment adjustments determined under paragraph (a)(1) of this section 

and applied as specified in §414.1275(c)(1). 

(b) For the CY 2016 payment adjustment period: 

(1) A downward payment adjustment of -2.0 percent will be applied to a group of 

physicians subject to the value-based payment modifier if, during the applicable performance 

period as defined in §414.1215, the following apply: 

(i) Such group does not self-nominate for the PQRS GPRO and meet the criteria as a 

group to avoid the PQRS payment adjustment for CY 2016 as specified by CMS; and 

(ii) Seventy percent of the eligible professionals in such group do not meet the criteria as 

individuals to avoid the PQRS payment adjustment for CY 2016 as specified by CMS. 

(2) For a group of physicians comprised of 100 or more eligible professionals that is not 

included in paragraph (b)(1) of this section, the value-based payment modifier adjustment will 

be equal to the amount determined under §414.1275(c)(2). 

(3) For a group of physicians comprised of between 10 and 99 eligible professionals that 

is not included in paragraph (b)(1) of this section, the value-based payment modifier adjustment 

will be equal to the amount determined under §414.1275(c)(2), except that such adjustment will 

be 0.0 percent if the group of physicians is determined to be low quality/high cost, low 

quality/average cost, or average quality/high cost. 

(4) If all of the eligible professionals in a group of physicians subject to the value-based 

payment modifier participate as individuals in the PQRS using a qualified clinical data registry 

or any other reporting mechanism available to them, and CMS is unable to receive quality 
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performance data for those eligible professionals 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 value-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) and (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 comparison of the composite of quality of care 

measures and a composite of cost measures. 

* * * * * 

(c)(1) The following value-based payment modifier percentages apply to the CY 2015 

payment adjustment period: 

CY 2015 Value-Based Payment Modifier Amounts for the Quality-Tiering Approach 

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 +1.0x if (1) reporting Physician Quality 

Reporting System quality measures through the GPRO web-interface or CMS-qualified registry, 

and (2) average beneficiary risk score is in the top 25 percent of all beneficiary risk scores. 

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

payment adjustment period: 

CY 2016 Value-Based Payment Modifier Amounts for the Quality-Tiering 

Approach 

Quality/cost Low cost Average cost High cost 

High quality +2.0x* +1.0x* +0.0% 
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Average quality +1.0x* +0.0% -1.0% 

Low quality +0.0% -1.0% -2.0% 

* Groups of physicians eligible for an additional +1.0x if reporting Physician 

Quality Reporting System quality measures and average beneficiary risk score is in the 

top 25 percent of all beneficiary risk scores. 

(d) Groups of physicians subject to the value-based payment modifier that have an 

attributed beneficiary population with an average risk score in the top 25 percent of the risk 

scores of beneficiaries nationwide and for the CY 2015 payment adjustment period elect the 

quality-tiering approach or for the CY 2016 payment adjustment period are subject to the 

quality-tiering approach, receive a greater upward payment adjustment as follows: 

* * * * * 

PART 423--VOLUNTARY MEDICARE PRESCRIPTION DRUG BENEFIT 

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

Authority: Sections 1102, 1106, 1860D-1 through 1860D-42, and 1871 of the Social 

Security Act (42 U.S.C. 1302, 1306, 1395w-101 through 1395w-152, and 1395hh). 

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 specified 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 paragraphs (b)(2)(ii), (b)(3) through (b)(4), (b)(5)(i) and (b)(6). 
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(iii) From [60 days after publication of the 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 specified 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, Implementation Guide, Version 1, Release 0 (Version 1.0), 

October 2005 (incorporated by reference in paragraph (c)(1)(ii) of this section) for transmitting 

formulary and benefits information between prescribers and Medicare Part D sponsors. 

 (ii) Formulary and benefits. On The National Council for Prescription Drug Programs 

Formulary and Benefits Standard, Implementation Guide, Version 1, Release 0 (Version 1.0), 

October 2005 (incorporated by reference in paragraph (c)(1)(ii) of this section), or The National 

Council for Prescription Drug Programs Formulary and Benefits Standard, Implementation 

Guide, Version 3, Release 0 (Version 3.0), 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. 

 (iii) Formulary and benefits. The National Council for Prescription Drug Programs 

Formulary and Benefits Standard, Implementation 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) * * * 
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 (vi) The National Council for Prescription Drug Programs Formulary and Benefits 

Standard, Implementation Guide, Version 3, Release 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 paragraph (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 that report under the Physician Quality Reporting 

System. 

44. Section 425.502 is amended by revising paragraph (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 unreliable to set the quality 

benchmarks, CMS will set the benchmarks using flat percentages. 

(ii) CMS will reduce performance rate clustering 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 30th and 90th deciles. 
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(B) For tightly clustered measures, CMS will apply a 1.0 fixed percentage point spread 

between each deciles, using the 60th percentile as the 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) heading, and (b)(1). 

C. Adding paragraphs (c) and (d). 

The revisions and additions read as follows: 

§425.504 Incorporating reporting requirements related to the Physician Quality Reporting 

System Incentive and Payment Adjustment. 

(a) * * * 

(1) ACOs, on behalf of their ACO provider/suppliers who are eligible professionals, must 

submit the measures determined under §425.500 using a CMS web interface, to qualify on behalf 

of their eligible professionals for the Physician Quality Reporting System incentive under the 

Shared Savings Program. 

* * * * * 

(b) Physician Quality Reporting System payment adjustment for 2015. (1) ACOs, on 

behalf of their ACO provider/suppliers who are eligible professionals, must submit one of the 

ACO GPRO measures determined under §425.500 using a CMS web interface, to satisfactorily 

report on behalf of their eligible professionals for purposes of the 2015 Physician Quality 

Reporting System payment adjustment under the Shared Savings Program. 

* * * * * 
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(c) Physician Quality Reporting System payment adjustment for 2016 and subsequent 

years. 

(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 using a CMS web interface, 

to satisfactorily report on behalf of their eligible professionals for purposes of the Physician 

Quality Reporting System payment adjustment under the Shared Savings Program for 2016 and 

subsequent years. 

(2)(i) ACO providers/suppliers that are eligible professionals within an ACO may only 

participate under their ACO participant TIN as a group practice under the Physician Quality 

Reporting System Group Practice Reporting Option of the Shared Savings Program for purposes 

of the Physician Quality Reporting System payment adjustment under the Shared Savings 

Program for 2016 and subsequent years. 

(ii) ACOs, on behalf of its ACO provider/suppliers who are eligible professionals, must 

satisfactorily report all of the ACO GPRO measures determined under §425.500 using a CMS 

web interface for purposes of the Physician Quality Reporting System payment adjustment under 

the Shared Savings Program for 2016 and subsequent years. 

(3) If an ACO, on behalf of its ACO providers/suppliers who are eligible professionals, 

does not satisfactorily report for purposes of the Physician Quality Reporting System payment 

adjustment for 2016 and subsequent years, each ACO 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 professionals cannot satisfactorily report for purposes of a 

Physician Quality Reporting System payment adjustment outside of the Medicare Shared 

Savings Program for 2016 and subsequent years. 
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(5) For eligible professionals subject to the Physician Quality Reporting System payment 

adjustment under the Medicare Shared Savings Program for 2016 and subsequent years, the 

Medicare Part B Physician Fee Schedule amount for covered professional services furnished 

during the program year is equal to the applicable percent of the Medicare Part B Physician Fee 

Schedule amount that would otherwise apply to such services under section 1848 of the Act, as 

described in §414.90(e). 

(d) The reporting period for a year is the calendar year from January 1 through December 

31 that occurs 2 years prior to the program year in which the payment adjustment is applied. 

(Catalog of Federal Domestic Assistance Program No. 93.773, Medicare--Hospital Insurance; 

and Program No. 93.774, Medicare--Supplementary Medical Insurance Program) 

Dated: 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 Filed 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]